M 



The 

 LONG 



RANGE 



vFarm 

 Program 



^ 



What 



Is 



It 



■y CUSTON fOSm 



Editer, lAA Raconl 



WHAT kind of agricultural pro- 

 grams can farmers expect in 

 the next few years? That's a 

 question to stump the experts, 

 but a good picture of the laws 

 now on the books was given at the con- 

 ference on national agricultural legis- 

 lation of the 34th 

 annual meeting of 

 the Illinois Agricul- 

 tural Association. 



Dr. H. C. M. 

 Case, head of the 

 department of agri- 

 cultural economics, 

 University of Illi- 

 nois College of Ag- 

 riculture, presented 

 a thorough analysis 

 Or. Com of the Agricultural 



Act of 1948. Dr. 

 Case was particularly well qualified to dis- 

 cuss this act since he helped develop 

 much of the information used in draft- 

 ing the law. 



Many of the objectives of a desir- 

 able long-range agricultural policy are 

 provided for in existing legislation, but 

 there are still many gaps to be filled. 

 Dr. Case pointed out in his analysis. 

 Senate Bill 2318 included some of these 

 objectives, part of which were retained 

 in the Agricultural Act of 1948. 



This act, passed in the last hours of 

 the 80th Congress, is limited to a price 

 support program. It is essentially a 

 compromise between two different price 

 support philosophies represented in the 

 separate Senate and House bills. 



As finally passed, the act provides 

 for a flexible price support program 

 adjusted to supply, to become effective 

 in 1950. The flexible price support 

 feature was a part of the Senate bill. 

 The House bill provided that most of 

 the farm price support measures now 

 in existence should continue for two 

 years. 



Thus the bill finally agreed to by 

 the Senate and House conferees com- 

 bined part of the Senate bill and part 

 of the House bill. 



It provides that the price support of 

 basic farm commodities — corn, wheat, 

 cotton, rice, and peanuts, — will con- 

 tinue at 90 per cent of parity until 

 the 1949 crop is marketed, or until 

 June 30, 1950, thus shortening the pe- 

 riod of high price supports contained 

 in the original House bill. 



On July 1, 1950, the long-time flex- 

 ible farm price support program will 

 go into effect for these commodities un- 

 less legislation is changed by the new 

 Congress. The fact that this legisla- 

 tion is now on the books is a strategic 

 advantage in Dr. Case's opinion. 



The Agricultural Act of 1948 also 

 provides in addition to the basic com- 

 modities, price supports for milk and 



its products, hogs, chickens and eggs 

 at 90 per cent of parity until Dec. 31, 

 1949, and for other Steagall commod- 

 ities at not less than 60 or more than 

 90 per cent of parity at the discretion 

 of the Secretary of Agriculture until 

 Dec. 31, 1949. 



As Dr. Case pointed out, this pro- 

 vision was the result of another com- 

 promise between the Senate and House 

 bills. 



The long-time feature of the act, 

 which becomes effective in 1950, pro- 

 vides that a normal supply of corn, 

 wheat, cotton, rice, and peanuts will be 

 supported at 75 per cent of parity price. 



As the supply increases by 2 per cent 

 of normal, the price support drops 1 

 per cent of parity until it reaches 60 

 per cent of parity with a supply of 130 

 per cent of normal production. 



Also, as the supply falls to 70 per 

 cent of normal, the price support rises 

 to 90 per cent of parity. 



"This flexible price support is the 

 most distinctive feature of the new leg- 

 islation. Dr. Case said, and is intended 

 to correct the present uneconomic pro- 

 gram of supporting prices without ref- 

 erence to supply. 



The law further provides that the 

 Secretary of Agriculture may adjust the 

 support price level after conducting 

 public hearings if the above plan does 

 not provide desirable results. It may 

 be found, for example. Dr. Case said, 

 that a price support of 80 per cent of 

 parity price will be preferable to the 

 75 per cent support when there is a 

 normal production. 



The 1948 Agricultural Act also pro- 

 vides that when the long-range price 

 support program goes into effect, a new 

 parity price formula also becomes ef- 

 fective. Dr. Case pointed out. 



The difference between the old and 

 new parity formulas, according to Dr. 

 Case is simply this: The old parity 

 formula maintains the relationship be- 

 tween prices of individual farm com- 

 modities in 1909-14 unless some other 

 base period has been selected. Because 

 of changes in methods of production, 

 the improvement in crop yields, 

 changes in relative demands, and many 

 other factors, this 1909-14 period does 

 not reflect present day price relation- 

 ships. Dr. Case explained. 



"The new parity formula uses the re- 

 lationship of the price of an individual 

 farm product to the average price of 

 all farm products for the 10 preceding 

 years. This keeps the parity prices of 

 individual farm products adjusted to 

 changing demand and price relation- 

 ships. It is an automatic formula which 

 each year adds the new year and drops 

 the oldest of 10 preceding years as a 



« I 



L A. A. RECORD 



basis for 

 of individi 

 The pri( 

 vides for t 

 than the 

 tobacco at 

 parity with 

 available 

 ture. 



The so-c 



represent 



duties, are 



price supp< 



amounted 



1947-48; 



dollars are 



lunch pro£ 



60 million 



ous comm( 



In addit 



Corporatio 



prices of s 



are handle 



ing charge 



support th 



ucts. 



Dr. Cas 

 voking qi 

 points of 

 posed the 

 want a hi 

 tied to suj 

 ing of acr 

 ing quotas 

 feet three- 

 major prcx 

 for an aci 

 spending : 

 Or, do ] 

 at a cons< 

 price supp 

 supply of 

 quent use 

 supply an 

 productioi 

 periods ? 



Dr. Cai 



of data o' 



flexible pi 



in the Sei 



called fo 



emergenc 



the fixed 



cent of 1 



acreage c 



jor crop! 



time ovei 



Under 



said, wh< 



posed, it 



and a co 



unless s( 



place of 



Dr. a 



tural Ac 



so that tl 



tion can 



trolled 1 



JANUAl 



