basis for determining the parity price 

 of individual farm products. 



The price support bill further pro- 

 vides for the support of prices of other 

 than the five basic commodities and 

 tobacco at prices up to 90 per cent of 

 parity with such funds as may be made 

 available to the Secretary of Agricul- 

 ture. 



The so-called Section 32 funds, which 

 represent 30 per cent of our import 

 duties, are made available for farm 

 price support operations. These funds 

 amounted to 135 million dollars in 

 1947-48; of this amount, 75 million 

 dollars are now assigned to the school 

 lunch program. This still leaves about 

 60 million dollars for supporting vari- 

 ous commodities. 



In addition, the Commodity Credit 

 Corporation is permitted to support 

 prices of storable farm products if they 

 are handled without too great a carry- 

 ing charge. Section 32 funds will help 

 support the prices of perishable prod- 

 ucts. 



Dr. Case raised some thought-pro- 

 voking questions in presenting two 

 points of view on price supports. He 

 posed the following queries: Do you 

 want a high fixed price support not 

 tied to supply, except through the fix- 

 ing of acreage allotments and market- 

 ing quotas which are likely to be in ef- 

 fect three-fourths of the time for our 

 major products.' And which will call 

 for an acreage reduction and a corre- 

 sponding reduction in income. 



Or, do you want a floor under prices 

 at a conservative level and a flexible 

 price support varying inversely to the 

 supply of a product and making infre- 

 quent use of controls, which will let 

 supply and demand be the guide to 

 production except in acute depression 

 periods ? 



Dr. Case said that a careful analysis 

 of data over past years shows that the 

 flexible price support program set forth 

 in the Senate Bill 2318 would not have 

 called for acreage control except in 

 emergency periods such as 1932-33. But 

 the fixed high price support of 90 per 

 cent of parity would have called for 

 acreage control over some of our ma- 

 jor crops about three-fourths of the 

 time over the past 25 years. 



Under production controls. Dr. Case 

 said, when acreage restrictions are im- 

 posed, it means an acreage reduction 

 and a corresponding income reduction 

 unless some other crop is grown in 

 place of the reduced acres. 



Dr. Case said that the 1948 Agricul- 

 ^ tural Act should probably be revised 



so that the Commodity Credit Corpora- 

 tion cannot sell any commodity con- 

 trolled by it at a price below 90 per 



fori C SmM, former presMciit of ffco IMbioi* AgrUuHvral Assocteflen, rflsnwao* ffco 

 long-ranga form program rmtmmUf oiMMtocf fc|r Ceofroas, during Him national agrltal- 

 fvrol loglthMon toMorontm of lAA convanfloa. M loft U Prof. H. C. M. Ca<«, komd 

 ol tka rfoportment of agrltoHorol •conomics^ Unlvonlty of Itllnete. At right b IT. T. 

 Smith, coirferenc* chairman and mombor of tho lAA board of dirottort. 



cent of parity, or a price half way be- 

 tween the support price and parity, 

 which ever is lower. 



The provision in the Commodity 

 Credit Charter which prohibits the CCC 

 from owning or leasing facilities for 

 grain storage is a mistake. Dr. Case 

 said. But he added that it should be 

 clear that this was no part of the work 

 of the agricultural committees of either 

 the House or Senate. 



In conclusion, Dr. Case said, there 

 are a few claims that can justly be made 

 for the long-range price support pro- 

 visions of the new agricultural legisla- 

 tion, which will come into effect in 

 1950 without further Congressional ac- 

 tion: 



1. The flexible price support feature 

 of the act should make supply and de- 

 mand the major guides to farm pro- 

 duction. 



2. The revisions of parity prices will 

 tend to encourage the production of 

 livestock. Thit in turn will help to 

 dispose of btvtdensome grain supplies 

 and indirectly encourage better human 

 nutrition. 



3. The minimum support level for 

 basic commodities and other commod- 



ities within the limit of available funds 

 should prevent ruinously low prices 

 and also have the moral effect of hold- 

 ing farm prices above the minimum 

 support levels. 



4. The judicious use of Section 32 

 funds, made available for price support 

 operations, should materially aid in 

 stabilizing prices of other than the basic 

 commodities and should encourage bet- 

 ter human food habits. 



5. Assuming that the price support 

 program becomes operative at both 

 high and low support levels, it will as- 

 sure farmers a larger return for a larger 

 production of basic commodities than 

 for a smaller production. That will 

 help to assure consumers of an abund- 

 ant production. 



6. When other means fail to keep 

 production within bounds, the new leg- 

 islation provides for production and 

 marketing quotas if farmers want them. 



7. If farmers vote against controls, 

 the 50 f>er cent of parity price support 

 prevents coercing them into accepting 

 controls, as would be done if all sup>- 

 ports were withdrawn. 



8. Finally the act leaves even the 



{Continued on page 48) 



JANUARY. 1949 



