Iti^iil Sii|)|iorrs Mojiii Ih'^id Toiifrols 



From the Saturday Evening Post, Jan. 1, 1949 



A PHENOMENON we never expected to see in our time was the stand 

 taken by an impressive list of farm organizations in favor of flexible price 

 supports, as opposed to the rigid 90-per-cent-of -parity plan, which the 

 despised and rejected Eightieth Congress wisely amended. The Iowa 

 Farm Bureau Federation at its November meeting supported the flexible prin- 

 ciple on the ground that too high price .^^— ^^^^_^______»_^^^.««. 



supports would produce unwieldy crop 

 surpluses, with disastrous results. One 

 such result, as pointed out in a similar 

 resolution passed by the Illinois Agricul- 

 tural Association, would be "fixed prices 

 and rigid controls." 



Unfortunately, President Truman 

 seems to interpret his election triumph 

 as an endorsement of rigid supports at 

 90 per cent of parity. Certain farm or- 

 ganizations like the National Farmers 

 Union are attempting to confirm this im- 

 pression, and, since easy money is very 

 tempting to most people, including farm- 

 ers, the higher support rate is easier to 

 sell than the sounder flexible system. 

 Rigid price supports, with the certain 

 consequence of acreage control and price 

 fixing, are naturally favored by left-wing 

 groups now eagerly nosing along the 

 fence for any mt leading to "planning." 

 Nevertheless, support of the Aiken Bill 

 — providing flexible price supports — is 

 reported from so many farm groups in 

 the Middle Western states, several of 

 which supported President Truman, that 

 the sky's-the-limit element in Congress 

 may meet with more resistance than 

 seemed likely at first. 



Even at their best, price supports are a 

 ticklish business. In a recent news article 

 from Washington, Mark Sullivan showed 

 how government support of the price 

 of potatoes had resulted in American 

 pressure on the Canadian Government to 

 put an embargo against Canadian potatoes 

 destined for the United States. That re- 

 sulted in glut in Canada, and, of course, 

 a supfMJrt price for Canadian potatoes. 

 In the meantime American farmers in- 

 crease their acreage devoted to crops en- 

 joying price supports, and the Govern- 

 ment's effort to dispose of surplus po- 

 tatoes, without letting anybody eat them, 

 becomes more desperate. Inevitably this 

 problem will become still tougher if the 

 90-per-cent-of-parity scale is maintained, 

 and our progress toward a so-called 

 planned economy will be speeded up. 



The attitude of the Truman Adminis- 

 tration will be interesting to watch. Sec- 

 retary Brannan supported the Aiken Bill 



during the last session of Congress, as did 

 the Grange, Farm Bureau Federation and 

 most of the other important farm organi- 

 zations. The mere fact that President 

 Truman took the Farmers Union-CIO 

 attitude during the campaign hardly jus- 

 tifies reversal on a program which was 

 carefully worked out and agreed to by 

 agricultural authorities in both parties. 

 Senator Aiken himself expects the flexi- 

 ble principle to stand and describes the 

 promises to repeal it as "seasonal cam- 

 paign arguments." Maybe so, but Mr. 

 Tmman is certain to be beseiged by left- 

 ist agrarians who won't be put off so 

 easily. As usual, the issue will be be- 

 tween those who dread controls and those 

 who want them. In making up its mind. 

 Congress can hardly fail to understand 

 that. If the issue is understood. Con- 

 gress will not change the agricultural 

 program for the worse, even if President 

 Truman's campaign promises are made 

 to look a little silly. 



P 



From the Des Moines Register 

 December 27, 1948 



RODUCTION and marketing ad- 

 ministration officials have been cam- 

 paigning to create dissatisfaction 

 among farmers with the flexible 

 price support system of the 1948 

 farm price act. These officials believe that 

 a high, fixed support system — at 90 per 

 cent of parity — backed up by acreage 

 restrictions and marketing quotas would 

 return farmers higher incomes. (It also 

 would give P.M.A. a bigger job to do and 

 increase its importance as a federal 

 agency.) 



The method of this campaign is to 

 ask the farmers whether they would 

 prefer to have prices of their products 

 at 90 per cent of parity or at 60 per 

 cent, the lower level of the sliding scale 

 for basic crops under the 1948 act. 

 This is pure demagoguery. 

 Of course any farmer would answer 

 90 per cent. 0/ course any farmer 

 would like to have prices as high as he 



can get — ij other factors are left out of 

 the picture. Why stop at 90 per cent? 

 Why not 100 or 125 per cent of parity? 



But merely wanting high prices will 

 not get them — through government leg- 

 islation or any other way. Farmers, like 

 other groups, have to consider what is 

 politically and economically possible. 



They also have to consider whether 

 prices alone are what they really want. 

 The highest prices do not mean the most 

 income over the long mn. Prices pegged 

 at 90 per cent of parity can only be ob- 

 tained by cutting down on the supply 

 that reaches the market. Income is the 

 product of supply multiplied by the price.. 

 The gain in income that farmers can 

 make by restricting production is limited, 

 therefore. 



Farmers also must consider whether 

 production control can be effective. One 

 thing is certain: Controls would have to 

 be much tighter than they were under 

 AAA in the Thirties in order to get the 

 job done. 



Corn acreage limitation was designed 

 to hold down total feed output and cur- 

 tail livestock production. It didn't work. 

 Farmers raised as much corn as before 

 by using better methods, more fertilizer, 

 and better seed on their most fertile acres. 

 The replacement crops for corn — alfalfa, 

 clover, and other legumes — produced as 

 much feed as before. 



Since Corn Belt farmers get most of 

 their income from livestock, they cannot 

 use monopoly economics to raise their 

 returns unless they effectively restrict 

 livestock output to boost prices. Work- 

 ing on com alone is only part of the task. 



But even assuming that farmers could 

 raise their incomes by a restrictive pro- 

 gram that kept prices high, would it be 

 worth the candle? It would mean a 

 tight control of farmers' plantings and 

 of their marketings. 



It would prevent natural shifts in pro- 

 duction brought about by changing mar- 

 kets and changing production methods. 

 It might be expected to do for Cora Belt 

 farmers about what the cotton control 

 program did for the South — invite com- 

 petition from other countries in overseas 

 markets and from rayon in domestic 

 markets. 



When advocates of 90 per cent of 

 parity ask farmers what level of prices 

 they want, they should also explain the 

 grief involved in fixing and holding a 

 high level. 



National Publications See Wisdom in Flexible Support Prices and Ask Advocates of 90 Per Cent of 

 Parity to Explain Grief Involved in Fixing High Support Prices At a High Level. I 



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FEBRUARY. 1 



