FARMERS: The Wheat Evil

Economic discomfiture for a people is political discomfiture for a government. Spurred on by the agonized cry of the wheat farmers in the West, the Cabinet spent two sessions largely devoted to the question: How can the farmer be satisfied? The President wished an answer. Secretary of Agriculture Wallace prepared a report. And others, outside the Cabinet, visited the White House from time to time to offer suggestions.

The Problem. The U. S. is expected to eat about 584 million bushels of wheat this year. It is expected to produce about 821 million bushels of wheat. How is the difference of 237 million bushels to be prevented from drugging the market and dragging down the price of wheat? How is this to be prevented in years to come?

The story of the surplus and its disposal commences in the days before the War. Export (in millions of bushels) of the chief wheat-selling countries was at that time approximately as follows:

U. S……………………………………….. 156

Canada………………………………….. 81

Argentina…………………………………93

Australia…………………………………. 48

Russia and Eastern Europe….. 185

Total ………………………………………..563

Other nations supplied about 40 million bushels in addition, making an annual importation of about 600 million bushels of wheat into Western Europe.

This year, according to economists, the same countries will have surpluses for export:

U. S……………………………………….. 237

Canada………………………………… 323

Argentina………………………………119

Australia……………………………… 68

Russia and Eastern Europe………..Practically none

Total………………………………………747

There is too much wheat. Canada, especially, has quadrupled her production. Meanwhile, owing to an unusually good wheat crop and a consumption still depressed by the War, Western Europe may consume only 500 million bushels.

Nostrums:

¶Regional conferences between representatives of the Department of Agriculture and Commerce and farmers (suggested at the Cabinet meeting). Secretary Wallace was said to favor them. But conferences (to produce results) must do more than confer.

¶Reduction of the wheat acreage (favored by Secretary Wallace). This is being brought about naturally by farmers who abandon their land on account of low prices. It may be brought about deliberately by diversification of crops and greater plantings of flax and sugar-beets—products which we now import. But, if it is necessary to increase the tariff on sugar to foster beet culture, there will be strong political opposition.

¶Purchase by the Government of wheat at $1.75 a bushel, or similar price, in order to sustain the market. This is advocated by some ” radicals” of the wheat belt, but opposed by Secretary Wallace because it would tend to increase wheat production, thereby augmenting the existing evil of oversupply. Eventually the Government would have to dump the wheat back on the market or into the sea.

¶A higher protective tariff on wheat. This was advocated by Representative Sydney Anderson (Chairman of the Joint Congressional Commitee on Agricultural Inquiry) in a conference with the President. The President was also reported to have considered this proposal with the Tariff Commission. Canadian wheat is being sold in Minneapolis at the same price as our native product in spite of the present duty of 30c. a bushel. This is made possible by the fact that Canadian taxes and land values are lower than ours. A higher customs tax might prevent this influx of foreign wheat. But a higher tariff cannot protect such of our wheat as is sold abroad. If we are undersold abroad, our surplus will remain to drug our own market.

¶A revival of the U. S. Grain Corporation to improve the wheat situation by more orderlymarketing. This project is advanced by Northwestern bankers. Representative Young of North Dakota arranged for these men to place their views before the President. Their plan might ameliorate but is hardly likely to cure the wheat evil.

¶Lower railroad rates. The wheat belt eagerly calls for this remedy, which would materially aid the wheat farmer. It would necessitate action by the Interstate Commerce Commission. The Administration is likely to oppose this plan if the Commission believes it would be disastrous to the railroads.

¶A general lowering of the tariff. This remedy is propounded by the Democrats. They argue that the Fordney-McCumber tariff on wheat does not protect our farmers but that the present high tariff on other goods makes farmers pay too much for what they must buy.