FARMERS: Corn Unlimited

For the first time since the U.S. Department of Agriculture began buying corn to support its price (in 1933), farmers voted last week to abolish the acreage controls that went with the high, rigid props. In 26 commercial corn states 346,976 farmers voted 71.1% for a new program proposed by Secretary Ezra Taft Benson. Result: next year corn growers will give up a system that paid 75% to 90% of parity if they planted no more than a Government-set limit, turn to a system that sets the props closer to real market value (i.e., 90% of the previous three-year average, but not below 65% of parity) for all the corn they can raise.

“This was the first clear-cut, realistic choice farmers have ever had on the question of controls versus freedom of decision,” crowed Benson. “Farmers are now free to plant as much or as little corn as they wish, with the safeguard of a reasonable support level. They have acted in their own, best long-term interests.”

Costlier Handouts? The vote may, as Benson devoutly hopes, provide a long-range step-down of subsidized prices toward market prices, may help trim the monstrous program that inflated USDA’s current budget to $6.9 billion. But, in the short haul, Benson’s economy-seeking victory could become the costliest cornucopia in the history of subsidies.* In recent years only a small proportion (12% in 1958) of corn farms qualified for high supports by staying inside the Government’s acreage limits. Farmers who planted more fed it to livestock, sold it on the open market—or sold it to the Government under a slightly lower price prop, which Benson obligingly extended to such “noncompliance” corn three crops ago. After 1956 the extra price prop was never guaranteed before the crop was planted, but the farmers’ expectations encouraged surplus production. Last week, before the vote, word went around the corn belt that Benson would not support noncompliance corn next year if farmers rejected his plan. Thus many who approved his new system felt that they were voting for continued broad, if lower, price props, against his threat to cut subsidies.

Uncertainty Removed. The big threat to the Treasury lies in the fact that Benson’s scheme removes all uncertainty about what a farmer can get for his corn, no matter how big the crop. The price: $1.12 to $1.15 per bu., about 12¢ lower than high supports would have been, but 6¢ to 9¢ per bu. higher than the present price peg for noncompliance corn. At Benson’s price, efficient growers can make good money on all the well-fertilized hybrids that their big tractors can cultivate.

For example, in Iowa’s Mahaska County, one farmer let 176 of his 800 acres lie idle in the now-expiring soil-bank “acreage reserve,” this year put only 14 acres in corn. In a move matched by many a neighbor, he decided after last week’s vote to plant corn on 250 to 300 acres—18 times as much as this year. “If they want corn,” said he, “we’ll give ’em corn.”

* Present corn surplus: 1,132,000,000 bu., which cost the Government $1.8 billion, eats up $370,000 a day in storage fees.