AGRICULTURE: Farm Plans for the Future

Shirtsleeves up, pencils at the ready, 17 members of the President’s Agricultural Advisory Commission met in Washington last week to wrestle with a hydra-headed monster. Every time they lopped off one head, two more seemed to sprout up. The monster: a farm program to go into effect after 1954.

For weeks the commission, headed by Dean William Myers of the Cornell College of Agriculture, has been reviewing suggestions from growers, handlers, processors, wholesalers and retailers, to draw up a program that will meet the approval of Agriculture Secretary Ezra Benson, the White House and Congress.

Farmers’ Hassle. The job is complicated by the fact that farmers themselves cannot agree on any broad solution. The American Farm Bureau Federation is expected to go on record this month for some system of flexible price supports; the National Farmers Union, honeycombed with oldtime New Dealers, goes all-out for high, rigid supports; the National Grange has fired such a scattershot that no one knows just what it wants. Even those who grow or handle a single commodity cannot agree on what should be done. Not long ago, woolmen, for instance, favored a quasi-governmental stabilization corporation to handle their price supports. Now that idea has been abandoned because the various segments of the industry could not agree on a slate of directors for the corporation.

By last week there were so many complex facts and figures on hand that it seemed clear there will be no overall new farm program that can be labeled the “Benson Plan.” What is shaping up instead is a group of elaborately detailed price support plans, a different one for each major commodity. To operate under any one of them, many a farmer may feel he needs a slide rule in his jeans, a staff of bookkeepers in the barn, and an I.B.M. machine in the basement.

Two-Price Systems. Among the proposals most likely to be okayed by the commission are “two-price plans” for such commodities as wheat, rice and possibly cotton. Under a two-price plan, wheat, for example, would be sold on the open market both in the U.S. and abroad for whatever it brings. For the portion of the crop used domestically for human food (about half the total), wheat farmers would be guaranteed 100% of parity, i.e., they would get subsidies to make up the difference between the open-market price and parity.

Advocates of such a two-price system cite many advantages. For one thing, they say, farmers’ prices would average out at about 80% of parity, only slightly less than they receive now, since many farmers do not take full advantage of the present loan program. To an economy-minded Congress, there is an even more compelling point: the two-price system would be selfsupporting; the subsidies to farmers would be provided by requiring wheat processors to buy processing certificates, a form of processors’ tax. Though the U.S. Supreme Court once held such a processing tax unconstitutional, the commission thinks there is a legal way around the ban. Nevertheless, a big obstacle remains: foreign nations object to the cut-rate “dumping” of grain on world markets.

Other likely commission recommendations :

¶ No change in the present price support systems for.tobacco and peanuts. ¶ Flexible price supports for corn, ranging from 75% to 90% of parity, plus a legal limit on the amount of surplus corn the Government can take in. ¶ Direct payments for wool growers, largely financed out of tariffs, to bring wool’s support price to about 69¢ a lb., or 16¢ above current levels.

Bargain Day. The dairy industry has developed one of the most ambitious plans to get rid of the enormous surpluses now held by the Government. It suggests that the Government sell back to the trade, at a loss, its entire stock of dairy products (the loss leader: 250 million Ibs. of surplus butter). Then distributors, presumably, would resell it to the public in a giant bargain sale.

After that one-shot deal, the milkmen have a long-range program to take care of future dairy problems under what would amount to a Government-sanctioned monopoly. They would set up a stabilization board, appointed by the President, with $500 million borrowed from the Treasury. The board would set and support dairy prices, paying the load out of assessments on farmers; presumably, the consumer would ultimately foot the bill, through higher prices. The stabilization board could sell its stocks abroad (but not in the U.S.) at below-support prices. There would be no import restrictions, but in surplus years, the U.S. Government would be required to buy dairy products in amounts equal to what is imported.

Fear Abroad. One basic drawback to many of the farm plans is the assumption that foreign markets will absorb much of the U.S. farm surplus. Recent events suggest no such hope. At present, the Government has $4 billion tied up in price-prop loans and farm products, an alltime record. Among the stocks on hand: 426 million bu. of wheat v. 133 million last year, 457 million bu. of corn v. 280 million in 1952, 426 million Ibs. of dried milk v. 31 million. In an effort to get rid of the surpluses, the U.S. is willing to sell $130 million worth for soft currencies. Britain has agreed to take $20 million worth of tobacco; West Germany will, take:—as a gift—$15 million worth of soybeans and tobacco. But the rest of Europe, fearful of U.S. dumping, will have none of the surpluses.

In short, if the President’s agricultural commission turns out any kind of farm program by January, it will have worked a wonder; if it turns out one that works without costing taxpayers billions, it will have performed a miracle.