The past year has seen a marked improvement in the general condition of
agriculture. Production is better balanced and without acute shortage or
heavy surplus. Costs have been reduced and the average output of the worker
increased. The level of farm prices has risen while others have fallen, so
that the purchasing power of the farmer is approaching a normal figure. The
individual farmer is entitled to great credit for the progress made since
1921. He has adjusted his production and through cooperative organizations
and other methods improved his marketing. He is using authenticated facts
and employing sound methods which other industries are obliged to use to
secure stability and prosperity. The old-fashioned haphazard system is
being abandoned, economics are being applied to ascertain the best adapted
unit of land, diversification is being promoted, and scientific methods are
being used in production, and business principles in marketing.
Agriculture has not fully recovered from postwar depression. The fact is
that economic progress never marches forward in a straight line. It goes in
waves. One part goes ahead, while another halts and another recedes.
Everybody wishes agriculture to prosper. Any sound and workable proposal to
help the farmer will have the earnest support of the Government. Their
interests are not all identical. Legislation should assist as many
producers in as many regions as possible. It should be the aim to assist
the farmer to work out his own salvation socially and economically. No plan
will be of any permanent value to him which does not leave him standing on
his own foundation.
In the past the Government has spent vast sums to bring land under
cultivation. It is apparent that this has reached temporarily the
saturation point. We have had a surplus of production and a poor market for
land, which has only lately shown signs of improvement. The main problem
which is presented for solution is one of dealing with a surplus of
production. It is useless to propose a temporary expedient. What is needed
is permanency and stability. Government price fixing is known to be unsound
and bound to result in disaster. A Government subsidy would work out in the
same way. It can not be sound for all of the people to hire some of the
people to produce a crop which neither the producers nor the rest of the
people want.
Price fixing and subsidy will both increase the surplus, instead of
diminishing it. Putting the Government directly into business is merely a
combination of subsidy and price fixing aggravated by political pressure.
These expedients would lead logically to telling the farmer by law what and
how much he should plant and where he should plant it, and what and how
much he should sell and where he should sell it. The most effective means
of dealing with surplus crops is to reduce the surplus acreage. While this
can not be done by the individual farmer, it can be done through the
organizations already in existence, through the information published by
the Department of Agriculture, and especially through banks and others who
supply credit refusing to finance an acreage manifestly too large.
It is impossible to provide by law for an assured success and prosperity
for all those who engage in farming. If acreage becomes overextended, the
Government can not assume responsibility for it. The Government can,
however, assist cooperative associations and other organizations in orderly
marketing and handling a surplus clearly due to weather and seasonal
conditions, in order to save the producer from preventable loss. While it
is probably impossible to secure this result at a single step, and much
will have to be worked out by trial and rejection, a beginning could be
made by setting up a Federal board or commission of able and experienced
men in marketing, granting equal advantages under this board to the various
agricultural commodities and sections of the country, giving encouragement
to the cooperative movement in agriculture, and providing a revolving loan
fund at a moderate rate of interest for the necessary financing. Such
legislation would lay the foundation for a permanent solution of the
surplus problem.
This is not a proposal to lend more money to the farmer, who is already
fairly well financed, but to lend money temporarily to experimental
marketing associations which will no doubt ultimately be financed by the
regularly established banks, as were the temporary operations of the War
Finance Corporation. Cooperative marketing especially would be provided
with means of buying or building physical properties.
The National Government has almost entirely relieved the farmer from income
taxes by successive tax reductions, but State and local taxes have
increased, putting on him a grievous burden. A policy of rigid economy
should be applied to State and local expenditures. This is clearly within
the legislative domain of the States. The Federal Government has also
improved our banking structure and system of agricultural credits. The
farmer will be greatly benefited by similar action in many States. The
Department of Agriculture is undergoing changes in organization in order
more completely to separate the research and regulatory divisions, that
each may be better administered. More emphasis is being placed on the
research program, not only by enlarging the appropriations for State
experiment stations but by providing funds for expanding the research work
of the department. It is in this direction that much future progress can be
expected.