U.S. Farm Surplus Keeps On Growing

Press, Volume XCVIII, Issue 28894, 14 May 1959, Page 12

U.S. Farm Surplus Keeps On Growing

[Specially written for N.Z.P.A. by

FRANK OLIVER]

WASHINGTON, May 13. In the ice age, America was covered by the ice cap. If things go on as they are, she may one day be covered by a wheat cap. The surplus food problem is again acute. Everyone is shouting about it. Not much is being done about it. Some say that the little that is being done about it is wrong and will only increase the fantastic surplus. The nation’s total farm product is growing rapidly. Greater surpluses of maize, wheat and cotton are building up and livestock production is rising. Last December official figures said Government investment in these surpluses would reach 8900 million dollars by the end of this June.

That figure has already been passed and officials now admit the total may well be 10,500 million dollars. Worse in Store

Bad as that looks, worse is in store—unless Congress does something drastic before it adjourns. Farmers this year are to plant eight and a half million more acres than were planted in, 1958. the year that produced the greatest harvest on record—ll per cent, higher than in any previous year.

Officially, the Agriculture Department doubts that the 1959 crop will be as big as 1958, but privately officials of the department are saying that greater acreage, plus a good growing season, plus the ingenuity of the American farmer, plus the advantages of the technological revolution in agriculture, may well add up to a harvest the like of which has not yet been seen. Last year, the maize crop was 3,800,000 million bushels. This year it is expected to be 200 million bushels more. Wheat planting is up by nearly 9 per cent., barley up by 5 per cent, and rice up by 11 per cent. Oats and soya beans will be down a little. The number of livestock is up. and egg, chicken and turkey production is up. Dairy production holds steady and ho great increase is expected this year. The only real drop is in horses and mules, that population having been cut in half in the last six years but. as one newspaper puts it, who uses horses and mules any more? Two Years’ Wheat Supply

The “Washington Post’’ says bluntly that Congress ought not to delay any longer its attack on the country’s mountainous surplus of wheat. It wonders if i legislators dare go home this summer until they have done something to relieve the glut, which now amounts to a twoyear supply of wheat. One sub-committee of the House of Representatives has voted to cut the wheat acreage by 20 per cent, and increase price supports from 75 to 85 per cent. Opponents of this plan point out that this is a sure yay to increase the surplus, not decrease it. Experience shows that when farmers are by law compelled to reduce their acreage of a crop like wheat they simply “pour on” the fertiliser and produce more from a smaller acreage. Big Loophole The sub-committee’s recommendation also points up another enormous loophole in the agricultural system which amounts for a big share of recent surpluses. As the law stands, any farmer, no matter how small, can grow 15 acres of wheat without regulation and without penalty. Price supports being high, this has encouraged countless farmers who never used to grow wheat to nut in th(?ir 15 acres. This naturally greatly expands the total crop. The sub-committee would deal with this problem by reducing the uncontrolled acreage to 12 on any one farm, but at the same time it is increasing the incentive to plant wheat by boosting the support price from 75 to 85 per cent. Critics of the plan point out that the only forseeable result of this scheme is more and more wheat, which no-one wants, but which the Government must buy. The “Washington Post” argues for a lowering of the support price and an easing of acreage restrictions. That would minimise the incentive for everyone with a few acres to plant his 15 free acres. The newspaper further urges Congress to move towards freer market prices that would permit some wheat to be used for animal

feed and hasten the reduction of the surplus. It sees nothing but disaster in the “regressive squeezing of quotas and artificial lifting of prices to a point where utilisation of the surplus becomes virtually impossible.” Crisis Expected

To the ordinary observer some sort of crisis seems bound to build up. The consumer is paying the highest prices ever for food and in addition supplying the tax money with which the Government buys up all that the farmers grow, but cannot sell.

Consumers are beginning to ask why top grade steak is the equivalent of 10s per lb and butter 5s per lb. Even the farmer appears to be getting tired of Government controls and schemes for reducing surpluses that only result in greater surpluses. Recently the “Farm Journal” conducted a poll which showed that 78 per cent, of farmers are in favour of lower price supports and fewer Government controls. Only 7 per cent, of those polled wanted higher price supports. But the most interesting result was that 55 per cent, of farmers urged that the Government get out of agriculture entirely. This result seems to have surprised everybody and apparently has the warm approval of the consumer, who has provided the 10 billion dollars the Government has invested in surplus food and fibres, an investment that can never pay a dividend or even allow the Government to come out even.

The 55 per cent, startled some Congressmen and there is a possibility, some observers think, that if consumers keep up pressure on Congressmen, something fairly drastic may be done in this session to halt the increase of surpluses at least and to reduce them if possible.