C§Jlletin3~ Esm 45

C§JLLETIN3~ ESM 45 COOPERATIVE EXTENSION SERVICE I THE OHIO STATE UNIVERSITY Even though farm numbers continue to decline rapidly, increasing production from the remaining farms more than adequately supplies the food and fiber needs of our in creasing population. Since farm incomes are lower than the incomes of non-farm workers, cooperative and legislative attempts have been made to improve the farmer's economic position and increase SUMMARY society's standard of living. Farm income from all sources on a per person basis now is about 80 percent that of non-farm people--an improvement over the 50 percent level of 1959. Legislators have provided various programs--price supports (either directly or through surplus purchases and storage), agricultural credit, production controls on acreage and marketings, the s01l bank, and more recently the voluntary partial land retirement programs (feed grains, cotton, wheat)--to impro\e low farm incomes. Wars, depression, diseases, droughts and changes in the Ame rica11 diet ha\e all contributed to a shifting of emphasis concerning farm needs and legislatiYe action. Changes in the future will continue to spur new programs aimed at improving conditions for agriculture and its contribution to our total welfare. CONTENTS Farm Problems. • . 3 Obfective s •........... , ...............•......................... , ..... , . • • 4 Early Agricultural Policy.............. • . • . 4 Education and Research. • . • . 5 Farm Organization and the Cooperative Movement.............. • . • . • . • 5 Credit Smted to Farmers' Needs..................... • . • . 6 Two Price Bills Vetoed................................ • . • . • • 6 The Federal Farm Board.................................................... 6 Agricultural Adjustment Act of 1933 ................................. ~.......... 7 Agricultural Act of 1936.......................................................... 7 Agricultural Marketing Agreement Act.. • • . • . • 7 Agricultural Act of 1938.................................. 7 Steagall Amendment......................................................... 8 Agricultural Act of 1948. • . • . • . • . 8 Agricultural Act of 1949...... • . • . • . • . • . • . • . • • . • . • . • . 9 Agricultural Act of 1954. • . • • . • • • . • . • . • . • . • . • . • . • 10 Agricultural Act of 1956.. • . • . • . • . • . 10 Agricultural Act of 1958 ..•..................•.....•..................•.•.... 11 Feed, Grain Program. • . • . • . • . • • . • . • . • . • . • . • . • . 11 Wheat Stabilization Program•......•.........•.•..•.••.........•...•.•.....•• 12 The 1962 Agricultural Act. • • • • • . • . • . • . • . • . • . • . 12 Food and Agriculture Act of 1965 ..........••.....................•....•..••.. 13 Tobacco Legislation. • . • . • . • . • . • . 13 Agricultural Act of 1970 •.................................................•.. 14 Future Programs •.......•.......•.........•......•.............•....•...... 15 Revised 6/71··4M Issued in furtherance of Cooperative Extension work, Acts of May 8 and June 30, 1914, in cooperation with the U. S. Department of Agriculture. Roy M. Kottman, Director of the Cooperative Extension Service, The Ohio State University. legi1/afive Attempts fo Solve e 1•Fatm Income ob/em" by Wai lace Barr* Farm population, as a per cent of total United States population, has de clined rapidly during the past 100 years. Now, only about 5 per cent of our people are farmers. An important reason for migration from farms is that the average econo mic well-being of farmers has been lower than the average well-being of non farmers. This is true even though the farmer's return is not only from labor but as a manager and financier as well. It is recognized that some farmers do relatively well. Should average farm incomes be as high as non-farm incomes? One an swer is that keeping average agricultural incomes as high as those in the non agricultural sector would lower society's overall standard of living. Fewer farm people would seek non-agricultural employment which produces things for improving our living standards. This often is not a satisfactory answer, however, to those farmers who have had to make major adjustments as a re sult of income disparity. farm Problems Many farmers, non-farmers and congressmen have been concerned be cause average agricultural incomes are not on a "par" with those of other important groups in our society. They feel society should help raise aver age agricultural incomes. They point out that many other businesses are helped with both hidden and obvious subsidies. Over the years, a second major obstacle for farmers has been fluctuating farm prices. Demand for farm products is relatively "sticky" or inelastic- that is, the quantity demanded changes only slightly when farm prices rise or drop. Thus, small changes in supply are oft.en associated with great chan ges in price. For all agricultural commodities, prices change 4 to 5 per cent with a 1 per cent change in supply. Consumers will not buy many more farm commodities when prices are low than when prices are high. Relatively low incomes, plus fluctuating prices for the average producer, have been important reasons for creation of many of our farm programs over the last several decades. Farm programs are debated in almost every ses sion of Congress. *Extension Economist, Public Affairs and Outlook. This is a revision and updating of an earlier bulletin published in 1964 under the joint authorship of Riley Dougan and Wallace Barr. 3 Another expressed concern of many people is assuring an adequate sup ply of food. The total food supply must increase to provide for our popula tion growth of about 1. 2 per cent per year. Continued development of better ways to produce farm goods helps meet this need as well as to fulfill export needs, Some farmers cannot or do not quickly change their farming opera tion to take advantage of new developments. Their slower adjustment re sults in lower net income for them. Objectives Three basic objectives of farm programs have been: (1) to raise average farm incomes and stabilize farm prices, (2) to provide freedom in farm op eration, and (3) to increase agricultural efficiency for the benefit of all so ciety, These objectives conflict, even in the same legislation. Jn the past we have frequently failed to define clearly which objectives our programs were expected to achieve. Frequently we, the public, uphold or condemn a certain program without consciously considering its objectives. None of us has only a single objective, excluding all others. We emphasize some more than others, and that emphasis changes from time to time, Throughout the last century our legislators have made frequent attempts to promote one or more objectives for improving the lot of farm people. Their task is a continuing one because of constantly changing conditions. Each succeeding Congress studies and seeks to satisfy the demand for farm aid or conditions influencing the competitive position of agriculture. Farmers have used science, technology and management effectively, in creasing production efficiency by the year and by the decade. National farm programs usually attempt to combine "adjustments" and "efficiency" objec tives--to balance output with needs; to provide "freedom"; to assure equit able producer returns with reasonable consumer prices; and to meet nation al and international food and fiber committments. Production that saturates markets loses the advantages gained by well run operations and suffers the disadvantages of market gluts. Without in centives to assure ample supplies, though, efficient operations can be hin dered by under production, with resultant losses in both domestic and for eign markets and slackened contribution to the general economy and stan dard of living. Early Agricultural Policy Almost from the beginning of our nation, a major question was how to provide for orderly settlement of new areas. From initial plans for sale of public domain lands in large blocks, policy gradually moved toward encour aging settlement by lowering the minimum acreage that could be purchased and providing for more lenient terms of payment by settlers. These poli cies culminated in the Homestead Act of 1862, which granted title to 160 acres to settlers who lived on the land for 5 years. After 6 months of re sidency, homesteaders could get title by paying up to $2. 50 an acre. The authorities did very little planning to determine which land should be home- 4 steaded and which should not, Some lands not economically suited for agri cultural production were settled. Since farming was the predominant way of life in early settlements, legis lation was "flavored" with the farm viewpoint. Tariff regulations, for ex ample, were influenced by the farm point of view, since the farmer was the major constituent of legislators. Diminishing farm population and reappor tionment has changed this situation. Education and Research About the time of the homestead legislation, Congress passed and Presi dent Lincoln signed the law creating the land-grant college system to provide education and research for citizens engaged in agriculture and mechanical arts. Agricultural research received a boost in 1887 when the first federal grants-in-aid came to state experiment stations. In 1914, educational op portunities were expanded for rural people through establishment of the Fed eral Extension Service, In 1917 the Smith-Hughes Act provided for teaching vocational agriculture and home economics in high schools. Legislation

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