Agriculture Inl7')Trong Position for Long Pull

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Agriculture Inl7')Trong Position for Long Pull FEDERAL RESERVE BANK OF MINNEAPOLIS Serial Vol. 10 MAY 31, 1951 No. 17 Agriculture inL7)trong Position for Long Pull OUNG farmers today face a fu- 1 ture which appears from an World Demand for Food May Equal and Even over-all economic viewpoint to be de- Exceed Supply Over the Next Two Decades; cidedly favorable over a period of 20 years or longer. Costs a High Risk Factor in Farming Today I There will he temporary market surpluses and gluts in the period ahead, to be sure, but there is evi- By FRANKLIN L. PARSONS my opinion, very little chance to in- dence that chronic farm surpluses crease total volume of production as at ruinously low prices, lasting for he did during World War II. Then years in succession such as occurred These statements concerning agri- he increased it 35% or added 35 during the 1920s and 1930s, may be culture's long-run prospects are based units of gross volume of product. He I largely a matter of history. on an interpretation of certain sup- has maintained that volume. To again Evidence is also available which ply and demand factors which are ex- increase his production by 35%, he indicates the farmer's future eco- pected to be effective over the next must add 47 additional units. Or, nomic position may be much more 20 years or so. reversing the figures, we may say stable than it was in the inter-war that to add 35 units he will have to New Farm Land Cant period of the 1920s and 30s. Should increase production by about 25%. U. S. population continue to increase Match Population Growth "Either way you say it, I feel sure at present rates during the next two On the supply side, the agricul- you will agree that the probability of decades, the farm problem may well tural picture in the U. S. may shape any such increases on top of those be one of holding some farm prices up about as follows over the next added during the last 10 years is down to a reasonable level rather 10 to 20 years: very remote. Nevertheless, the need than the other way around. For ex- It may be more and more difficult is even greater, for there are more ample, the greatly expanded demand to expand total food production at of us here at home and our World for beef in recent years boosted cattle the same rate as in the past. Even commitments are greater." prices to around 150 percent of parity during the past six years, total food It is a fact that the supply of farm by mid-April 1951. production has remained at about the land is relatively fixed. There is little There is little doubt, however, same rate—approximately some 35% additional farm land that can be that future development in the agri- to 40% above the pre-war level. brought into profitable cultivation at cultural sciences will make it pos- The tremendous increase in food today's price level. The additional sible to maintain, if not improve, the production in the World War II land that may be farmed probably Present magnificent dietary standard period was due to a number of will not match the future trend in- which we enjoy in the U. S. Even factors, such as farm mechanization, population growth. Furthermore, so, it is possible that over the next use of hybrid seed, new insecticides reclamation and development of new 20-year period, food may comprise and weedicides, favorable weather, farm land may be about offset by the a somewhat larger share of the aver- and to a large carryover of sur- tragic loss of soil by erosion and poor aux person's budget than is true to- plus wheat and feed grains from land use. day. This would most likely be true the late 1930's. During the past 30 years, agri- horse It world political and military de- Mr, D. Howard Doane said in a culture has passed from a elopments are such as to stimulate recent speech before the Minneapolis economy to a tractor economy. Thirty huge expenditures year after year for years ago about one-fourth of the d Farm Forum, "There is no question efense. The economic effects from but what the farmer will do his part total harvested crop acres was uti- lized for horse and mule feed—this a seriously troubled world situation (to produce more) but there is, in hold out small promise of a rising being the fuel for farm power. To- standard of living in which food This special article is the text of an address day, farm power comes from below given at the Conference of Ninth District costs might be substantially reduced. Bankers. April 21, 1951. the ground. There are few horses and 174 NINTH FEDERAL RESERVE DISTRICT mules left. Some 65 million acres, or to be sure, but will these factors and These trends may become more and about 18% of total crop land, have the extent to which they are adopted more significant to American agricul- thus been released during the past 30 on a worldwide basis offset the great ture in the immediate years ahead. years to produce food and fiber for surge in population growth in the These trends may also be important human consumption. U. S. and the world at large? to the existence of the U. S. as a This "cushion" or "slack" in har- The scientific outlook for agricul- free nation. vested acres for human use has now ture is one answer and it is encour- The world population is increasing been used. In the future, there is aging. As one writer puts it, "One at the fastest rate in history—an ex- bound to be a gradual decline in the finds hope in the fact that science plosive 20 million per year. There are number of crop acres per capita in knows so much, and even greater 21/2 billion people in the world to- the United States. hope in the fact that science knows day. This is double the number of so little." 100 years ago. At present rates of Unfavorable Weather Cycle increase, the number will be 3%2 bil- Could Cut Food Supply Trend Is Toward Fewer lion in another 50 years. We have been through a 10-year Crop Acres Per Person The thin fine between population period, more or less, of favorable The second factor in the long-run growth and food supply is said to `. • weather. Can this favorable weather agricultural outlook equation is de- become more precarious year by year. cycle be expected to continue during mand. Will long-run demand for This is so partly because of tre- the next 10- or 20-year period? Prob- farm products over-shadow potential mendous advancement in holding in ably not, unless we can learn how to food supply? It may for the follow- check two great allies of the grim make it rain where and when we ing reasons: reaper—disease and pestilence. Peo- want it. The market for farm products is ple live longer. Fewer babies die— Likewise, can we expect agricul- people, and the people of the U. S. and more people reach reproductive tural technology to continue with its have doubled in number during the ages. Public health, sanitation, and dizzy pace of accomplishments? past 50 years. Population has in- the new miracle drugs have had the There is a ray of hope here. There creased more than 20 million during effect of saddling the world with a is hope, too, in the fact that modern the past 10 years. Twenty years from pressing new problem of food sup- farming methods make it possible to now, our population may be up ply. produce food even though weather another 25 to 30 million—to 175 or In India, population increased more conditions may be relatively unfavor- 180 million persons, maybe more. than 50 million in the past 10 years, able at some seasons. With land supply constant and a about j./3 the total population of the In the past, the U. S. imported vigorously growing population, a U. S. India wants two million tons certain farm products that were in seriously depressed agriculture in the of American grain to prevent the short domestic supply. Until quite next 20 years does not seem probable, current starvation of several million recently the U. S. was a regular net at least not a depressed situation any- people. If this is granted, and it importer of cheese from Europe, flax- where near comparable to the two should be on humanitarian grounds seed from Argentina, and beef cattle decades of the 1920's and 1930's. alone, India will soon need even from Mexico. In periods of drouth or There may be serious surplus prob- more food to match new levels in emergency such as in the mid-1930's, lems with some farm commodities population growth. such products as wheat, corn, and such as wheat and cotton, or now In China, there are approximately other feed grains were imported, and then some other crop. But even 475 million people. In another 50 mostly from Canada. in the case of wheat or cotton, some years there could be 950 million In the future such supplies may other crops such as grasses, feed Chinese. In Japan, there are SO mil- be more difficult to secure because grains, or vegetable oil crops may be lion people without a decent food of the pressure of demand from world grown in place of these surplus standard.
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