From Flexible to Variable

In Chicago's ornate Civic Opera House one day last week, Secretary of Agriculture Ezra Taft Benson arose before 3,000 members of the American Farm Bureau Federation to talk about farm problems and policy. Just before he spoke, the "Deltones," a girls' trio from Delta County, Utah, sang "Santa Claus Is Comin' to Town." But Ezra Taft Benson made no effort to pose as a man with a snowy white beard and a bag full of gifts.

The farm situation, Benson bluntly admitted, certainly is not all Cadillacs and caviar. Since February 1951, the prices farmers get have dropped 64 points (from 313 to 249) on the Agriculture Department's index. Prices that farmers pay for goods they buy (including livestock feed) did not begin dropping until May 1952, and have dropped only 13 points. Most of the decline in farm prices occurred before the Eisenhower Administration took office, Benson said, but the farmer is still in the cost-price squeeze.

Five Loaves Apiece. To bolster farm income, the Department of Agriculture has been using and will continue to use "every tool at its command," the Secretary said. As a result of its efforts, the Federal Government now owns or has made loans on $5 billion worth of farm products; e.g., it is holding 425 million bushels of wheat--enough to make five loaves of bread for every human being in the world--and has made loans on 764 million bushels of corn. The Government's storage bill for all farm commodities is $465,000 a day. Asked Benson: "What are we going to do about it?"

Answering his own question, Benson said that the Administration will soon come forward with a new program designed to "root out the bad points and strengthen the weaknesses." He again avoided listing details of the program, but he left no doubt on two points: 1) he is against the present system of rigid price supports for basic farm crops at 90% of parity, because he thinks it encourages farmers to produce surpluses and sell them to the Government; 2) he is against price supports for livestock.

"You hog raisers know what happened to hogs last year," said Benson. "They were selling for 16-c- a pound a year ago --only 77% of parity. There was some agitation for hog supports then. But Secretary Brannan at that time didn't think supports were feasible . . . What did farmers do when they knew there would be no price supports . . .? You bred 12% fewer sows for spring farrow this year--5% fewer sows for fall farrow. And hog prices bounced back quickly. Some of you sold hogs here in Chicago this week for $24 . . . Doesn't this make a pretty good argument that supply and demand will solve a particular farm problem faster than Government possibly can?"

The Right Language. While Ezra Taft Benson has raised plenty of dust among some farmers with that kind of philosophy, he was talking the right language to the Farm Bureau, the largest (1,626,632 families) farm organization in the U.S. For six years the Farm Bureau's president, an Iowa hog farmer named Allan Kline, has been arguing for flexible price supports. Kline subscribes to the theory that farmers would gear their production to supply and demand rather than to Government bounty if support prices ranged from 75% of parity when a crop is in surplus to 90% of parity when it is scarce.

Caught in the price-cost squeeze, some Farm Bureau members turned against Kline. To appease the dissidents in Chicago, Kline & Co. employed a semantic device. In the resolution renewing the organization's stand, they used "variable" instead of "flexible," which has become a bad word in some farm circles. With that and with some other minor bows to the go-percenters, the convention passed the resolution and re-elected Kline. Farm Bureau leaders thought it was a notable show of unity. Said one: "It's hard enough for a corn man and a wheat man to get along, not to mention the difference of, say, a hog man and a cotton bug.''*

Benson's words and the Farm Bureau's action indicated that the Administration's new farm program will lean toward "variable" supports and the law of supply and demand.

*For more on the cotton man's attitude, see BUSINESS.

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