Food as an Implement of War
THE RESPONSIBILITIES OF FARMERS
By JOSEPH S. DAVIS, Director, Food Research Institute, Stanford University, Cal.
Delivered before the annual meeting of the California Farm Bureau Federation, Santa Cruz, Cal, November 17 1943
Vital Speeches of the Day, Vol. X, pp. 235-240.
MY Davis forebears were farmers through many generations, long in Pennsylvania, and earlier in Wales. I still feel at home among farmers, but I can't pose as one of you in any sense of the word. For 22 years, however, I have spent a lot of time studying farmers' problems and farm policies. Now I am greatly troubled about some phases of the farming situation and outlook. Although I am terribly busy, I couldn't refuse when your president asked me to be on your program. I crave a heart-to-heart talk with you folks of the Farm Bureau. I represent no one but myself, but I am trying to see things as straight as history will. I write and speak with great frankness. I know you will not like all that I have to say, but I hope you will hear me through.
"Food as an Implement of War": I shan't spend much time on the usual ideas about this timely topic. They have been hammered home by the President, the Secretary of Agriculture, the War Food Administrators, your leaders, and your own selves. As I briefly remind you of them, let me merely throw in a few qualifications of my own.
An army still "marches on its belly," as I believe Napoleon said. Enough food, of the right kinds, at the right tune, is just as absolutely essential to the fighting efficiency of modern armies, navies, and air forces as oil, gasoline, trucks, tanks, planes, ships, guns, ammunition, shoes, other clothing, medical supplies and services are. Mind you, I say "just as absolutely essential." What the armed services require is a well-coordinated supply of a great many things, food included.
You are too honest and sensible to swallow the "pap" that come try to feed you. Food is vital, but by no means is all foods necessary. Some are almost pure luxuries; luxury elements are present in many; and even of the most essential foods, consumption above some level is luxurious consumption. In general, food deserves priorities, but by no means top priority. Farming is a fundamental industry, not the fundamental industry. Farmers are essential, in peace and in war, but of course they are not the only essential people. A nation at war must get teamwork, the best possible. Every class, group, and individual has a vital part to play, and needs to feel conscious of its part; but nobody, no group or class, can fairly claim to be the most essential. Why should we?
Besides the armed services, civilian workers who are producing our fighting equipment and our ships, and those who man the no less essential industries and services farther behind the front, of course must be well nourished if they are to produce the utmost possible. Their families also need to be properly fed if fighters and war workers are to be "physically strong, mentally awake, and morally straight." Among other things, this means food, enough and of the right kinds, continually available and effectively used. Under the strains of war, we need to be better nourished than many actually were in the quieter days of peace. But this doesn't mean that we must now get an abundance of all the kinds of food that we prefer and could pay for: that is simply out of the question in wartime. In food as in other lines, we must strive to cover our needs but cannot hope to satisfy all our wants. And overeating in various forms, and wastes of all other kinds, are more objectionable than in peace.
A highly misleading slogan was current a while ago: "The United States will feed the world." Obviously we couldn't and we can't, and our spokesmen shouldn't have loosely talked as if we were going to try to do this. They no longer talk that way. But we must, I believe you are fully agreed, do all that the United States reasonably can, in conjunction with other food-exporting United Nations, first toward meeting the food deficits of the British and the Russians, and eventually those of the Chinese as well, on the basis of need. These peoples have home the great burden of the war to date. It is our war as well as theirs. Every gain that we can help them make will shorten the common struggle and hold down our own further sacrifices. All-out aid now will also strengthen our influence in making a good peace. There is terrible needin Soviet Union territories recently reconquered by the amazing Red Armies. A bitter famine is raging in India. Hundreds of thousands died in another in China last year.
But all the food that we can possibly supply our allies will not win the war. We cannot just "let George do it," or Tommy, or Ivan. We cannot safely soothe ourselves with the new slogan: "Food fights for freedom." Freedom will be won by men and women, fighting with all their resources, fighting in which our own take vigorous parts, fighting in which the fighters get all the backing that the home front can provide. These are winning the war for us. Food is one highly important part of it, but only a part. You also know, I am sure, that food for civilians must follow the advancing forces on the continent of Europe, as it has in North Africa, in Sicily, in southern Italy: food to check and prevent starvation, to correct undernutrition or semi-starvation (which is far more prevalent), to eliminate serious deficiency diseases, to provide the basis for civil order, restored morale, assistance to our own armed forces, and economic and political rehabilitation. Even the assurance that food will be so provided, and so used, softens resistance and wins support before and after actual invasion. This food can serve as a "lever for victory"—a phrase that I strongly prefer to the phrase "implement of war." Then, when victory is won in Europe, food will need to be shipped in and distributed on a large scale, to those who have been our enemies as well as to our ruthlessly oppressed friends, in order to help clinch the victory and help start the peace. We already want to do our part here too, and later in the Far East—not with impractical open-handedness but also without selfish stinginess. I do not doubt it. Does any of you? But our determination needs to be sharpened, and carried into effect. There is not too much time to prepare, and our preparations are thus far inadequate.
We can exaggerate the quantity of American food that will be required for these purposes and the supplies that we must | produce and share, and so be needlessly appalled by an inflated prospect. This is too common a mistake in Washington today. We are too prone to talk too big. The job is big, but manageable. Properly sized up, with resources effectively utilized, it can be done. But how best to do it is not yet settled, and we can too easily underrate the brains, tact, planning, and organization that the tasks demand.
Men and women, not food alone or primarily, "will win the war and write the peace." Secretary Wickard's slogan was a neat phrase with elements of truth in it. But it was as extreme an exaggeration as Winston Churchill's famous request, while we were still on the sidelines: "Give us the tools [he said] and we will finish the job." They didn't. They couldn't. We were needed as well as the tools. It wasn't a British job. It was and is a United Nations job, as we eventually were shocked into recognizing. Much is to be hoped from the United Nations Relief and Rehabilitation Administration, whose new council is now in session in Atlantic City.
The food job will not be finished when the first stages of relief and rehabilitation are past. Already serious minds are struggling with the problems of making reality out of that superambitious slogan, "freedom from want" all over the world. The United Nations Conference on Food and Agriculture has been followed by an Interim Commission which is now sitting in Washington. Food is not only an implement of war and a lever for victory. It can also become a powerful engine for durable peace. All this concerns you very much. Today, however, I have no time to go into it.
Fanners—men and women like you all over this country and other countries—have a clear-cut job: to do their full share in producing all the food that is essential to the combined job of winning the war and buttressing the peace. I take my hat off to them as producers. In this work you and the others have been doing magnificently, using your brains as well as your brawn, drawing on reserves of patience and good humor as well as of energy, making the best of shortages of machinery, parts, hired labor, and often other essentials, coping with harassing, difficulties of red tape, of conflicting advice and orders, and of prices.
You haven't been alone in all this. Almost everybody I know is working harder, playing less, sharing more, and enduring more irritations than usual. That's war! "C'est la guerre," as we used to say 25 years ago. We gripe and growl about our troubles, but this is just one of our habitual pleasures—whether we are farmers or college boys or soldiers or economists. Compared with most other peoples involved in this war, our difficulties and sacrifices have been and are extremely small. Considering everything, and partly thanks to a run of good years weatherwise, we are really doing amazingly well, foodwise and otherwise.
Or are we? Individually, most of us may be doing the best we know, but collectively we are certainly not doing nearly well enough. If not, why not? Our wartime food management is away below par. The President, in his recent food message, glossed over defects that are distressingly serious. It is a grave exaggeration to say that it is all in chaos, but there is a lot that is wrong and needs to be set right. We are not achieving anything like the success of which we are capable, in making food the most efficient implement of war and lever for victory. Indeed, there are grounds for fear that we shall needlessly let down peoples who have been led to count on us for food within the year ahead.
In a recent pamphlet I have tried to set forth fairly the strengths and weaknesses of our wartime food management, to trace both to their sources, and to suggest essential improvements. Correspondence with a good many who are well posted on different phases of the subject convinces me that most of what I wrote in midsummer is still timely, true, and important. If any of you cares to get a copy to read, let me know and I'll send you one. (Please don't be prejudiced by the fact that it was written for and published by the Los Angeles Chamber of Commerce. Confused by the food problem, they asked me: "Give us the facts as you see them and spare no feelings.") But it was not written for farmers in particular. Today I want to go somewhat more fully into several points of special concern to American farmers, and especially to those who are members of farm organizations.
American farmers are important not only as individual producers, but also as organized groups and as a political force. They have great collective power. With power goes responsibility. You see this clearly when you look at union labor, at combinations of capital, at railroads, banks, manufacturing concerns, mail-order houses, or chain-store groups, and at local or regional public utility companies. Organized farmers, with large political influence, cannot afford to ignore their grave responsibilities in connection with preventing inflation, maintaining industrial peace, and perfecting wartime food management beyond the production stage. These responsibilities are being evaded. They should be dodged no longer.
For 20 years improvement in the farmers' financial condition was the subject of profound concern to fanners and to the nation. Especially in the past 14 years, "action programs" of several kinds have been applied on their behalf, with much public sympathy and support. Now, in the midst of war, conditions have radically changed, but our agricultural policy has not been appropriately altered. Old and new elements of agricultural policy are in conflict with sound food policy.
More than you realize, I am sure, this conflict has gone far to defeat good food management, and it is now preventing the most effective use of food either as an implement of war or as a lever for victory. This month's campaign slogan is: "Produce and conserve, share and play square." It is time seriously to raise the question: Are farmers, as a collective body, a political force, playing square with the American people? This is a crucial question, at the heart of the topic given me.
The country has been led to think of the farmers as underprivileged. This notion was never too well founded, and is today out of date. Farmers generally suffered acute financial hardship in the early 1920's and worse still in the early 1930's; and, of course, some continue in poor circumstances when the general average is good or better. But especially in the 1930's, farmers were accorded various special privileges, including government guarantees and subsidies of several kinds. These have not been withdrawn as farm income has risen to unprecedented heights, but even increased. Farmers are now enjoying additional privileges as well as exceptional incomes. Let me mention just a few.
Farm people grow and preserve a considerable part of the food they eat. Because of this, they are free from many food restrictions that are keenly felt by other groups. Yet they get the same ration coupons as others who must depend far more heavily, if not entirely, on purchased foods. This is obviously not fair, but no administratively feasible way of correcting it has been found. By and large, farmers have stayed on their home places, and not been uprooted like so many others, to face strange and difficult living conditions. They and their sons and hired workers are given special exemptions under the Selective Service Act. Congress has passed legislation promising government price support for various farm products, "not only during the war, but for two years afterward." This is not, as the President recently called it, "a guarantee against postwar disaster," but it is a privilege accorded to no other group.
My own view is that such privileges are on the whole excessive. I believe that organized agriculture has already overplayed its excellent hand, and that it is now risking a disastrous revulsion of public sentiment. Even if this does not come, increasing wartime prosperity almost certainly insures postwar collapse in prices and income, and in the boom in land values that is proceeding almost precisely as it did in World War I. But you should not be influenced only by fears of bad consequences. I rely heavily on your sense of fairness and your patriotism, if you squarely face the situation and can see through the fog and smoke screens of confusing "facts" and arguments.
Let me quote a few sentences from President O'Neal's opening address to the 1942 convention of the American Farm Bureau Federation:
Labor also must clean its own house if it is to continue to enjoy its present privileges. . . . It is preposterous for labor union leaders to expect that the American people will continue to grant the very great privileges that union labor now has under the law, unless the unions will agree to accept social responsibilities commensurate with the privileges. . . . There is no more justification for "featherbed" rules in labor than there is for an industry to have excessive tariff protection. There is no more justification for high monopoly wages than there is for high monopoly prices.
I heartily agree. But let me read it again, with only a few words changed:
Agriculture also must clean its own house if it is to continue to enjoy its present privileges. It is preposterous for agricultural leaders to expect that the American people will continue to grant the great privileges that agriculture now has under the law, unless the farmers will agree to accept social responsibilities commensurate with the privileges. There is no more justification for "featherbed" loan rates, farmer subsidies, and high tariffs on wheat sorely needed for feed than there is for "featherbed" rules in labor or for an industry to have excessive tariff protection. There is no more justification for current high levels of farm prices than there is for high monopoly wages or for high monopoly prices.
This revised version of mine deserves, I am sure, equally emphatic endorsement. Can you expect the American people much longer to endure what amounts to competitive gouging by labor and agriculture?
Oh wad some power the gif tie gie us
To see oursels as others see us!
It wad frae monie a blunder free us,
An' foolish notion.
A valued Kansas correspondent writes me: ". . . the rank and file of our farmers want only a fair deal and are not seeking any advantage whatsoever. They are not made up that way." Your own resolutions last year included similar statement, e.g.:
Farmers do not seek abnormal profits. All that they ask is that the prices of urgently needed farm products be permitted at a level which will cover the costs necessary for maximum production, and thereby enable farmers to contribute their full effort toward victory—and a lasting peace.
I have long been disposed to believe such statements. I still want to. But how can I, now, when they are absolutely contradicted by wartime experience ? All sorts of evidence show that American farmers are making big money out of the war. I do not mean, of course, each and every farmer. Some are not; nor are all laborers getting shipyard wages. Data are not available to show, for any given period, the precise proportions of those whose net incomes have risen greatly, moderately, or not at all. But I do mean that farmers in the aggregate are making big money out of wartime farming, and that marked improvement in the level of farm income is general, not exceptional.
Farmers resent the term "war profiteers," but it fits. They are not alone, of course, but they are outstanding. I don't believe farmers realize the facts of the case. I still hate to think they want or mean to profiteer, but I am greatly disturbed because they are making no moves to stop it. Good intentions—well, you know the proverb—are not enough.
Unless you at the "grass roots" do something about this, your leaders will probably keep on fighting to raise your prices and income further, regardless. At the National Farm Institute in Des Moines last year, a woman member of the Iowa Farm Bureau Federation coolly asked: "Do we want to have as a national policy the objective that everyone should be well fed? We have never had this as an objective; we have been interested in seeing that the producer is well paid. Mr. O'Neal said in another group there: "Our job is to see that the farmer is as well protected as possible during this period and afterward." Are these your primary objectives? If so, no matter how hard you work and how much you produce, you will be doing less than your share to make food an effective implement of war and a powerful lever for victory.
Let me cite a few figures. I'll pass over those on cash income or gross income, for of course farmers' expenses have gone up too. But farmers' net income has risen strikingly
and is still going up. You know it. Everybody knows it. But the extent is not generally realized. The best estimates are not perfect, but the Department of Agriculture is pretty good at this job, through thick as well as thin. The latest official figures, always subject to revision, will probably not be radically changed except possibly (perhaps upward) for 1943.
First, however, I must explain two concepts—income parity and net income to Persons on farms from farming.
To quote the Agricultural Adjustment Act, 1938:
"Parity," as applied to income, shall be that per capita net income of individuals on farms from farming operations that bears to the per capita net income of individuals not on farms the same relation as prevailed during the period from August 1909 to July 1914.
So defined, income parity was reached on the average in 1935-39.
Net income to persons on farms from farming includes net income of farm operators from current farming operations, adjusted for farm inventory changes, and farm wages to laborers on farms, inclusive of cash wages and the value of food, fuel, and lodging furnished the laborer and his family. Net income of farm operators from current farming operations is the gross farm income less expenses of agricultural production. The gross income includes receipts from sales of farm products, the value of products of the farm consumed by persons thereon, imputed rental values of farm homes, and (since 1933) government payments to farmers. Expenses include cash wages and perquisites to hired labor, the cost of other services annually used in production, net rent to non-farm landlords, farm mortgage interest, and estimated depreciation or maintenance of durable implements, equipment, and buildings used in production and of farm dwellings besides.
So defined, net income from agriculture received by all persons on farms (including hired labor) averaged $5.3 billion in 1935-39, a billion more than in 1910-14, when the farm population averaged about 4 per cent larger. In 1941, when farm income from farming figured out 8 per cent above income parity, net income from agriculture to persons on farms was $7.5 billion. This was 41 per cent higher than the 1935-39 average, and the highest since 1917-20. In 1942 the corresponding estimate of net income was $11.3 billion, 15 per cent above the all-time peak of 1919 ($9.9 billion). In 1943 the corresponding figure will certainly be over $14 billion, though the farm population is the smallest in several decades. (The latest official estimates, as of January 1, show 27.8 million in 1943 as compared with 32.3 million in 1913, a decline of 14 per cent.) Per person on farms, the 1943 net income from agriculture received by persons on farms is estimated nearly three times what it averaged in 1935-39, when, I repeat, income parity as officially defined was reached.
Realized net income of farm operators from farming (not gross or cash, mind you, but net) is estimated at $3.6 billion in 1910-14, $4.7 billion on the average in 1935-39, $6.3 billion in 1941, $9.5 billion in 1942, and $12.5 billion in 1943. The 1943 figure is double the total in the prosperous year 1941 and 36 per cent larger than in the peak year 1919 ($9.2 billion). Farm organizations have protested overtime pay to industrial workers, but many farmers themselves are, in effect, getting extremely high rates for the overtime they put in.
For all recent years, subsidies to farmers are included in the figures I have cited. One might suppose that these would have dropped as cash income from marketings increased so remarkably. Actually, they are higher than in any year prior to 1939. Disregarding indirect subsidies of several kinds—in the aggregate of large current importance—checks for benefit, conservation, and parity payments alone averaged $503 million in 1935-39, rose to a peak of $807 million in 1939, and totaled about $700 million in 1942. In the first nine months of 1943 the total was $553 million, as compared with $511 million in the same months of 1942. Many farmers, moreover, are now cashing in afresh on productivity gains achieved through soil-conservation practices for which they had previously received government checks.
The President put it mildly when he said in his recent food message:
In plain language, the farmer this year is not only better off in relation to others in the population than he was before the war broke out; he is better off than he was in the base period 1910 to 1914, and better off than he has been in any year since that time.
The President appeasingly added: "This is just and desirable." With this I flatly disagree. Marked improvement as compared with the early 1930's was just and desirable. Some increase over the 1935-39 average was reasonable in view of the increased work farmers have been and are doing. But the actual increase in net income during the past three years has gone too far to be either just or desirable. If banks, railways, public utilities, industrial corporations, or organized labor were to claim that such treatment of them was just and desirable, farmers would howl to high heaven in protest.
Through the 1920's and 1930's the farmers strenuously demanded "fair exchange value" for what they produced and a "fair share of the national income." Parity became the watchword, parity prices and parity income the goals. In 1933 and later, these were written into federal laws, as overall objectives of action programs. Specific formulas were legislated. Acceptance of the "parity principle" was regarded by farmers as an epoch-making political achievement.
The parity formulas were biased in favor of the farmer. For the base period for parity price and parity income, the five years just preceding World War I were chosen, not merely on grounds of statistical convenience. In that period, price relationships were on the whole more favorable to farmers than in any earlier 5-year period. (Comparable data on farm prices of farm products are not available much before August 1909, but indexes of wholesale prices are.) So far as one can judge, per capita incomes of farmers were then higher, compared with other groups, than in any corresponding period before, or since until recently. In other words, the so-called farm parity goals were set at the best 5-year average in history, as if anything less than this best was unfair to fanners.
This wasn't enough. For some products, including tobacco and potatoes, another base period more favorable to farmers (1919-29) was substituted, and the base period for burley and flue-cured tobacco was again changed, in 1940, for the same reason, to 1934-39. The older base period has been retained for wheat and corn despite important subsequent reductions in production costs due to mechanization and the use of hybrid corn. Moreover, the parity-price formula itself was changed to include interest and taxes as well as prices farmers pay, when this change raised the computed parity prices. When agricultural wages went up, efforts to change the formula again to raise parity prices further were barely checkmated, for the time, by the President's opposition. Parity income, furthermore, was defined so as to exclude from farmers' income, and to include in income of non-farmers, all the income received by people on farms from sources
her than farming. According to recent estimates, such come averaged in 1935-39 $2.1 billion as compared with $5.3 billion from farming operations.
If labor or industry, or General Motors or the United Mine Workers, were to compute parity for itself in like fashion, you would probably be flabbergasted by the results. Would you approve the methods? Have you been aware that they were employed in your behalf ?
When the parity principle was fought for and accepted, it was the common interpretation that farmers sought to have the level of farm prices and the level of farm income raised to the parity levels—on the average, over a period of years, not for every farm product in every year; and that such average levels should be if possible maintained, but not materially exceeded. Earl C. Smith, vice-president of the American Farm Bureau Federation, testifying before the House Committee on Agriculture in May 1937, expressed the conviction that the provisions of the draft bill under consideration (a forerunner of the Agricultural Adjustment Act, 1938) "would keep the price level effectively confined . . . between 10 per cent below the parity and 10 per cent above parity." In short, the avowed aim was to raise the "parity price ratio" and the "income parity ratio" to around 100 per cent. Considering the formulas employed, this seemed to me the uppermost limit of what could be called fair, on the reasoning of farmer' advocates themselves.
In these senses, parity as officially defined was reached in the course of 1941. Did farmers say: "This is what we've been fighting for. We've reached it. Now let's just keep it"? When parity goals that had been urged on the basis of fairness to agriculture were reached, did farmers frankly acknowledge that over-attainment of these goals would be unfair to the rest of the nation? Secretary Wickard so argued, in an address on August 12, 1941, "Let's Keep Parity." But his position won no effective farmer support.
Since then the index of prices farmers receive has been pretty consistently at or above the index of prices farmers pay plus interest and taxes. Recently the parity price ratio has Seen running at the abnormally high figures of 116-117 per cent, much as it did at the height of the farm prosperity spree in World War I. It would be much higher except for the fact that rising farm prices have been heavily responsible for the rise in the index of prices farmers pay. Income parity was exceeded in 1941 by 8 per cent, in 1942 by 38 per cent. The latest estimates are that income parity this year will be exceeded by 50 per cent.
"We want parity but we don't want to be hogs," said President O'Neal at Des Moines last year. But I gather that he meant, and still means, at least parity prices on every farm product every year—regardless of how much above parity farm prices average or how high the farm price of any product goes. This is a rank distortion of the original parity goal, indefensible by any standard of fairness that I know. There has never been any justification for this objective, and I wish I could take time to explain its extreme unreasonableness under wartime conditions.
If Mr. O'Neal has publicly faced the evidence about above-parity farm income, I have run across no indication of it. How many of you, I wonder, even knew it a month ago—or a minute ago? I do not want to conclude that farmers have become, by their own choice and volition, what Mr. O'Neal protests they don't want to be. But when farm income from agriculture to persons on farms is running 38-50 per cent above official income parity, should not farmers begin to shout: "Stop! We have enough!"?
Instead I hear some new arguments. Suppose the railroads had recently argued: "We have had many lean years. Our Services are in great demand. Let us raise rates enough to recoup all our losses of the past 20 years and lay up reserves for the postwar period besides." Would you say, "That's only fair"? The farmers' share of the retail food dollar reached 58 cents in August 1943, the highest on record since 1919. The 1935-39 average was 42 cents. This is ignored. But now it is asserted that the consumer has no right to complain of food prices if the percentage of his income spent for food is low, as it is. The estimate for 1943 is 22.7 per cent (for food and beverages), the lowest on record, though consumer expenditures for food and beverages are put 17 per cent higher than in 1942. Are we to be urged that it is fair for consumers to be asked to spend 25 per cent or more of their income for food, regardless of taxes, and no matter what the restrictions on availability of other consumer goods?
From an editorial in Wallace's Farmer of November 6 (p. 6) I quote four frank sentences:
The only crop whose market price is below parity is wheat [not quite true], and few wheat farmers will argue that a man can't make money with wheat at the present level, even tho it is less than the parity figure of $1.46.
Farm prices are about 117 per cent of parity as a whole. Farm income is around 150 per cent of parity.
So far as these long-time farm goals are concerned, they have been reached or surpassed.
Perhaps it is time now to figure out whether the old parity is exactly what we want.
This concluding sentence strikes me as altogether unworthy of a fine farm journal. But it is in line with political fanner tactics: Press your advantage! "Git while the gittin' is good!" Juggle the rules of the game! The sky is the limit! All under the banner of fairness, redefined as often as convenient!
To my way of thinking, here is an excellent illustration of what T. N. Carver, my old teacher, called "the pigtrough philosophy of life," whereas he would agree with me that farmers individually cherish the exact opposite, "the workbench philosophy." Which do you really hold?
I must answer a few of your questions and objections. What has all this to do with food as an implement of war? It is crucial. Many of our food difficulties have their roots in inflation of purchasing power and of prices. Political agriculture has stood, and apparently still stands, for inflation of farm purchasing power and farm prices. This specific inflation has been primarily responsible, notably since the spring of 1942, for most of the rise in wholesale prices, retail prices, and the cost of living. Among other things, it has heavily contributed to the disintegration of price control, the defeat of economic stabilization measures, the failure to "hold the line" against wage increases, and widespread strikes. It is primarily responsible for demands for large-scale subsidies to "roll back" the food cost of living. It has contributed much to prevent effective collaboration between the OPA and the WFA, and to interfere with the smooth flow of foods and feeds. The Administration is terrifically hampered. The example of organized farmers is operating strongly to defeat patriotic impulses to accept deprivations and even privations cheerfully, for the good of the nation's cause. Inflationary farm policies are operating to hamper relief operations, to increase their cost, and to intensify the postwar collapse of agricultural prices and land values.
The current fight in Washington centers on "stabilization subsidies" to keep food prices down. Organized farmers are reported "agin" them. Your instinct is right. Used within narrow limits, as one of many instruments in the hands of an
able War Food Administration, these and other types of subsidies are useful, perhaps essential. But there is no prospect that subsidies will be so used. The President rightly stressed the dangers of small doses of inflation: it is like a habit-forming drug; the appetite grows with feeding. So it is with subsidies, as the President must know but did not say. "Subsidies" is also a dangerous disease. You ought to know. Is there any group in the country that has been fed more subsidies, direct and indirect, than farmers? But can you be satisfied merely to defeat the Administration on this issue?
Aren't price increases necessary to insure all-out production? Some were. Some are. Even now a few prices should go up, I agree, at the farm, at wholesale, and at retail—but only if more should go down. Parity prices give absolutely no clue to the prices that our wartime food management needs to use in doing its job. Some prices should go up at retail, to help hold consumption in check, but not at the farm if this would distort the desirable pattern of total production. Some price increases at retail could yield funds to offset subsidies on essentials where subsidized production or consumption is desirable. Over-all price increases are inevitable only if they are politically inescapable, and you can do something about that, if you will. If organized agriculture would permit needed adjustments among farm prices, down as well as up, subsidies could be kept within very narrow limits if not completely eliminated.
President O'Neal hit the nail on the head when he said, in his statement of September 15, 1943:
Relative prices as between commodities should be adjusted so as to encourage the production of the types of foods most needed. Such an adjustment would not only be fair to farmers, but would tend to stabilize living costs and reduce consumers' expenditure for food.
Excellent! But to make such adjustments only and always upward is utterly unwarranted.
For years farm spokesmen have argued for "stabilization" of farm prices. Did they mean what they seemed to say? Their practice shows that "stabilizing" means "boosting," not only from low levels but from high as well.
Take the so-called non-recourse loans on farm products. If the price goes above the loan value, the farmer can sell at the market; if the price falls below loan values, the farmer doesn't repay the loan, the government takes over the collateral and bears the risk and usually eventual loss. Heads, the farmers win; tails, the government loses* Is this sound in principle, fair in practice? With loan rates at generally conservative levels, as a safeguard against catastrophic general price declines, there is something to be said for non-recourse loans. This was the original design. For a period, the Secretary of Agriculture could fix loan rates anywhere between 52 and 75 per cent of the parity price, and rightly chose rates near the bottom of this range. Congress then prescribed a flat rate of 85 per cent of parity, later raised it to 90 per cent (this rate not yet in effect on wheat and corn). Increases to 100 per cent of parity and further juggling with the parity formula now have strong Congressional support, when farm income is at unprecedented heights. This strikes me as a shamefully outrageous perversion of the original design.
Chiefly through these devices, prices of wheat, short-staple cotton, tobacco, and some other products have been continually raised, regardless of supply and demand. They are much too high—absolutely, not just relatively. Increases in their prices, under parity formulas and loan legislation, have forced the Administration to set support prices uneconomically high on war crops such as peanuts, soybeans, and flaxseed, on live hogs, and on many other products. Politically boosted prices of hogs and feed grains have raised the costs of the dairy farmer, helped to mess up the flow of feeds that is so exasperating in many parts of the country. Right now flour millers are in a serious squeeze between politically boosted wheat prices and altogether liberal flour-price ceilings, and the only solution that harassed administrators can see is to subsidize. The old argument that our ever-normal granary will insure consumers abundant flour at reasonable prices is conveniently forgotten.
To be effective, our wartime food management needs much greater freedom in adjusting prices than it now has, down as well as up. This requires Congressional action, and courageous administration too. Both should have farmer backing. They have not had it. Will you give it, or deny it?
If organized farmers choose to stick to their line on the main points of agricultural policy, let them cut out all talk of fairness, of price stabilization, of sacrifice, of playing square, and frankly adopt new language fitting their actions. If, on the other hand, they are eager to make good on their fair words, let them see the light as Saul of Tarsus did. Not only as individuals, but as a group, they still have an opportunity to be a great constructive force in making food do its utmost toward winning the war and writing the peace. Will you see and seize it—very late, but better late than never? What does the conversion entail? Wake up, rise up, and express your patriotism concretely. Quit vying with union labor in promoting your shortsighted self-interests. I cannot urge this too strongly. Why not assume the leadership in the right direction, instead of pulling as one half of a team in the wrong direction? Accompany your complaints of the Administration with effective offers of help—not just individually but collectively.
Through your respective leaders, sit down with the unions and say: We're both making too much money for the country's good and our own good. We vividly remember what our last war-prosperity spree cost us and the country. We don't want to repeat it. We're not profiteers by nature. We haven't realized what we were doing. We want to check inflation, and will do our part in checking it. This fight over subsidies is unnecessary. We'll urge Congress to stop increasing our subsidies, to scrap several of them, and to permit the Administration to cut back loan rates on farm products and to use prices as a lever to adjust production and smooth the flow of goods, even if our income is reduced thereby. We'll even permit the public to get and use margarine freely while supplies of butter are so short. Will you meet us halfway? Let's come to an understanding.
Say to the Administration: We know you are having a hard time on the home front. We want to help, in every way, not just in producing. Don't be afraid of us. Don't hesitate to ask sacrifices of us. We have boys in the armed forces, facing hardships and making sacrifices far beyond ours. You stood by us and worked for us in our great distress. We'll stand by you in this year of crisis, even if it hurts. We are ready to go to any reasonable length to modify our previous stand so as to make possible a first-class wartime food management. Count on us. If you can, work out the details with us, with labor, with industry. But move, and move fast.
Impossible, will you say? Too much to ask? Too late to change? Maybe so. There are other ways, but the will is essential. I am confident that I speak for a multitude of your fellow-citizens, who are less informed, less frank, or less articulate than I am, when I say that faith in the American farmer, already profoundly shaken, will be broken if you just sit tight.