Grand Forks herald. [volume] (Grand Forks, N.D.) 1916-1955, 1922-12-16
GUARANTEE OF COFFEE PRICES.

AS = SNA~ASs .s{
A correspondent who favors the guarantee OF
wheat prices by the government suggests a parallel
between the wheat situation in the United States
and the coffee situation in Brazil. He refers to the
condition of the Brazilian coffee producers a few
years ago, which he understands to have been sim
liar to that of the wheat growers OF the United
States now, and speaks OF the fixing of prices tor
coffee by the Brazilian government as a remedial
measure, with the result that the Brazilian grower
knows in advance what he will receive for his
product. .,.
1t is a fact that the Brazilian government did
undertake the regulation of the coffee business, and
that its action brought relief-at least temporary.--.
to the coffee grower. But Brazirs experience with
coffee cannot serve as a guide to what the United
States might do with reference to wheat because
the conditions surrounding the two industries and
the two countries are entirely different.
The United States produces, on an average, per-
haps rs per cent of the worlds wheat. The grain
lis produced III large quantities in every country i'll
the two temperate zones. The exportable surplus
of any one country comes inevitably into competl-
ton with the production of the entire world, not OF
wheat alone, but of other cereals which are used
for similar purposes. Among these are corn, barley,
rye, and rice, any one of which may be substituted
for the other, or for wheat. 1t is clear that a coun-
try which produces only rs per cent of he-worlds
wheat, and much less than that production of the
worlds total cereal crops, cannot by independent
action advance materially the price of any of these
products in the worlds markets. Our government
can guarantee the price of wheat, as it can guarar-
tee the price of anything else; but if it does so the
additional cost will necessarily be shifted back to
the tax-paying public or to the American consumers
of the wheat. There is no way by which we can
make the foreigner pay the greater price, for he can
ignore our relatively insignificant surplus and buy
wheat or grain in other markets. !
Brazil has not quite a monopoly of the coffee
production of the world, but the industry in that
country assumes the proportions of a monopoly.
There have been years in which Brazil produced as
imuch coffee as was handled commercially in the
entire world. In 1906 her coffee exports were 1,847
million pounds against exports from all countries
soi 1850 million pounds. No other country is SO
SITUATED with reference to the production OF any
Siood commodity in general use.
Brazil. therefore, has the coffee industry large
E Nv in her own hands. Her excessive production
4 sonae years ago glutted the markets, and an effort
d was made. under government supervision, to stabi-
I lize it This effort did not take the form merely Of
e price fixing. 1t included the restriction OF produc-
v Tcicr. for the Brazilian government understood that
: to ix the price at a profitable level would be suicidal
y IL all who chose were at liberty to take advantage of
:, would surely have been done had it been permitted.
/ he arrangement made, therefore, involved a rigor-
Eous limitation OF production curtailment of new
Eplan,ings, and the purchase of the product by a
i government commission at a fixed price.
Most OF Brazils coffee goes abroad. Foreigners
demand it, and they can obtain it in sufficient guam
e titles nowhere else. The increased price which
! the Brazilian growers receive for their diminished
e product, therefore, is paid, not by the people of
e Brazil, but by their foreign customers.
No such result would be possible were our gov
|ernment to undertake the fixing of the price of
wheat. Our own people will eat three-fourths of
e this years crop of wheat. The other fourth will be
+ sold abroad. for what it will bring. If the govern
l. ncnt should buy the exportable surplus, at a prem
IS iu1m it would lose whatever premium was paid. If
it stood ready to buy the rest of the crop at the same
price, and should prohibit imports, our people who
eat the wheat would pay the price. The American
a public, agricultural, industrial, and what not, will
e necessarily pay every dollar of whatever premium
e is placed on wheat. There is no escape from that.
n The Brazilians, because of a popularity in their in
# dustry and their situation, are able to collect the ad-
IS vanced price from the foreign coffee drinker.
n There is another feature which must not be
overlooked. A price guarantee large enough to be
le worth while would Immediately Stimulate the pro-
1t lduction of wheat. That would enlarge the proper
IS tons of the problem for another year. There would
be a larger surplus, and the government would have
to pay a premium on a greater number OF bushels
ID The only way in which that could be avoided is the
as plan followed in Brazil, enforced restriction OF. pro.
ut duction. How many American farmers are ready t.
I'd turn or to the government the regulation of Their
~ crop acreage? What farmer is ready to have a gov
t. eminent agent serve notice on him that he will BIZ
S permitted this year to plant so many acres of wheat
he and no more? Yet that is a necessary accompRni
On lmcnt of price fixing. 6.#5
in Mention has been made Of the effect Of pric,
as fixing on the progress Of crop diversifcation. Thi
lis regardedsby many experienced farmers as tn,
most serious feature Of the whole problem. No mat
ut ter to what crop the guarantee is given, the tendency
ryIwi1l be to cause farmers to concentrate on tina
DIS crop, and constructive work that has taken man,
he years in this territory would be set back for per
is haps a generation il this were permitted to occur.
Isrnet Pasha says that the Armenianss in >Tur
key would be perfectly happy if agitators Would4le
them alone. III may all be true but f~therefhas beer
a sortSof 4 general notion that the Turks had some
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