The Washington times., 1935-12-06
FARM
PRICES URGED
BY HANEY
BY LEWIS HANEY
Professor of Economics, New York
UniyeFAIty

Professor of Economies, New York
University
Secretary wallace, in his recent
Chicago address, pictures the AAA
as a permanent institution. The
Administration announces four
year plan."
This means that the Roosevelt
administration plans to put our
Government into the farming
business. Politically it means that
the New Deal seeks to hold the
farm vote by giving our money to
farmers.
In view of the probable uncon-
Stitutionality of the AAA process
ing taxes, Mr.. Wallace takes up va
rious alternatives. When we eX-
anime his thought it all comes
down to Cd Government price fix
ing for farm products. and CD
Government control over farm
production.
This means huge, expensive
bureaucracy in the Federal De-
partment of Agriculture. 1t means
pclitics and patronage.
The Wallace alternatives may be
reduced to five heads:
l. Raise money by taxation to
give farmers a bonus for not pro-
ducing. In this way, the Federal
bureaucrats could control the
planting of crops.
Two kinds of taxes are proposed
as substitutes for the processing
-,
sales tax on consumers. or we can
impose higher income taxes. This
is the same scheme as the present,
only the bonus money for farmers
would be taken either from all
consumers, instead of consumers
of wheat, tobacco, cotton, etc; or
from people who pay income taxes.
2. Direct Government control
over planting and harvesting. This
would mean that the Federal
bureaucrats would tell each farmer
that he could raise and sell a
certain quantity. If he exceeded
that quantity, he would be fined.
The quotas" would be fixed
with the idea of maintaining
certain price to be named by the
bureaucratS at Washington.
3. Indirect Government control
over planting and harvesting,
through pooling. The U. S. Treas
ury would in some way give a
fund of a billion dollars This
would be used to buy and hold
crops in years of surplus. thus
putting our Government into the
business Of financing and Specu.
lating in farm commodities.
In return for such operations"
to support his market, the farmer
would agree to reduce his produc
tion.
4. Pool the domestic market
and hold up prices charged do
mestic consumers, while dumping
what could not be sold here on the
foreign markets for whatever price
1t would bring.
5. Try to stimulate foreign mar
kets in two ways, by making loans
to foreign buyers and by reducing
tariffs to encourage imports of
goods to be traded for our farm
products.
All these schemes" are costly.
wasteful, and political. All but
the last one involve attempts by
some bunch of politically selected
bureaucrats to fix prices and con-
troll production.
AS I see it, there is only one
sound course to follow, and that
Is as follows:
Let farmers adjust their produc-
tion to consumption at the lowest
price that will cover the costs of
the more efficient producers. Then
give relief to those farmers who
cannot make living.
The price of farm products
should be low enough to stimulate
consumption, so as both to bene-
fit domestic consumers and to re-
gain the foreign markets we are
losing.
This would necessarily have the
result of reducing the cost of pro.
ducing farm products. First, it
would increase the volume of
products that could be raised and
sold, and that generally means
less cost per bushel or bale. Sec.
ond, the lower prices would
eliminate the less-efficient or high
cost farmers, which is the most
important thing to accomplish.
Then the politicians should quit
trying to run the business. They
should help in two ways: %
Help orderly marketing by en-
couraging sound business credits.
and by education and informa-
ton; (2) give relief to those
farmers who fail. and help them
to find their place.
One fatal blunder of AAA is
that it is SubSidizing the inefficient
farmers. Another is that it is
holding prices up so as to restrict
farmers markets. Another is
that it is turning farming into
politics.
L0AD|NGS TOP