Evening star., 1941-05-25
Big Farm Outlay
Declared Blow
To Taxpayers
Standard and Poor's
DepIores Conflict in
u. S. Price Policies
Special Dispatch TO The Star.

cording to a survey of the Standard
and PoorS Corp. BY the skin of its
teeth. the American public each
year Just misses being saddled with
some scheme to guarantee prosper
ity for farmers by Federal price
fixing of agricultural products,
equalization fees. debentures, par
tiles and similar euphemistic eX-
pressions.
If our perennial escapes from
these schemes were clean-cut, we
might hope that the forces of rea-
son would continue to prevail in
the future. But. unfortunately, we
pay a price. That price is always
some compromise. the effect OF
which is to give the farmer more
than he got before in the way of
public money.
Parity Prices the Goal.
Among the Welter of proposals
this year for cutting the farmer in
on more money was the income
certificate plan processing taxes
under a disguised title. Consumers
would pay taxes for the privilege of
consuming certain farm products,
the taxes to be paid over to the
farmers.
There was the Fulmer bill. and
the Bankhead bill. and the Farm
Bureaus bill for IS per cent parity
loans on crops. and the Russell
amendment for paying farmers
$3.50 10000 in parity payments, in
addition TO the usual S500000,0 900
for soil conservation payments.
What is meant by parity pay
ments and parity loans? This is the
basic concept: The years 1909-1914
have been selected as the parity
base. During that time the various
farm products had a certain eX-
change value. A farmer selling, say.
a bushel of wheat would receive
in cash enough to buy. say pair
of overalls. Thus the price Of any
given farm product for the years
1909-1914 in relation to the farmers
cost OF living in those same years
is the parity base
The naritv price TO-DAY. then. is the
average for the years l909l9l4 in
creased by the percentage which
farmers living costs have increased
since 1909-l9l4. As an example, the
average farm price of wheat in the
base period was 88.4 cents a bushel.
Today. farmers living costs are 29
per cent higher than in the base
years. The parity price of wheat
at present, then. is price % per
cent greater than 884 cents, or 81 IA
If the farm bloc had its way the
Government would see to it that
the wheat farmers received S114 a
bushel for wheat And if living
costs rose further the Government
would see that the farmers received
proportionatelv more.
New Loans IS Per Cent of Parity.
Last year the Government guar
anteed the farmers a price at rs
per cent of parity for corn and
56 per cent each for cotton and
wheat Under the bill just passed
farmers producing any of the five
basic crops-wheat. cotton. corn. to-
bacco and rice-Will be guaranteed
price al 85 per cent of the parity
rate.
As a result prices of wheat and
cotton have advanced sharply, while
corn has advanced more moderately
Rice is already above parity, which
is also true of some tobacco.
Producers of other farm products
are not being neglected by any
means. for about a month ago the
Government announced a policy of
"stabilizing" prices for hogs, dairy
products. chickens and eggs. 1t is
doing this by purchasing in the
open market Needless to say. the
stabilized prices announced were
higher than those prevailing in the
open market at the time.
Price Aims Conflict.
Thus We find the Government in
the anomalous position of attempt
ing to avoid a rising price level
by freezing some prices and threat
ening TO freeze others if they rise.
while at the same time deliberately
raising food costs. which account
for at least 35 per cent of the
expenditures of the average low
income family
No one will deny to the farmer
a right to fair price for his labors.
But, contrary to ideas fostered by
the farm bloc, American agriculture
is far from depressed. The pur-
power of farmers is now
ranging from Is to 20 per cent above
the 1929 level, which is appreciably
better than the gain in buying power
of the non-farm group
Farm leaders insist that the cost
of living will not be increased by
more than 5 per cent as a result of
the new parity loans, but it is we'll
to consider that the cost of living
has not yet increased per cent
despite more than a year and a
half of war, during which time
labor has secured sub
stantial wage increases. What will
labor's demands be when the cost
Of living really starts to move under
the inf1unce of artiicially high
food prices?
Cost Over a Billion.
Agricultural Adjustment Admin
lstrator Evans figures that the Gov
eminent would need 1925 100000 to
take up crops at loans based on
IS per cent of parity, and he figures
that the 85 per cent rate would add
about $200,000,00 more. How much
of the SLIPS 100000 will eventually
be lost no one can say.
In addition to this huge sum
Congress is appropriating 5O0,OO0,-
D00 for conservation payments to
farmers and is currently undecided
whether it will vote S212,000.O00 or
$3.50 100000 for parity payments,
both direct cash subsidies. Also,
under a 6-year-old law the farmers
get 30 per cent of the customs col
lections, a fund used to buy up
surplus commodities. This amounts
to more than S100,0oO00O..
Aside from all this money are
the sums for running the Depart
19ee TAYPAYTRS pare T-a0