Evening star., 1941-05-11

serving and soil-building practices, has
added millions of dollars to the pro-
ductive value of Southern farms.
officials also claim that the program
has encouraged and helped cotton farm
ers, particularly those in low-income
classes to produce more food and feed
crops for their own use. The A. A. A.
program recognized, they say, that cot
ton farmers had for too long time
depended upon single cash crop for an
income for virtually all their needs, in
cluding food.
Apparently anticipating the A. A. A.
argument about the "unprofitability" OF
supplying world markets at low prices,
the economics report said the extent to
which American producers could afford
to expand production and sell at re-
duced prices in order to compete more
effectively with foreign producers de-
pended largely on the alternatives
available to American cottor. producers.
"Little Offsetting Advantages"
The report said studies indicated that
returns from cotton usually were SUBJ
stantially greater than from alternative
crop and livestock enterprises in the
cotton belt. 1t also said industry ap-
parently was not able to absorb the un-
employed in the South at living wage.
Consequently it concluded, attractive
alternatives to cotton production we're
very limited.
"Under such situation" the report as
serted, the maintenance of prices for
American cotton above their normal re-
lationships to those of other groWths
permits cotton producers in other coun-
tries to take over large proportion Of
the foreign market for American cotton
with relatively little offsetting advantages
to American cotton producers in the form
of substantial Improvements in the gen.
eral level of cotton prices"
The report conceded that the effects
of lost foreign markets might be offset
temporarily, in whole or in part by Gov
eminent benefit payments to producers
cooperating with crop programs 1t
cautioned. however, that some considera-
ton might we'll be given to the situation
/ in the event Government payments were
| greatly reduced or discontinued.
There is only one bright spot for the
/ cotton producer, and that is the domestic
market Under the stimulus Of the de-
/ fense program, domestic consumption is
running far above any level of the past.
! Also contributing to this high level
! of consumption have been the Agricul-
I ture Departments surplus disposal pro-
grams under which cotton has been
distributed among needy families in the
South for cotton mattresses.
Surplus Remains Problem.
However, the surplus of old-crop
American cotton when the new crop
starts moving to market this summer
| is expected to be near the record level
| of 100000 bales This would be more
/ than enough to supply domestic and
| foreign needs for a year. About ll00C,-
900 bales of this surplus either belongs
! to the Government, as a consequence
of its grower-loan operations, or IS stored
| as collateral for outstanding loans.
Just what the Government Will do
with this surplus is a problem that
apparently must await future develop
ments Indications are that the surplus
will be even larger next year. Steps are
being taken to increase grower loan
! rates on cotton. Such action would in
crease the disparity between American
and foreign cotton prices in world mar
kets and could be expected to result in
even smaller exports.
1t is possible that the A. A. A. may
! ask growers to make further reductions
in cotton production pending conclu-
sion of the war.
Some farm officials believe that, should
the democracies win. the United States
would be in position to bring about
an international cotton agreement un-
der which exporting nations would di-
vide up the world market so as to assure
each an equitable" share at reason
able prices.
Americas huge surplus. these officials
say, would be an important weapon in
behalf of such an agreement.