Evening star. [volume] (Washington, D.C.) 1854-1972, 1945-07-15
St,5OO,OOO,OOO Food
Costs Soon 10 Be
Shifted 10 Public

The administration is working on
plans for shifting $500, 100000 in
food costs to consumer pocketbookS
next year, eliminating subsidies.
The objective Is to ease ADJUST
ment Of farm prices to postwar
conditions and to reduce Govern
ment expenditures.
The subsidies involved are largely
those which the Government estab-
lshed to prevent increases in con-
sumner ceiling prices on important
food items while at the same time
providing greater incentive for farm
production, and the so-called roll
back" subsidies set up in 1913 when
prices of some foods were reduced
10 per cent.
Higher Ceiling Prices.
The plan calls for increases in
ceiling prices of the affected foods
to replace the subsidies.
Secretary of Agriculture Anderson
is leading inter-agency discussions
on the plan. Friends say he be-
lieves it could be accompanied by
an upward adjustment in industrial
wages, now controlled under the
Little Steel formula, without add
ing any new inf1ationary threat.
The contention that increases in
wages and prices would not be in
f1ationary is based upon the assump-
ton that the war with Japan will
end next year and bring on def1a-
tionary factors incident to indus
trial reconverSion.
Elimination of the subsidies
would increase the Nations total
food bill about per cent, Agricul-
ture Department economists esti-
mate. Consumers are buying food
at the rate of about 10000, 900, 900 a
year.
Food Items Involved.
Food items on which the Govern
ment is paying subsidies include
meats, butter, fluid milk and most
manufactured dairy products, flour
and, indirectly, bread and bakery
products, canned fruits and vege-
tables, sugar, dry beans, peanut but
ter, lard and soybean products.
Supporting the subsidy abandon
ment idea are several major farm
organizations and strong bloc in
Congress.
Back Of the pressure to wipe out
the subsidies is concern over post
war agricultural prices. Secretary
Anderson and many farmers ex-
pect farm prices to go down after
the abnormal war market fades.
They also expect a public demand
for curtailment in Government ex-
penditures.
Mr.. Anderson believes the effects
on agriculture will be less harmful
if the subsidies are removed while
prices are high and the demand is
good rather than later when prices
have declined.
Actual Farm Prices Hidden.
Under the subsidy program, the
actual prices Cor returnS) received
by farmers are hidden, so to speak,
from the consumer. The consumer
pays only part of the price on the
subsidized items. The Government
pays the remainder.
Abandonment of the subsidies
would be done in connection with
the Governments farm price sup
port program for 1916. In the case
of some items, the elimination might
be gradual over a period of months.
On some items it might not be nee
essary to increase ceilings to the
full extent of subsidies.
One of the principal objections
raised against subsidies is that they
put the Government in the posi-
ton of paying a part of the food
bill of poor and rich alike at a time
when there is an excess of purchas-
ing power over the supply of civil
ian goods available at ceiling prices.
Much of this extra buying, subsidy
opponents say, is being used to sup
port black markets.
Secretary Anderson is not OPP
posed to all food subsidies. He has
stated that he believes it may be-
come necessary in the postwar pc
INDEPENDENTLY should there be
considerable unemployment-to sub
Sidize consumption by low-income
PrOuDS