Evening star., 1950-06-23
Two Letters About the Bronnon Plan

THE OTHER DAY. we got q letter
i at The Star Once which asked some
questions We weren't sure we could an
swer. So we sent 1t over to the Agricul-
ture Department, and in due course it
came back with a reply.
Both letters were a little too long to
At in this space. so we have had to do
some trimming. But here, In its essen
tials, Is the exchange:
To the Editor Of The Star:
Inasmuch as the Brannan Plan is an
issue in the political campaigns. has not
the time arrived for the press to answer
some questions that must be in the
minds of a number Of people?
The Brannan Plan is described as
national farm program, whereby agri-
cultural commodities would go to mar
ket at price determined by supply and
demand, and the Government would pay
the farmer in cash, in one payment. the
difference between actual cash receipts
and a sum calculated according to a
formula fixed by law) to be rightfui
cash receipts.
The Brannan Plan theoretically would
give the people the benefit Of the album
dance Of the Nations agricultural pro-
duction and require only one payment
tax money paid to farmers. But no
high food costs.
That is what that the people have
been told about the Brannan Plan. 1t
sounds so good that wonder. -.
/. How could the "law of supply
and demand" operate as an economic
law if the farmer were so subsidized as
to lose incentive to sell for the highest
price his produce could command?
2. Would the Government invite farm
ers to produce abundantly and promise
to pay each farmer enough cash to make
up the difference between actual cash
receipts and what he should receive-a
blank check, so to speak?
3. Rather than write a blank check
would Congress provide some machinery
for the Department of Agriculture to
limit production or restrict marketings?
4. If farmer were told by the Agri-
culture Department to plant only within
certain acreages, or to market only with
in fixed quotas if he wished to be eligi-
BILE for cash payments. what would hap
pen should farmer decide to speculate
on the food market and exceed the Gov
ernments planting or marketing limi-
tationS?
S. Would the Government deny that
farmer any cash payments? Under pro-
posed legislation, the answer is yes. But
how would that over-supply affect the
overall price of that commodity?
Wouldn't the price go down, owing to
increased supply, and wouldn't the Gov
ernment (and the taxpayer) then be
obligated to pay more to the farmer
who stayed within the Governments
limits?
6. If farmer exercised little or no
control over insect and plant disease
damage to his crops, would the Govern
ment guarantee him price equal to
that guaranteed to the farmer who
worked his land diligently to produce
top-quality foods?
7. Would the Agriculture Department
be empowered to estimate in advance of
paintings how much of each foodstuff the
public will consume each year, and then
order farmers not to exceed those quotas?
Who is capable of estimating correctly?
In establishing marketing quotas on basic
commodities under present law, is the
department estimating correctly?
8. In the long-run, wouldn't the Gov
ernment be put in a position where 1t
had to tell each farmer what to plant.
how many acres, and on what land, and
how much of each food could be mar
keted, at what time, and at what markets.
L. x. L.
To the Editor of The Star:
L. X. LIS questions fall into two cate
gories: Those based on miSunderStand-
ing OF the production payment method,
and those which are concerned pri-
marily with the price support principle,
rather than the so o-called Brannan Plan
as such.
In the first group are those questions
dealing with the incentives for good
farming and good marketing, and the
"blank check"
Remember two points. First, we have
proposed production payments only on
those perishables receiving support.
Second, the payments would cover the
difference between the support level and
average market prices, not the difference
between support and the individuals
selling price. There's big difference.
Suppose that the support price for
potatoes was 800 a bushel. and the
average market price amounted to 80
cents The production payment in that
instance would be 10 cents a bushel.
Now, let's also suppose Farmer Jones
marketed cleaner, better quality spuds,
sacked them more carefully. and conse-
quently was paid above the average price
say $1.10. He would also receive the
production payment of 10 cents, or a
total of $120 buShel
But on the other hand, suppose the
potatoes that his neighbor. Farmer
Brown, marketed were dirty, bruised
and poorly sacked as a result of which
he was paid only 80 cents bushel in
the open market. He, too, would re-
ceive the 10-cent production payment.
but his total return would be only 80
cents bushel. The two would receive
exactly the same payment, but the good
producer would get 80 cents more for his
potatoes, just as he would have II
there had been no payment.
If that happened, I think neighbor
Brown would begin realizing he wasn't