Chapter 27: Problems of Agricultural Economics

CHAPTER 2< PROBLEMS OF AGRICULTURAL ECONOMICS § 1. Size of farms, and total farming area. § 2. Influences acting upon the size of farms. § 3. Self-sufficing versus commercial farming. § 4. Farming viewed as a capitalistic enterprise. § 5. Diversified versus specialized farming. § 6. Conditions favoring diversified farming. § 7. Intensive farming in Europe and America. § 8. Prospect of more intensive cultivation of land in America. § 9. The new agriculture. § 10. Difficulty of cooperation among farmers. § 11. Rapid growth of farmers' selling cooperation. § 12. Some economic features of farmers' selling cooperation. § 13. Cooperation in buying. § 14. Need of agricultural credit. § 15. Provisions for farm loans. § 16. Need of an agricultural policy. § 1. Size of farms, and total farming area. The average area of farms 1 has varied from a maximum of 203 acres in 1850 (the first figures) to a minimum of 134 acres in 1880, being 138 acres in 1910. A better index, perhaps, is the average improved area per farm, which has been more nearly stationary, varying from a maximum of 80 acres in 1860 to a minimum of 71 acres in 1870 and 1880, being 75 acres in 1910. Here again the statistics require interpretation, for in, the spread of the frontier the addition of large farms in the arid and semi-arid regions may raise the average, or the breaking up of large plantations in the South may decrease the average, without this indicating any essential change in the technical conditions of farming in the country generally.

i A farm is defined for census purposes as "all the land which is directly farmed by one person, either by his own labor alone or with the assistance of members of his household, or hired employees. When a landowner has one or more tenants, renters, croppers, or managers, the land operated by each is considered a farm." 457 458 PUBLIC POLICY TOWARD PRIVATE INDUSTRY [PT. V Since about 1900 the total area in farms has increased very slowly. Between 1900 and 1910 the increase was only 4.8 per cent; whereas a larger increase occurred in the area of improved land, 15.4 per cent, and the improved area in farms decreased 5.6. Future changes of farm areas may be expected to be of this same nature, mainly in the improvement of rough pastures, swamps, partly cleared woodlands, and desert lands awaiting irrigation. An increasing population will have to Fig. 1, Chapter 27. Acreage of Corn. NOTE: NOW king of all crops, in value equal to that of cotton and wheat combined. Generally cultivated in eastern half of country.

be provided with food and other products of agriculture on a farming area that henceforth will be increasing less rapidly than it has in the past and than the population increases. § 2. Influences acting upon the size of farms. In these averages for the whole country many conflicting influences unite and neutralize one another. Making for smaller farms is the breaking up of large grazing areas in the West into smaller general-purpose farms or irrigated fruit districts, and OH. 27] PROBLEMS OF AGRICULTURAL ECONOMICS 459 of larger general farms in the North and East into small poultry, flower, and fruit farms. Opposed to this is a movement toward the merging of farms of 50 to 100 acres into larger farms of 300 acres, more or less. The economic cause of this movement is interesting and important. The typical and economic size of farms when the Atlantic states were settled was determined by the use of hand tools, which permitted a man and his family to operate a farm of about 75 acres, of which about half was tilled and the rest was in permanent pasture Fig. 2, Chapter 27.—Acreage of cotton.

NOTE: Second in value among farm crops, but limited to a region less than a fourth of the whole country. Some production in the three states west of Texas is not shown on this map. and woodland. The fields were small and were laid out irregularly, which was no disadvantage for hand cultivation. But tor the most economic use of land in field crops and under more modern conditions it is necessary to have pretty level fields, of regular rectangular shape. The farm unit should be of such extent as to permit of the proper use of the soil by rotation of crops, and to employ fully the best modern laborsaving machinery for each purpose. Numerous recent agricultural surveys point to the conclusion that for general farm460 PUBLIC POLICY TOWARD PRIVATE INDUSTRY [PT. V ing this unit is a comparatively large area of about 300 acres. These conditions offer a reward to those agricultural enterprisers who can purchase lands at a price based upon the high costs and lower yields of the older methods and cultivate them at the lower costs and with the larger yields of the newer methods. This movement, therefore, toward the consolidation of smaller into larger farms is likely to continue in many communities for several decades. This is likewise an advantage to the community in increasing the production with less labor. But the net effect upon the social life of the countryside is more doubtful, and calls for careful consideration.

§ 3. Self-sufficing versus commercial farming. The typical American farming family once produced nearly everything it used, and used nearly everything it produced. It was very nearly a self-sufficing economic unit, a " closed economy," as it is sometimes called. Food, clothing, fuel, lumber, houses, furniture, tools, were on the farm carried through the various processes from the first gathering of the raw materials to the finished product. They were then consumed by the farm household. It is true that even in the first settlements there were some craftsmen—cobblers, millers, weavers, blacksmiths—whose services and wares were got by trading some of the surplus products from the farms—butter, cheese, eggs, wool, hides, furs, live stock, grain, lumber. A few rare commodities of foreign make found their way to the farm through peddlers and merchants; but altogether the goods produced outside the farm were a small fraction of the family's consumption, and were exchanged for but little of the farm's production. Most farmers tried to produce for themselves, as far as possible, everything their families needed, even when the soil and situation were poorly suited to the purposes. True, there were early some exceptional cases in which only one kind of product was taken from the land. Such were the forest products of masts, shingles, lumber, and turpentine, and the great southern staple, tobacco, CH. 27] PROBLEMS OF AGRICULTURAL ECONOMICS 461 and later cotton. The exceptions have been tending to become the rule in more and more communities. Farmers have been specializing more and more in the kinds of products to which their farms are adapted in respect to soil, relation to market, and otherwise. These products are taken to market and sold for money with which are bought the things needed for use on the farm.

§ 4. Farming viewed as a capitalistic enterprise. Thus WHEAT Fig. 3, Chapter 27.—Production of wheat. NOTE: La/gely produced in a comparatively restricted wheat belt bordering the semi-arid region; elsewhere mainly a rotation crop. the farm comes to be looked upon more and more, not merely as a home, hut much as if it were a commercial enterprise or a factory, by which products are made for sale. This change, to be sure, is far from complete, as the figures for the average farmer's income show that a large share of the family living still comes from the farm. It has gone on much further in some districts than in others, as is indicated in the types of farming discussed below. But, just to the extent that the farmer grows crops to sell, his outlook on his work undergoes 462 PUBLIC POLICY TOWARD PRIVATE INDUSTRY [PT. V a change. He is less exclusively a farmer, concerned with the technical processes of farming; he must be more largely a business man. Like a manufacturing enterpriser, he buys the factors of production, combines them into new products, and sells them again. He becomes interested in market conditions and prices. He grows more commercially minded.