Freedom For Farmers; C. Shuman

138 and reduced sales. The poverty program failed to reduce poverty, and socialized medicine for the el derly is a miserable and costly failure. In a desperate effort to make these schemes work the lib· eral politicians have voted vast in creases in po,ver for the Federal government. The excuse was that only the Federal government could provide enough money and move with sufficient speed to break down the barriers that were slowing so cial and economic reform. The most recent "national emer· geney" to be treated to the massive infusion of Federal funds cure is hunger and malnutrition. The White House conference on food, nutrition, and health which was held last week in Washington re sulted in new proposals for huge appropriations, and low income is an important factor. The organizer of the conference estimated that 1970 FREEDOM FOR FARMERS 139 there are 30 million hungry people in America but that hunger could be eliminated within three years by appropriating three to five billion dollars per year for food payments out of the Federal treasury.

While there may be 30 million undernourished people in the United States, there are other causes. Much of this socalled hun ger is the result of ignorance of proper nutrition, prejudice about food, or unwise dieting practices, and it cannot be cured by food stamps or other spending pro grams. Like all of its predecessor national emergency programs, the hunger program will probably re sult in a huge new Federal bu reaucracy busily soliciting clients to put on the free food list. Many people will be encouraged to reduce their efforts to help themselves and thus become eligible for food stamps. The "hunger" situation may actually worsen rather than improve. Much of the frustration and un happiness which has exploded into present-day demonstrations and protests are a direct result of the disappointment of those who ex pected more than could be deliv ered by government, and in reality found themselves worse off be cause of the inflation which de stroyed their purchasing power.

In difficult times like these it is natural to look for a scapegoat, but I believe that all of us - busi nessmen, farmers, workers, and professional people - have become obsessed with the notion that we can legislate prosperity for our selves and - therefore, we must all take the major responsibility for the present trouble. Like Pogo, "We has found the enemy and he is us." Schemes That failed If anyone in America has an excuse to be frustrated and bitter, it would be farmers and ranchers. For 40 years, the Congress has experimented with many different schemes to manage production, prices, and marketing of farm products. Almost without excep tion these schemes have failed, only to be replaced with some new concoction. Even now, the House Agriculture Committee is floun dering around trying to find some way to patch up and extend the decrepit and costly Food and Agri culture Act of 1965.

'The objective of this legislation was to reduce production and in crease prices of feed grain, wheat, and cotton. It has failed in both ob jectives. The acreage of wheat and feed grains has been cut sharply in the last two years, yet total pro duction has continued to move up wards. Acreage allotments of wheat were cut 13 per cent in 1968 and another 13 per cent in 1969, 140 THE FREEMAN March but the carryover stocks have con tinued to pile up and the 1.9 billion bushels on hand October 1 is the largest October stocks since 1963. Corn and grain sorghum acreage was cut 2 per cent in 1969, but the tonnage harvested was 2 per cent more than the 1968 crop - the carryover is up for the third straight year and now totals 50.2 million tons. The price of wheat fell to the lowest level in 27 years. The effect of the Act of 1965 on cotton producers is even more dis couraging. Despite a government check-off for research, advertising, and promotion, cotton farmers are rapidly losing their market to syn thetics - sales are down 5,000 bales per day in two years. Exten sion of the Act of 1965 could re sult in completely destroying the cotton industry in the' United States. This is overpowering evi dence, especially when this sorry record is contrasted with the un controlled, unsubsidized, but boom ing livestock business.

It is obvious that when farm ers turned to government, first in 1929 and more definitely in 1933, they took a turn in the wrong di rection. Fortunately, Farm Bu reau members recognized the mis take several years. ago and, almost single-handedly, have prevented the spread of government manage ment to all of agricultural produc tion and marketing. Only about 40 per cent of agricultural produc tion is under government farm programs. Most of the sickness in our industry is in this segment that is government controlled and priced. vVhile Farm Bureau has succeeded in its efforts to block the extension of supply manage ment to livestock, dairy, poultry, and fruits and vegetables, we have not yet succeeded in restoring the government crops to the market place, although most farmers now know that they cannot share equitably in prosperity until this change is made. "Everyone Else Doing it"

The wrong turn we took in ag riculture 40 years ago was moti vated by the same needs and de sires that have caused other citi zens to turn to government for special privileges, subsidies, and protectionist devices. In fact, many farmers have justified their acceptance of controls, subsidies, and price supports with the ex cuse that "everyone else is doing it." This might be a plausible ar gument if it could be demon strated that the government pro grams have actually benefited farmers. The opposite is true. Government farm programs have stimulated excess production and have been used to hold farm prices at low levels. One of the major causes of excessive produc1970 FREEDOM FOR FARMERS 141 tion is the requirement that the support price be announced before the crop is planted. When farm ers know the price before plant ing, they are encouraged to spend more money on fertilizer and other production inputs than they would if the price was uncertain. This one feature of the Food and Agri culture Act of 1965 is probably re sponsible for much of the in creased production that has more than offset the acreage cuts. Yet the cries go up from those who are hooked on payments or who have jobs or warehouses to pro tect, "It is better than nothing."

This is not the alternative, but even if it were, 1 would challenge this assumption. While the support prices im plemented by Commodity Credit Corporation purchases have at times acted as a floor under the market, they have also acted as a ceiling, and prevented price gains when the supply was short or the demand high. Very seldom have the prices of the government crops risen above the support level. In fact, political management of mar keting under the Food and Agri culture Act of 1965 has often de pressed prices both in years of abundant production and when the crop was short. When a large crop is in prospect, those in charge of Commodity Credit Corporation marketing tend to panic because they know that it is a political li ability to have large quantities of grain piling up in government storage. Under these conditions the domestic market is already overburdened and it is necessary to unload the excess supplies on the world market. During the past summer we have seen a drama tic demonstration of government fi nanced price cutting in the world market for wheat.

International Wheat Agreement The International Grain Trade Convention (wheat agreement) is an international treaty which was approved by the Senate of the United States in 1968 and which attempted to establish the world price for wheat somewhat above the market price. The ink had hardly dried on the signatures on this treaty before several nations were attempting to find ways to move their huge crops by cutting the price. First one country, then another, including the United States, ,made sales considerably under the agreed on price. Since the losses incurred in this inter national price-cutting war were paid by the taxpayers of these wheat producing countries, the Cl,ltS in price were far greater than if the losses had come out of the pockets of the individuals who were making the sales. The international wheat agree142 THE FREEMAN March ment has cost wheat farmers many millions of dollars and should be suspended immediately. If the other nations party to the agree ment will not. agree to a suspen sion, the United States should an nounce that it will not be bound by the terms of this now dis credited scrap of paper.

It may seem strange but a simi lar downward pressure on mar kets is exerted by the Commodity Credit Corporation in a short crop year. Government supply man agers also tend to panic in a short crop season especially if the house wi ves begin to picket the retail stores to complain about high re tail food prices. The farmers and ranchers of America were given a painful demonstration of this panic about three years ago when Secretary of Agriculture Orville Freeman dumped hundreds of mil lions of bushels of grain on the market to hold feed prices down in an effort to stimulate livestock feeding. During recent months the Commodity Credit Corporation has been moving substantial quan tities of wheat into the feed grain market. When Congress passed the Food and Agriculture Act of 1965, it included provision for making di rect payments to farmers. This action in itself was an admission that the net effect of government managed production, pricing, and marketing was to reduce the prices to farmers. These direct payments have only been a partial offset to the market price losses sustained under this legislation. Approxi mately 23 per cent of net farm income is now represented by these payments and cotton farm ers look to these payments for about 40 per cent of their gross receipts from cotton lint.

Further Payments No Help in Getting "Unhooked" Causing farmers to be depend ent on Congressional appropria tions for so much of their income is a sorry state of affairs and one which cannot be continued if there is to be a good future for farm ers. Consumers and taxpayers look upon these payments in the same light as they look upon welfare payments to the poverty stricken. This means that limitations on the amount paid to anyone producer will be imposed and eventually Agricultural Stabilization and Conservation "case workers" will supervise the spending of these "welfare" checks. Many farmers are hooked. on payments because the price in the market has been depressed to such a low level that their only hope of covering pro duction expenses is to add the pay ments to the market price. How ever, the solution is not to con tinue payments. The only sensible 1970 FREEDOM FOR FARMERS 143 approach is to find a way to get unhooked.

Getting unhooked from farm programs will. be a costly opera tion because the distortions and imagined advantages of the pro grams have been capitalized into land values and machinery. Three Steps to DeControl There are three essentials that must be adhered to in any pro gram to change directions. First, the unsuccessful attempts to con trolproduction by government al lotments and quotas must be ter minated. Acreage controls have been worse than useless - they have actually stimulated surplus production. Second, price supports have acted as a ceiling to prevent price increases and must be phased out or keyed to market prices if farmers are to share in the pros perity of our competitive enter prise economy. Third, welfare type direct payments in lieu of competitive prices must be phased out. Making the transition from the present program to a market price agriculture should not be too dif ficult once the Congress has agreed on the objective of phasing out government supply management in agriculture.

The temptation for farmers to seek an "easy" 'way to develop market power remains, even though Federal control of produc tion and pricing have proven un successful. Those who would "let the government do it" favor na tionwide marketing orders, Fed eral marketing boards, or other government supervised and man aged marketing and bargaining. Government has a proper and im portant role in the marketing sys tem; however this role is not to supervise marketing or to partici pate in the price-making process. Government should act as a ref eree to establish rules and to pro tect consumers against conspira cies to set price, or other monopo listic practices. Experience in other countries with government marketing boards and other devices to control the marketing of farm products have proven to be ineffective and unsat isfactory from the farmers' stand point. Here again, political ap pointees who administer the pro grams must please the majority of voters - the 95 per cent who are consumers. It is inevitable that any government price management will result in. holding prices down to please this big consumer majority.

The egg marketing board in the United Kingdom was recently abandoned because it had stimu lated surplus production, depressed prices, reduced the quality, and in creased the retail cost of eggs. If the labor-socialist government of 144 THE FREEMAN March the United Kingdom, which is dedi cated to a managed economy, can not control the egg market, who can say that our government can manage the marketing of any ag ricultural commodity successfully? Congress Must Control Spending Nineteen seventy will perhaps be one of the most crucial election years in history. The nation is in need of a change in direction. That change can come if the new Con gress is willing to accept its respon sibility to control Federal spend ing. Government, fiscal, and mone tary policies must be stabilized and the budget brought into bal ance. Irresponsibility in high pub lic office invites the same atti tude by the people. Much of the bitterness and frustration which is evidenced in the demonstra tions and riots is in part a by product of government fiscal irre sponsibility. Extravagant promis es of instant prosperity and total security could not be fulfilled, and so the disillusioned protested.

]duch of the present discontent probably should be charged up to the rapidly escalating inflation which is boosting prices and de stroying the value of savings. In flation is caused by. huge govern ment spending programs to satisfy the demands of the citizens for ever-increasing government bene fits - the "something for nothing" idea. The costly war in Vietnam has generated inflation but so too have the multibillion-dollar do mestic spending programs, such as urban renewal, poverty, and farm subsidies. Centuries ago, Pericles said: "Happiness is freedom and free dom is courage." In our search for the good life we have been concentrating on material com forts while neglecting more fun damental values. True happiness cannot be purchased, it cannot be be found in material comforts alone. Undoubtedly, much of the cur rent turmoil is the result of the frustration experienced by many people when they find that money and things have not brought hap piness. It is also probable that in creasing restrictions on individual freedom are being felt but not al ways identified. Ever higher prop erty taxes, sales taxes, income taxes, and surtaxes are required to pay for planned society schemes, and this reduces the individual's freedom to spend his income.

Furthermore, the welfare state breeds countless rules and regula tions as thousands of new laws are passed each year. Big government and individual freedom are not compatible. Money, luxury goods, leisure time, security from the cradle to the grave - all these are valued by 1970 FREEDOM FOR FARMERS 145 many people but they alone do not bring happiness. What we need in America is a big dose of courage: courage to take a position on con troversial issues; courage to re j ect compromise between good and evil; courage to take a stand on moral issues; courage to refuse to be "bought" by government pay ments or private bribes; courage to accept risk as the price for op portunity. Produce for the Market, Not for Government Storage Up to now, this has been a rather doleful recital of the sad state of affairs in the United States generally, and particularly in agriculture. If we stopped here in our analysis, the conclusion could be drawn that the future is bleak, but I am optimistic. I be lieve that the next few years will bring a change in direction, a change in the attitude of people toward government and new hope for farmers as they seek to pro duce for consun1er markets rather than government storage.

The time for a change is long past due. It is time to rid the United States of welfare state policies· and philosophies. Time to return government to its proper role of providing a healthy eco nomic climate for private enter prise rather than attempting to guarantee security from the cradle to the grave. Time to recognize the failure of the wild spending "new economics" theories and to re-establish government fiscal re sponsibility by balancing the bud get. Time to abandon government policies that force farm families to depend upon welfare type sub sidy payments for their income. Time to re-establish a free market agriculture with income derived from profits. Time to restore proper respect for law and order. ; IDEAS ON LIBERTY Look to the Individual THE RENEWAL OF CIVILIZATION has nothing to do with movements which hear the character of experiences of the crowd; these are never anything but reactions to external happenings. But civiliza tion can only revive when there shall come into being in a number of individuals a new tone of mind independent of the one prevalent among the crowd and in opposition to it, a tone of mind which will gradually win influence over the collective one, and in the end determine its character. It is only an ethical movement which can rescue us from the slough of barbarism, and the ethical comes into existence only in individuals ....

ALB E R T S C H WEI T Z E R, The Decay and the Restoration of Civilization Getting to kno LEONARD E. READ IF WE KNEW BEANS - and I mean this Iiterally - we would know that labor is a commodity. My dic tionary states that a commodity is "any useful thing; anything bought and sold; any article of commerce." This definition would seem to be acceptable to any econ omist. Listen to a distinguished busi nessman who puts himself on the side of the overwhelming ma jority: The concept of labor as a "commod ity" is so outmoded that we don't even talk about it today.! Granted, this concept is out moded. Further, it is against the law: "The labor of a human being is not a commodity or article of commerce."2 But it's not the first 1 Ira Mosher, President, National Association of Manufacturers, 1949. 2 The Clayton AntiTrust Act, 1914. 146 time men have thought the truth had been outmoded. When a truth is out of style, or at odds with leg islation, that's precisely when we should be thinking, writing, talk ing about it - especially when the confusion is as costly as in this case.