Farm Policyt - Now What; W. Peterson

420 million of its $500 million in oper ating capital, with nothing to show for it but record farm foreclosures. Every· time the Board had a modi cum of success, production would shoot up, foreign markets would fade away, and heavy inventories would overhang the market like the sword of Damocles. Soon President Hoover recommended the next logical step of price intervention: production re strictions-withdrawing land from cultivation, slaughtering young an imals, plowing under crops. Presi dent Roosevelt and his successors put these and other restrictions into practice. Thus the pattern for some five decades of farm intervention was set: production incentives such as price supports and crop insurance, on the one hand, and production curbs such as acreage allotments and market ing quotas, on the other. Generally the production incentives have won, burdening the government and tax payer with huge stockpiles of food FARM POLICY-NOW WHAT? 421 But as the number of farms and farm employment has dropped in this period the size of farms has nearly tripled in entrepreneurial response to the economies of scale over the years: Farm Percent employment civilian (millions) labor force 1930 12.5 25.8 1940 11.0 19.8 1950 9.9 15.9 1960 7.1 10.2 1970 4.5 5.4 1980 3.7 3.5 subsidies, offers fewer and fewer job opportunities as farmer-entrepre neurs have automated their produc tion. Note how the number of full time farm jobs, including those of farm operators, their family mem bers doing farm work, and hired hands has plummeted over a 50-year span: and fiber over the years. The stock piles, in turn, have forced the gov ernment into such welfare ventures as food stamps, school lunches, se nior citizen "nutritional programs,"

"Food for Peace" foreign giveaways, and so on. The rub with modern farm policy, then, is its useless and quite irratio nal attempt to repeal the law of sup ply and demand-to reinvent the wheel. The unhampered price mech anism, in other words, ever pulls supply and demand toward equilib rium, leading to optimum efficiency and economic growth and assuring that whenever shortages or sur pluses do emerge they are fleeting and short-lived. The further rub is that the farmer to be saved wasn't. Ultimately he was burned and he, like his forebears, quit the farm for other pursuits, causing a massive change in the composition of the American popu lation. The 1981 Statistical Abstract of the U.S. tells the story: Farm Per cent population of total (millions) population Farms (millions) Average farm size (acres) 1930 30.5 24.9 1930 1940 30.5 23.2 1940 1950 23.0 15.3 1950 1960 15.6 8.7 1960 1970 9.7 4.8 1970 1980 7.2 3.3 1980 6.5 151 6.3 167 5.6.......... 213 4.0.......... 297 2.9 374 2.4 429 In a like way, American agricul ture, notwithstanding the lure of Moreover, despite all manner of government controls, farm produc422 THE FREEMAN tivity has generally raced ahead of nonfarm productivity in recent decades. From the 1950-1954 period to the 1975-1979 period, for exam ple, the annual average yield of corn leaped from 39.4 to 95.2 bushels per acre, wheat from 17.3 to 31.4 bush els per acre, potatoes from 15,100 to 26,200 pounds per acre, milk from 5,400 to 11,000 pounds per cow, and eggs from 181 to 236 per laying chicken.

In the same periods, annual aver age manhours necessary to produce each 100 pounds of chicken broilers dropped from 2.4 to .1, reflecting enormous acceleration in automated broiler production and a reduction in manhour requirements by 96 per cent in a 25-year stretch. During this same period, turkey production au tomation was not quite so rapid. Here, 6.8 manhours were required to produce each 100 pounds of tur keys, on an annual average basis, in the 1950-1954 period, against only .5 manhours in the 1975-1979 pe riod, thereby reflecting a 93 per cent manhour reduction in turkey pro duction. About the only winners I can find in America's farm picture are the farm politician and the farm bu reaucrat. The bureaucrat really farms the farmer. While the number of farms and the farm population have plummeted, the number of em ployees at the Agriculture Department has grown like weeds. In 1930 there were 26,050 employees, 98,694 in 1960, and 129,139 in 1980.

Clearly depopulation of the farm sector has weakened the farm bloc but only relatively. Last November all 21 Democratic members of the House Agriculture Committee seek ing re-election held on to their seats while the GOP saw 5 of their 19 members defeated, including rank ing member William D. Wampler of Virginia and second-ranking Paul Findley of Illinois, a key Adminis tration supporter on farm bills. So regardless of the irrationality and colossal waste of modern farm pol icy, the immediate outlook is for more of the same. But the longer-run outlook seems saner. As farms more and more come into stronger hands and grow in size, farmers will tend to demand more of a no-nonsense farm policy. Then in creasingly unhampered farm entre preneurship can playa more con structive role for the farmer, the consumer and the economy. For to day's farmer, after all, is still a pri vate property-holding, technologi cally astute, business entrepreneur.

And when he becomes numerically smaller still and hence no longer fair game for politicians and bureau crats, when, in other words, he be comes just another unsubsidized businessman (if in dungarees), he will thrive. , Hans ~ Sennholz BenefitMandates cause Unemployment MOST PEOPLE expect more from their work than wages. They seek addi tional benefits, such as a sense of purpose, accomplishment, apprecia tion, companionship, etc. They de sire all sorts of things in exchange for their labor. In the broadest sense all these things are "fringe bene fits." Psychic benefits have great eco nomic significance as they may af fect a person's spirit, disposition, and attitude. They influence his will and power of work, his contribution to the production effort. A wise em ployer is keenly aware of the impor tance of psychic benefits which he grants with great generosity. They never impoverish the giver, but al ways enrich the lives of those who recei ve them as well as those who confer them. They cannot be calcu lated in dollars and cents although Dr. Sennholz heads the Department of Economics at Grove City College in Pennsylvania. He is a noted writer and lecturer on economic, political and mone tary affairs.