Show Operation of New Farm Parity Measure Puts U. U S. S Agriculture on Business Business' Basis I WASHINGTON When When the making history Farm Parity law went into effect the first of this month American agri agri- agriculture agriculture agriculture culture began for the first time to operate like a gigan gigan- gigantic tic manufacturing organization tion with every farmer guar guar- guaranteed guaranteed guaranteed a definite sales price for the things he produces produces- whether cereals meats fats dairy products tobacco eggs fruits poultry or cotton What does parity mean and how does it operate Simply that from now on the American farmer will re re- receive receive receive prices for his products that will give him a purchasing ing power equal to that which he held in the World pre-World war years of 1909 to 1914 That was one of the most favor favor- favorable favorable favorable able farm price periods in hi history The farmer is guar guar- guaranteed guaranteed guaranteed a crop loan rate of 85 per cent figured on a fixed valuation basis If prices go above parity he reaps the benefit If they fall below that valuation the farmers farmer's crops go into the governments government's govern govern- governments government's ments ment's surplus bins and Uncle Sam takes the loss The parity law will add a billion dollars to American farm income this year agri agricultural agri- agri agricultural gri- gri cultural economists predict It will generate a buying pow pow- power power I er er that will be translated d into expanding purchases of practically tic t ally every commodity the farmer uses Manufacturers have bave usually been able to name the price at which they wished to sell seU the volume of their th output Now a floor has been placed under farm prices similar to the floor under industrial income So the farmer can roll roU up his bis sleeves and pitch in with the knowledge that he bc ae has been placed virtually on an economic equality with industry With the manufacturer such a pro pro- program program gram has required good judgment concerning costs desired profit supply and demand competition and the volume of production To all aU Intents and purposes a similar re- re responsibility responsibility responsibility has been placed on agri culture Wheat Assured In order to prevent price breaks due to overproduction safeguards restricting r the volume of farm out out- output output put p ut have been set by the new law And to protect prices further sur sur- surpluses surpluses pluses p luses of the thc farmers farmer's production are limited to quantities that can be easily absorbed by the Federal Surplus Commodity corporation Sponsors of the law believe it will assure farmers a return of at least a bushel for wheat 87 cents a bushel for corn and 16 cents a pound for cotton With an increasing demand for farm products for lor de de- defense defense Tense purposes and the Feed Brit Brit- Britain Britain ain a m program under the lend lease lease lend bill l prices may easily rise above these levels One thing is certain Farm In in- Income income come came and farm expenditures will be sharply increased by this new parity law Last year agriculture received for its production The 1941 income will mount well over according to current forecasts of at the U. U S. S department of agriculture History has demon demon- demonstrated strafed str ted that when national farm in in- income income income come rises above a year agricultural expenditures rise about as sharply as income Another favorable factor is that at atthe atthe atthe the present time the farmer has a f t t s Edward ONeal president of the American Farm Bureau federation Operation of the farm parity meas meas- measure measure ure arc culminates 25 years of effort on the part of this organization to bring about these benefits 1 rn n v rN 0 rA t Nr N A W 4 LIA W 01 rill Y nu Nil II r. r IM 1 ALI HOW IN LN ry W-N W 1 Y l nr ua rn l c ea sr w t r r T TreY n reY wr IN 1 N rJ Mr- Mr tl ra UI A R V W IwI The graph above prepared by the t e bureau borean of agricultural economics of the United States department of agriculture In Washington Illustrates the current farm situation in the nation today good deal of last years year's production In storage under loan He is there there- therefore therefore fore tore holding a sized good-sized equity In his last years year's production which he can sell at better prices due to war conditions as well as the guarantee of parity prices The farmers farmer's last years year's production is like money in inthe inthe Inthe the bank Labor Cost Is Up Increased taxes and higher costs for tor farm labor and for many of the products the farmer buys will sy sy- sy phon part of the income gain The price the farmer f pays for fertilizer however promises to be relatively lower than for numerous other prod prod- Teamwork between science and industry has combined to cut the cost of soil improvement A. A L. L Mehring Metering of the U. U S. S department of agriculture recently pointed out that American farmers now save a year due to reductions inthe in inthe inthe the cost of fertilizer resulting from scientific research One of the almost inevitable re re- results results re- re suits of increased farm income will willbe willbe willbe be a rise in the value of farm land The history of all aU past eras has shown that whenever farm products have risen in price for a considerable ble period land has likewise risen in value The rising trend may tempt many farmers to slon sion As a matter of fact the im im- improved improved I proved outlook for agriculture has already caused many farm folks to consider buying an extra farm If farmers will remember the aft aftermath aftermath of World War No ls l's farm expansion a good many future head head- headaches headaches headaches aches can be bc avoided During that first World war American agriculture agriculture ture tare was pushed to the limit Food Will Win the War was the slogan Under high pressure mil millions millions lions of new acres came under cul cul- cultivation pyramided But after the Treaty Tr aty of Versailles Versa lUes agri agri- agriculture agriculture culture fell feU Into difficulties And many farmers to this day feel the hangover twinges of that speculative spree Improve Soil Program What Is the alternative to the urge for more land today It lies In diverting any extra mon mon- money money money ey that comes In from the farm parity law Into lines that will bring more permanent security at less risk In the long run For Instance paying off indebtedness repairing old and putting up needed new farm buildings improving livestock and increasing the fertility of the soil soll sollon on the present farm This last is especially important for on the productivity of the soil soll depends the farmers farmer's ability to pro pro- produce prod produce duce d ce abundant crops for defense needs and to take advantage ge of the added income the parity p rity law pro provides vides And as a matter of fact farmers can actually enlarge their farms without Incurring the hazards of The secret lies In hi making the present farm acreage do a better production job said a recent state state- ment men of the Middle West Soil Soli Im Im- Improvement Improvement Improvement provement Committee This means following f a soil soli management pro pro- program program program gram that will raise the lands land's total tot l fertility level Even In the most productive areas the average farm can usually be enlarged so to speak the equivalent equivalent lent of 10 per cent and sometimes as much as 50 per cent through Intelli intelli- Intelligent intelligent intelligent gent soil treatment In combination with other sound sound farming practices the use of fertilizer fertilizer fertilizer lizer containing nitrogen phosphor phosphorus us and potash po sh is essential in stepping up the soils soil's productive capacity Such a practice not only has an immediate effect in increasing the per acre yield of crops needed In Inthe Inthe inthe the nations nation's defense effort but rep rep- represents represents represents resents an important long range soil building program It likewise means lower production costs and improved crop quality The soundness of this principle may be appreciated by a brief but detailed study of the performance of farm land prices from the pre pre- 1914 days through the World war ex ex- ex- ex pans on and down to the thc depression Farm Values Rise and Fall In a group of middle western states the price of farm products more than doubled from Cram 1910 to 1920 During this period land values also rose rose to record levels After 1920 the reverse was true But 1940 prices of farm products were only about one half as high as In 1920 and land values were likewise cut in inh half h lf Walter H. H Ebling a farm economist economist mist studying land values discovered discovered ered that a piece of typical farm farmland farmland fa faland land that was worth an acre in the first parity days preceding preceding ing lag the World war w r had reached a selling price of an acre in 1920 0 an an Increase of 71 per cent B By 1930 it was worth only or a adro drop dro of 54 from 1920 Then during durin g the low ebb years of the depression the value of this same piece o oland of f land receded to 80 With some Improvement In th the e prices of farm products after 1933 the value of farm land rose slightly By 1937 the piece of land Eblin Ebling studied would have been worth 89 89 or 9 more than during the lowest years of the depression but still sill 11 less than its value before the tin e World war When the recession of o f 38 1937 carried the price of farm fa products down farm lands again agai n slipped in value So by 1940 the th e piece of land would have been worth wor th only 84 or 5 per acre less than In 1937 and 16 less than it was in th the e World pre-World war w r period |