Course By
, ^ - now almost 50 vears sincp thp . benefits or the program
federal government assurned a maior role to the operators of the largest faVms,
m determining the production aSd SficTno 'ncomes were already above the
of farm Dro&ts. The Sn?odif? oro? Li™ ?.''Ara?e. the top
GOVERNMENT CONTROL AND
INDIVIDUAL FREEDOM
One effect, Intended or not,
nramc*^ Commodity pro- nerrent nf farmpr^ roroif/in'oi ® substitute government decision making for ■
fhe^^oavment^^^Avprlfno^^ffrln^®-^^^ ° individual freedom of management. The
scalP^^wprp*^Hlo' ®o,ntinue on a reduced increaS but'onlvl^v^widpliil^n thp°??f® question, basic to the commodity
f^rnlv ^^^e the betwoen Hch and nnnr ^^® 9®P programs and stiil unanswered, is the
family farm from threatened ecnnnmir uetween rich and poor. degree to which individual freedom is an
disaster.
YpttnHav ^ , u’’’*^® PJg fa.i'mers used their payments to
apmc tp buy outiheir smaller neighbors, speeding
a1ISnP*°nf^l nm ^f^^angered species. An
average of 2,000 farms have gone out of
Qnmpifl “'950. Although
^3''ms are family
Department of Agricul-
“there will be a few
inlf a few® ySs.®production in
programs in agriculture
asspS ®®®^® appropriate to
*K® rP°''®''^'P®nt activities begun
during the Depression.
up the demise of the small farm.
Benefits drove up the price of farm land.
A tobacco or peanut allotment was worth
more than the. land on which the crop was
end in itself, and the degree to which it is
but one of several alternative means to the
end called increased income.
Farmers who produced certain products—
BfCONFIDENT
when trouble stnlies
grown. Thus the program meant a windfall chiefly tobacco, peanuts, sugar, and dairy
to those who owned the land when the products-became so dependent on govern-
program began, but an added cost to the rnent programs that they resisted the trend
next generation. toward market orientation that has become
The commodity programs also resulted in evident in the iast 15 years,
the United States losing markets for its A fair assessment of the commodity
« r- 1- r until programs is that in the early years they
helped to prevent political ana economic
exports. For example
1961, the United States
stated purposes ana anving up our price.
The major objectives of the commodity ourselves out of the market
programs were to increase the prices of
farms products; to stabilize supplies; to
improve farnr income; and to
from 1930
. held its cotton . .
production to 14.4 million bales. During disaster. But they were continued beyond
the same period foreign production of fheir time, and with this extended life
cotton doubied. By curtailing production came an aggravation of their many
and driving up our price, we priced problems. In the end, consumers
taxpayers, and many farmers themselves
'fiikpeiHknt]
/AGENT,
Mrvzs voo first
eS53',
YOURj
JautroKe
- _ , , , _iny
The assessment that surplus production became disillusioned,
i/as the major problem for farmers became Hence the retreat-but not
save the self-fulfilling, if the price of a competitive these programs.
family farm These objectives were to be good is helcfsubstantially and continuously We should read the lesson
accornplished mainly by paying farmers to above its market price, a surplus inevitably repeat it.
curtail production, thus driving up prices, develops, regardless of the original supply
The programs applied chiefly to wheat, situation. The artificially supported price
corn, cotton, rice, peanuts, tobacco, dairy encourages production and discourages
products, wooi, and sugar. Meat, poultry, consumption: hence the piie-up of stocks
fruits, and most vegetables were never in government hands,
deep y involved. Inclusion was based The programs were costiv to consumenq
mainly on the workability of controls and and
well, lest we
You can b« sure .you’ll f«t hcTp
••St—if you fet your home. c*r,
or business msurence through
us We re injfJeptrt^nt agthtt.
Our sirmbot above is a stgn of
tervice btyooo the call of duty
Step m soon.
Maxwd B. Haimi^
mEET^BOlUNOp
fiWNBOPWS
programs were costly to consumers
A* *1, ' - s and and taxp^ers. According to economist
on pohtics. At the program’s peak, Charles Schultze, during the period
commodities accounting for three-fourths 1964-69 the program increased the price of
of farm income were not controlled, food by 4 percent each year above what it
Because the program’s scope was limited, otherwise would have been
so too was its ability to achieve its , , ...
o^ectives. A study initiated by Secretary of ,,
The measuring rod for prices was parity. Agriculture Ezra Taft Benson placed the Economic
that is, a given amount of the commodity t® the government at
should purchase the same goods and billion for the period 1932-1959. Since
services as it did in the period 1910-1914, then costs increased greatly, but Benson’s
when farmers enjoyed a relatively good accounting was attacked so strongly by
'^SSH^THE author
^AARLBERG is Professor Emeritus
at Purdue Universjty, where he taught
agriculturai economics for many years, ne
has heid appointments from Presidents
Eisenhower, Nixon, and Ford, serving as
Assistant to the President, Coordinator of
the Food-fpr-Peace program. Assistant
Secretary of Agriculture, and Director of
Agricultural Economics. In addition, he
advisor to Secretaries
Hardin, Butz, and
S^_l I— >
Knebel
can
standard of living.
During the three Depression
1930-32, immediately before the enact-
farm interests that it was never'updated.
years
gubl'cations include “Amerl-
Farm Policy”: “Great Mvths of
Economics’’; and “F^arm and Food^Policy-
Issues of the 1980’s.” '-wm.y.
ment of the commodity programs, farm
sent
E
rices
averaged 72 percent of parity,
uring the last three years that the
jrams were in substantial full force,
370-72, farm prices again were 72 percent
of parity, the same as before the programs
began. Forty years of effort had failed to
achieve the parity price objectives.
Together with other government initia
tives, the programs did bring about some
stability. The disastrous price declines of
1920-21 and 1930-32, when few stabiliza
tion programs were in effect, were not
repeated after World War II, when there
were many such programs.
Supplies as well as prices were stabilized
to a degree by storing, in government
hands, the commodities that could not be
sold at the government-supported price.
These stocks assured consumers of steady
supplies, but they also depressed market
prices and required deep cuts in farm
production.
Incomes of the farm population rose
absoluteiy and relatively during the
40-year life of the programs. Before 1933,
the average income for farm people was 70
percent or that for nonfarm people. Forty
years later, their incomes were about
equal. This gain in per capita farm income,
however, was probably due not so much to
the commodity programs as to the increase
in farm size and efficiency, the decline in
the number of farmers, and the increase in
off-farm earnings of farmers, which came
to exceed their incomes from farming.
Clearly, the program did not preserve the
family farm. In 1930 there were 6.5 million
farms; by 1970 there were 2.9 million, less
than half as many.
This drastic decline in the number of
farms was caused chiefly by technological
change and resulting farm consolidation.
The commodity programs actually speeded
up this process by providing price
incentives for greater yields per acre,
stimulating the adoption of new large-scale
technology.
A major purpose of the commodity
programs—perhaps the main one, though
not openly acknowledged—was to avert an
agricultural uprising. The Great Depres
sion was an unbelievable disaster to
modern Americans. The farm mood in
1932-33 was grim.
The New Deal put into operation the
programs the farmers themselves wanted
and put farmers to work administering
them. Checks began to flow into farmers^
hands, and the mood changed for the
better. Elsewhere in the Depression-curs
ed world, as in Germany and Italy, the
open economic system gave way to
Fascism. In the United States^, the open
system survived, though witn modifica
tions.
The stated objectives of the commodity
programs were thus only partially
achieved.
SIDE EFFECTS
The most profound effects, however,
were unintended, and most of them were
adverse in terms of program objectives.
TAX TIPS ’82
434-2227
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It is always surprising that
the same cost-conscious
consumer who would be
meticulous in comparing the
price of beef roasts or new
furniture can be casual
about tax filing and record
keeping.
This is especially notable
when you consider that the
amount of money to be
lost—or gained—is much
more significant.
The Economic Recovery
Tax Act of 1981 promises
some relief to all taxpayers,
regardless of income level.
However, it still will pay to
become tax-wise, whether
that means learning what
the new laws hold for you,
or simply taking advantage
of tax breaks previously
available.
• Make use of retirement
savings. The IRS allows you
currently to put aside
$1,500 into an individual
retirement account (IRA)
for yourself, or $1,750
where an account was
opened for a working and
non-working spouse. For
the next year, you’ll be able
to stock away $2,000 for
yourself, or up to $2,250
where a non-employed
spouse is included whether
or not your employer covers
you with a separate pension
plan.
For two-career couples,
each can have their own
IRA, with a deduction of
$2,000 each for a total of
$4,000 a year. Essentially,
this provides an available
tax shelter for your savings,
as well as encouraging set-
aside for retirement. But
don’t forget that valuable
deH jction at tax time.
• Dual-incomes should be
figured carefully. Whether
it’s the situation of a tax
payer holding two or more
jobs, or a dual-career house
hold, it will pay to consider
filing strategy extremely
carefully.
Would you benefit by
income averaging, especially
where your spouse has re
cently taken on a job? Are
you having the right amount
of FICA withheld? (Regard
less of income, the top
amount of FICA any tax
payer should owe is
$1,975.05 for this year, and
you won’t get a refund
unless you file for it.) The
so-called “marriage penalty”
You may be able to save
money the next time
you pay your taxes.
is seeing some relief for tax
year 1982, but that won’t
change the need for solid
tax planning.
• Watch new tax breaks
when buying or selling your
home. Among the many
changes brought about by
the 1981 tax legislation are
those concerning the pur
chase or sale of your home.
One important change
lengthens the period (cur
rently 18 months) during
which a person can save on
taxes by re-investing pro
ceeds into a new home of
equal or greater value. Now,
you’ll get 24 months—good
news for those bogged down
on the current real estate
market. The once-in-a-
lifetime exclusion for home
sales by persons 55 or over
has been raised by $25,000,
to $125,000, also good
news to older people selling
their principal residence.
• If you need help, get it.
There’s a good reason that
more than half of all Ameri
cans now seek help with
their taxes. It’s hard to be a
once-a-year tax expert, and
that is especially true with
many upcoming tax law
changes.
You’re almost certain to
benefit from trained assis
tance if: 1) you have bought
or sold a home, 2) your
income level has changed
appreciably, 3) you have in
vestments income, 4) you
have gotten divorced or
became separated, 5) you
have made a long-distance
move to a new job or have
been seeking employment,
and in many other common
lifestyle or income situa
tions.
So if it looks as though
you’d benefit from help, get
it. Don’t be penny-wise and
pound-foolish.
For free information on
what the new tax laws mean
to you, write c/o “Tax
Tips,” H & R Block, Inc.,
4410 Main Street, Kansas
City, Mo. 64111.
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BOILING SPRINGS, N.C
434-7851
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Strawberries are an excet
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* *
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Timing is important if
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