Down to Earth

woi TV in cooperation with the Iowa State Extension Service presents non-0 Dave Baker no well good evening and welcome to down to earth and to our third in the series of 11 programs that we've planned for you on public affairs now you see tonight I'm seated with a group of good folks here from storey County and we intend to discuss this program after the show is over in other words we want to find out among ourselves just what we think and what others in the group think about this topic that we're going to discuss tonight you know its methods of price or income support we think it has a lot of possibilities for a good discussion and we hope that you are in a discussion group or are making plans to be in one because there's a lot to be gained in this series of programs we think now then without further ado if you got into the program tonight and I wanted to introduce the moderator for the series mr. Wallace all who is extension economist but there are thank you Dave tonight we're going to talk about three methods of price and income support these methods will serve to help transfer income from the rest of the economy to farm families in a time of full employment such as we have now or they'd be this would be called a high level of support I think or they can be used to as a sort of standby protection in case the depression should develop now the level however at which we try to support prices or income by any of these methods does make a difference if it makes a difference in which of the methods or what combination of them that we might choose and it also makes a difference about how difficult it will be to carry out the program the higher the level the more difficult it will be - for either prices or income one method that we can use is the one that we're using right at the moment direct price supports now we're this particular kind of method we support prices when the market price is when the market price is declined below the guaranteed support level the government government supports the prices by taking part of the supply off the market and by storing it and disposing of it outside the market this they may do either with loans like corn loans or by government buying as we do it butter with this method part of what is produced is not sold to consumers in the market but prices still tell farmers that it's possible to continue production and production controls then usual will have to be used to hold down output and slow down and stop the piling up of surpluses and this is the method used with 90% supports now and it could also be used with flexible supports another method is production payments with this method as prices decline the government makes the different makes up the difference between the guaranteed support level and the average market price by cash payments we use this method there on dairy products and on beef during World War two with this method that is produced is all sold to consumers the guaranteed price however does encourage farmers continue producing just as price supports do and in this case the production control might be needed to hold down the cost to the program another method that we might use is method that we call income payments with this method if market prices decline enough to cause the total farm income to file below some determined minimum level minimum level maybe further higher probably low the government would make a grant in aid to individual farm families and and this grant in aid would help maintain an income to fund these payments would be made on it could be made on several different basis it could be several different means by which you decide how to distribute the payments the nearest thing to this that we ever used was the old corn hub checks in the early 30s now this method does not directly interfere with prices it lets consumers buy all that's produced and prices are permitted to tell farmers whether they're producing more than people wanted favorable prices now these then are the methods that we're going to be talking about tonight we have with us tonight our authority on the facts as we have had in some of the previous programs mr. Carl Malone my colleague and then again tonight we have the Don fish farmer from Maynard Iowa now Don in a year right 1953 which method or which combination of these methods would you choose being consistent with what I have said before I think that in a period like 1953 that flexible supports with the government supporting prices by either commodity loans or direct buying should take care of things pretty well so in this kind of gear you choose the first method direct principle that's right Wallace we have also with us tonight Asahina farmer from Marcus Oscar in a year like 1953 which of these methods they're combination of these methods would you prefer that you use all three em ideas direct price supports at 90 percent of parity for storable products such as friend I did production Coleman's our other products that even though they may be storable for short period of time would be of the perishable nature night butter - that's right and might we won't use it for instance in the proposal which the president made on well the original height might be useful err and I've used income payments on acres taken out of production if they were taken completely out of production if that was the necessary procedure and reviews consult conservation purposes and you would you would like to use income payments to help achieve production control yes I know we have with us tonight a new participant on our panel Loren Souls from Des Moines Lorna near like 1953 which of these methods or combination of them would you will prefer the lost I agree with Oscar Helene that all three should be used depending on the commodity depending on the situation depending on what you want to do it's wrong to make this an either-or proposition either flexible supports or high price supports either loans or production payments all these methods can be used could be you haven't had a chance to lauren to argue with either one of these men about levels and each of them have expressed some preference about levels do you want to say anything about whether you'd be interested in a in a support at 90% of parodies oscars indicated or at a more with some flexibility as dawn has or something different than that you want to comment on that here again Wallace I am NOT going to obtain myself to 90% of parity or to 75% or any other figure I think you have to look at each commodity and what the situation is and what you want to do 90% of parity doesn't mean the same thing in cotton for example as a dozen corn I happen to think that 90% of parity is a pretty good support for corn and not far out of line with what we want to accomplish with a corn price support program I think 90% of he is ridiculously high for cotton or wheat I'm a butter 90% of parity is way too high for butter too and when you've got a commodity piling up in storage the way butter is and the consumer is being forced to switch to oleo margarine obviously butter is priced too high and the support ought to come down Don I think you have indicated before that you would be inclined also to make some difference between commodities in the flexibility do you want to comment on this before we go on that's one of the things that I've had on my notes after each one of these perils is that the thing that was indicated was a commodity by commodity approach because the as far as I'm concerned especially when you're tying yourself up to something like parity there's no one answer for any two things that will come out right well Oscar if I understand you right you would be willing to have a commodity by commodity just so long as you don't go below 90 production she can maintain it and still find out about the level were the consumer well where he would buy any given product and then he would be better able to determine the kind of production that was necessary for a given product when you talk about eighteen or twenty cent all of years against 75 to 80 cent butter it had seemed that he would have to have much less than 75 percent authority to get butter consumed in sufficient amounts to take care of the production capacity of today and you'll probably find that you're going to have to really get take cows out of production and instead of just butter you're going to have to do some very drastic things that seems to be in the dairy business well knowledge so let's move on to this business of methods and a little different framework a number of people have expressed concern and particularly among those folks that I associate with economists that we may be in for well anywhere from a slight recession to a fairly sizable one that might even almost call be called a depression now as I remembered one Australian economist Lauren has indicated that we might have somewhere in the neighborhood of some eight million people unemployed by the end of this year now if we got into a recession and supposing we did I am NOT predicting it and I don't really think we will but supposing we did have seven million people unemployed what do you what do you men think then would be the appropriate methods that we ought to use or a combination of them again any of you well if you're asking me Wallace I should say that agriculture and all the rest of the economy should look to something besides specialized programs for this kind of an operation in other words you want a general approach to prime the pump for the whole economy and one way to illustrate what I mean is that as far as agriculture is concerned the budget message that the president gave to Congress today is a far greater significance to general economic stability and and the prosperity of farmers than anything that he proposed in a specialized farm program what I'm saying is that if you do have a beginning of a slump then the thing to do is to operate on the economy as a whole through fiscal and monetary policy and you can't do very much by a farm program or any other specialized program with that kind you know I before we've learned to talk about what you want but specifically for methods under these circumstances and I do want you to answer that question I think maybe Oscar and Dawn might want to come however at this point on what you just said about the general stable stability and full employment I suspect was very well agreed here that's right I feel that if we would approach a depression anyways near like the one we had in nineteen thirty-one and thirty-two that anything that might help the whole economy we should do and I certainly wouldn't disagree with that a bit I can remember in 1934 and 35 how desperately we needed the corn hug checks we got and if that is a necessary part of the pump priming operation as Lauren says why on for us well Oscar do you want to comment but I think it'd be a good idea for us to get some agreement here if we could have well I'm in general agreement the only thing I want to add is that we do have built into our economy now some things we didn't have at our last general depression such as unemployment insurance and things of that kind which will be helpful in those areas and it might be that there is for our we at that time is when we might want to really explore the possibility of this any come Pillman thing more than we have expressed to so far this evening all right now I want you to come to my question and nobody's answered it just except in this general framework if we had at the end of this year seven million people unemployed say which of these methods or what combination of them would you gentlemen like to use to really provide support and protection for a grocer do you want me to name you even start down if you want to well I would just go on the way I the way I started that I don't think seven or eight million unemployed is a major depression or recession or whatever you economists want to call it and I still see that nothing to indicate that the program which I ever expressed myself as believing in wouldn't be sufficient as you would you wouldn't say that even under these conditions that a program of flexible supports using direct enterprise support would be right you see though the reason one of the reasons that I have liked flexible price supports it is it gives us the floor I don't know but what perhaps I might prefer 60% - 70 personally but that's the thing that you get out of that is a floor and 68% of parody on corn would still be around the dollar bushel and I think it would keep most of us relatively solvent you fellows want to comment on his position before you state your own or even what would you like I'd like to say this Wally but first of all in a depression or in a general downtrend in the business cycle any agricultural program wants to be consistent with a general anti-depression policy now any kind of price supports in the market even Don fish's flexible supports 75% of the parity are 160 percent even 60 perhaps I don't know but remember in the last depression the 50 percent of parity seemed pretty high the point I'm making is that any kind of a price support that actually supports the prices that does something more than the market would do aggravates the depression it tends to make food harder to buy it for city folks and it tends to hamper the general program with the government and a business to get us out of the slump and to get the recovery started therefore I think we shouldn't count on price supports even flexible supports or much help in a depression to agriculture I think we'll have to turn to something else and there's Don fish says some kind of income payments to agriculture as part of a general priming operation maybe the old corn hug idea maybe something tied to soil conservation that has a general popular appeal they pay farmers extra money for building up soil conservation structures on their farms and so on a lot of different ways that you could do this one proposal made by an Illinois professor was for income payments of a very direct kind tied right to the income tax take the farmers income tax and payment percentage on that basis in cash when you got into a real serious depression now all I'm really saying is that price supports in the market are not a good anti-depression tool at all and we have to look for something else in agriculture in a real depression and the thing we want to look for first I want to repeat this is the depression starts outside agriculture and you got to cure it outside agriculture you've got to operate on the economy as a whole and let's not look upon price stabilization programs in agriculture as anti-depression machinery I've talked to you on more well I think you've said good things you know ordinarily in the past we thought of agriculture as being the front-runner and I'm not your servant what it's pretty much the full runner over the depression today if we should have one and that's one reason why I want to maintain rather high supports and good income for farmers to keep them going into the tailspin first and I am pretty sure that there are a significant group that they aren't the most important group and our economy from the standpoint of helping us to get into a depression and so until we really get in there until it is proven that we get into or that we have any depression I'm going to stick to the rather high in town or agriculture I think Karl Malone our man has been very sound over here would like to have a chance to get into this at this point and comment so Carl Lester what do you have to comment what these men have been saying well I would like to see if I understand what they said about particularly about this prosperity trade and what they're going to do them now as I get it Oscar Helene wants high-priced support or 90% price supports and also production payments for the perishables and when he does that he's thinking largely of the matter of supporting farmers income and somewhat less of the matter of making adjustments in agriculture and somewhat less in the matter of our foreign markets for as Don fish who takes the other side and what's flexible supports so that they would slide down in the case of a larger supplies is much more concerned with freedom and agriculture with having farmers a chance to adjust and make changes and so on and he's not as much bothered about the prospect farm income being lower than they are satisfied with and or and so I think Warren as I get your position you're sorta in the middle ground you want to keep agriculture fairly flexible you don't want to put all your eggs in any one of these baskets as to methods but you want to adjust things in total by pretty good planning so to come out well now all of you then departed from this when you got the depression and you come much nearer agreement I want to just tell near this agreement is I think you made an excellent summary Carl of their positions for situation centers we have now and I'd like to see whether we do agree and how far we do agree on this business of what we do for farmers in a in a saying of a recession let's not call it a major depression I don't think either Don that 7 million unemployed is a depression but let's say we have that many in poverty recession whatever you want do I think we ought to see how Donna seems to me has to put himself on record as favoring still they flexible things with with a floor the well officer so you'll excuse me there's one little thing that I have felt for the last two weeks needed to be said and that is that the things that I say I'm saying them because I'm an American citizen first and a farmer second it just happens that I happen to feel that a free enterprise agriculture is very necessary to our well-being of our whole government that's the reason I'm saying the things that I do some I think if necessary having a little lower it incomes in agriculture is a price well worth paying for that I agree entirely with what Lauren says and I feel that when you come to depression whenever you wanted to find two such the main cure has to be outside of agriculture I figured sixty to seventy percent although supports would interfere less with the other mechanics of getting us out of a depression than 90 percent of supports that's why that's true said the things I did yeah no there's one thing that we've got left hanging here and Lauren has indicated that any kind of price support is not a very good method of combating a depression and helping incomes during a depression and I think we've left Oscar in the position of supporting prices and and production payments and being willing to use income payments - now what about this you want to comment on his criticism of price supports in this town just one comment in the short time that it seems to me that we haven't said much about foreign markets but if we don't have enough outlets then the income payment seems to me ought to be made on the acres which we have to take out of production and there I think there's where the income payments ought to come into play the only thing about income payments that I'd like to add is that there's something we should never have to do there's something we should keep in reserve but a depression in a modern society like ours should never get to the point where you have to resort to that we have the novel excuse me Lorne but if I were a farmer and got income payments I would fee feel like I was being kept by the government and I don't think many would be it would feel like that after all the tobacco farmer you know has been voting up as high as 99 percent for his controls doing it year after year and they are they're pretty good American citizens over there I agree they're getting along all right sure everybody is willing to accept government handouts except on fish I think really is interested in in the welfare of the country and he may disagree with some of you people about how we have it now let's that's just sort of see where we have gotten to in this discussion and then we'll let the group over here make some decisions about it after we we get to but as we have discussed this thing tonight we have had the three methods of price and/or income support there's a direct to support that we're using now there's production payments where we make up the difference between average prices and the market price with a cash payment and then there's the income payment which as it's been described doesn't usually relate too much to market prices at all now I think you can recognize that any one of these sorts of methods of doing the job could use and other methods that we haven't talked much about tonight would have earlier and is production control to boost by reducing the supply the boost the total income Franco survived produced by lowering the supply and boosting 20 now these these methods have been discussed both for a for a period of good times like we have now and a period of depression I think we want to point out that the most important thing is that there is a real difference in the kind of method you use for one time and another Dave will you take over with your group over there now and go ahead well Wallace thank you very much and to your group over there for fine discussion now then what do you want do you want a fixed or you want flexible price support by the way if you have any questions you'd like to ask us here on this program why don't you write me here wor-tv and we'll try to answer those questions for you and by the way we've been getting some mighty fine letters in here too a lot of them in fact both of them a lots of them brother on both sides the question presents we have it a couple letters here now that I want to read to you briefly here's one from Earlham Iowa which says we are back a mr. Fisch 100% on these ideas it seems to us if the support so Lord while we have such a surface but discourage the speculative suitcase farmer who is in it only because the government guarantees him a profit now then on the other side here is a group that met down in Medellin Clarion Iowa rather and all seven couples signed this card saying this group disagrees with mr. Fisch 100% so mr. Helene that should be some consolation to you now then about next week's program Karl Malone I've asked him to discuss it briefly with you because he has a lot of good information on it Karl would you take over here and discuss the program we intend to have for next Thursday well next week we're going to have something a little different we're going to move to the political process now the way our society operates it is the function of the political process and the political representatives to find some kind of a common denominator of our ideas and to stand for this common denominator or that that is in their judgment the common denominator and past it into laws for the benefit of our people and so next week we're going to have representatives of the political parties here to give their ideas of what this common denominator is regarding our farm programs that I think will be an interesting session well thank you have you tried though have you started a group discussion of you all or have you become a member of a group discussion in your community or in your neighborhood why don't you go to your County Extension director or your County Extension home economist and find out it's such a group operating and get to be a member of it so that you can also discuss as we intend to discuss tonight after the show's over some of the problems that were brought out here I I think you'll enjoy it now I think that the County Extension Office will have a lot of good information for you so until next Thursday night then good night this program was produced for the Agricultural Extension Service of Iowa State College by a Dave Pitman technical director Rose Byrne custom dagoth was invented by a joke