WOI-TV: Down To Earth- #4 Price and income supports

I Want a farm program that will maintain farm income I Want a farm program that will give us some protection, but I would like to see the prices determined in the free market Woi TV in cooperation with the Agricultural Extension Service presents down-to-earth We continue with another public service by discussing the present farm issues tonight on down-to-earth with Dave Bateman Well, good evening We certainly are glad to have you again tonight to help us start off our second on the series of programs on public affairs Now tonight we're discussing goals for a farm price program last week we just discussed shall we change the present farm program tonight goals for a farm program price program and next week We're going to discuss methods of price and income support and on January the 28th farm price supports The issues and the choices now that is a part of the general area of farm price and income policy Now we know that these Topics are timely and important and we certainly hope that we can make them interesting for you Now everyone has been discussing the farm programs lately but in newspapers But on radio it's been on television and you've heard ample opportunity to hear and read about it now a lot of that was brought about because President Eisenhower focused the attention of the people on it when he sent his message to Congress When he asked that some changes be made in other words, he has recommended that some changes be made in the farm program That's enough to cause quite a bit of discussion. Now, there's one thing I hope that you will remember Throughout this entire series and that's just how important you are as an individual and this whole scheme of things In the nation's agriculture in the nation's business And of course in order to be to be important or to make the maximum contribution Let us say you have to be well informed And that's what we hope to be able to do on this program is to give you information on which you can base Some of the facts that you will have to determine later on this year next year and in the years to come Now in our audience tonight, we have several individuals that I want you to meet sitting here with me as mr. Karl Malone. Mr Karl Malone is extension economist He's an authority on the facts to be discussed tonight and you'll be hearing from him from time to time throughout the show And then we're delighted to have had with us again tonight Two gentlemen that were with us last week. Mr. Don fish of Maynard does the livestock farmer? And mr. Oscar Helene who is a farmer from Marcus Now then in addition to that our studio audience tonight is made up of a group of Four farm folks from Hamilton and Boone counties and certainly they will have some questions to ask mr. Fish. And mr Helene later on our moderator for this series of shows all of them is mr Wallace OGG extension economist here at Iowa State College Wallace Thank you Dave before we discuss farm policy goals I want to talk to you about an idea That is important in a democracy if people are to make the kind of decisions that you've been talking about now We've tried to draw a picture this idea we have a chart over here of methods and goals now If you think about a goal that you want to attain Usually there has to be some kind of method and the goal is quite often an intermediate goal to some higher level goal. That is Superior to that now, we feel that people will agree often about the the highest level goal, but sometimes disagree about the methods and the Intermediate goals now let's illustrate if you take methods for instance, the Corn loan is an illustration of a kind of method and this is a method to an intermediate goal Supporting corn prices but supporting corn prices really isn't a goal in itself. It's just a Another kind of method to a higher level goal in this case Fair income between corn farmers and the rest of the people now at each of these levels people may disagree They can disagree over the methods. They can disagree over the intermediate goals They can even disagree over the higher goals But usually people are more inclined to agree over for instance that the idea of a fair income or parity for agriculture isn't the are to agree over the the intermediate goal supporting prices because you can always do these things by some other means now If we Do tend to agree at the higher levels, then that ought to be true of our panel tonight, and I predict that our men will tend to agree about some of the More ultimate goals, you might call them but well disagree over how we get there Now before We Get to this business of a discussion of farm policy goals In itself. I like to ask you gentlemen About some other kinds of goals for instance We have This question of national security which people in United States are very much concerned about now. The tension is relaxed a little bit but would you agree that our Farm program should at least not interfere with national security. How about it on sure. How about you? Okay Well now As you think about this business of adjusting to an uneasy. Peace A lot of people are discussing the possibility that we might be on the brink of a depression now would you also agree that farm policy ought to help us avoid a depression a Lot of time now any questions that either one of you have about any of these goals we go along. I don't hesitate to interrupt Now would you also agree that? We're interested in progress economic progress and economic efficiency in our society Well, that's been one of the Main attributes of our people in this country is their ability to go forward with efficient production of all kinds All right now one that's just a little more difficult this business of Fair income I Wonder if we can agree on a definition of of a fair income opportunity for farm families. I I Have a definition here That's kind of an economist definition But I'd like to to give it to you fellows and see if you are willing to go along with it farm families To have a fair income opportunity Have a faery income opportunity when they had the opportunity to earn a living that is equal to In either in agriculture or another employment is equal to the income that people in other employment may earn with the same effort and ability now that's a little complicated but Any question about it before we I Agree that I think it's an accepted policy in this country and I think we ought to try to maintain it. How about two done? is this Definition of fair income. All right with you Pretty much. So do you have any qualifications you wanna make you sound a little hizmet? well, there's always the possibility if if you can't make a Living that you think you ought to be making an agriculture that you can move out of agriculture well we we said that to see we said that you have the opportunity or an either an agriculture another employment the same level of living that Other families could earn with similar African ability All right. Now then I'd like to ask you gentlemen if you think that farm families have this kind of opportunity When we have the kind of inflation that we had during World War two or during the Korean War. How about it? After you was I'm pretty sure we did in fact is on rising markets, generally agriculture nearly always Comes in as quickly as any other segment of society So, I'm sure that agriculture fair fairly. Well during the inflationary period and some farmers of course might have done a little better than this other it's not quite so well, but well How about you Don? Oh one of the few times tonight all agree with Oscar, but what you've been doing pretty well in the green so far, but now I want to ask you if you think that Farmers have this kind of opportunity When there's a depression going on, how about two John? Maybe not quite so much So, I mean that they really might be some case four or some kind of aged agriculture during depression. That's right. All right How about you? Yes, I think it's always been to that as we had a little advantage on the way going up We're certainly having a disadvantage going down. So Both of your degrees that something ought to be done for agriculture when we have a depression now The question where I think you will park Tony Do we have this kind of opportunity for farm families at a time like the present When we have full employment, and we don't have any inflation we haven't a depression yet anyway, and we don't have a war now under these circumstances the Oscar would you say that farmers have this kind of opportunity? Well It's pretty difficult to maintain satisfactory income when you have a plant which is over built and That's about what's happening in agriculture today that it's a little bigger because of the water demands and world demands then is necessary and this particular time of And so you're saying it with the full employment that we have now at least farmers don't have this opportunity it's not very good Well, how about you Don? Well, I would say that under the conditions that we have at the present time that We shouldn't make an effort to set a government's or support price is high enough that they will make the market I think you know under the conditions that we have prices for farm products should be set largely on a free market that the goal of support prices flexible supports like I believe in would be to provide some sort of Security on the lower level but still enough room that in times like this. Our farm prices are set in the free market Well, that's why you want to have agriculture take the Front of the thing. Are you going to recommend that labor are an industry? No similarly There was a question that you brought up last time Oscar that I wanted to challenge just a little bit You intimated that practically all of labor and all of Industry were subsidized. I think that's not true Certainly labor have got themselves some better things and some higher wages But there's nobody guarantees labor a job regardless what the wages are there are certain sections of industry that are subsidized notably that aircraft industry probably the oil industry to a little Extent the male business, but there are also large parts of our industry some of the most successful parts like the automobile industry and the appliances industry, which aren't subsidized and which operate in a free market yes, but what they actually do in a situation of that kind when they Produce more than the market can Absorb, they don't Have a flexible price to get rid of their product. They use the better method business method of Curtailing their production to tailor the demand and a notable example I think is what happened recently in the Studebaker corporation where they laid off a rather large number of people They didn't cut the prices of their product and it seems to me that Agriculture is growing up. So to speak at the present time we're in it is just as important to business as any other area in our society and that it seems to me that that we ought to take a leaf out of the experience of other business and That when we find that our plant is too big and that we're producing more than we can Consumed at a parity price, then we ought to cut down our plant now Oscar There are two things that I'd like to say first thing just a kind of a minor aside and that is while industry Doesn't change their price every day. They still do change their prices for instance I've been informed that in the Des Moines area just before Christmas Westinghouse cut the price on television sets $50 set and Within a period of two weeks they were three hundred orders behind something like that businesses do adjust their prices to maximize their profits The other thing that I'm going to say and I think this is a very important one and farmers should never underestimate it that is that we assume if we are going to Control prices, so to speak that we're also going to control production and we're going to control a very rigidly Your businessmen that you were just talking about does that he? He makes his plant become idle. He lays off workers I'm just wondering how well you can do that in agriculture, and I would just like to Ask you this question for instance this fall Under the wheat program Producers are having a rather serious cut somewhere in the neighborhood of 25 or 30 percent but I've been informed that if their wheat farmers were really facing up to the issue and Wanting to do something about the huge surplus they have they would have to cut production 45 or 50 percent How do you think Oscar that farmers in your area? Would like it if their corn production all of a sudden was cut 50 percent. Do you think that could be many Get this problem a little horse directly into focus we have in industry and in agriculture expanded our plant to take care of the war needs and The extra demands that came on us after the war at including the Korean War we expanded agriculture To a large degree because we had this demand coming up. We were fortunate we could expand it We did expand it. And now that the demand isn't quite there We have somewhat to our Japan now We did the same thing in many of the other industries in industry because we had to have the tools of war And we wanted as much of the peacetime kind of production for ourselves as we could get at the same time now It seems to me that that is the setting in which we operate and the question is. Where do you go from there? for Agriculture when you've got this plant a little over expanding now if I may a pick up at this point Karl It seems to me that that Oscar has been saying that with the plant somewhat over expanded by the way Would you agree that the plan that some would over expanded on and that we do have a problem of? Declining prices probably still ahead of us if we flex down with your seed you would you agree to that? That's right is the tissie is on the right? So we are agreed that this is going to be painful somewhat as I understand it from you Oscar. You're saying that You will Want to maintain the price level and take up the slack by whatever is necessary in the way of rigid production control, right? That's right And I just like to ask Don if he thinks that by reducing the price level From 90 percent to 75 percent that we will actually reduce production Come on of course, I would like to answer ask Oscar by asking him another question if you Cut it coordinator. It's 20 percent. Do you think you can cut corn production 20 percent? No, but I think you will cut into materially There will be some increase in the total number of acres which we plant because of our technological know-how but actually, when we take our acres out of production where I would recommend that we take them completely out of production in other words you can't substitute with other grain, or feed crops and But with that method we can I think really reduce production now, you're really asking for a kind of production control however, Oscar that we never yet have have Actually had is that right? That's right And however, we've got some experience and the tobacco thing which does indicate that people will do it well, it isn't tobacco I would think we might go that far, but I'm not sure that we we have really known what it was like in corn and wheat, I think Stealing right? Well, no, wait a minute. I want to I want to press you now and I just want to get Oskar off the Hook here. Now if you if you have Your kind of program with flexible prices dawn and you are Agreeing to let prices go down to the market level and you're going to take the adjustment not by Submitting to control but by submitting to a lower income, is that right? Possibly some lower income and in other words lawless, I'm making this point. I may be a Crusader or something like that But I think it's important enough to keep free enterprise and agriculture to sacrifice some small amount of income I think I Feel that we wouldn't be sacrificing too much. That's my opinion others might think we'd sacrifice more but I I feel that the kind of Agriculture that we have today Wasn't made by the kind of practices that you're going to guarantee you a a parody income I think as a farmer in the long run I want to produce the things and the amount of things that the market will take and If the market won't take it, maybe we'd better be shifting a little bit and that's another thing I don't like about these high price supports based on a past parody They tend to to stabilize agriculture the way it was 20 years ago. Now youyou didn't answer Oscars question though about whether you thought that that reducing prices down to say 75% of parity would Bring about some adjustment in acreage. I don't know the exact Point but I would say this that you can't overlook the fact that price is not only a factor in determining income but price is also a guide to the amount of the goods that the consumer will buy and it's also a guide to production and I don't think they probably would have just done. I think we would consume a lot more of the product Which would have the same fact I'd like to get in on that one on the consumption thing after all How many? People in this country are hungry. I can't help but think that there are about thirty million people in this country They're already on a diet My doctor and my wife look at me and they say that we ought to you that I offer you watch my diet And so I put it in front of me where I can see it now There are thirty million other people who's doing that in this country? And I don't believe it's possible for you to increase production very much there's a Certain class that probably is but I'm listening all week to people who say well now by selling campaigns and doing the right thing With this particular product we can get more eggs consumed we can get more bacon consumed more turkey consumed More of everything consumed one. You'd consume it in one product. You'd simply take it away from another Actually in weight for instance We are not producing or consuming any more wheat today, and we did 25 years ago the per capita consumption is going down because we've been taught to eat other things which we like better and So you can get certain things consumed, but you can't get everything Consumed because we're eating pretty well in argument on our foreign markets gone. So I think all you can do is to Narrow the production area of this country so that you fit the plant to the demand now you haven't Oscar however indicated how you would actually achieve the the Adjustment if we are producing a little too much did you say we are and I don't think Don has indicated this either now you you How we gonna get adjustment from too much plant? Come on Our price is going to encourage it. What would you like to make it for a specific commodity? Well, I'm thinking about agriculture in total that is if we have a problem of overproduction in ourselves in total as a result of the stimulation from war How are we going to? Make the adjustment with prices if we grant that with people eat a little more even though Oscar doesn't think to leave very much more now you will agree with Me that since the war is over. We have a whole new set of demands set set up for farm commodities They weren't the same as during the war for instance the demand for wheat, the effective demand is much lower. I Think there will be an adjustment natural adjustment of acreages between commodities an adjustment of resources Among livestock. I think we'll get it all admit as I did a while ago We may go down to a little bit lower income But we will get our product consume What I've been trying to get said was that you really are asking. However that some people get out of agriculture That's right Fundamentally, I think one of the biggest problems we have is an overpopulation in agriculture And I'm sure that if all of the people in agriculture were producing at a net loss If they got out that the rest of us would be very much better off. Well now we have Been talking these things over here, but we've got a studio audience here who are going to be Thinking through and trying to make some decisions on the things that we've been talking about And so I think we before we ask them to make a decision to if they have any questions They would like to ask of either of you gentlemen How about you folks over here in the studio audience? Would you like to raise some questions to either one of these people? Any of you have questions For our manager with the don't agricultural service, mr. Fish do you think of the New York sliding-scale? Goals that the farmer can maintain a good net income. I Think that I think that in the in the long run that he'll make the the kind of net income that his That his operations earn Well that that's the sum total of all agriculture earns What you're saying is that if you think That's right parody price is the thing that I don't like it's always based on a past concept a Parody price as far as I'm concerned the only correct parody price is the one that you can't figure but the one that's in effect today and very often that's different than in the past and the parity income that we're setting up that's based on 15 years ago or sliding-scale average all that sort of thing is not an accurate parity price, especially between Products and I would like to just mention the fact that citrus citrus food producers are producing Citrus fruit add a good profit at selling it somewhere around 32% of parity, but we're not supporting citrus. We're supporting basics now How about some of you folks over here? Do you have any other questions that you would like to ask me though? Any people? I'm John Salley farmer from Boone County and I'd like to ask Mr. Fish if he thought it was possible for us to eat her way through this surplus Actually, I don't think you could eat your way out of the cotton surplus or probably the wheat self surplus I think there's a very good possibility if the prices were lower enough that what we would eat ourselves out of the surplus of food products actually What actually happens if it gets cheap enough there will be people who waste some of it and They will do other things with it then saving it for Food purposes to that extent you will probably eliminate part of the circle. I think we have time for one more question You have one anybody have another question And I would like to ask mr. Fish if he doesn't think that we will have to have just as rigid control say in the corn field at 75% of the parity as we do with 90% of very kind of working on your daughter That's all right Actually When you say 75% 90% of parity, I think you would have to Maybe not have such rigid controls because you wouldn't have to you wouldn't be trying to cut your production quite quite so far it Seems to me that if you cut your production as far as we might, I think we haven't faced up to this enough If we're going to keep prices at 90 son of parity We're going to have to cut production in some of these things so much that it's going to take much more serious regimentation than any of us have ever innovation and Of the kind that I personally don't like now. May I just say one thing? Here before we turn it back to Dave as I understand it Oscar is is asking for Rigid controls and Maintain our pricing prices by government programs, Don is asking for Getting rid of the controls and letting crises flex down to their normal level now, I believe that's where we're leaving it Dave Well Wallace, I think that the questions have definitely been debated we're delighted I've had all of you folks with us from the Rural areas here. And obviously we're always glad to have you folks with us. Now. There are two things you can do Maybe you have some questions you would like to ask mister Helene and mr. Fisch why don't you write me here at woi TV and we'll see that they get those questions and Answer them for you either on the air or by personal letter Now if you haven't received or haven't gotten your copy of what's next in farm programs Be sure and go to your County Extension Office either through your County Extension Director or your County Extension home economist and ask them for a copy of this new Leaflet which is available to you. Well, it's always nice having you with us and we'll see you again next Thursday tonight Woi TV and the cooperation with the Agricultural Extension Service has presented farm facts. We have Dave Bateman Technical director Vernon Casper His program directed by Joe edifice Be with us again next Thursday for down to work