Down on the Farm

"President Eisenhower has two major problems, and one of them is Korea." said a Washington official last week. "The other one is the drop in farm prices." At the outset of its term, the new Administration has to deal with a farm-price decline that began in 1951, continued through 1952 (an average 11% during the year), and is now pinching many farmers hard. Last week talk of a farm depression was in the air, and a Chicago commodity letter saw "economic disaster" ahead if the new Administration did not change its "lackadaisical attitude" and do something quick.

Stampede to the Stockpens. The loudest cries of pain last week came from the cattlemen. Nationwide, the on-the-hoof price for beef cattle of all grades has dropped about 30% since the post-Korea high last spring. A fortnight ago the Omaha cattle market saw its worst break in three years, as choice steers slipped to 23.4-c- a lb.; a year ago, such steers brought 34-c-. The basic reason for the cattle-price decline is that beef animals are in long supply; by Agriculture Department estimates, the nation's cattle population has grown some 20% in the past two years, to 93 million head. On top of that, droughts in the Southwest forced cattlemen to move their stock to feed lots early. Result: an above-normal flow from crowded feed lots to the stockpens of Chicago, Omaha and Kansas City, and a sharp decline in prices. This in turn touched off some scare selling.

What the cattlemen wanted from the Government, they said, was not price floors, but abolition of price ceilings and the compulsory grading of cattle required by OPS regulations. Before the week was out, the cattlemen got their wish: the Administration discarded meat-price ceilings (see above), and grading automatically became a voluntary matter again, as in pre-OPS days. Agriculture Secretary Ezra Taft Benson advised cattlemen to rid their minds of "unwarranted pessimism" and to avoid "panic selling." By week's end the stampede to the stockpens had slowed down, and cattle prices had firmed. An Agriculture Department bulletin reported: "The sharp decline in meat-animal prices seems to be about ended."

But prices of some other farm products were still under pressure. Main reasons: last year's rich harvests, poor exports. A Government economist told the Senate Agriculture Committee last week that farmers can expect a further 5% drop in income in 1953. (Farm income last year was down 4% from 1951.) Wheat continued its recent slump last week. Corn is selling for 15% .less than a year ago. Cotton has fallen 30% since April 1951. Butter has fallen below support prices.

Break with the Past. Against this background, Secretary Benson called in the press last week and handed out a statement of his views on policy. He called for "a vigorous re-emphasis of the principles, benefits and values of private competitive enterprise." Price supports, said Benson, "should provide insurance against disaster." Supports that "result in continuing heavy surpluses and subsidies should be avoided . . . Fanners should not be placed in a position of working for Government bounty rather than producing for a free market." Now is the time, said the Secretary, to re-examine "every public agricultural program now in operation to ascertain if it is actually needed and, if needed, whether it can be reduced, combined, decentralized, coordinated . . ."

Benson's statement marked a sharp break with the control-minded attitudes that shaped federal farm policy under the New and Fair Deals. Programs that began as emergency steps in time of depression swelled and hardened in time of prosperity; Benson wants to reverse the trend. He has a hard row to hoe. With farm prices softening, farmers may be in a mood for more Government buttressing, not less. Already some farm-state Congressmen are restlessly muttering for more Government action. The farm-price problem may not be as important as the Korean war, but Eisenhower may find it just as sticky.

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