Farming's Golden Challenge

In shock, anger and disbelief, Americans this year have watched food scarcities drive grocery bills out of sight and the U.S. shut out eager foreign buyers by clamping export controls on soybeans and some other crops. Round the world, concern about food shortages grows. In Rome last week, Addeke H. Boerma, director general of the U.N. Food and Agriculture Organization, called officials of five major farming nations, including the U.S., to an urgent conference Sept. 20 that will consider ways to deal with a threatened global wheat pinch. U.S. agriculture, long regarded as a bottomless cornucopia whose output had to be deliberately held down, has suddenly seemed unable to turn out all the food that Americans and foreigners want to buy.

Yet the U.S. undeniably has the capability not only to maintain but also to expand its historic role as a world supplier of food--to the benefit of everybody. The present bind is all too real, but it is largely a legacy of the restrictive policies of the past. Once that legacy is shaken off, U.S. farmers can raise enough livestock, wheat and oil seeds to satisfy their fellow citizens' desire for good food at reasonable prices and meet all foreseeable foreign demand too. In a burst of optimism last week, Bud Frazier, vice president of Hennessy & Associates, a commodity brokerage firm in Chicago, declared: "This country can produce more stuff than the world can carry away."

Miraculous Capacity. Immediately, the nation can--and will--give production a big lift by putting idle cropland back into use. During the past dozen years, an average of 60 million acres of farm land, out of a total of 330 million, has been kept fallow by the operations of the price-support program. Roughly 40 million acres were released for output in time for this year's planting season. Last month President Nixon signed into law a new policy that eliminates acreage controls altogether and permits a farmer to sell his crop for whatever the market will bring; if his price falls below specified target levels, the Government will send him a check for the difference. Farmers from now on can plant their property fence-to-fence if they wish. Even with planting restrictions, this year's harvest will be one of the most bounteous ever. Official estimates put the wheat crop at 1.7 billion bu. and soybeans at 1.5 billion bu., both records.

Increasing acreage, of course, gives production only a one-shot lift. Indeed, U.S. cropland is being steadily nibbled away to make room for roads, factories and housing. The real key to all-out farm production is raising yields per acre--and in this the U.S. has a capability that is little short of miraculous.

For example, in the past 15 years, increasingly potent seeds, pesticides and fertilizers, along with ever more advanced methods and machinery, have almost doubled the average corn yield to 92 bu. an acre. On some experimental farms, yields have already reached 300 bu. Soybean yields have risen by half a bushel an acre per year for the past ten years, to about 30 bu. The Government figures that by 1985, soybean production will increase by more than 30%, to 2 billion bu., and that estimate seems low. Agronomists contend that they could double the soybean crop in a few years if adequate research funds for fertilizer studies and soil were available.

The greatest obstacle to increasing output is not technical but psychological: the farmer's traditional fear that if he grows everything he can, he will only produce a glut that will depress prices. That attitude may seem totally irrational, given the almost hysterical state of current markets, but in fact farmers have some reason for regarding the present deluge of world demand as an abnormality that will soon pass. It has been caused by an extraordinary combination of temporary factors: bad weather round the world; crop failures in Africa, Asia and the Soviet Union; a decline in the catch of the Peruvian anchovy, which is a rich animal-feed supplement; a global inflationary boom; and the decline of the dollar, which has enabled foreigners to bid high for U.S. food.

These trends combined to push up U.S. farm exports an amazing 60%, to $13 billion, in 1972-73 alone. Export demand is still rising, but nothing short of a series of malevolent miracles could prolong that pace. Already, some tendencies are at work to take the frenzy out of demand. The huge size of the American crop is allaying fears of foreign buyers, who are now likely to scale down immediate orders in the belief that supplies probably will be available later. Other nations are increasing their harvests this year. Canada's wheat crop, for instance, should weigh in at close to a record. Soviet grain output is falling short of targets, but nowhere near as disastrously as in 1972.

Golden Opportunity. Yet the U.S. farmer has little reason to doubt that over the long run, the world market will absorb as much as he can grow. The Department of Agriculture estimates that the-- tonnage of U.S. crop exports will climb about 60% by 1985. To begin with, world reserve stocks of wheat and some other grains have been dangerously depleted by recent crop disasters, and will have to be rebuilt.

Then, too, basic demand is constantly increasing. For example, because more and more people round the world are eating meat--especially prosperous Americans, Europeans and Japanese --trade in feed grains increases an average of 8% to 10% every year. No one can see that trend stopping. The Government reckons that Americans alone will eat 140 Ibs. of beef and veal per person by 1985, up from 118 Ibs. today.

Beyond that, there is the challenge of meeting the needs of the world's burgeoning population, which all but doubles in a generation. The problem is most severe in developing countries, where birth rates are highest, food supplies scantiest and famine as close as the next crop failure. Last year, according to the U.N.'s Food and Agriculture Organization, farm output in 42 developing nations actually dropped by 1%. As a result, some of these countries now face outright starvation. Until the developing world can learn to tap its own fast-growing potential--and curb its runaway population growth --demand on farmers in the U.S. and other big food-growing countries will remain strong.

A continuing surge in farm exports presents the U.S. with a golden opportunity. It will help shrink the nation's disruptive payments deficit, strengthen the dollar in world markets and offset the growing cost of buying more and more oil, gas and other materials abroad. Having given up the unrealistic goal of policing the world, the U.S. can turn with enthusiasm to the more rewarding job of trying to feed it.

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