B. H. Hibbard

The Outlook for Agriculture

The very brief time at my disposal will not be devoted tol a weather forecast, although the character of the weather vouchsafed to the farmer from season to season is the most immediately important factor in his prosperity or distress. Neither shall I attempt a forecast of general business as it impinges specifically upon agriculture, though it might seem that questions of wage rates, employment, and trade activity influence quite largely the outlook of the agricultural producer. It is obvious that both these groups of influences will effect deviations either up or down in the farmers line of prosperity during the years just ahead of us. But there are also certain basic characteristics of the industry which, in a still more fundamental way, will influence its major trend during the next ten years or so. It is to these factors in the long-run outlook that I shall address myself, classifying them under two heads: (1) the technological situation and (2) the nature of economic organization and institutions with which this technological situation is to be met.

A National Land Policy to Conserve Land Values

a desirable balance should be encouraged. Until within the past few years, most of the farm land of the country, from the time it became private property, had continued to rise in selling value. From this fact, so long continued and so widespread, it was generally believed that for some unexplained reason the value of land was destined indefinitely to rise in price. To what extent this belief was based on Ricardo’s, or the Single Tax, doctrine, one cannot say, but the belief was so firmly established that it, no doubt, had a sustaining influence in the maintenance of a steady, even though not uniform, upward trend in land values throughout substantially the whole country west of the Alleghenies. The experience of the past decade has served to disillusion the owners of real estate respecting the immunity of land prices from downward influences. The question now under discussion is whether or not the Government can do anything to prevent recurrences of such disasters as the recent one attendant upon the decline in land prices since 1920. The desirability of stabilization of land values at some level is beyond argument.

Legislative Pressure Groups Among Farmers

About the first outbreak of remonstrance and demand came from the wool growers of the North and the cotton growers of the South, almost simultaneously, during the period of low prices a few years after the War of 1812. The home market was usally fully supplied with goods, and a significant surplus was obliged to find an outlet in the world markets. This applies to the leading agricultural products. On the contrary wool was imported, and at low rates of duty. At the same time, the producers of wool saw the manufacturers do their work behind tariff walls of supposedly such heights as to afford genuine protection from foreign competition, while the price of wool was disastrously low. Because of these circumstances Congress found itself vigorously pressed by the two groups, the one demanding a tariff on its own product, and the other demanding a general lowering of the tariff schedules. Congress was obliged to take these demands seriously, and, as the North outvoted the South, there was instituted the long r6gime of high tariff dominance which, although temporarily defeated on several occasions, is yet the order of the day. Wool wa.s not the leading agricultural product of America, then or at any time since; and although the country was dominantly agricultural in population numbers, that fact in itself does not insure political dominance. Even so, there was enough coherence and force in the wool growers’ organizations to command the attention of Congress and to lead to an increase in wool tariffs.

The Agricultural Tariff of 1922 and a Look Ahead

were already at the turning of the ways with respect to the balance of imports against exports. The farmers had been told that the period of surplus production was past, and that in the near future there was to be a shortage of farm products in America. Exports of agricultural products had indeed been falling off for some years before the War, and it was easy to calculate, on the basis of this apparent gain of consumption over production, at what future time we would be, for one important product after another, on a permanent import basis. This sort of doctrine and prophesy had gained such a vogue as to impress itself on many farmers and their friends. Hence, the renewed faith in the tariff as a savior of the agricultural situation following the cessation of hostilities in November, 1918. It is true that there was more than a tendency for agricultural products to make their way to American ports, as from time to time the buying power of foreign countries slackened. In 1919 and 1920, we imported appreciable quantities of agricultural products, including considerable consignments of dairy products, eggs, wool, beef, mutton, vegetable oils, wheat and sundry fruits -all of which articles compete with our home grown products. Of course, sugar also is imported in quantity, but the competition is on a different basis, since the bulk of our supplies is regularly produced outside the country. This unusual invasion of our ports by such quantities of goods from abroad was indeed a circumstance to attract attention. When, in the summer of 1920, our food stuff prices went over a precipice and fell like a plummet, it was inescapable that the blame should be laid at the door of the political party which had so suavely, and so characteristic-

The Tariff on American Dairy Products

It was inevitable that the American manufacturer would ask for an increased tariff at the close of the World War. It was no less inevitable that the farmer would likewise ask for a tariff on his products at the same time. Furthermore, there was every probability that the demand on the part of the farmer would be granted by Congress with little hesitation. This was true in general because of the attitude of the dominant party toward protection, and specifically because of the necessity of keeping the Middle West satisfied with the policies of the party. Thus it was the manifest destiny of the farmer to get a tariff on anything and everything in so far as he cared to ask for it. Along with the sweeping demand for a general agricultural tariff, the tariff on dairy products was not only sure to be included, but much more, it was sure to occupy a prominent place. It may be well to notice that dairy product prices had risen less, relatively, than several other of the leading farm products during and just following the War. Quite as striking is the fact that the prices of dairy products fell less during the time of declining prices than was the case with cereals and live stock. In other words, the prices of dairy products have fluctuated less since 1917 than have the prices of farm products in general.

The Intensity of Cultivation

Question of intensity of culture an old one; never purely objective, 646. — Ability of the entrepreneur the limiting factor, 647. — The problem of intensity of culture stated in one of three ways: entrepreneurship fixed, land fixed, capital fixed, 648. — An experiment may be made with something less than the whole amount of land or capital, 653. — An illustration of the difficulties of the trial method, 654. — Income will be alike for all at the margin, 657. — Intensity varied within a given year, 657. — Social aspect of intensity of culture, 658. — Effect of change of price of product or intensity of culture, 659. — Payment of rent induces intensity of culture, 661. — Effect of changes in wages or capital cost on intensity of culture, 662. — Intensity will vary inversely with these costs, 662.