Agricultural Distress and Proposed Relief Measures

Report Outline
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Summary

The long continued depression in American agriculture can be directly traced to the stimulus to production given by high prices during and immediately following the war, and the failure of American farmers generally during the last four years to limit surplus production of agricultural staples to reduced export demand.

The prices of agricultural staples, such as wheat and pork products, of which large surpluses are produced in the United States, are fixed in world markets. The large American surpluses produced in post-war years, coming into competition in European markets, where buying power has been seriously reduced, with accumulated low-cost surpluses forwarded by countries cut off from those markets during the war, caused disastrous declines in prices, from which there has thus far been little recovery. While present exports in all staple lines, except cotton, exceed pre-war exports in quantity, the prices at which these exports are sold are, in many cases, perilously near or below the American cost of production.

Production costs in the United States have been largely increased since 1914 by (1) a shortage of farm labor, which has caused a 51 per cent advance in farm wages, (2) increased state and local taxation, (3) increased interest charges on the large indebtedness contracted during the war, and (4) the failure of prices of non-agricultural products, which the farmer has to buy, to decline in ratio with the decline in prices of farm products.