Problem of Farm Surpluses

Report Outline
New Efforts to Reduce Crop Surpluses
Government Acquisition of Surpluses
Surplus Disposal and Removal Programs
Proposals to Boost Use of Surpluses
Special Focus

New Efforts to Reduce Crop Surpluses

Anew drive to reduce the huge volume of agricultural surpluses in the hands of the government is getting into gear under authority granted by the farm bill enacted late in May. President Eisenhower told Congress in a special message on Jan. 9, 1956, that the “mountainous surpluses” overshadowed all of “the many difficulties that aggravate the farm problem.” If it were not for the government's “bulging stocks,” he said, farmers would be receiving “far more for their products today.” Secretary of Agriculture Benson has estimated that surpluses hanging over the market reduced farm income last year by more than $2 billion.

Although there is disagreement as to the responsibility of high, rigid price supports for growth of the government's surplus holdings, it is plain that the surpluses represent over-production or under-consumption. While U.S. farm output has increased, domestic consumption has not risen correspondingly, and exports have declined sharply from the totals of the war and early postwar years when foreign markets were absorbing about one-third of the yield of American farms. The result has been that the volume of commodities acquired by the government to maintain prices has soared to unprecedented heights.

Pertinent Provisions of the Farm Act of 1956

The Agricultural Act of 1956, approved May 28, seeks not only to slow down accumulation of surpluses through its acreage-reducing soil bank, but also to speed up liquidation of commodities already held by means of new disposal programs and more intensive use of old programs. The soil bank plan enables the government, to a limited extent, to “use the surplus to use up the surplus.” Grain farmers taking acres out of production under the plan are to receive negotiable certificates redeemable either in cash or in surplus grain held by the Agriculture Department's Commodity Credit Corporation. President Eisenhower noted in his farm message that if production is cut, “Commodities…in government ownership can be used to supply market needs up to a proportionate amount.”