The critical ingredients of the farm problem are seldom if ever addressed. One problem is relative value of commodities. For example, I receive an American salary that is several times that of some of my colleagues in other nations. Bankers, lawyers, doctors, union laborers, etc., are relatively the same. In contrast, farm products are generally among the items subject to the world price. We have lost most of the real family farms because an American farmer needs the American salary equivalent to live and to pay his bills, and the world crop prices just will not produce it on traditional family farms.
The average American farmer just does not get a fair share of America's plenty. The response of our farm community has been to mechanize and use large acreages to obtain efficiency of the equipment and per hour of labor. But even the large farms are hard pressed to show profit at world prices.
This problem is world wide. Some foreign governments subsidize agricultural exports, which can then undersell our farmers. Thus, those governments earn foreign currency, which is often worth more than its face value.
If those who process and market food in the United States would rather import it at lower prices than it can be produced by American farmers, there is little hope for continuing agriculture in this country. This conclusion, however, throws away concepts of food security.
If the American farmer were compensated for his products with an American salary in mind, the price of food would be two or three times what it now is in this country. This, however, would be more fair to farmers than the present arrangement, but only if farmers could get a reasonable share of the increase.
In many countries of the world, half of income goes for food; here it is 20% or less for the majority of the population. Food is too expensive at any price for a few in the United States, and those persons must be cared for separately. The others should perhaps pay more for food.
Farmers do add to their own problems by responding poorly to the law of supply and demand. The world, however, is too large and complex for the meaning of the law to be translated by an individual farmer to the size of his planting. Also, politics is more apt to dictate decisions than is economics.
Overproduction drives prices down, but the only seeming way for the farmer to get more income is to increase production. Organization at a level above the individual farm is necessary to solve this problem. If overproduction is necessary for food security and national defense, who should pay for it? It would appear that farmers need to be better organized to get their problems solved.
To be sure, not all farmers sell produce at world prices. A select group certainly does get American prices, and these farmers have no need for government-aid programs. Strawberry growers are quite capable of survival. Tobacco growers, it would seem need no support; but those that produce wheat, corn, cotton, rice, and some other crops at world prices do need serious consideration.
Wallace is professor of plant nutrition at UCLA.