1940: Agriculture

Nineteen-forty was a year in which American farmers produced approximately the same yields as in the few preceding years. But as they did so, they anxiously appraised their situation in a world shaken by war and in a nation mobilizing every resource for defense. One eventful decade had just ended. For ten years they had taken steps to overcome the complex maladjustments that followed the previous World War. Now they again faced conditions which might disrupt an agricultural economy. In 1940, American farmers had to make vital decisions which may affect their welfare for many decades to come.

Agriculture in National Defense.

Of first importance to farmers and to the defense of the United States is the fact that in 1940 agriculture had become more strongly organized, better informed, and more highly mobilized for action than ever before. More than 6,000,000 farmers were cooperating in the national farm program.

The role which American agriculture must play in national defense has two important aspects. First, it must be a reasonably profitable industry in order that our whole economy, including agriculture, may function efficiently. Secondly, agriculture must provide the nation with adequate supplies of food and fibre. Had it not been that farmers were cooperating almost universally to stabilize production, to maintain prices, to conserve basic resources, and to adjust plans quickly to new conditions — in other words, if agriculture had been as little organized in 1940 as it was in 1917, or even in 1929 — the impact of the present war might have demoralized markets, weakened the position of the farmer, and threatened the essential continuity of production. Normal markets were suddenly restricted, then completely blockaded. But the shock to United States producers was remarkably cushioned through the operation of the Ever Normal Granary part of the national farm program. For example, as European markets closed, the price established by the Argentine government for corn at Buenos Aires was 36 cents a bushel, the equivalent of a farm price of about 26 cents. In the United States, the loan available to cooperating corn producers was 57 cents a bushel, which, with farm program payments, returned growers a total of about 75 cents a bushel. In Canada farmers were guaranteed a price of 70 cents a bushel for No. 1 Northern Spring wheat at ports, which meant about 45 cents (American money) at the farm. In the United States, cooperating wheat farmers were able to obtain loans of 63 cents a bushel which, with farm program payments, returned growers a total of 81 cents a bushel. For the past two years such loans have enabled farmers to hold their wheat off the market until it could be sold for more than the loan value.

The United States is well prepared in food and fibre. There are no 'bottlenecks' on the farms. While industry is straining every resource to reach needed capacity for defense needs, for steel, lumber, airplanes, machine tools, tanks, housing, and other important elements, and is searching for skilled workers to man the facilities of defense production, farmers already have done much of their defense job. After providing for the nation's needs in 1940 — for domestic consumption and a safe reserve — farmers could safely have sold to other countries as much as 150,000,000 bushels of wheat, 400,000,000 bushels of corn, 8,000,000 bales of cotton, 100,000,000 bushels of barley, 350,000,000 pounds of pork, 500,000,000 pounds of lard, and 250,000,000 pounds of other edible fats. These extra reserves are reassuring to the nation but could be disastrous to producers. However, the Ever Normal Granary program has made it possible for the nation to carry these ample supplies without sacrificing the welfare of the producer.

At the same time, rapid progress has been made in conserving the productive capacity of the United States. This conservation effort started none too soon. Almost one-fifth of all the land in the United States had been ruined or seriously damaged by erosion. Nearly 100,000,000 acres of crop land, about one-fourth of the area now used for crops, has been destroyed by erosion. To defend agriculture, and through it, the nation, farmers are now rebuilding depleted soils and halting erosion on a broad scale.

Agriculture is strong in manpower and efficiency. From 1910 to 1930 farm production per worker increased 41 per cent and has steadily expanded further during the past decade. Improved farm machinery, better methods of tillage, higher yielding crop varieties, more efficient strains of livestock, better feeds — all of these have made it possible for the farmer to produce more products for a given amount of work. An example of increasing efficiency is hybrid corn, which yields 15 to 20 per cent more per acre than open pollinated varieties; another is rubber-tired, high-speed tractors. The striking gain in farm efficiency has laid the groundwork for a great variety and abundance of foods and raw products from the farm. Also it has made manpower available for production of other goods and services. Agriculture, operating at capacity, still would need only 9,000,000 or 10,000,000 workers as compared with the 12,000,000 now on farms.

This surplus manpower has been and still is a problem to agriculture. During the depression and during the years that farmers have been rehabilitating their industry, they have also carried the burden of 2 to 3 extra million workers. The need for complete defense changes the situation somewhat. At least a part of the rural reservoir of manpower will be needed by industry and national defense. The fact that the men are there — many of them young and trained in mechanical skills — is reassuring.

Effects of War and Defense on American Agriculture.

It is not possible to generalize much about the short-time and long-time effects of the war and the national defense program on American agriculture. For example, increased domestic use of cotton, under defense stimulation, does not offset the terrific loss in world markets; but dairy products, seldom exported, are benefited by increased economic activity in the United States.

Increased Farm Income.

Even so, the most favorable thing in the agricultural situation is the stimulation that industry is receiving through defense work and war sales. This is increasing the demand for many agricultural products, and promises to absorb some of the surplus rural labor. It now appears that industrial production by 1942 will be at least 20 per cent ahead of 1940, and non-agricultural employment may rise from 36,000,000 to 40,000,000 or 41,000,000. National income might reach 90,000,000,000 dollars, as compared to 75,000,000,000 in 1940. This quickened industrial pace may increase cash farm income from 9,000,000,000 dollars in 1940 to approximately 10,500,000,000 dollars in 1942, including benefit payments in both years.

On the other hand, farmers as a whole may have to make more than proportionate sacrifices in this time of crisis. The gain in farm income may be offset by a rise in the prices paid by farmers for goods and services. The farm share of the national income may be no greater than at present. This would still leave farm income about 2,000,000,000 dollars short of the 'parity' income standard.

Decrease in Farm Exports.

The increased farm income will not be uniformly distributed among the various agricultural regions or producers. Farmers who produce mainly for the domestic market will gain most; producers of export crops may lose more from the closing of foreign markets than they gain from increased domestic demand. In 1940 agricultural exports dropped as shown by the following figures for the first 11 months of 1940 as compared to the like period in 1939: Wheat, 14,078,000 bushels as compared to 62,617,000 in 1939; lard, 189 million pounds as compared to 258,000,000; tobacco, 218,000,000 pounds as compared to 327,000,000; and cotton, 4,006,000 bales as compared to 4,244,000 for 1939. It should be noted that the strong export movement of cotton during 1939 extended over into the first part of 1940, after which exports dropped off precipitately. For the first 4 months of the 1940-41 season (August to November) cotton exports totalled only 495,000 bales, the lowest since 1873 and only 21 per cent of exports during the corresponding season in 1939. The total value of farm exports, for the 11-month period, in 1940 was 493,000,000 dollars as compared to 578,000,000 in 1939. Contrast these years with 1917 when American farmers sold 2,300,000,000 dollars worth of their products abroad. Moreover, the farm export situation seems unlikely to improve while the war continues. Europe entered the war after garnering vast agricultural reserves and after a period of strenuous progress toward self-sufficiency in foods and raw materials. The British first blockaded Germany and then practically all of the European Continent, closing markets that formerly took one-third of our farm exports. Great Britain, which normally takes half of our farm sales abroad, has been forced to conserve its dollar exchange for the purchases of material of war, and has relied on its Empire for more and more farm products. In the first 10 months of 1940 Great Britain bought $135,570,000 of American agricultural goods, as compared to $164,168,000 in 1939. The outlook for export demand in 1941 is less favorable than in 1940 unless the war should end.

Even if the war should end in 1941, however, American agriculture would face far-reaching readjustments. For example, the economy of the South, with its cotton farms, warehouses, gins, factories, transportation facilities, and so on is conditioned to a cotton production of six to eight million bales for domestic needs and about six million bales for export. If Great Britain wins the war the outlook for cotton would be somewhat more favorable than if Germany, with its government-dominated barter, wins. At best, however, it is difficult to forecast a world market of more than 2,000,000 or 3,000,000 bales for American cotton. Programs now in effect have gone about as far as they can in bringing about a uniform reduction in cotton production. If still further reduction is required, it would appear to be necessary to facilitate the retirement of high-cost cotton areas from that commodity and the development of new systems of land use. Should this become necessary, it would mean a complete reconditioning of the economy in many areas.

Thus, it became apparent in 1940 that the war and the defense program spelled no golden harvest for the American farmers but in fact might demand much of them. During the year rural planning committees in all parts of the country began considering the possibility of increased self-sufficiency, of national cooperation with South and Central America that might require unwelcome concessions on their part, of new types of land-use adjustments and soil conservation, and of a future peace when workers now employed in defense efforts must find something else to do, when the present domestic markets for farm products may again contract, and when world trade, whoever wins, will undergo a far-reaching realignment.

Farmers and the public generally realize that greater agricultural self-sufficiency may become a necessary part of our defense if the war spreads. Most of the farm products that we import could be produced in the United States. The only difficulty inherent in some of these is that consumers would have to pay the increased costs — certain special fats and oils, and flaxseed, for example. Another group of products which could be produced here would be inferior in quality — fats and oils, certain wines, certain fruits and nuts, some wool, special types of tobacco, cheese, and special types of cotton. Then there are products which cannot be produced domestically, but can be supplied by Central and South America, such as coffee, chocolate, cocoa, bananas, sisal, and henequen. And last come such products as rubber, silk, spices, tea, special vegetable oils, and hemp, which cannot now be obtained in this hemisphere. These would have to be produced synthetically, or produced in South America, or substitutes would have to be found, which probably would cost more than the original products.

A practical defense plan for the United States includes defense of the Western Hemisphere as a whole. This requires more than military preparedness for all American countries. It means also a common social and economic interest.

Trade with Central and South America.

South and Central America must trade to live, and unless means can be found to establish a mutually-advantageous commerce between the United States and Latin America, their trading must be with the powers that control Europe, which in turn would provide dangerous opportunity for European economic and political penetration. The Western Hemisphere cannot present a solid, united front to aggressor nations as long as the trade routes of many of its nations are tied primarily to Europe.

Two-way trade between Latin America and the United States is not a simple problem. Latin America needs many of the industrial products of the United States, but to buy them they must be permitted to pay with agricultural products which may compete with our own farm products. Many of the products which Latin America has sold to Europe are the same as those that burden American storehouses — wheat, cotton, tobacco, and meat.

It may be possible to increase the two-way trade between the United States and Latin America, and at the same time continue essential trade with Europe in such a manner as to reduce many of its dangers.

For one thing, it may be possible to obtain from certain South and Central American countries increased quantities of tropical or semi-tropical products that we now obtain from non-American countries. These make up about half of our present imports from Latin America, and do not compete with products from our farms. Among these are rubber, cinchona from which quinine is made, hemp, kapok, rotenone and other insecticides, tea, cocoa, camphor, and tropical hardwoods. In 1939, the United States imported about 236,000,000 dollars worth of these kinds of products, but Latin America furnished only 16,000,000 dollars of the total. Many commodities of this nature could be grown, or present production increased, in Latin America. Rubber, for example, is native to South America, yet from the East Indies we obtain 90 per cent of our imports; this trade involved 178,000,000 dollars in 1939. Another native South American plant is cinchona. Yet in 1939 we imported from South America only $4,000 worth of this product out of $850,000 worth purchased abroad.

The development of a dependable source of non-competitive products in Latin America depends largely on research to show the way in which they can be produced economically.

The other half of the agricultural imports from Latin America consists of products also grown in the United States. Some of these are imported only when, due to drought or other difficulty, our own supplies are low and our prices are high enough to offset the tariff walls. Some are supplemental to our own supplies — sugar, vegetable oil, cattle hides, certain types of wool, cigar tobacco, and flaxseed.

The most difficult products with which to deal are wheat, cotton, and meat. For these, there are hemispheric surpluses. Perhaps the perils that accompany competition for sales can be reduced by agreements among the exporting countries to share the available markets. Such action might at least reduce the pressure on weaker nations to risk economic or political domination in order to find a market for their surpluses. It would place all cooperating nations in a strong bargaining position. Furthermore, an American cartel would be better able to cope with worldtrade problems of the future which, in Europe at least, seem destined to be dominated by government.

Rural Conservation Works Program.

During 1940 organized agriculture developed the outlines of a new program which has not yet reached legislative status — a rural works program designed to utilize surplus rural labor in speeding up conservation now and to absorb additional workers in the inevitable post-war decline.

Finding constructive work and income for some 3,000,000 totally or partially unemployed men now on farms is a primary need. At the same time it is imperative to the future welfare of the Nation that land, water, and forest resources be conserved. The United States does not have a surplus of really good land. Only 342,000,000 of the nation's 415,000,000 acres of crop land can be considered as good land. The remainder is worn out, eroded, swampy, arid, or otherwise unsuited for economical cultivation. Much of the 342,000,000 acres of good land is eroding; only 62,000,000 acres are not losing soil and fertility.

The unemployed farm people and the wasting resources are side by side in many cases. The rural areas that have the most unemployed and the direst poverty are the same areas that most need terracing, soil building crops, development of farm forestry, retirement of land from soil-depleting cash crops, and other conservation measures. The rural conservation works program would simply apply the need of rural people for employment to the need of the land.

The same kind of work that is contemplated in a rural-works program is now being done in soil conservation districts, in soil conservation demonstration projects, on watersheds where water run-off is being retarded and erosion prevented in aid of flood control, and on farms where operators are carrying out strip-cropping, contouring, and other conservation practices under the AAA. However, despite all that has been done, soil waste in the United States is still proceeding faster than soil conservation.

A rural conservation works program would have both public and private benefits. Where the work has added to the value of a farm, the owner himself would finance an equitable share of the cost, or would furnish a part of the materials, equipment and labor.

Most landowners today are willing and able to undertake such work, and to pay their proportionate share, if technical assistance, guidance, and supervision are supplied. Where the project adds little or nothing to the value of the individual farm, but is valuable to the area as a whole, and to the conservation of national resources, it is proper for the government to bear all or nearly all of the cost.

Total benefits of a rural works program would be large. This nation, if it would, could save much of the 6,000,000,000 dollars worth of plant food that is lost annually from eroding lands. It could ameliorate floods which have been increasing in frequency and size. It could stop the alarming trends toward declining yields, smaller incomes, and less employment. Some resources, such as farm forests, could be improved and developed to yield more income and employment.

Forest planting and timber improvement are good examples of profitable rural conservation works. Full development of our forest lands could provide work each year for 2,000,000 additional men. More than 4,000,000 man-days of employment could be used in fire protection on privately owned forests alone. Better management of farm woods could add 150,000,000 dollars a year to farm income, and could increase the farm production of lumber, a much-needed resource, by as much as 300 per cent.

Farm Production and Crops.

Nineteen-forty was a year of good harvests. The acreage of all crops under cultivation was 1 per cent larger than in 1939, or 315,909,000 acres as compared to 311,921,000 acres, and total production of crops also was 1 per cent larger. The 1940 crop acreage compared to a 10-year average of 330,577,000 acres.

A number of crops set, or came near setting, new records for production or yield. Wheat production was 9 per cent larger than 1939, and 8 per cent above the 10-year average. The wheat yield was 2.1 bushels an acre above average. Cotton yields went above half a bale per acre for the second time on record. The output of feed grains, including the second largest corn crop since 1932, was large enough to feed all livestock without drawing on accumulated reserves. Legumes — beans, soybeans, and peanuts — scored a new high in total production. Tobacco production was below average — 32.8 per cent under the record 1939 crop — but the supply will be ample in view of accumulated stocks. A shortage in sweet potato production was offset by a potato production that was 19,000,000 bushels larger than 1939, and 13,000,000 bushels above average. Fruit production was under 1939, but plentiful in view of reduced export demand. Truck crops were more plentiful than in 1939.

The increase of livestock numbers that started in 1938 continued into 1940. At the beginning of 1940 there were more cattle, milk cows, hogs, and sheep on farms than a year earlier. However, hog production declined during the year with a reduction of about 8 per cent in the spring pig crop, and 12 per cent in the 1940 fall pig crop. Cattle and sheep on farms continued to increase.

Wheat.

Wheat production in 1940 was 816,698,000 bushels, an average yield of 15.3 bushels per acre from the 53,503,000 acres harvested. Although the harvested acreage was 6 per cent below the 10-year (1929-38) average, the production was 8 per cent above that average. Winter wheat made up 589,151,000 bushels of the total production; the spring crop 227,547,000 bushels; and durum, 34,776,000 bushels.

In the winter wheat belt, the 1940 harvest was called a 'miracle crop' because of its marvelous recovery following an extremely poor fall and winter. In the western plains some of the crop was 'dusted in' in the fall of 1939 in a dry seed-bed and did not sprout until late winter brought some moisture.

In the winter wheat belt about a fourth of the acreage was abandoned; in six central and south-western Plains States, more than a third of all acreage was abandoned. Yet the acreage over the wheat belt as a whole returned better-than-average yields. As of July 1, 1940 the carry-over of wheat was 284,000,000 bushels. Total supply of United States wheat for 1940-41 is 1,101,000,000 bushels, prospective domestic consumption is 685,000,000 bushels, and prospective exports are 23,000,000, leaving a July 1, 1941 carryover of 393,000,000 bushels — the largest on record.

The principal factor in wheat prices during 1940 was the Ever Normal Granary wheat loan program, which maintained domestic prices 20 to 30 cents above world levels. The advance between the season low price of 71.2 on Aug. 17, and the high price of 88.1 on Nov. 23, was 16.9 cents. On Dec. 17, two weeks before the final date for execution of wheat loans, more than 268,000,000 bushels had been placed under loans as compared with 164,000,000 bushels a year earlier.

Cotton.

Cotton production was 12,686,000 bales from 24,078,000 acres, as compared with 11,817,000 bales in 1939 from 23,800,000 acres, and a 10-year average of 13,547,000 bales from 33,100,000 acres. The 1940 yield of 250 pounds per acre was the second highest on record. Total supplies of American cotton were about 25,000,000 bales, near the 1939 level, and still far above average.

Cotton, supported by government loans and heavy domestic consumption, sold at higher prices in 1940 than in the previous year. Near the close of the year, about 2,500,000 bales of the 1940 crop were under loan, raising government-owned and financed stocks to around 10,500,000 bales. Mill consumption of cotton was a little higher, about 7,800,000 bales, compared with 7,750,000 in 1939. This offset somewhat the loss of blockaded foreign markets that normally take annually about 2,500,000 bales of American cotton. Total exports of American cotton for the 1940-41 crop year might be less than 2,000,000 bales, as compared with 6,000,000 in 1939-40. Prices of 1940 spot cotton generally stayed within a few points of the government loan rates, which averaged 9.30 cents per pound for middling 15/16 inch.

Tobacco.

The year's tobacco crop was 1,241,700,000 pounds, a drop of 32.8 per cent from the record-breaking 1939 production of 1,848,700,000 pounds. Production of flue-cured tobacco, which was particularly hard-hit in 1939 by the shut-down of the British market, was reduced from 1,159,300,000 pounds in 1939 to 643,000,000 pounds in 1940 — a 44.5 per cent decrease. Total supplies of all tobacco were down somewhat from 1939, but were still overlarge. Despite a drop of 40 per cent in exports, prices received by farmers for flue-cured tobacco were higher than in 1939, largely because of Federal marketing quotas and the purchase and loan program of the Commodity Credit Corporation.

Corn.

Corn growers entered 1940 with near-record supplies on hand, a total of 3,151,000,000 bushels. This was the second largest supply since 1932, when the total supply was 3,202,000,000 bushels, and the price averaged only 32 cents a bushel. However, due to the corn loan program, growers realized an average of 59 cents a bushel on their 1939-40 season corn. The loan rate on such corn was 57 cents a bushel, and about 475,000,000 bushels went under seal. The 1940 corn crop yielded an estimated total of 2,449,000,000 bushels, only 153,000,000 bushels under the 1939 production, and equal to the 10-year average. This crop, and an Oct. 1 carry-over of 701,000,000 bushels from the 1939 crop, meant that corn growers ended the year with a total supply of about 3,151,000,000 bushels, just about 1 per cent under the previous year's supply. In November the Commodity Credit Corporation announced that the loan rate on 1940 corn would be 61 cents a bushel. It is estimated that about 600,000,000 bushels of the total supply may be sealed under loan.

Livestock.

A large volume of livestock moved to market in 1940; yet due to the improving consumer demand, prices declined much less than the usual seasonal amounts. An expansion of livestock numbers started in 1938 and continued through 1939. At the beginning of 1940 the supplies of cattle, hogs, and sheep on farms were larger than a year earlier. Meat processed under Federal Inspection amounted to a total (dressed weight) of 11,555,593,000 pounds of beef, veal, pork, lard, lamb and mutton, as compared to 10,434,466,000 pounds in 1939. Inspected slaughter of hogs in the 1939-40 season increased to 47,600,000 head, 20 per cent more than a year earlier, the largest since 1928-29. Slaughter of cattle in 1940 was only a little ahead of 1939. The 1940 lamb crop was 32,700,000 head, 3 per cent larger than 1939, and the largest on record.

Top prices of hogs at Chicago started the year at about $5.80 a hundred, well under 1939 prices, but went above $6.75, and over 1939 prices, in August, and stayed near 1939 levels for the rest of the year. Beef steers at Chicago started the year at $9.50, under 1939 prices, but moved above the 1939 level in April, and were $11.70 at the end of December, $2.19 over 1939. Lamb prices started the year at around $9.60 a hundred and were higher than 1939 prices the first half of the year, reaching a high of $11 a hundred in June. For the balance of the year 1940 lamb prices were fairly close to 1939 levels.

Poultry and Eggs.

Total production of chickens in 1940 was 680,000,000 as compared with 773,000,000 in 1939. Egg production during the first 11 months of 1940 was 102,300,000 cases, as compared with 99,700,000 cases in 1939. Farmers ended the year with about 5 per cent fewer layers than at the end of 1939, setting the stage for smaller egg and meat production and higher prices. The turkey crop, which was expected to be about 33,000,000 birds, was hard hit by early blizzards, cutting final production to around 32,000,000. During 1940 farmers received prices for eggs ranging from 14.4 cents a dozen in June to 26.2 cents in November. Prices were under 1939 levels until October, when they moved slightly above them. Prices received for chickens ranged from 12 to 13.7 cents a pound and were slightly under 1939 levels until the latter part of the year.

Dairy Products.

The dairy farmer's year was highlighted by increasing herds and production, better domestic demand as the result of larger industrial payrolls, and increases in exports of dairy products. The year closed with the largest number of milk cows in five years, the second largest supply of feed grains in 20 years, and unusually good consumer demand.

Milk production for the first 11 months of 1940 was 102,900,000,000 pounds as compared with 100,700,000,000 pounds for the similar period in 1939. Butter production was 1,683,510,000 pounds for the 11 months as compared with 1,644,760,000 pounds for the 1939 period, a gain of 2.4 per cent.

Exports of manufactured dairy products rose steadily during 1939, and this trend continued in 1940. Records for the first 7 months of 1940 showed that 176,200,000 pounds of dairy products (whole milk equivalent) had been exported, as compared to 99,100,000 pounds for the similar period in 1939.

Farm Income.

Total farm income in 1940 was $10,250,000,000 compared with $9,769,000,000 in 1939. Cash farm income, including government payments to farmers, was about 9,000,000,000 dollars, up 460,000,000, or 5 per cent, from the previous year. It was the highest cash income for any year since 1930, with the exception of 1937, when total cash income was 9,100,000,000 dollars. Cash income from marketings, excluding government payments, was around $8,250,000,000, or about 7 per cent larger than 1939. Government payments were smaller, 750,000,000 dollars as compared to 807,000,000 in the year before. The value of products consumed on the farm was larger, as dairy products were more valuable, and the weather encouraged production of garden and other home-consumed crops.

Crops and livestock both shared in the increase of income. Particularly favored were northern Great Plains farmers, as production of crops and livestock approached pre-drought levels, and income was the highest for any year since 1929. The western States generally had a higher income, as did the North Atlantic and East North Central States. The income of the South did not change much from that of 1939.

The actual purchasing power of the farmer's income in 1940, taking into account the prices of the goods and services that farmers buy, increased by 5 per cent over 1939. Although the 1940 money income from farming had a purchasing power 80 per cent greater than that of 1932, it still was only 78 per cent of a 'parity' income.

National Farm Program.

During the past eight years farmers and the Federal government have cooperated to develop a national farm program aimed at achieving stability of income, conservation of resources, greater security of tenure for those who use the land, and improved distribution and consumption.

Activities under the national farm program in 1940 are summarized, as follows:

Agricultural Adjustment.

More than 6,000,000 of the nation's 7,000,000 farmers cooperated in the AAA program in 1940 as compared with 5,750,000 the year before. Under this program are geared together the adjustment of production of soil-depleting surplus crops and the improvement of land resources through the use of soil-building crops and practices. In 1939, 354,000,000 acres of crop land, 78 per cent of all crop land in the nation, was farmed by growers cooperating in the program. In 1940 this increased to 80 per cent of all crop land.

The final figures on the use of this land in 1940 will not be available for some months. In 1939 cooperating farmers made new seedings of legumes and grasses on 41,000,000 acres; seeded 26,000,000 acres to green manure and cover crops; protected 26,000,000 acres from erosion by contour farming, strip-cropping, and summer fallow; applied nearly 5,800,000 tons of lime and 640,000 tons of superphosphate fertilizer, and constructed more than 67,000 miles of terraces.

Under the range conservation program, which covered 213,000,000 acres, more than 48,000 farmers and ranchers improved the stand of grass on 24,400,000 acres, built 21,000 tanks and reservoirs for stock water, and constructed more than 8,000,000 feet of water-spreading terraces.

Improvement of farm forests was encouraged by the program, with forest conservation practices carried out on more than 350,000 acres, including 58,000 acres of tree planting.

One of the principal objectives of farmers in cooperating in the program is to produce according to market and reserve requirements. In 1940, farmers planted within national acreage goals set up for the four major crops. The goal for corn was 88-90,000,000 acres; the planted acreage was 88,143,000. The cotton goal was 27-29,000,000 acres; 25,073,000 were planted. The wheat goal was 60-65,000,000 acres; 64,388,000 were planted. The combined goal for the principal varieties of tobacco was 1,265,000 to 1,305,000 acres; 1,284,000 were planted. The rice goal was slightly exceeded; the goal was 880,000 to 900,000 acres, and 1,095,000 were planted.

Under the AAA program farmers earned a total of $451,000,000 for staying within acreage allotments and for carrying out soil-building practices. Producers of four basic commodities who stayed within their acreage allotments also received price-adjustment, or 'parity' payments on their share of the domestically consumed portion of these crops. Parity payments for 1940 when completed will be approximately as follows, by crops: Corn, $48,800,000; wheat, $56,600,000; cotton, $96,000,000; and rice, $1,380,000.

Total Conservation.

In addition to conservation payments to farmers for the most urgently needed conservation practices, the Federal government also provides technical guidance and other assistance to farmers who organize legally-constituted soil conservation districts for the purpose of adopting complete soil and moisture conservation plans fitted specifically to the needs and adaptabilities of each individual farm. Such assistance is provided by the Soil Conservation Service.

In older countries, where resources have long been limited, conservation has been an inherent part of farming and forestry. But in the United States we have had an exploitive attitude toward the land. Until recently, the resources seemed endless; the needs of an expanding nation were urgent. We plowed up the prairies, skimmed the richness from the land and moved on. We cleared the forests without regard to the future needs for lumber, and without regard to the need of the land for cover. But now we can measure the remaining resources. They are still sufficient to provide abundant production, but they are not limitless and the rate of loss is still tremendous.

Nineteen-forty saw many advances made by farmers in working toward conservation of their soil, their timber, and their water supplies. This was especially true of farmers who, under State laws, have organized soil conservation districts as local political subdivisions of their States. Thirty-eight States have enacted laws which permit farmers to organize such districts, and by the end of the year the Soil Conservation Service of the Department of Agriculture was cooperating with 307 districts, covering 186,000,000 acres in 34 states. Upon request of a district the Soil Conservation Service will help develop a complete conservation program for the district, make surveys, assign a technical staff to aid farmers in developing and carrying out conservation plans on their farms, and furnish equipment and some materials for erosion control work.

Local districts, in which farmers take the major responsibility for obtaining total conservation, developed in the United States only after large numbers of farmers had seen the benefits of such work in Federal demonstration projects. Between 1933 and 1940, the Soil Conservation Service organized 180 demonstration projects in 45 states. Each project averaged 25,000 acres. Methods and results of reasonably complete erosion control were demonstrated on the farms of cooperating farmers. More than 90,000 farmers operating 26,000,000 acres have participated in the demonstrations.

Another phase of conservation is the acquisition of submarginal land by public purchase and its development for some better use, such as forestry, grazing, or wildlife. About 100,000 acres was purchased in 1940. The total area of land acquired since the start of this program is about 11,000,000 acres. In addition, the Forest Service has acquired 12,000,000 acres of forest land since 1933, to bring the national forest area up to about 175,000,000 acres. ½

Commodity Loans.

Commodity loans, a part of the Federal Ever Normal Granary program, aided in stabilizing farm prices in 1940. Loans were made by the Commodity Credit Corporation on cotton, wheat, and corn under the provisions of the Agricultural Adjustment Act of 1938 which made loans mandatory under the conditions of supply which existed, and in addition loans were available to growers of flue-cured and dark tobacco, barley, rye, peanuts, prunes, raisins, gum rosin and turpentine.

Under the 1940 cotton loan program, approximately 2,666,000 bales had been pledged by producers up to January 1940 at an average rate of about 9½ cents a pound. As much as 4,000,000 bales may come under the loan before the end of the marketing year.

About 278,000,000 bushels of wheat had gone under the 1940 loan by January 1941, at the farm loan rate of 64 cents a bushel. Some of this wheat may be redeemed as the marketing season progresses; the outlook is for about 200,000,000 bushels under loan by the time the next crop is harvested.

The corn marketing season opened Oct. 1 with 475,000,000 bushels under loan or owned by the CCC. The 1940 loan was announced at 61 cents a bushel, and it is expected that about 250,000,000 bushels will be pledged in addition to 425,000,000 bushels of old corn which may be resealed. Barley loans were made on 5,000,000 bushels and less than 3,000,000 bushels of rye came under loan.

As a result of the emergency loan and purchase program to offset the loss of British tobacco markets, the Commodity Credit Corporation owns nearly 300,000,000 pounds of tobacco, and prospects at the end of the year were for acquisition of an additional 100 million pounds.

Crop Insurance.

Another part of the Federal Ever Normal Granary for wheat growers is the crop insurance program. Although the country's 1940 wheat crop was above average, the growers in some areas experienced ruinous losses, and scattered crop damage was reported in all wheat regions. Through all-risk crop insurance, many wheat producers who otherwise would have lost much or all of their income received indemnities to make up their losses. Altogether, about 112,500 growers collected indemnities amounting to 22,000,000 bushels of wheat. The bulk of the indemnities went to the Southwestern Great Plains where crop losses were extremely heavy. The insurance program showed considerable growth in 1940; the number of contracts increased from 165,700 in 1939 to 378,900, and premium payments by growers rose from 6,684,000 bushels to 14,683,000.

Surplus Disposal.

The emphasis on removal and utilization of surpluses shifted from export subsidies to utilization of such surpluses by needy families in this country. Started in May, 1939, on an experimental basis, the Food Stamp Plan has been extended gradually throughout the country. Under this plan, families eligible for public aid may buy orange-colored stamps which may be used in the purchase of any food products. With each $1 of orange stamps purchased, the buyer receives 50 cents worth of blue stamps, free, which may be used to purchase any farm product on a 'surplus' list. The stamps are redeemed from grocers by the Surplus Marketing Administration.

By Nov. 15, 1940, the Food Stamp Plan had been extended to 226 areas. About 2,500,000 persons were benefiting from the plan. They were consuming $5,000,000 more of surplus foods each month than they had before the program was initiated. Families using the stamp plan have been spending about 14 per cent of this additional food money for butter, 14 per cent for eggs, 17 per cent for flour, and other cereals, 12 per cent for vegetables, 13 per cent for fruits, and 30 per cent for lard and pork.

Along the same pattern is the experimental Cotton Stamp Plan, started in May of 1940, under which relief families may buy green stamps in the amount they normally spend for cotton goods. For every $1 of green stamps bought, $1 of brown colored stamps are given free. Both kinds of stamps may be used in any store in a prescribed area to buy products made from American cotton. The Cotton Stamp Plan by November had been extended for testing in 11 areas.

Through the direct purchase and distribution of surplus farm products a wide range of foods has been made available for distribution by state welfare agencies and for use in school lunches. During the past year 3,000,000,000 pounds of surpluses of more than 40 farm products were bought and distributed, involving a total expenditure of 117,000,000 dollars. In the peak month in 1940, about 3,000,000 children obtained surplus foods in the school lunch program.

Conserving Human Resources.

There are great disparities within agriculture, as there are in any other industry. Many farm families have very few acres of good crop land; they are participants in an archaic tenure system; hundreds of thousands of them move every year; they are undernourished; they are the underprivileged of agriculture.

Since 1935 the Department of Agriculture, through the Farm Security Administration, has sought to help one million of these needy farm families make the adjustments necessary to achieve self-support.

Rehabilitation loans are made to low-income families who are unable to get credit elsewhere. The basis of each loan is a specially prepared farm and home management plan that is designed to enable the farmer to become self-supporting. Rehabilitation loans during the fiscal year ended July, 1940, totaled $93,500,000 to 299,000 families. Since the start of the program in 1935, $507,360,000 has been loaned to 850,000 farm families. Up to June 30, 1940, $152,387,000 had been repaid: $45,353,000 was repaid during the last year. Interest payments for the 5 years amount to more than $10,514,000. Indications are that at least 80 per cent of all the loans will be repaid with interest in spite of the fact that to be eligible borrowers must be 'poor' credit risks in the ordinary commercial sense.

The Farm Security Administration also aids in adjustment of debts, under which voluntary agreements are made with creditors to scale down and apportion the debts of farmers in line with their ability to pay. During the past year, the debts of 26,632 farmers amounting to $75,501,000 were reduced by $13,405,000, or 17.8 per cent. In five years, debts of $403,932,000 have been scaled down by $92,521,000, or 22.9 per cent.

Under the Farm Tenant Act, the Farm Security Administration aids tenants who wish to become farm owners. In 1940, 6,172 tenants were advanced funds to buy farms, bringing the total of such loans to $12,234 for the three years this program has been in operation.

Rural Electrification.

On Jan. 1, 1935, before a national program for taking electricity to the farms was established, only 750,000 farms, 10.9 per cent of all farms in the United States, had the advantages of electric power. On June 30, 1940, 1,872,000 farms, more than 25 per cent, were being supplied with electricity. This increase in power and light for rural America is largely the result of the loan program administered by the Rural Electrification Administration, which handles the endeavor through farmer-cooperatives. As of Sept. 30, 1940, a total of 664 REA-financed systems in 45 States were operating 256,000 miles of lines, serving 630,000 farm families and other rural users. Construction of an additional 70,000 miles to serve 175,000 farm families will be completed by June 30, 1941. While the rural cooperatives are interested primarily in electricity for farms, their systems are also providing power to many hundreds of small, decentralized manufacturing plants, some of which produce essential defense materials.

Land-Use Planning.

In 1908, the Land Grant Colleges of 47 States and the United States Department of Agriculture entered into a cooperative agreement to foster the organization of community, county, and state land-use planning committees which would do two things: (1) after studying all the relevant evidence in each locality, develop for it a general land-use plan that would indicate the best long-time use of all available resources; (2) indicate for each class of land the physical, social, and economic adjustments that would have to be made to achieve optimum benefits consistent with the conservation of the resource.

For two years the planning committees have been studying basic conditions and mapping out different land-use areas, such as hilly areas with poor types of farms, timbered areas, areas of highly productive cropland. They have delineated the areas that should be retired from farming, and those suitable for heavier settlement; they have recommended changes in types of farming and needed improvements in tenure. They have discovered the specific adjustments needed for preventing soil erosion, for better management of woodlands, for obtaining greater efficiency in local government, for developing industrial resources to provide employment.

As the plans are developed in communities and counties they are considered by state land use planning committees which are developing comparable plans for each state as a whole. Thus there is being developed a sound basis for correlating all public and private agricultural action toward common objectives.

Land-use planning was underway in more than 1,500 counties in 45 states in 1940. Expansion of the work to all of the 3,000 agricultural counties in the nation is expected within the next two years. The undertaking is based primarily on the voluntary cooperation of farmers who obtain no assistance other than the technical information that is supplied by public agencies and specialists. In one county, for example, more than 1,000 farmers took part in one or more of nearly 100 meetings that were held by the Land-Use Planning Committee as it formulated its plan. The resulting program represented the combined judgment of practical farmers, technicians, and administrators.

Land-use planning is one vital contribution that American agriculture is making to the efficient functioning of democracy.