THE $5 BILLION FARM SCANDAL Every Day In Every Way It Gets Worse

WHEAT COMBINES HARVESTING TROUBLEMAKING BUMPER CROP IN BENTON COUNTY, WASH. 12 TIME , AUGUST 19, 1957

RESTLESS combines growled and rattled across the rippling wheat fields of the Northwest. In the South, newly picked cotton sped through gins and balers. Midwestern farmers sweated in fields of hay and ripe, yellow oats. Across the nation, the yearly harvest was under way, and despite drought in the Northeast, the worst in 35 years or more, many a U.S. farmer could agree with Fred Hill of Umatilla County, Ore. Pushing back his Stetson, lanky Farmer Hill, 44, cast an admiring eye over a field of ripened wheat and said with a grin: "The Lord's been good to us again. She's gonna be a hon ey." The Agriculture Department agreed.

Topsy-Turvy Values

By yardsticks of common sense, the promise of a bumper harvest ought to measure up as an unmixed blessing. But in the U.S. of 1957, the soil's abundance has become a costly national problem that turns values topsy-turvy, makes good crop weather seem a national calamity and drought a boon. In a year of bountiful crops, the Agriculture Department will spend a record $5 billion, largely in an effort to cope with surpluses. Instead of going to markets, countless tons of the wheat, corn and cotton harvested last week will swell the $5.5 billion worth of farm surpluses stored in U.S. Government silos, warehouses and cold-storage vaults, which already hold more wheat than the nation consumes in a year and a pound of cheese for every man, woman, child and white rat in the country.

The glut is largely the fault of the federal price-support program, a mode of agricultural life so obsolete that in its present form it amounts to a national scandal. Designed to cope with the problem of farm surpluses, it brings on bigger surpluses by setting high price supports. Designed to keep small farmers from going broke when surpluses drag prices down, it actually helps the poorest farmers least and the richest most. Designed to bolster the health and welfare of agricultural communities, it has tempted many a farmer to sharp practices because "only suckers" would refuse to take advantage of the loopholes in the law. Designed to cut surpluses by subsidized sales of grain and cotton abroad, it is so rigged that, as overseas sales are successful, price supports rise automatically -- hence bring on more surpluses. Designed to ensure farm stabilization, it has instead warped the farm economy, e.g., Northwest farmers, restricted on wheat acreage, grow barley instead, and are now starting a cattle-feeding program to use the barley. "The hell of it is," said one of them, "all it would take is an administrative ruling right now to rip up the whole program."

Political Reflex

What keeps this clumsy, costly apparatus from the scrap heap is longstanding political regard for the farm vote. Understandably, U.S. farmers have learned to use political power to make up for economic weakness. Unlike big unions, farmers have no collective bargaining power. Unlike big corporations, they cannot control the supply of their products. When the nation's farms produce too much wheat, an individual farmer cannot keep the price up by holding part of his crop off the market: even a big farmer's share of the total wheat supply is a thimbleful in a carload. In a free market, even modest surpluses can send farm prices sinking drastically. Vulnerable as they are, the farmers look to Washington for help.

After farm prices sank in the '20s and '30s, the New Deal bolted together the prototype support machinery. Far from dismantling it and building a sounder model as the Depression gave way to postwar national prosperity. Congress kept attaching gimmicks and gadgets. Meanwhile, what Agriculture Secretary Ezra Taft Benson calls a "technological explosion" has taken place on U.S. farms. The combined impact of more machinery, more fertilizer, deadlier insecticides and higher-yielding hybrid seed has upped overall U.S. farm productivity by onethird since 1940, lowered the number of man-hours needed to produce 100 bu. of wheat from 67 to 26. Since the early 19403, the average U.S. farm investment per worker has soared from $3,500 to more than $15,000. This technological explosion has made the small, unmechanized farm economically obsolete.

A Toll in Morale

To keep high price supports from boosting surpluses, the Government imposes acreage allotments on farmers who ask for supports.* Last year, in a further effort to hold down surpluses, Congress passed a soil-bank program to pay farm ers for taking acreage out of production. But the technological explosion makes such curbs futile. Last year, with strict acreage and marketing controls in effect, millions of acres in the soil bank and a severe drought pinching the Southwest, technology-armed U.S. farmers matched the biggest total harvest they had ever known. On land diverted from corn and wheat under acreage allotments, farmers bring in crops -- barley, soybeans, sorghums -- that compete with corn and wheat as livestock feeds. Result: bigger corn and wheat surpluses. "As soon as they plaster a patch on one place," says an Illinois farm-organization official, "something squirts out in another."

For whatever economic benefit they bring, or fail to bring to farmers, federal farm programs exact a toll in morale. TIME correspondents in all major agricultural regions found farmers who wanted to talk "off the record" about temptations to dishonesty under the program. One Indianan sold the topsoil off a field and put the barren ground into a soil bank; a group of Californians use soil-banked acres to start future fruit orchards. Says Lynn Larson, who holds a city job to fatten his lean income from a 2O9-acre farm near East Garland, Utah: "Under these federal programs, the farmers border on being crooks--always looking for loopholes, letting cattle graze on land put into the soil bank." Echoes Kansas Farmer Joe Goldsmith, a 480-acre man: "It makes cheats out of all of us. Some of them cheat more than others, and the big cheats benefit at the expense of those who are most honest."

The Chameleon

Most farmers and farm leaders sense that changes in federal farm programs are overdue. A lot of farmers, and members of Congress too, favor a "two-price" plan under which 1) farmers would get 100% of parity for commodities sold for human use in the U.S., but 2) would get the free-market price for animal feeds and commodities sold for exports (a scheme sure to bring yowls against dumping from foreign countries).

A big (70,000 acres) Kansas farmer has another idea: give farmers an income-tax break by letting them average good years with bad. A little (ten acres) Georgia cotton farmer who seldom nets more than $400 a year, thinks the only "fair thing" is 100%-of-parity supports under all farm commodities--or at least under cotton. A Colorado wheat farmer offers still another plan: "Congress should create huge cooperatives to handle the crops, and only enough should be let out to maintain the market." But farm experts who take a broad view see no simple, straightforward answer. "The farm problem," broods an Illinois farm economist,"is semi-economic, semipolitical, semi-moral and semi-social. It's as changeable as a chameleon and prickly as a porcupine."

Above Principle

How prickly the porcupine is, nobody knows better than Ezra Taft Benson. He went to Washington in 1953 convinced that a dedicated agriculture secretary, willing to rise above politics and make himself personally unpopular, could end huge surpluses, high price supports, acreage controls and big Agriculture Department budgets. But it was Benson's bad luck to take his job just as the farm economy was about to feel the technological explosion's full impact. Under the impact, farm prices sagged. With net farm income sliding from $13.3 billion in 1953 to $11.6 billion in 1956, U.S. farmers were in no mood for experiments with lower price supports, and Congress was in no mood to make the farmers any madder. So Benson found Congress unwilling to rise very far above politics.

He did win from Congress in 1954 a grudging bit of price-support flexibility, but last year it took an Eisenhower veto to keep Capitol Hill from restoring the old system of rigid, mandatory support, at 90% of parity, under six basic farm commodities, including wheat, cotton, corn. Benson himself has had to learn to bend with political winds, to compromise, zigzag and, as he puts it with a wan smile, "rise above principle."

"Phony as Hell"

Despite all the porcupine quills stuck in him, Ezra Taft Benson still hopes to get a radically altered price-support program through Congress next year. Enough fresh evidence of the current program's failure has piled up, he trusts, to convince Capitol Hill that it is high time for a change.

Benson wants Congress to get rid of rigid, mandatory price supports altogether, grant the Agriculture Secretary authority to set support under any farm commodity at whatever level he deems suitable, from 100% down. If Benson gets his way, the Government will no longer use supports to try to make farming profitable even for an inefficient farmer on an obsolete small farm. Supports would serve only to prevent drastic price falls from one year to the next. In coping with a commodity in oversupply, e.g., wheat, Benson would lower the support price bit by bit. Gradually, farmers would shift wheat fields to more profitable crops. In time--he hopes --supply would come into balance with demand, acreage controls would fade away, and the flow of wheat into Government storage would end.

Many members of Congress would rather ignore the porcupine than vote for any such new program. But even farmers have come to realize that the present setup cannot last. Wonders an Oregon wheat farmer: "Is the taxpayer going to stand for it? I can't think any program relying on Government help in the long run is an answer. It's phony, phony as hell." A Utah farmer looks at it the same way: "You can't buy a solution to the farm problem by spending more and more money. So why don't they stop trying, before the city people rise up in arms?" Says Indiana Farm Editor (Indianapolis News') Frank Salzarulo: "It's time to quit being average or quit farming. Most farmers are willing to junk the program completely."

Nationally speaking, most farmers are not that foolhardy--if only because they may continue to need help to extricate themselves from the contradictory kind of help that now holds them like a solicitous boa constrictor. But city dwellers and farmers alike should realize that every clay the present program continues--to the tune of $5 billion a year--the situation is going to get worse.

* In 1956, in the ultimate contradiction, the Administration put into effect a support price lor corn grown outside the acreage limitation program, i.e., a guaranteed market of $1.25 a bushel for those who thumbed their noses at crop-restriction programs.

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