Should Imports be Prohibited, Export Basis, Agricultural Exports (1935)
The Drought and Current Farm Imports - 1935 - Section 5
Section five from the 1935 Booklet Issued by the WPA covers topics on import controls on commodities, the discussion of the U.S. as an Export Basis nation, and the impact of increased agricultural exports on the economy.
Should Imports be Prohibited?
Some American producers have argued that since the A. A. A. has effected control programs in the case of wheat, corn, and hogs, and other commodities, imports should be excluded entirely in order to secure every benefit to American producers.
While it would be unthinkable to encourage American producers to adjust their output and at the same time permit the benefits to be dispersed through other lands because of greatly enlarged imports, it would be equally unwise to adopt a mandatory policy of exclusion to be applied under all conditions, regardless of droughts, and of the quantity and real importance of the imports.
Farmers should realize that they stand to lose much if they agree to high industrial tariffs which are real burdens on agriculture, in exchange for illusory farm tariffs.
Consideration might be given to the use of quotas if necessary to prevent significant increases in imports of a commodity with which the A. A. A. is dealing. Some reasons why tariffs of exclusion might not be of actual benefit to American producers may be set forth.
In the first place, the percentage of imports, as noted before, is so small as to have almost no effect on American prices. Moreover, as in the case of butter, decrease in domestic consumption during a period of high prices and low supplies has been relatively a larger factor than increased imports.
In the second place, exclusion of imports by embargo or other methods would be certain to result in retaliation on the part of foreign nations which in the end would harm rather than help American producers.
American farmers in particular normally have a large stake in America's export trade, and this stake would be endangered for future years by restrictive tariff practices at the present time.
Third, there are certain agricultural products which the United States is in need of, either temporarily, or normally. For example, the extremely short crop of durum wheat last year which was only one-fifth of the usual domestic production, has required importation temporarily of this type of wheat.
Exclusion would result in the definite lack of a commodity needed by American consumers. Producers would not gain from exclusion of needed commodities, but would only arouse consumer resentment.
Fourth, the imports which are being received are not really displacing products which American producers have for sale. They are supplementing drought shortages in American supplies.
Finally, it is to be observed that the authority to adjust tariffs or otherwise control foreign commerce lies with Congress. The power of prohibiting importation of agricultural products has not been granted the Agricultural Adjustment Administration.
By the Reciprocal Tariff Act, the President was granted the power to raise or lower existing tariff rates by as much as 50 percent in connection with reciprocity agreements with foreign countries. He was no. conceded the power, however, to prohibit importations absolutely This power remains with Congress.
The United States is on an Export Basis for its Major Agricultural Products
In spite of the current increase in imports of some agricultural products, the United States is still on an export basis for the aggregate of its chief agricultural products.
Thus, during 1934, it exported more than 650 million dollars' worth of cotton, tobacco, meat products, grains and grain preparations, and fruits and preparations, while it imported only approximately 125 million dollars' worth of these kinds of products, including 24 million dollars' worth of noncompetitive bananas.
The export trade level is very much reduced, however, from the level of pre-war and earlier post-war exports. On the basis of the 1909 to 1914 average volume of agricultural exports, the January 1935 index for all commodities stood at 57, as compared to 93 for January 1934, and 97 for January 1933.
Grain and grain products stood at 17, animal products at 33, dairy products and eggs at 69, fruit at 189, cotton fiber at 68, wheat including flour at 14, un-manufactured tobacco at 97, hams and bacon at 18, and lard at 45. It should be noted, however, that because of the rise in prices, the value of these exports had not declined to as great an extent as the volume.
In the case of grains, the United States was to a small degree on an import basis (luring January 1935. This was true particularly in the case of barley, oats, and rye (all commodities, however, for which there were no adjustment programs) and corn.
Imports of corn totaled 1,887,000 bushels during this month, while exports were negligible. Imports and exports of wheat almost exactly balanced. Had there been normal weather in 1934, which would have increased the wheat crop by about 300,000,000 bushels, exports of wheat from the United States would undoubtedly have far exceeded imports.
In the case of corn, it may be noted that a considerable quantity was exported in the form of pork and lard. Exports of pork were approximately 9% million pounds in January 1935 and exports of lard almost 18 million pounds.
Roughly 3 million bushels of corn would have been consumed in production of these quantities of pork and lard. This would make the United States a net exporter of corn in this month to the extent of more than a million bushels.
How can the United States increase agricultural exports once more?
Farmers—even more than other groups—are dissatisfied with the present curtailed exports of agricultural products. Setting aside, for the moment, the factor of the drought in reducing supplies to the point where exportable quantities of drought-reduced products are temporarily unavailable, let us ask the question: How can American agriculture increase its exports when supplies again are normal?
The crop land to grow products for an export market is in existence; farmers only too gladly will be ready to produce for such market if the market is there. Cotton planters, wheat growers, hog raisers, are not at all happy about keeping part of their land out of production or using only a portion of their facilities for growing stock.
Examination of the tables in later pages on the exports of pork and lard, grains, and other products over the last few years will show that exports were declining before adjustment programs were put into effect.
A correct statement of cause and effect with regard to exports and adjustment programs is that decline in exports caused the adjustment programs rather than the reverse.
Even with the ruinous prices of 1932, and with tremendous surpluses of every major agricultural product, pork exports had declined from 14.1 percent of production in 1929 to 8.5 percent in 1932; exports of lard had declined from 829,828,000 pounds in 1929 to 546,202,000 pounds in 1932; wheat exports had declined from 140 million bushels in 1929-30, or 17.4 percent of average production, to 32 million bushels in 1932-33, or only 4 percent of average production.
If large domestic supplies and low domestic prices were the only factors influencing exports, this country's exports should have been greater in 1932 than they were in 1929. Since this was not the case, other factors must have influenced the decline in exports.
One such factor has been the increasing efforts at self-sufficiency on the part of other nations, which has led them to encourage home production of agricultural products and to raise barriers against imports. Another factor, however, has been the increasing difficulty of obtaining dollar exchange on the part of foreign countries which buy American agricultural products.
Index to Part I of the Current Farm Imports 1935 Booklet
- Introduction, Export-Import Status, Imports in 1923
- Current Imports, Relative Volume and Corn Imports
- Adjustment of Oats, Barley, and Rye; Meat Imports; Slaughter of Animals
- Butter Imports, Reduction in Tariffs, Present Situation
- Should Imports be Prohibited, Export Basis, Agricultural Exports
- Exchange of Goods, AAA Programs, Livestock Programs
- Drought Shortages and Excess Crop Acreage