Exchange of Goods, AAA Programs, Livestock Programs (1935)
The Drought and Current Farm Imports - 1935 - Section 6
Section six from the 1935 Booklet Issued by the WPA covers topics on trading goods with foreign nations, and the impact of international trade agreements. It also covers the effectiveness of the A.A.A. programs during the drought and the balance of livestock and crops.
Mutual Exchange of Goods Needed
Why do foreign nations find it difficult to obtain the dollars to buy American agricultural products? The reason is that this country's _ high tariffs exclude the products of other nations—they cannot sell the United States their goods and thus obtain the money to buy back American goods. After the war the United States lent money in order to provide this dollar exchange.
This could not go on indefinitely; in 1929 and 1930 the United States ceased lending large amounts of money abroad. Foreign nations have since shipped large amounts of gold to the United States in an effort, in some part, to make up the balance. But this, too, cannot go on long, since a large percentage of the world supply of gold is already in the United States.
Only by increased mutual exchange of goods between the United States and other nations can exports of the United States be increased. This can be accomplished by a selective lowering of tariffs or by trade agreements, or both. Efforts are now being made, through the Reciprocal Tariff Act passed in 1933, to increase international trade.
Agreements with Cuba and Belgium have been made and are now in effect and an agreement with Brazil is awaiting passage by the Brazilian Congress. The success of the Cuban agreement since last September indicates that progress can be made in this manner.
Farmers as an isolated group, however, cannot produce for a world market while dollar exchange is unavailable to buy their products, and while high tariffs for industrial goods makes the things the farmers buy relatively much higher in price than the things the farmers sell.
The shrinkage of international trade forced the farmer to produce for the domestic market and for such export markets as were still open to his products. Exports of agricultural products can increase once more when barriers to international trade are removed and when the United States is willing to accept desirable imports of other countries.
The AAA Programs and the Feed Situation
Examination of the effect of the various A. A. A. programs during the period of the drought indicates that more rather than less feed was available per consuming animal unit during the 1934-35 winter feeding season because of the programs.
Emergency forage crops were encouraged on the 13 million acres of corn land kept out of corn production through the 1934 corn-hog program. A large volume of feed was also produced on the 15 million contracted acres of cotton land, the 8 million contracted acres of wheat land, and the 500,000 contracted acres of tobacco land. Without the A. A. A. programs, forage crops would not have been grown on this aggregate acreage of nonfeed crop land.
Because of the low yields due to the drought, only 200 million bushels of corn could have been produced on the contracted corn acreage in 1934. Altogether, the feed production on the total of 36,500,000 contracted acres for all crops under adjustment programs more than offset this reduction in corn production under the corn-hog program.
Livestock Programs Were Conservation Measures
Moreover, the livestock programs of the Adjustment Administration, by effecting an earlier reduction in livestock numbers, served to lessen the amount of corn and other feed used when supplies were plentiful, and thus to increase the amount which was available after the drought.
Perhaps 60 to 75 million bushels of corn were "saved" in this manner by the emergency pig and sow marketing program, which, involving the slaughter of more than 6 million unfattened pigs, was undertaken in the fall of 1933 to avert collapse in the price of hogs.
By transferring the availability of this corn from a period of excess hog production to a period of short supplies, the 1933 slaughter program also operated to increase the amount of pork now on hand over what it would have been without the slaughter program.
The 1934 corn-hog program involved an adjustment in farrowings equivalent to at least 200 million bushels of corn, or the volume required to feed out the pigs which would have been grown without the program.
The drought-relief purchase of cattle by the Government also served to reduce corn requirements during the present feeding season, to the extent, perhaps of 10 to 20 million bushels.
The Government's corn loan program in the fall of 1933, through easing the need for early disposal of the corn crop of that year, encouraged more conservative feeding of corn during the winter of 1933-34.
With corn very plentiful at that time, the 270 million bushels that were sealed in cribs during the loan program were withheld from the amount available for feeding. The conservative feeding induced by this measure may have "saved" as much as 25 million bushels.
The various adjustment programs acted thus as a leveling factor in easing the shortage cycle caused by the drought.
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