The High Cost of Farmers

Wheat prices rose 3-c- to 5-c- a bushel last week to the highest level since May 1940; corn rose 3/8-c- to 1-c- to new peaks since August 1938; and cotton rose 67 to 74 points ($3.35 to $3.70 a bale) to four-year highs. The double-headed reason: The House passed the Fulmer Bill making crop loans of 75% of parity prices* mandatory, and the Senate Agricultural Committee unanimously approved 85% loans. The existing law gives the Secretary of Agriculture discretion between 52% and 75% of parity, and present loans were made on the basis of what was 52% of parity when the rate was fixed.

Washington dopesters figure the House and the Senate will compromise. On the basis of today's parity, 75% to 85% rates would mean 1941 crop loans to farmers from 85.5-c- to 96.9-c- a bushel on wheat (present loan 64-c-); 62.1-c- to 70.3-c- on a bushel of corn (now 61-c-) ; and 12.0-c- to 13.-c-/a pound on cotton (now 8.5-c-).

Unless President Roosevelt displays enough political courage to veto the bill, the probable result is that the Government, which is now financing almost half a year's supply of wheat, about a quarter of a year's supply of corn, and 18 months' domestic supply of cotton, will shortly be in even deeper.

*Parity prices are the average price for the last five years before World War I, adjusted upwards to reflect the increase in the cost of things the farmer has to buy.

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