A $700 Million Failure?

WHEN Congress last year created the soil bank, it hoped that by paying farmers to take land out of cultivation of price-supported crops a big bite would be taken out of farm surpluses. Both parties were so sure the bank was a good thing that they endorsed it in their platforms, even quarreled over who thought it up in the first place. A fortnight ago, as it appeared that the soil bank this year would cost more than $700 million, the House voted to eliminate $500 million in funds requested to operate the soil bank in 1958, in effect killing the bank if the action stands. Said California's Democratic Congressman B. F. Sisk, who represents a prosperous farming district and who voted for the bank last year: "The soil bank is a demonstrated failure."

The soil bank was a compromise from the start. After campaigning for years to get rid of costly, futile, surplus-accumulating price supports, Agriculture Secretary Ezra Benson was forced in pre-election 1956 to settle for much less flexibility in price-support levels than he wanted. Reluctantly he and the Administration adopted the soil bank, a three-year program of paying farmers to reduce production, with the hope that after 1959 surpluses would be gone, and farmers could get back to a free market. In its favor were plausible arguments about conserving the soil, preventing erosion, etc. But even before the law was passed, politicians went to work to convert the bank into an election-year bonanza. Benson did not v/ant to begin the bank until 1957, but Congress, its eyes on November, ordered him to start dishing out the millions in 1956. The result was that the Government paid out some $260 million last year to farmers to take land out of production often after farmers had already tried to grow a crop on it and failed, either through natural causes such as drought, hailstorms or insect infestation, or by sheer neglect. To nobody's surprise, 1956 farm production set new records.

Much of the opposition to the soil bank is based on the charge that it is highly partial in whom it helps. Apart from the relatively unimportant conservation-reserve phase, the benefits are confined to producers of the five price-supported crops--wheat, corn, cotton, rice and tobacco. Such crops account for only 23% of total farm income--leaving the producers of the other 77% totally outside the benefits of the price support or soil-bank pro grams. The soil bank has turned out to be a money bank for the corn belt and Great Plains wheat states, plus a few specialized cotton and tobacco districts, leaving relatively little for most Southeast, Middle Atlantic, Northeast and West Coast areas. Kansas soil-bank payments this year will average $736.47 per farm v. $24.96 for Virginia, only $1.37 for New Hampshire.

The basic argument against the soil bank is that it is failing to reduce production. By pouring on the fertilizer, planting the rows closer together and cultivating more intensively, farmers are producing almost as much as before. For 1957, the U.S. signed up 233,453 farmers to take 12,784,968 acres of wheat out of production in return for $230,974,475 in payments. This should have cut output 20%, but the now ripening winter-seeded wheat crop (the bulk of the crop) is expected to be 703 million bu., only 4% under the 1956 total of 734 million. Moreover, per-acre yields of 22.5 bu. (v. 18.6 average for the past ten years) will break all records.

Some experts in the Agriculture Department believe that without the bank wheat production would be far higher, especially with rains in the old dust-bowl area. But the truth is that any surplus production avoided in wheat is turning up in rye, oats, grain sorghums or other crops, as farmers put their idle acreage into uncontrolled crops. One thing the soil bank once more proved was that, barring police-state controls, farmers will always outsmart bureaucrats. This year, for example, most farmers gave the soil bank their poorest acres, keeping their best for their price-supported crops. This was legal, if the payment reflected the poor quality of the land. Often it did not. Many farmers plowed up pastureland and planted crops, offsetting any production cutback.

Last week there were still some Agriculture Department officials and Congressmen who said that if its operation could be improved the soil bank might yet do some good. Secretary Benson himself argued that the bank should be allowed to operate for at least one full year in order to have a fair trial. But unless it was cleaned up soon, the bank was fast joining the list of discredited agricultural panaceas. For political reasons the Senate is almost certain to restore most of the cuts. The House will probably go along at some compromise figure, if for no other reason than to have some federal farm handout operating in the 1958 congressional election campaign.

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