NEW DEVELOPMENTS IN FARM PRICE AND INCOME POLICY PROGRAMS: PART I. SITUATION AND PROBLEM

Table 1. Changing Physical Requirements of Agriculture

Source: “Changes in Farm Production and Efficiency,” Statistical Bulletin No.

233, and “The Balance Sheet of Agriculture,” Agriculture Information Bulletin No. 201.

Mechanization and automation of the agricultural business have
contributed to the decrease in number and increase in size of farms.
New production technology has been adopted at a fast rate. Alterna-
tive off-farm employment opportunities continue to attract some farm
people. The growth of vertical integration and contract farming is
another facet of the changing agricultural structure.

C. Where Are We Heading in the Next Three to Five Years?

In recent years farm earnings have failed to keep pace with earn-
ings in the rest of the economy. Real income of farmers in terms of
constant dollars has declined since the early 1950’s, while the real
income of other segments of the economy has generally improved.
Indications for 1959 and the three to five year period ahead point
to a continuation of the widening spread between the real income
of farm people and of the nonfarm segment. The decline in real income
of farmers is related to changes in the demand and supply of agri-
cultural products.

1. Demand for Agricultural Products. Barring emergency
situations, any significant increase in foreign demand for our products
during the next three to five year period is unlikely. Domestic con-
sumption of agricultural commodities has increased primarily due to
increasing population. Although the American diet will likely con-
tinue to improve, domestic demand for food will probably increase
only slightly more than the population during the three to five year
period under discussion.

2. Supply of Agricultural Products. Agricultural output
has continued to outrun demand in recent years. This is a major reason

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