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



1. A voluntary land retirement program.

2. A voluntary transfer of human resources out of agriculture.

3. An effective production control program.

4. A modified free market price program.

Part II. Resource Adjustment Through Voluntary Land
Retirement Programs

J. Carroll Bottum
Assistant Chief in Agricultural Economics
Purdue University

A. How the Alternative Would Work

If a market cannot be found for expanding supplies of farm prod-
ucts and the free economic forces are allowed to work, some of our
high-cost crop producing areas will shift to other uses. An intelligent
and properly administered land retirement program can ease this
shift. In the early stages, fairly uniform shifts throughout the country
may be required to obtain immediate but temporary adjustments, but
eventually the shifts should be directed heavily toward the lower re-
turning plow land. In our dynamic economy, the adjustments brought
about by normal economic forces are more likely to succeed than
programs which attempt to reverse the natural trend or to maintain
the
status quo.

The United States has a total land area of approximately 1,904
million acres. Of this, about 450 million acres are in plow land. Ap-
proximately 965 million acres are in permanent hay and pasture. The
remaining acreage is in nonpasture forest land, waste, and nonagricul-
tural uses. If a land retirement approach is used to bring present agri-
cultural production and demand into a more desirable balance, some-
thing like 50 million acres of this 450 million acres of plow land
would need to be shifted out of production. The required acreage
adjustment may vary 20 percent either way from the 50 million acres
depending upon the type of land taken out and the type of program
followed.

The 50 million acres equal 11 percent of the total plow land. The
question may be raised of why so large a percentage shift is required.
We need to recognize that the lower producing land will be taken
out of production and that some slack in the administration of the
adjustment programs should be expected. We likewise should recognize
that some production arises from the 965 million acres of permanent
pasture and hay land. Little adjustment would probably occur in this
area under a land retirement program.

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