Some economists claim that such devices have been regressive
in terms of equality of income distribution. If so (and it may be
true only in regard to farm income distribution), why did we do all
these things? There seems to be a consensus that we did them in
futile attempts to alleviate poverty of certain groups of people or,
in other words, to achieve more nearly equal distribution of income.
Most of these policies have had the longer-run effect of drawing
resources into and then retaining them in agriculture. The long-run
elasticity of supply for agriculture has been high.
But this result in turn created another result. It assured Ameri-
can consumers of adequate food supplies at reasonable prices. There
can be little doubt that this result has been, and is, progressive rather
than regressive in terms of achieving a more equal distribution of
income. The progressive features of explicit agricultural policies of
recent decades, applying as they do to 100 percent of our population,
may more than offset in net effects on income distribution the regres-
sive features internal to farm income distribution affecting 5 to 6
percent of the population.
Productive Capacity
Do we still need government programs to insure the income re-
distribution effects of low food prices? See if the following figures
and ideas add any meaning. In 1967, of the 308 million acres of crops
that were harvested, 71 million acres were used to produce exports.
On top of these 71 million acres (which have fallen as low as 31
million acres in the period since 1950) we had about 30 to 35 mil-
lion acres of land diverted by government and our rate of progress
in yields over recent years has added the equivalent of 5 million
acres per year to our productive capacity, not to mention the poten-
tials we have for increasing our land resource base through water
resource development.
It appears that U.S. consumers have no worries about food sup-
plies, or the at-farm real costs of those supplies, for quite a few years
if agriculture is technically progressive. However, we know that for
industries to be progressive in their adoption of technical advances,
they must earn the revenues with which to install the new technol-
ogies, or appear to be able to earn for repaying creditors. In the face
of an excess capacity and an inelastic consumer demand, an industry
must control its total output to maintain profits. An atomistically
structured industry is usually considered to require the assistance of
the government to achieve such control.
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