¹ Shefrin, F., “Agricultural Policy: Wartime Prices of Farm Products” (Economic Annalist, 02, 1945, p. 10).Google Scholar

² Reid, E. P., “Wartime Policies: Fruits and Vegetables” (Economic Annalist, 11, 1944, p. 77).Google Scholar

³ Leckie, H. K., “A Record Year of Meat Production” (Economic Annalist, 02, 1945, p. 6).Google Scholar

⁴ Campbell, B. A., “The Dairy Industry in Wartime” (Economic Annalist, 08, 1944, p. 52).Google Scholar

⁵ Leckie, H. K., “Another Year of Bacon History” (Economic Annalist, 02, 1944, p. 16).Google Scholar

⁶ “Subsidy Payments in Agriculture, 1943” (Economic Annalist, 05, 1944, p. 37)Google Scholar; Shefrin, F., “Agricultural Policy: Subsidies and Bonuses, 1943” (Economic Annalist, 02, 1944, P. 4).Google Scholar

⁷ For a discussion of Canada's war-time agricultural exports, see Shefrin, F., “Agricultural Policy: Wartime Exports” (Economic Annalist, 11, 1944, p. 83).Google Scholar

⁸ Canning, J. B., “The Demand for Agricultural Commodities in the Period of Transition from War to Peace” (Journal of Farm Economics, vol. XXVI, no. 4, 11, 1944, p. 709)CrossRefGoogle Scholar; Shefrin, , “Agricultural Policy: Wartime Exports,” p. 83.Google Scholar

⁹ For discussion of other aspects of the problem of farm income in Canada see Rutherford, J. B., “Agricultural Income” (Canadian Journal of Economics and Political Science, vol. IV, 08, 1938, p. 420)CrossRefGoogle Scholar; Hope, E. C., “Agriculture's Share of the National Income” (Canadian Journal of Economics and Political Science, vol. IX, 08, 1943, p. 384)CrossRefGoogle Scholar; MacGregor, D. C., Rutherford, J. B., Britnell, G. E., Deutsch, J. J., National Income (Royal Commission on Dominion-Provincial Relations, Appendix 4, 1939)Google Scholar; Burton, G. L., “Agriculture's Share of the National Income: A Comment” (Canadian Journal of Economics and Political Science, vol. X, no. 2, 05, 1944, p. 206)CrossRefGoogle Scholar; Skeoch, L. A., “Agriculture's Share of the National Income-Further Considered” (Canadian Journal of Economics and Political Science, vol. X, no. 2, 05, 1944, p. 210)CrossRefGoogle Scholar; Dominion Bureau of Statistics, “Value of Agricultural Production, Farm Cash Income, and Value of Farm Capital” (Quarterly Bulletin of Agricultural Statistics, vol. XXXVI, 10, 1942 - March, 1944, p. 9)Google Scholar; Dominion Bureau of Statistics, “Net Farm Income Canada, 1940 to 1943” (Quarterly Bulletin of Agricultural Statistics, 04 - June, 1944).Google Scholar

¹⁰ Hopper, W. C., “Food Consumption in Post-War Canada” (C.S.T.A. Review, vol. XLIV, 03, 1945, p. 26)Google Scholar; Canning, , “The Demand for Agricultural Commodities in the Period of Transition from War to Peace,” p. 709 Google Scholar; Skelton, D. A., “Canada-United States Trade Relationships” (Journal of Farm Economics, vol. XXIV, no. 1, 02, 1942, p. 35)CrossRefGoogle Scholar; Brandt, K., “The Prospects of European Agriculture and Their Implications for the United States” (Journal of Farm Economics, vol. XXVI, no. 4, 11, 1944, p. 601)CrossRefGoogle Scholar; Tolley, H. R. and others, “Agriculture in the Transition from War to Peace” (American Economic Review, vol. XXXV, no. 2, 05, 1945, p. 390).Google Scholar

¹¹ The absence of fuller treatment of domestic and export demand is not intended to imply that these factors are unimportant. The writer subscribes to the view that, in Canada, external trade is of the utmost importance to the welfare of primary producers, and holds that, within the framework of international exchange, domestic policies affecting earnings and demand can make an important contribution to income stabilization. However, discussion of these matters would be more appropriate to a paper on international trade, or one on budgetary and financial policy. Granted the importance of domestic and export demand, there is still some advantage in considering other means of income stabilization, for the following reasons. First, even with relative stability of demand some elements of irregularity of income would remain. Second, discussion of alternative techniques of stabilization discloses some of the possible consequences of failure to secure stability of demand. Third, assuming that less than the desired degree of stability of demand is secured, the adoption of other means of stabilizing incomes seems certain to follow.

¹² For these several reasons the problems of variability are particularly acute in the Prairie Provinces ( Britnell, G. E., The Wheat Economy, Toronto, 1939).Google Scholar

¹³ The effects of increased knowledge of nutrition and of educational programmes to this end, are gradual and are not likely to create serious disturbances in the market for major agricultural products. War-time shifts in demand are in a different category; and improvements in refrigeration and dehydration may have significant effects on the post-war demand for foods.

¹⁴ McArthur, I. S. and Burton, G. L., “Canadian Food Consumption Levels in Relation to Purchasing Power” (C.S.T.A. Review, no. 44, 03, 1945, p. 21).Google Scholar There is no index of the aggregate volume of agricultural production in Canada ( Kirk, J. K., Agriculture and the Trade Cycle, London, 1933, pp. 22 ff.Google Scholar; Barger, H. and Landsberg, H. H., American Agriculture, 1899-1942: A Study of Output, Employment and Productivity, National Bureau of Economic Research, 1942, p. 22).Google Scholar

¹⁵ Shepherd, G., Agricultural Prices after the War (“Wartime Farm and Food Policy,” Pam. no. 11, Iowa State College, 1945), p. 8.Google Scholar

¹⁶ War-time scarcity of labour and substantial increases in wages, have particularly affected milk-production costs. A study of milk-production costs in Alberta shows labour costs varying from about 30 per cent of gross costs for whole-milk farms to over 40 per cent of gross costs for inspected cream, churning cream, and condensery farms ( Patterson, H. L., “The Alberta Dairy Farm Business,” Paper read before the Alberta Dairymen's Convention, Calgary, 02, 1945).Google Scholar

¹⁷ Stabilization of net incomes could be directly effected by placing all primary producers on salary and expenses. Apart from the great difficulties of determining expenses, such a procedure would radically change the basis of the direction of the use of resources. Although prices, of products and of agents, might continue to be quoted, there would be no effective inducement to competitive behaviour on the part of producers and to the search for the most profitable organization of the producing unit. Unless other directives were introduced, the flow of products would bear no close relation to the needs, wants, or demands of consumers. To avoid this the community might be expected to insist on close superimposed direction of production, leaving at most only a narrow range of decisions to the producer. While other considerations might enter into agricultural policy, and while it is by no means certain that competitive conditions could be successfully simulated, it is sufficient for the purpose of the present discussion to assume competitive conditions, and the objective of supporting salaries at the level of normal competitive returns. Except that adjustments of production would be more easily effected, the problems of stabilization would then be similar to those discussed below.

¹⁸ Patton, H. S., “Wartime Wheat Policy in Canada” (Journal of Farm Economics, vol. XXIV, no. 4, 11, 1942, p. 772).CrossRefGoogle Scholar

¹⁹ Shepherd, G., “Stabilization Operations of the Commodity Credit Corporation” (Journal of Farm Economics, vol. XXIV, no. 3, 08, 1942, p. 557)Google Scholar, “Bases for Controlling Agricultural Prices” (Journal of Farm Economics, vol. XXIV, no. 4, 11, 1942, p. 743)Google Scholar, Commodity Loans and Price Floors for Farm Products (“Wartime Farm and Food Policy,” Pam. no. 6, Iowa State College, 1943).Google Scholar

²⁰ The operations of the Federal Crop Insurance Corporation provide the most extensive experience with general crop-yield insurance (wheat and cotton). The F.C.I.C. was established in 1938, and commenced operations in the 1938-9 crop year. The activities of the Corporation were suspended when Congress failed to appropriate the funds necessary to continue insurance in 1944. The reasons given were, first, that participation had been less than had been expected, and second, that the losses incurred by the Treasury had been excessive. For a review of the operations of the F.C.I.C, see Report of the Manager of the Federal Crop Insurance Corporation, 1943. The Corporation recommended writing insurance in 1945. Canadian reports on crop insurance include: Crop Insurance in Manitoba: A Report on the Feasibility and Practicability of Crop Insurance in Manitoba (February, 1940); Preliminary Report of the Committee on Crop Insurance, 1935 (Saskatchewan); Hansen, W. J., Crop Insurance: Progress Report of a Study of the Possibilities of a Plan of Crop Insurance with Respect to the Province of Saskatchewan (01, 1937)Google Scholar; Motherwell, R. E., A Study of Crop Insurance (Report of the Saskatchewan Reconstruction Council, Appendix 3, 1944)Google Scholar; Report on Rehabilitalion of the Dry Areas of Alberta and Crop Insurance, 1935-36; Stewart, A., “Crop Insurance in Alberta” (unpublished report, Alberta Post-War Reconstruction Committee, 1945).Google Scholar Assistance, with small contributions from recipients, has been provided under the Prairie Farm Assistance Act, 1939. For a review of operations under the P.F.A.A., see Motherwell, A Study of Crop Insurance.

²¹ During the war bacon and butter have been purchased, stored, and later released. This policy has been pursued largely to eliminate seasonal variations in prices. The problem of seasonal variations in prices is not dealt with in this paper. However, where differences in production costs occur during the season, a flat price, unless accompanied by production controls, must lead to difficulties by stimulating production at the period of low costs, that is, at a period when production is otherwise large. Such difficulties have been encountered with both butterfat and hogs (J. G. Taggart, Chairman, Agricultural Prices Support Board, Address delivered at Meeting of Ontario Agricultural Societies Association, Toronto, Feb. 9, 1945).

²² For example, segregating the inelastic milling wheat market from the elastic live-stock feed market by denaturing the grain (practised in several European countries); segregating the ware potato market from the live-stock feed market by riddle regulations (Great Britain). In Canada, during the war, potatoes have been diverted into the manufacture of starch, fresh fruits and vegetables into canning plants, and fresh vegetables have been dehydrated. In the United States “surplus disposal” programmes include the Food Stamp and Cotton Stamp Plans, the School Lunch Program, special penny-milk and nickel-milk schemes for persons on relief.

²³ There is some difference of opinion among economists in the United States regarding the extent to which “surplus disposal” programmes such as the Food Stamp Plan affected agricultural income. Shepherd states (Agricultural Prices after the War, p. 28): “In actual operation, the plan was only about 75 per cent effective. That is to say, for every dollar the government spent on the plan (exclusive of administration costs) the participants increased their consumption of food by 75 cents. If cash had been distributed with no strings attached instead of food stamps, about 50 cents of each dollar would have been spent for food.” See also, Gold, N. L., Hoffman, A. C., and Waugh, F. V., Economic Analysis of the Food Stamp Plan (U.S.D.A., 1940).Google Scholar

²⁴ The Federal Farm Board was unable to survive the attempt to stabilize wheat and cotton prices in the face of the decline in demand between 1929 and 1932. The Commodity Credit Corporation was encountering difficulties prior to the outbreak of war ( Shepherd, , Commodity Loans and Price Floors for Farm Products, p. 5 Google Scholar).

²⁵ Schultz, T. W., “Two Conditions Necessary for Economic Progress in Agriculture” (Canadian Journal of Economics and Political Science, vol. X, no. 3, 08, 1944)Google Scholar; Johnson, D. G., “Contribution of Price Policy to the Income and Resources Problems in Agriculture” (Journal of Farm Economics, vol. XXVI, no. 4, 11, 1944, p. 662).Google Scholar

²⁶ For an extended discussion of parity prices, see Black, J. D., Parity, Parity, Parity (Cambridge, Mass., 1942).Google Scholar Informed opinion in the United States is generally opposed to continued rigid adherence to the parity price formula. Schultz, T. W., Redirecting Farm Policy (New York, 1943)Google Scholar; Canning, J. B., “Rescue Programmes and Managed Agricultural Progress” (Journal of Farm Economics, vol. XXIV, no. 2, 05, 1942, p. 503)Google Scholar; Shepherd, , “Bases for Controlling Agricultural Prices,” p. 744.Google Scholar For a somewhat different view, see Wells, O. V., “Agricultural Prices Following World War II” (Journal of Farm Economics, vol. XXVI, no. 4, 11, 1944, pp. 733–4Google Scholar); Working, E. J., “Agricultural Price Supports and Their Consequences: Work of the Committee on Agricultural Price Supports and Their Consequences” (American Economic Review, vol. XXXV, no. 2, 05, 1945, p. 419).Google Scholar

²⁷ A number of proposals have received consideration in the United States. Early in 1942, Johnson, S. E. (“Adapting Agricultural Programs for War Needs,” Journal of Farm Economics, vol. XXIV, no. 1, 02, 1942)Google Scholar proposed that producers might be paid a higher price on quantities produced in excess of a basic production allotment. Later Shepherd (“Bases for Controlling Agricultural Prices”) pointed out that Johnson's scheme could be operated in reverse during periods of reduced demand. In a more recent publication, Shepherd (Agricultural Prices after the War) has elaborated this proposal, and an alternative. Under the first plan “the whole crop would be sold at the open market price, whatever that might be. The WFA (War Food Administration) would then pay the difference between that price and the support price on the quantity that could have been sold at the support price” (p. 39). The alternative plan is credited to F. V. Waugh. This plan would stabilize total income by varying prices inversely and proportionally with production, calculations being based on a basic quantity at the support price. The schedule of prices would be announced in advance (p. 40).

²⁸ Canadian experience with quotas is limited to milk (sales quotas), sugar beets (acreage contracts), and wheat (sales quotas).

²⁹ There are no limits to human ingenuity in devising means of evasion. It is doubtful if price controls can be effectively applied to commodities which are largely sold by farmers to farmers, for example, oats and barley. Evasion may be checked but not eliminated by penalties for offenders, special marking of the controlled product, interposing some agency between producer and dealer, and obscuring any disparity between the “prescribed” and the “market” price.

³⁰ 8 Geo. VI, c. 29, An Act for the Support of the Prices of Agricultural Products during the transition from War to Peace. Assented to Aug. 15, 1944. In the debate on the bill the Minister of Agriculture stated that no time limit could be set, and implied that the Board might have to operate for a number of years after the war (“Floor Prices for Agriculture,” Monthly Review, Bank of Nova Scotia, vol. XVIII, no. 2, 12, 1944).Google Scholar

³¹ The Chairman of the Board has stated: “In following the broad policy laid down in the Act, the Board might endeavour, on the one hand, to support the price of every individual product at some particular level, or it might endeavour to meet its obligations to the farmer by maintaining a fair general level of prices, while allowing certain commodities to drop in price in order to clear surpluses from the market, or discouraging production of a commodity which could not be sold” ( Taggart, J. G., “The Agricultural Prices Support Act,” Address to Annual Meeting U.C.C., Quebec City, 10 18, 1944 Google Scholar).

³² Farmers in the United States have been assured of supported prices under the “Steagall Amendment” and the Agricultural Adjustment Act of 1938 as amended in 1942. Prices of basic commodities and those commodities for which increases in production have been requested are to be maintained at not less than 90 per cent of parity “for two years from the January 1 following the date on which the President and Congress shall have proclaimed hostilities to have ended” ( Wells, , “Agricultural Prices Following World War II,” p. 729 Google Scholar). It is anticipated that pursuit of these objectives will involve very substantial payments to producers and serious difficulties of disposal, as well as problems of economical use of resources (Shepherd, Agricultural Prices after the War; Working, “Agricultural Price Supports and Their Consequences,” p. 419).