Business: Bitter Pill

Agriculture Secretary Ezra Taft Benson, who believes that free markets are best for farmers, last week had to swallow a bitter pill. He restricted plantings for next year’s wheat crop to 62 million acres, down 20% from this year’s planting, and thus imposed the first acreage controls on wheat in three years. He also ordered a vote by the nation’s farmers on whether marketing quotas should be imposed, the first such poll in eleven years. If two-thirds of the farmers approve the quotas, as expected, they may sell only as much as they produce, and the Government will continue to support wheat at 90% of parity (now about $2.20 a bu.). If the quotas are not approved, the support price will automatically be cut to 50% of parity and farmers will be free to sell storage wheat also.

Benson was forced to act under the present farm law, which requires a quota proclamation if indicated wheat supplies are 20% above “normal” domestic and foreign demand. Just the day before, Dwight Eisenhower had signed a bill to raise the minimum permissible acreage from 55 million to 62 million acres. Benson said he set the 1954 allotment at the new minimum because the indicated wheat supply would set a record high.