Teaching/Communication/Extension/Profession,

Atkinson, T.E.

Penn, Raymond J.

Peterson, Everett E.

Simerl, L.H.

English

Research Papers in Economics

EXTENSION  PROGRAMS  ON  THE  SOIL  BANK
Raymond J. Penn, Professor of Agricultural Economics,  University of
Wisconsin, Chairman; T. E. Atkinson,  Extension Economist, University of
Arkansas; L. H. Simerl, Extension Economist in Marketing, University of
Illinois; Everett E. Peterson, Extension Economist, University of Nebraska.
WISCONSIN
Prior to the passage of the  Soil Bank legislation  in  May  1956,  the
function of the Extension  Service  in  this area was  truly  one of public
policy education.  Information  was  made  available  to farm  people  to
help them form better judgments  on the wisdom  of the Soil Bank pro-
gram.
To  convert  these  judgments  into  intelligent  decisions,  extension
workers  in public affairs  should  also have  some  responsibility  for  see-
ing  that the reactions of farm people  and the  ideas they may have for
improving  the program  are  transmitted  to public  officials.
Extension  in  most  states  can  claim  some  credit  for  the fact  that
the  general  idea  on which  the  Soil Bank program  was  based  has had
rather widespread  acceptance.  However, because the Soil Bank legisla-
tion was passed with considerable  haste, and legislators  and the public
alike were  at the  time  chiefly preoccupied  with the  level  of price  sup-
ports,  the  specific  Soil Bank  proposals  did  not receive  adequate  con-
sideration.
Since  the  Soil Bank program  began  operation,  the primary  exten-
sion  activity  has  been  to assist  individual farm  operators  in  deciding
how to apply the  provisions of the program  on their own farms.  Thus,
for  extension  workers  the  Soil  Bank  has  become  primarily  a  farm
management  activity.
A major exception was  the corn acreage  referendum  in  December
1956,  which  furnished  an  excellent  opportunity  for  a  public  policy
educational  program.  Since  the choice  to  be  made  was  between  the
then  existing  corn  program  and  a  new  one,  and  since  participation
in  the  Soil Bank  would  be  substantially  affected  by  the outcome,  the
corn  referendum  stimulated  considerable  interest  in  price  programs.
Extension  and  ASC staff worked  closely together  in preparing  for
the  referendum.  In Wisconsin  the  feeling  was  that the  policy  educa-
tional efforts in October and November  1956 were particularly fruitful.
In addition,  the interagency  cooperation  on  the program has  sub-
sequently  continued  and  improved.
141Late  in  1957  and  in the  first  half  of  1958  we  will  again  see  the
Soil Bank become a major policy issue.  Both the House of Representa-
tives and  the  Senate have raised  some  questions  about continuing  the
750 million dollar acreage  reserve.  Should the program be  continued?
How  should  it  be  changed?  These  will  become  major  farm  policy
issues,  and Extension  should  become  involved.
One  favorable  aspect  of  the task  is  that  by now  we  can  draw  on
the results of research into the operation of the Soil Bank during  1957.
The  South  Dakota  reports  of  Lyle  Bender,  Carroll  Bottum's  paper
at the  1957  American  Farm Economic  Association  meeting,  and  the
study of the Soil Bank in Rock County,  Wisconsin,  are  illustrations of
the type of research  information that is becoming available.  We should
find  this  information  useful  and  productive  in  the  Soil  Bank  policy
discussions  that will  be carried  on,  officially  or  unofficially,  in  almost
every  state this winter.
ARKANSAS
In Arkansas  we  conducted  more policy  discussions  while the  Solt
Bank  was  being  considered  by  Congress  than  after  its  passage.  The
reason was  that we  prefer to base  policy work  on  issues or  problems
rather  than  on  specific  programs.
Instead  of discussing  the  Soil  Bank we  usually  discussed  problems
of resource  adjustment.  Of course,  special emphasis  was  placed on the
soil  resource.  We  pointed  out  the  increasing  substitution  of  capital
items  for  land and  the resulting  output of  farm  products.
After  the  Act  was  passed,  the  Arkansas  Agricultural  Extension
Service  cooperated  with  other  agencies  in  conducting  district  meet-
ings  for  all  professional  agricultural  workers.  These  were  not  policy
meetings;  they were  devoted  to  the administration  of  the Act.  When
considering specific  programs,  my experience  has been that most farm
audiences prefer  to discuss  administrative  alternatives  rather than pol-
icy alternatives  based on economic  concepts,  such  as the allocation  of
resources,  both within agriculture  and  in the total  economy.
The  Soil Bank in Arkansas has been essentially  an acreage  reserve
program.  Participation  by  cotton  producers  varied from  5 percent  of
the  allotment in Mississippi  County  to  85 percent  in Garland.  In gen-
eral,  the sign-up  increased  gradually  from the Northeast  to the South
and West.  This  means  relatively  more land was  "banked"  in  the  less
productive  areas,  or  areas  where  technology  and  new  practices  have
had  less  influence on  yields  during  recent years.
For example, producers  who have introduced  irrigation during the
last  few years  felt that prospective  yield  would  make  planting  more
profitable  than the  Soil Bank payment.
142It  is  interesting  to  note  that  even  when  producers  are  paid  for
removing  land  from  cotton  the  percentage  removed  varies  consid-
erably.  On  the  other  hand,  acreage  allotments  often  reduce  acreage
on  a percentage  basis.  Imagine  the  complex farm  management  prob-
lem for a producer who has three or four special allotments  and desires
to budget  various  alternatives.
ILLINOIS
"Soil  Bank"  is  a new  name  for  crop  production  control  that has
been  in  use  off  and  on  for  nearly  25  years.  It was  so  treated  in  our
extension  work  in  Illinois.
Persons  interested  in agricultural  policy  are,  or should  be,  con-
cerned  with the development of ideas  into programs.  We had  an excel-
lent opportunity to watch the transformation,  or metamorphosis,  of the
Soil Bank  in Illinois.
The  Soil Bank idea, as first proposed by Illinois  farmers, was  to be
a self-financing  program. Farmers  who used their land in  accord with
prescribed  regulations were to receive  payments from money raised  by
taxing those who did not do so. The self-financing  goal  was soon aban-
doned  as too  unpopular  with farmers.
The next promotion was based on the idea that the Soil Bank would
be  a substitute for existing  programs.  Some  persons  opposed  the  Soil
Bank  proposal on  the  basis  that  it would  probably  become  an  addi-
tional  program,  rather  than  a  substitute.  Those  opposed,  including
some  Washington  officials  proved  to  be right.
After  the  Soil Bank  bill was  enacted,  a  principal  policy  question
was  presented in the corn referendum.  In this situation  the Extension
Service  worked  closely  with  the  state  and  county  ASC  officials  and
with the  leading farm  organizations  in the  state.
Time  and  personnel  were  not available  to hold  extensive  county
meetings attended by extension specialists. The specialists prepared and
distributed  several  press  releases,  made  radio  and  TV  explanations,
and issued two publications.
The first publication,  "Corn Facts," presented basic economic facts
about the  production,  marketing,  and  use  of  corn.  This  was  sent  to
farm  advisers  (county  agents),  and other interested  persons.
The  second  publication,  "Which  Price  Support  for  Corn?"  ex-
plained the two  alternatives  offered in the referendum.  Over  300,000
copies  of  this  publication  were  printed  and  distributed  by  the  ASC
officials  to all farmers  and farm  landowners  in the state.
143Of the Illinois farmers  who voted in the referendum,  80.5  percent
voted  against  acreage  allotments  for  corn.
Perhaps extension workers  and research economists should become
more  interested  in some  fundamental  questions  about  the  Soil  Bank
ard similar  programs.
I  suggest  that  we  need  to  examine  very  carefully  the  price  and
income problems  of farm people. It is people,  not industries, that have
problems.  I am convinced that the income needs  of most of the people
now living on farms cannot be met by restricting production,  nor even
by raising the prices  of their products.  We need to face up  to the fact
that  a  large  majority  of  our farms,  including  a  great  many  so-called
family-size  commercial  farms,  are  too  small  to provide  a  modern in-
come for a family  even  if prices  were  raised  to so-called  parity.
We need  also  to re-examine  very carefully  our assumptions  about
the elasticity  of the demand for United  States farm products.  Some of
our most highly regarded  agricultural  economists have  assured us that
the demand  for United States farm  products  is quite  inelastic.  That is,
a small reduction in the supply of a product will result in a big increase
in its  price.
The statistical  procedures  upon which  they base their conclusions
are,  I  believe,  invalid  for  use  in  planning  long-time  farm  price  and
income  programs.
The demand elasticities  now in common use are based on relatively
short-time,  year-to-year,  changes  in supplies.  Such elasticities  were  de-
veloped and are useful for forecasting  price changes from year to year.
They are,  I suspect,  very misleading  for forecasting  the effects  of sus-
tained changes in supplies  upon prices of United States farm  products.
Prices of most of the United States farm products involved in price-
support  production  control programs  are  greatly  influenced  by inter-
national  economic  forces.  If it  is true,  which  I doubt,  that the United
States can materially  raise world price levels  by restricting  production
slightly,  then  it  must  also  be  true that other  nations  can  easily  offset
the price raising effects of our production  control programs.  Surely the
United States cannot  materially  raise or control  world price levels  for
cotton,  wheat,  rice,  or tobacco.  Yet this  is  exactly  what we  try  to do
by our production  control programs.
NEBRASKA
The  enactment  of  the  Soil  Bank  Act in  the  late  spring of  1956
and the efforts  to apply its provisions  to  1956 crops required  an inten-
sive educational  program  with very little  time for  planning.  This was
144followed shortly by the 1957 winter wheat acreage reserve program, the
conservation reserve program, and the corn referendum.  The Nebraska
Agricultural  Extension Service worked  closely with the state and
county  ASC  offices  in  carrying  out  this  informational  job.  Participa-
tion  in  the  program  by  Nebraska  farmers  was  good  because  of  the
drouth  relief  aspects  of the program.
While  the  Soil Bank proposal  was  being  debated  in  Congress,  we
explained  the  probable  operation  and  the  advantages  and  disadvan-
tages  of  the program.  This  information  was  provided  to  farm  people
at  public meetings,  in  articles  for  farm  press  and  radio,  and  via  tele-
vision  and  radio.
Following  the  passage  of the  Soil  Bank  Act  in  May  1956,  exten-
sion economists  and administrative  staff attended  the  kick-off  meeting
of state  and federal Extension  and ASC to obtain details on the opera-
tion  of  the  program  and  the  role  of  the  Extension  Service  in  getting
information  to  farmers.  Our  activities  on  the  1956  acreage  reserve
program in Nebraska  included a question-and-answer  circular for gen-
eral  distribution  to  farmers,  seven  radio  programs  broadcast  by  all
radio stations  in  the state,  three  television  programs,  district meetings
of county ASC and Extension personnel, and news releases and articles
for farm newspapers  and magazines.
A  similar  procedure  was  followed  for  the  1957  wheat  and  corn
acreage  reserve program.  Circulars were also prepared  on these  phases
of the  program  at  the  request  of  county  agents  and  state  and  county
ASC committees.  A circular on the conservation reserve  program  was
prepared  in  October  1956,  and  a  series  of  four  television  programs
was  presented  using  the script and  pictures  received from the Federal
Extension  Service. The  visual aids  were  especially useful but the script
was  modified  considerably  because,  as  received,  it  was  primarily  a
"sales  talk."
The  Soil  Bank  program  was  explained  and  analyzed  at  a  series
of district conferences  of bankers,  sponsored by the Nebraska  Bankers
Association  to  provide  basic  information  to  member  banks  for  their
use  in planning  to meet  the credit  needs  of their farmer  patrons.  Spe-
cial emphasis  was  placed  upon  the income  insurance  and  cost reduc-
ing aspects  of the program  under Nebraska  conditions.
While  the results  of this  activity  were  far from  perfect  in  terms of
farmers'  knowledge  and understanding  of  the  Soil Bank  program,  it
was  reasonably  successful  as  indicated  by  comments  received  from
farmers,  county  agents,  bankers,  and  state  and  county  ASC  person-
nel.  Not  only  did county  agents  distribute  extension  circulars  but  the
material supplied  enabled them  to conduct meetings  and answer many
145farmers'  questions.  Comments  on  the  circulars,  meetings,  and  other
activities were  to the effect that these had contributed  greatly to farm-
ers' understanding  because the material was presented  in terms readily
understood  by farmers.
The working relationships  between the ASC and Extension Service
in  Nebraska  were  excellent  from  the  state  level  on  down,  and  were
largely responsible  for getting this job done within  the available time.
The procedure  followed  on the  Soil Bank,  with the Extension  Service
taking the  primary  responsibility  for the educational  job,  set  the pat-
tern for cooperative efforts  with  other agencies.  With the activation  of
the  Great  Plains  Conservation  Program  in  the  summer  of  1957,  the
Nebraska  Soil Conservation Service asked us to participate in the same
way on this program.
146

EXTENSION PROGRAMS ON THE SOIL BANK

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Research Papers in Economics