Research Bulletin (Iowa Agriculture and Home Economics Experiment Station)


The original objective of the storage programs in 1933 was to operate them as price-stabilization programs to stabilize the prices of farm products against year-to-year variations in production.

In actual fact, however, the programs soon began to go further than this. After the first few years, the objective changed from merely stabilizing prices to "stabilizing them upward." Loan rates were set above the average-weather-crop levels, at certain percentages of parity prices. This raised the level of prices as well as stabilized them against variations in supply. This high level of prices stimulated production, reduced consumption and led to the accumulation of unsalable surpluses in storage.

On Feb. 28, 1961, the investment of the CCC in price-support programs amounted to $9,193,721,000- made up of loans outstanding of $2,141,507,000 (including $946,376,813 of loans financed by lending agencies) and the cost of inventories, $7,052,214,000.

The "realized cost" of "programs primarily for stabilization of farm prices and income" in fiscal 1960 was $2,094,300,000. The total cost since the programs began in 1932 was $19,847,400,000.

In the case of corn, in fiscal 1958, for example, about one-third of the cost went to the grain trade and transportation agencies to cover storage and handling charges.

The acreage-control programs of the 1930's had little effect on production. The programs after World War II had more effect, but since cross-compliance was not included, the effect was mostly to shift production from one crop to another.



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