Exploring Alternative Formulations of Automobile Demand
would have received 56 per cent more under TAP. In the case of wheat this pattern is even more pronounced, and it is also present in tobacco; the case of corn has not been investigated. A much larger part of the subsidies to agriculture, therefore, would reach those for whom they are presumably intended. At the same time, by divorcing payments from current production cost TAP avoids the danger of encouraging inefficiency and of perpetuating uneconomic patterns of output. The cost of TAP can only be roughly estimated at the moment; the United States Department of Agriculture should be able to present more accurate calculations on the basis of its extensive market studies. Pending such calculations it appears that the cost of applying TAP to the three principal supported crops (wheat, corn, and cotton) at the rate mentioned earlier would not exceed $I.5 billion in the first year, and would be proportionately less in subsequent years.3 The cost of the present scheme is not known with any exactness but seems to exceed $4 billion per year. Some of the outlays under the existing program (notably those for storage and for the soil bank) would have to continue for some time after the introduction of TAP. Finally, it should be stressed that TAP is a transitional device and is consequently limited to a definite time period. By its very nature an acreage payment cannot be permanent without creating a caste of rural pensioners, and even the most sentimental devotees of the family farm would hardly advocate this. The appeal of this proposal is not to those who want to preserve the present structure of agriculture regardless of the burden on consumers and taxpayers; it is to those who recognize that in a progressive economy agriculture must change along with all other sectors, but who also recognize the wisdom of tempering the wind to the shorn lamb.
- DOI
- 10.2307/1926837
- Volume
- 43 (1)
- Pages
- 66
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