Controlling Wheat Production
After World War I most of the European nations greatly increased their wheat acreage to lessen their dependence on other countries and to reduce money payments abroad. The wheat-exporting countries ignored this situation.
By 1930 they had piled up a carryover that ruined market prices. This condition worked particular hardship on growers in the United States. By 1932 they were carrying over, unused, nearly half a normal crop. The government tried to help the farmers by buying and storing huge quantities. Expecting this action to insure a good price, the farmers grew more wheat than ever.
In 1933 the government tried to stop overproduction by paying farmers to reduce their wheat acreage by 15 percent. Then devastating droughts in 1934, 1935, and 1936 reduced production. They forced the United States for the first time in its history to import more wheat than it exported. By 1937 the world’s carryover was the lowest since 1919.
Overproduction again became a problem. In 1938 the United States government enlisted the cooperation of the farmers in a more extensive program for wheat control. It included crop insurance and acreage control, starting in 1939. To increase consumption, the government bought and held some surplus supplies of wheat. Subsidies were provided to aid exports by making up the difference between the price in the United States and the world price.
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