ECONOMIC

was an underutilization of productive capacity in the farming sector, measuredin terms of available cropland, underemployed labor, and underutilizedcapital equipment. In recent years this underutilization was a result of Governmentprograms that provided payments to farmers and concurrently divertedor "set aside" land from production, usually on an annual basis. Sincethe early 1960's about one-sixth of the Nation's cropland was recorded asbeing withheld from production under Government land retirement programs.In addition to withdrawing land from production, farm programscaused sizable stocks of several commodities to be accumulated by the Government.Because of the stockpile program, substantial short-term fluctuationsin either production or demand were largely offset by the accumulationor release of stocks of farm commodities under the various price supportprograms. These policies reduced instability in farm markets over the yearsat considerable cost in both Government budget outlays and intervention bythe Government in the agricultural sector. As experience was gained, legislativeand administrative actions were taken to "fine tune" production and restrictwhat was viewed as excessive accumulation of commodities underGovernment control. By the early 197O's the programs had become veryeffective in controlling total crop acreage to mesh prospective productionwith expected demand. Actual production varied, of course, with yields peracre, which were influenced by weather conditions. Nevertheless, a cleardownward trend in stocks was evident and reflected the direction of Governmentpolicy (Table 31).TABLE 31.—U.S. grain stocks compared to grain utilization, selected periods, 1950—73Marketing yearWheatEnd of marketing year stocks as a percent of totalutilizationRiceFeedgrainsSoybeansAnnual average:1950-541955-591960-641965-691970-73 »52.1102.796.544.445.88.548.114.011.514.624.943.049.428.421.22.99.68.615.19.2197019711972..1973164.248.658.021.718.323.012.45.727.118.925.115.018.77.86.04.6» Preliminary.Source: Department of Agriculture.Disappearance of "Excess Capacity"For years it was fashionable to talk of "excess capacity" in agriculture.The measure most widely referred to was the acres of cropland that wereidled each year by Government programs. That measure seemed to be anadequate approximation, because if more output and hence more landwere demanded the complementary inputs—labor, machinery, fertilizer,and seeds—would also be available to expand production. Several decades129