WORLD’S Agriculture Much Changed by the War and Its Results
The World War revealed in high light the basically vital significance of agricultural resources and greatly affected agriculture throughout the world. Many changes in world agriculture since 1914 are directly traceable to the war, while others are the results of forces only accelerated or retarded by the war. The war changed boundaries, which fact has affected international trade in farm products, caused or made possible agrarian reforms which have affected production in many countries, and stimulated the development of new agricultural areas in many other countries. An increase in the use of machinery, stimulated by the war but due mainly to the development of scientific inventions, and a greater application of science to production have encouraged the continuation of the expansion of production in many countries. The war, directly and indirectly, also affected the demand for farm products. The marked rapid changes in production and in the demand for farm products have given rise to serious agricultural problems in all parts of the world.
The immediate effect of the war was to eliminate Russia from the international trade in agricultural products, reduce the production of most European countries, and stimulate production in overseas countries from which supplies could be had most readily. Most European countries made strenuous efforts to continue and even increase agricultural production with but little success during the war. The end of the war found the cultivated area and the numbers of livestock reduced in many countries. It is estimated that the area of cereals, potatoes, and sugar beets cultivated in Europe, excluding Russia, in 1921 was about 11 per cent below the pre-war average. Production of butter and cheese in Europe outside of Russia had been cut about half and pork production was at least 15 per cent below the pre-war average. Russia, disorganized and with production greatly reduced, was not in position to resume exports to other European countries. Under normal conditions this situation would result in a great demand for products from surplus-producing countries other than in Europe.
Outside of Europe the immediate effect of the war was to stimulate production. The area devoted to cereals in Canada, United States, Argentina, and Australia in 1921 was 19 per cent greater than the pre-war average. The greatest development was in Canada where the area in wheat more than doubled. Livestock production was in- creased greatly. The production of pork in the United States, beef in Argentina, and butter and cheese in New Zealand and in Argetina was greatly stimulated. From the principal surplus-producing countries in 1921 the exports of butter were 204 per cent of the pre-war average, cheese 130 per cent, pork 180 per cent, and beef 163 per cent. Thus the surplus-producing countries outside of Europe were fully prepared to make up the European deficits at the end of the war.
At the end of the war the surplus-producing countries outside of Europe faced the prospect of recovery in the agricultural production of many Buropean countries and had to sell to consumers whose purchasing power had been greatly curtailed. The great decline in prices which took place in 1920-21 was due largely to deflation, but it was due in part to the decline in the purchasing power of consumers.
Soon after the war the United States and all other surplus-producing countries began to feel the effect of the reduction in purchasing power of the European consumer. Italy began shipping larger supplies of lemons to the United States because few consumers in Germany and other north European countries could buy them. Some Danish and New Zealand butter, and Swiss and Canadian cheese began to be diverted to the United States because of the reduction in the purchasing power of European consumers.
European agriculture recovered rapidly. Recovery was most rapid in those countries, such as Denmark and the Netherlands, which were disturbed but not directly involved in the war. By 1925 many countries had recovered the pre-war acreage of crops and pre-war numbers of livestock. In 1927, the last year for which complete statistics, are available, the cultivated area of Europe outside of Russia had recovered to 97 per cent of the pre-war average, and the production of milk, butter, cheese, and pork was far above the pre-war average. Fortunately the recovery of production was accompanied by a recovery in purchasing power, so Europe has continued to take large quantities from surplus-producing countries. Market demand has been reduced for some commodities but for others the European market is to-day as good a market as it was before the war.
Shifts in boundaries have had some effect upon the market for agricultural products of the United States in Europe. The creation of Poland has taken an agricultural surplus-producing area out of Germany and out of the protection of German tariffs. Separation of Austria and Hungary has made Austria a better market for our surplus products.
Agrarian reforms and unsettled political and social conditions have had some effect upon the agricultural situation. The Balkan countries have recovered from the war but slowly. Agrarian reforms in some areas have tended to reduce production and retard recovery of production of some commodities. This is particularly true of Rumania and Russia. These conditions will probably not persist indefinitely; it is to be expected that eventually production in these countries will recover from the effects of war and unsettled conditions following the war. Although they may not resume exports of wheat in so large a volume as before, it is to be expected that they may again export important quantities of wheat and many other products.
While agriculture in Europe has been recovering from the effects of the war, production in some countries outside of Europe has been readjusted to meet changing European conditions; in others production has continued to expand. The United States made some adjustments, reducing beef, dairy, and corn production to domestic requirements and making some reductions in the export surpluses of wheat and pork. Canada, Argentina, New Zealand, and Australia, on the other hand, continue to expand production and exports. Expansion of the wheat area in Canada was checked temporarily, but it is now greater than ever and is producing a record export surplus of wheat. From the point of view of the United States there is no prospect of curtailment of production or weakening in competition from these countries.
Before the war science was preparing for another “revolution” of agriculture. Agricultural and mechanical colleges in the United States have been long at work developing an agricultural science. Corresponding work was in progress in many other countries. Some great inventions just before the war were preparing the way for the application of more machinery to agriculture. The war stimulated the application of both machinery and science to agricultural production.
The automobile and the tractor now play an important part in the development of agricultural production in the United States and in many other countries. The automobile upon hard-surfaced roads is bringing remote areas closer to market, and the tractor makes it possible for a farmer to cultivate larger areas with a small amount of man labor. Both developments are contributing to the expansion of production in new and distant areas. Application of more machinery is also contributing to the shifting of population from farms to cities and to a rapid growth of industrial cities.
Science has shown how to produce more and better products with the same effort. For example, statistics show a great increase in the production per cow in Switzerland, in Denmark, and in the United States. This increase in production per cow, which is due to more scientific feeding and breeding, illustrates what is taking place with respect to many products in many countries.
Another significant development is a tendency to greater specialization in production. Use of machinery and of scientific knowledge encourages specialization. Improvement in transportation facilities and relatively cheap freight rates make it possible to specialize in production in distant areas most suitable for the product, and to market the product where there is the greatest demand.
Changes in markets and in demand for agricultural products are as significant as changes in production. The westernization of the Orient is increasing the oriental demand for the products of other countries. Japan is becoming a manufacturing country and the large coastal cities of China are importing large quantities of agricultural products from other parts of the world. Increase in demand from oriental markets has offset, in part, the reduction in European market demands. During the five years preceding the war only about 3 per cent of the agricultural exports of the United States went to Asia. In the past three years 11 per cent has been shipped to Asia. Peace in China now offers further opportunities for the development of the oriental market.
There are some significant changes in the world’s demand for agricultural products. Use of the automobile and the tractor is reducing the number of horses in the world, thereby reducing the demand for feed grains. Production of rayon has increased enormously as a substitute for or competitor with silk and wool. On the other hand, the demands for some commodities are increasing. It is apparent that the demand for wheat and sugar has increased rapidly in recent years. Although demand for wheat flour in the United States is now less than before the war, the demand has increased in many countries. In Europe wheat is taking the place of rye;in the Orient it is taking the place of rice and other grains as the bread grain of the people. The demand for tobacco, particularly of the cigarette type, has increased greatly. The enormous production and low prices of sugar have stimulated consumption in the United States and elsewhere. Another notable shift in demand is an increased use of vegetable oils as a substitute for, or in competition with, animal fats. There has been a tremendous growth in the use of vegetable oils both in the manufacture of soaps and as foodstuffs. These changes in demand must be taken into account in planning agricultural production.