When the National Socialist party acquired power on January 30th, 1933, German agriculture was on the brink of ruin. Some 12,000,000,000 reichsmarks of new debt had been contracted by farmers between 1924 (when the currency was stabilised) and 1932. The area covered by the farmsteads sold by auction during that period was about equal to that of Thuringia. The proceeds derived from the sale of farm produce decreased from some 10,000,000,000 reichsmarks in 1928-9 to 6,400,000,000 reichsmarks in 1932/3 – an amount insufficient to recover the cost of production. On the other hand, farmers had to pay high rates of taxes and interest and heavy social charges. As early as 1930, the National Socialist party directed public attention to the desperate state of the farming industry and asked that the country’s agricultural policy should pay increased attention to these matters, more especially by creating new legislation dealing with farm property, by regulating markets and by setting up a corporate system of self-administration. These demands have now been satisfied under the National Socialist regime. Some 700,000 hereditary farms (Erbhöfe) have been created and about 40 per cent. of the soil used for agricultural purposes has thus been liberated from the arbitrary interference of professional speculators in real estate. The law enacted to that end has strengthened the farmer’s connection with the soil he tills and has secured his rights of possession. Besides, the charges on farm property have been reduced to a reasonable level, partly by lowering the rates of interest and facilitating the repayment of debts and partly by granting tax abatement.
The National Food Estate (Reichsnährstand) was set up by the Act passed on September 13th, 1933. It is the sole organisation in the country embracing all persons associated in some way with farming or with the production and distribution of human food. The formerly existing organisations whose objects were similar have either been incorporated with the National Food Estate (N.F.E.) or have been dissolved. Those now incorporated with it include, among others, the Chambers of Agriculture, the Council of Agriculture, the National Farmers’ Association, the German Agricultural Federation, etc. The highly developed system of co-operative societies was likewise made subject to the administration of the N.F.E.
Membership of the N.F.E. includes all the owners, lessors and lessees of agricultural land, together with their families, employees and workmen. The term “agriculture” is understood to comprise horticulture, viniculture, and fishery as well. Membership further includes, as has been said, all those connected with the production and distribution of food, e.g., the producers of foodstuffs, millers, bakers, butchers, provision dealers, etc. The extension of membership to so many trades was necessary because, without it, the market organisation could not be controlled to the extent considered desirable in the national interests. Organisations have been created for all the markets here concerned, such as those for cereals, cattle, dairy products, sugar, potatoes, eggs, beer, fish, fruit, vegetables, wine, and others. Each of these separate market organisations is composed of all persons connected with its particular trade, thus – for instance – that for cereals consists of all the growers, grain dealers, grain associations, mills, mill-produce dealers, and bakers. The market organisations are partly regional and partly national, i.e., those set up for each part of Germany (the regional ones) are subordinated to one competent for the country as a whole (the national one). Thus, for example, the twenty regional organisations for the grain trade are combined to form the national organisation for that trade, and so on.
National Socialists have all along realised the importance of farmers as a class and that of farming as an industry. Notwithstanding the industrialisation of Germany, agriculture still absorbs almost 30 per cent of all those who work for their living. The greater part of the country’s food is produced by the intensive cultivation of the soil, even though there are large districts where the latter is of relatively poor quality. The promotion of farming and food production is therefore one of the most essential objectives at which German agricultural policy must be aimed.
The scope of that policy extends, in the first place, to the tillers of the soil, to their families and children, to the preservation of rural traditions and modes of thinking, and to the farmers’ views on honour and the interests of his vocation. The N.F.E., therefore, looks upon it as its special function to establish social harmony between employers and employees, to provide the ambitious and efficient farm labourer with facilities for advancement, to strengthen the ties that connect him with the soil he tills, and to accord preference to him when creating new farmsteads and new homesteads. Particular attention is also directed towards the improvement of the conditions of labour, to the housing problem, etc. The educational system is promoted by the establishment of vocational schools for farmers and in other ways. The feeling of solidarity among villagers is encouraged, and it is also intended to cultivate that feeling on a nation-wide basis. Visible expression is given to the last-named object by the National Farmers’ Congress (Reichsbauerntag) which is convened at Goslar once a year in the late autumn.
The second specific aim of the country’s agricultural policy is concerned with the farm as such, more especially with measures likely to increase and improve the output in one form or another (production, stockbreeding, supply of high-grade seeds, soil improvement, etc.). These important tasks can be carried out most conveniently by the close collaboration of the N.F.E. with the competent Government departments. Other matters here concerned are: advice on agricultural matters, vocational instruction, the machinery supply, and the holding of agricultural shows. In this latter respect notable progress has been achieved in recent years; and the National Food Estate’s annual show always provides excellent opportunities for studying the work already achieved.
Finally, the N.F.E. is entrusted with the control of the agricultural produce markets. Reference has already been made to the organisations established for that purpose, it being the special task of the N.F.E. to ensure their harmonious co-operation and their conduct along uniform principles.
Co-operation between the N.F.E. and the Government departments is very close. Thanks to the valuable work done by the members of the National Labour Service, large districts in the Ems country, along the shores of the North Sea and elsewhere have been opened up for cultivation. The N.F.E. is also connected with such matters as the regional planning of the Reich, the provision of land for public purposes, the creation of national reservations, afforestation schemes, etc.
The N.F.E. comprises 20 regional organisations, divided into about 500 district organisations, which-in turn-are subdivided into a large number of local groups. The “leader” of the National Food Estate is R. Walther Darré, who is also the Reich Farmers’ Leader. Each regional organisation is presided over by a Regional Farmers’ Leader, each district organisation by a District Farmers’ Leader, and each local organisation by a Local Farmers’ Leader.
The administrative organs of the N.F.E. comprise one central office domiciled in Berlin and 20 regional offices domiciled in the various regional districts. Each administrative office is divided into three departments, one each for the three special functions of the N.F.E. already described (i.e., the human element, the vocational element, and the control of the markets). The N.F.E. is not a department of the Government, even though its Leader is at the same time the National Minister of Food and Agriculture. The ideal of self-administration is realised by the arrangement under which the regional and subregional “leaders” assist in an honorary capacity in carrying out the functions of the N.F.E.
Particular interest – not only in Germany, but also elsewhere – is taken in the market control set up by the N.F.E., which is more consistently carried out than any corresponding system introduced in other parts of the world. The successes achieved prove that the fundamental principles underlying the German system are sound. According to the calculations of the Institute for the Study of the Business Cycle, the proceeds derived from the sale of agricultural produce increased in value from 6,400,000,000 to 8,800,000,000 reichsmarks during the three years that have passed since the introduction of the control system, whilst the prices payable by consumers did not undergo a rise in any way comparable to the benefit obtained by the producers.
The special features of the market control system have originated from the following facts:
Germany has neither the size and the natural resources of such a country as the United States, nor does she possess an overseas empire, as does, for instance, Great Britain. Although she has become largely industrialised, she has not abandoned her agricultural basis. Her soil is none too rich, and has nevertheless to support a population numbering about 360 to the square mile. Regional differences, especially between the chief centres of food production and food consumption, are very considerable. The number of small and medium-sized agricultural undertakings is also very large, which adds to the difficulty of organising them. Thus, neither the market policy of the overseas countries with their surplus production nor that of the countries relying upon measures for the protection of the price-level could be adopted. It would have been a mistake to give one-sided assistance to the farmer, whilst leaving the position of the consumer as it was. The method that had to be applied was that of guiding and supervising imports and of regulating the accumulation of stores containing such foodstuffs as cannot be produced at home. Moreover, regard had to be paid to the special social structure of Germany; and this could only be done by making the market organisation very comprehensive.
The introduction of that organisation presented some considerable difficulties. The various markets were in a condition bordering on chaos. In almost all of them the speculative character of the wholesale trade tended to augment the lack of proper organisation. The uncontrolled influence of the prices ruling in the world’s markets reduced those obtainable at home to a ruinous level and made production unremunerative. The unscrupulous competition among dealers led to widespread insolvency, the consequences of which were most disastrous to the farmer. Unfair business methods and an excessive number of middlemen helped to aggravate the position still further, more particularly in the “upgrading” industries.
The first step towards the restoration of healthy conditions was the reorganisation of the milk market by the National Commissioner for the Milk Trade. The experience thus gained was subsequently utilised when the final regulations were drawn up. It goes without saying that, in doing so, due regard was paid, to the peculiarities of the local markets and of the individual dairy products. The terms of delivery as between the farmers, the dairies and the retail trade were defined. Prices and price margins corresponding to the work done by each section and to the purchasing capacity of the consumers were fixed, and excessive margins were reduced. Unremunerative undertakings were shut down against payment of compensation, and undertakings essentially necessary to the country’s economic interests were encouraged. Special importance was attached to the production of high-class goods and to standardisation. The recent N.F.E. Show held at Frankfort has furnished convincing evidence of the high degree of efficiency attained by these methods. Prices have now been stabilised, both as regards the farmer and the consumer. What was considered impossible a short while ago has been achieved – the price of butter has, for instance, remained unchanged for two years and a half, and the same remark applies to most of the other kinds of agricultural produce. The interference of speculators and vested interests has been eliminated, notably in the grain trade. Prices no longer fall to pieces when the harvest has been particularly abundant. Neither the quality nor the extent of each farmer’s production is subject to any control. He can produce what he likes and as much as he likes. The market regulations will always enable him to sell at adequate prices those commodities for which there is a general demand. The number of middlemen in the process of distribution has been reduced to a minimum. During the preceding economic era, production was rationalised. To-day it has become necessary to organise the distribution-and therefore the supply – of the goods in accordance with the dictates of common sense, without restricting production in any way. This makes it possible to effect enormous savings, which can then be utilised for the benefit of the producer or the consumer. The increase in the yield of agricultural production is mainly due to such savings.
The” leaders” of the market associations, assisted by a committee representing the economic interests involved, are held responsible for the proper application of the market regulations-which, after all, are merely the outcome of considerations governed by common-sense principles. They are intended to serve – and they do serve – the national interests as well as those of the economic groups affected, more especially those of the producers and consumers. The dealers are required to be reliable, to have an expert knowledge of their trade, and to be financially sound. These various requirements are ensured by a system of licensing. The erection of new undertakings and the enlargement of existing ones is subject to the consent of the market associations, so that the interests of the nation as a whole can be properly protected. In this way, misplaced investments are prevented, and the remunerativeness of the undertakings that are of vital importance to the country is promoted. Considerable value must be ascribed to the system of “compensatory contributions”, the origin of which dates back to a time not so very long ago. Deductions were then made from the prices of milk used for drinking purposes, and these amounts were utilised to increase the prices of milk used for manufacturing purposes. The system has proved eminently successful, as it is now possible to induce the producers of milk in remote districts greatly to augrnent the volume of their production thanks to the millions of reichsmarks diverted towards that end. It should be noted that the money employed for this purpose is not contributed by the taxpayer, but by the industry concerned. In some instances, the system has been used for the introduction of methods tending to cheapen production.
The application of uniform principles to the whole domain of food production and food consumption has provided the agricultural policy of the National Socialist Government with a degree of efficiency hitherto regarded as impossible. This is acknowledged over and over again by the visitors from abroad who have made it a point to study conditions on the spot, no matter whether they have come to investigate the principles underlying the system of market control, the promotion of farming efficiency, the preservation of cultural traditions, or matters of vocational organisation. The discussion of the agricultural problems confronting individual countries, the solution of which is taken in hand everywhere, can be made very fruitful. It enables members of the various European nations to realise the fact that all of them have to work shoulder to shoulder in a common task and makes them anxious to contribute their own share for the benefit of all.