harm .Living—1950

harm .Living—1950

Does the outlook for somewhat lower farm income next year mean a cut in farm family spending?

Dr. Gertrude Weiss, in charge of family economics research for the Bureau of Human Nutrition, and Hftme Economic^, believes farm families generally will not cut their spending nfxt year as much as farm income is reduced.

Families do not change their spending habits easily and tend to keep up their spending even after income has dropped, Dr. Weiss observed in addressing the Annual Outlook Conference of the U. S. Department of Agriculture in Washington, D. C. Saving? and credit, she explained, provide the cushion families use to maintain this spending.

Farm family spending may stay on a fairly high level for other reasons too, Dr. Weiss pointed out. Wider extension of electricity to rural areas has taken electric service to half a million farms in the past year, providing incentive to acquire new equipment. Spending on housing will be stimulated by the Federal Housing Act of 1949. Slight price reductions in consumer goods will benefit farm families "like those in cities.

If farm families do make budget cuts, they are most likely to reduce their spending for gifts and contributions, recreation, and house furnishings and equipment, Dr. Weiss asserted. Surveys of farm families indicate that spending for. these items is more likely to be curtailed than spending for food and clothing.

Highjin;come families will be less affected than low-income families if they buy less house furnishings and equipment. Many farm families who have prospered from recent years of high income have a good stock- of household equipment that will not have to be replenished for a while. Young families and others who have not acquired household goods are more likely to miss the extra income which would have been spent on these items.