Economic and financial section > Agricultural crisis > Volume 1

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3. Increasing margin between the prices paid to the producers and those
obtained from the consumers;
4. Marketing difficulties.
The study of the origins of these phenomena and the means of combating them is
a burning question, which has been the subject of numerous searching enquiries and
of keen national and international discussions. The economic results of the depression
are shown in the reduction or elimination of profits for the producer and in the diminished
purchasing power of the agricultural population. The social consequences are seen in the
reduction of the standard of living of the rural population below the general level, fixing
a gulf between them and the members of other branches of economic activity and
strengthening the tendency to abandon agriculture for other pursuits: the flight from
the land.
Before investigating the fundamental causes of the depression, certain preliminary
observations should be made.
Austrian agriculture is closely linked up with international economy by reason of
Austria’s very considerable imports of agricultural products (especially grain and flour
and cattle for slaughter) and not inconsiderable exports (mainly timber and live-stock).
The agricultural depression in Austria is no isolated case; but it is a special case. The same
causes which are responsible for the worldwide agricultural depression are operative
directly or indirectly in the case of Austria. No enquiry into the Austrian agricultural
depression can ignore, therefore, what is happening in the world’s markets for agricultural
products. But, at the same time, there are a number of circumstances arising out of the
territorial and political situation of the new Austria in Central Europe which give the
Austrian problem a special aspect of its own. A very important factor in our view is to
be found in the transformation of the national and international economic structure of
the world, accelerated but not initiated by the world war and its aftermath, which has
had a disastrous effect upon agriculture. The ultimate causes of the agricultural depression
are not to be sought, in our opinion, in cyclical changes in the economic situation, but in the
far-reaching revolution which has taken place in the economic structure of the world,
partly as a result of the territorial changes in Europe, partly as a result of the divergent
development of agriculture and industry.
2. Production and Consumption.
In any appreciation of the economic position, one essential is to decide whether there
have been any considerable changes in the production and consumption of agricultural
products as compared with the period before the war.
In the development of cereal production during the last twenty years the changes have
been very marked. During the war, the exports of the East European agricultural States
ceased altogether and, as the world’s import requirements were not diminished to a
corresponding extent, the overseas countries were enabled to expand their production and
export on a considerable scale. This was especially the case with North America, for the
countries in the Southern Hemisphere were relatively more seriously hampered by the
lack of shipping, though this handicap was removed after the end of the war.
Grain was offered at attractive prices and the demand was maintained under the
influence of the American food credits until the middle of 1920. When at this date the
United States ceased to give credit to the Allied Powers of Western Europe, the artificially
heightened purchasing power of Europe collapsed and there was a fall in the price of
grain, which, in Central Europe, was at first concealed by inflation. This was the post-war
depression, which lasted approximately from 1920 to 1924. Under the influence of this