Senator AIKEN. I simply noticed that Secretary Brannan threw out the egg program, as Secretary; apparently he is advocating a restoration of it now that he is on the outside. Everybody has the right to change his mind, of course.

The CHAIRMAN. All right. Thank you.

Hon. ALLEN J. ELLENDER,

Senate Office Building,

Washington, D. C.

TRENTON, N. J.

DEAR SENATOR ELLENDER: At the hearing called by your committe in Utica, N. Y., on November 19, there was a great deal of probing into what was the particular form best fitted to each commodity. Unfortunately, with the lack of time, we feel that this field was not adequately covered, and we wish to supplement the testimony of Clarence R. Althouse, vice president of the Eastern Farmers Union, with the following practical application relative to eggs and poultry. We are enclosing a proposed bill which would accomplish these objectives.

You will note that production payments of less than $50 are not to be made. In this way, the necessity for including the smallest flock of, say a dozen birds, would be eliminated. In this regard too, we believe that there should also be a distinction between commercial and noncommercial production, such as is now the case in respect to corn, where there is a higher level of support for growers in the commercial areas.

Production payments would not exceed $2,500 per family unit in any one year. This would limit the payments to the family-farm level of production.

Actually, we believe that the simplest method of controlling production would be through the release of grain by the Federal Government, at such prices as to bring the egg-feed and poultry-feed ratios in line with equal-parity treatment. Only those warmers who comply with the production figures set by the Government would be eligible to receive the lower priced Government grain. Thus, there would be an incentive for compliance.

With the great hope that out of these hearings will come across-the-board full parity for all farm commodities up to the family-farm level of production,

Sincerely yours,

LOUIS SLOCUM,

Excutive Secretary, Eastern Farmers Union.

A BILL To amend the Agricultural Act of 1949 so as to provide for the establishment of equitable egg-feed and poultry-feed ratios

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That title II of the Agricultural Act of 1949 is amended by adding at the end thereof the following new section:

"SEC. 203. (a) (1) Notwithstanding section 407 of this Act, the Commodity Credit Corporation may sell grain, at prices determined under paragraph (2), to egg and poultry producers in any State in whch egg-production and poultryproduction quotas established under paragraph (3) are in effect.

"(2) Grain may be sold under this subsection at such prices as may be necessary to bring the egg-feed and poultry-feed ratios in line with a percentage of the parity prices for eggs and poultry equal to the average level of support for corn and wheat for the calendar year in which the sale is made. The average level of support for corn and wheat for a calendar year shall be computed by adding the level of support for corn (expressed in terms of percentage of parity price) to the level of support for wheat (so expressed), as of January 1 of that year, and dividing the resulting sum by two.

"(3) Not later than sixty days after the date this subsection is enacted, the Secretary shell determine and publish egg-production and poultry-production quotas for each State. Not later than sixty days before the end of each calendar year, the Secretary shall determine and publish egg-production and poultryproduction quotas for each State for the following calendar year. Within thirty days after the date a quota is so published, the Secretary shall conduct a referendum, by secret ballot, of egg and poultry producers who would be affected by the quota. If two-thirds of the producers voting in the referendum approve the quota, it shall be in effect during the calendar year for which it was determined.

64440-56-pt. 7-18

"(4) The amounts, terms, and conditions of grain sales under this subsection and the extent to which such sales are made shall be determined or approved by the Secretary. The Secretary, through the State and county committees, shall apportion grain sales and egg-production and poultry-production quotas within each State in whch such quotas are in effect.

"(b) (1) The Secretary shall make available price support to producers for eggs and poultry, through sales of grain under subsection (a), payments to producers, or a combination of both methods, in States in which production quotas established under subsection (a) are in effect, at a level equal to the average level of support for corn and wheat, as computed under paragraph (1) of subsection (a).

"(2) If payments to producers are utilized as a means of price support under this subsection, the Secretary may determine the rate or rates of payment annually or periodically on the basis of the amount by which the level of support exceeds the estimated average price to all producers. Such rate or rates shall be adjusted by the Secretary, to the extent he deems practicable, for differences in quality, location, and other factors. Payments shall not be made under this subsection to any one producer in excess of $2,500 in any one year. Payments to producers under this subsection shall be made on an annual basis and may, at the discretion of the Secretary, be limited to

"(A) the quantity of eggs and poultry marketed by the producers;

"(B) the quantity of eggs and poultry marketed in compliance with a marketing quota, if applicable;

"(C) the quantity of eggs and poultry produced in compliance with the applicable production quota ; or

"(D) the quantity and quality of eggs and poultry produced for commercial sale.

"The Secretary may refuse to make payments to any producer under this subsection for any year if he determines that the total amount to be paid is less than fifty dollars.

"(3) Compliance by the producer with production quotas established under subsection (a), and with such marketing quotas and marketing practices as the Secretary may prescribe, may be required as a condition of eligibility for price support under this subsection."

The CHAIRMAN. We will next hear from Mr. Norman Dailey.

Give us your name in full for the record. I hope you have something new to offer.

STATEMENT OF NORMAN DAILEY, PRESIDENT, EASTERN FEDERATION OF FEED MERCHANTS, INC., NARROWSBURG, N. Y.

Mr. DAILEY. Mr. Chairman and gentlemen of the committee, I am going to confine this paper to 4 or 5 paragraphs.

My name is Norman Dailey. I am a feed manufacturer and retailer, and president of the Eastern Federation of Feed Merchants, Inc., a trade association of 667 feed manufacturers and retailers, independents, who operate feed businesses at country points, at scattered locations throughout the 11 Northeastern States.

The thinking of livestock and poultry people and their feed suppliers is accurately reflected, I feel, in the statement that Government supporting of prices of agricultural products is not good for our farm economy. It nullifies demand-and-supply impacts on prices and, unquestionably, has resulted in the building of large troublesome surpluses of the basic agricultural products that are artificially price supported.

While conscious that the discontinuance of Government price-supporting programs would have far-reaching impacts, among them, economic hardship for farmers, we in the Northeast believe that our farm problem can only be solved by removing such Government supports, thus permitting supply and demand to determine price levels.

Granted it is that such a retreat from artificial price supports would temporarily cause severe headaches for farmers. However, it seems logical that from the long-pull standpoint, such is the better course; in fact, the only course that offers a practical solution to the farm problem.

Overproduction of agricultural products must end. A flexible pricing plan keyed to a gradual reduction in the degree of supports until they become nonexistent seems under all circumstances to be the commonsense approach. The degree of reduction of supports should be substantial enough to realize their complete elimination at the very earliest possible date.

Another strong conviction, based upon experience, is that Government price-support programs put the Government into business competition with private enterprises. Literally speaking, Government is in competition with private enterprise in every commodity groove in which price-supported commodities move.

our

The Commodity Credit Corporation, I am reliably told, is the largest nonfinancial corporation existing in our country today. Contributing no tax revenue to the Government, it strongly competes with taxpaying private businesses.

It has been encouraging to know during the last year that national policymaking leadership believes that the Government should get out of business. Government price supporting of agricultural products, however, moves the Government more and more into business, rather than out of it.

The CHAIRMAN. Thank you, sir. Your entire statement will be made a part of the record at this point.

(The prepared statement of Mr. Dailey is as follows:)

Your witness is Norman Dailey of Narrowsburg, N. Y., a feed manufacturer and retailer and president of the Eastern Federation of Feed Merchants, Inc., the trade association of 667 feed manufacturers and retailers (independents) who operate feed businesses at country points at scattered locations throughout the 11 Northeastern States.

Feed suppliers live very close to farmers. Like farmers, they have a heavy stake in our agricultural economy. Northeastern livestock and poultry farmers have found the economic going real rough in recent years. The cost of things farmers necessarily have to buy has mounted, while their income has gone down. These two important factors are currently out of balance.

The thinking of livestock and poultry people and their feed suppliers is accurately reflected, I feel, in the statement that Government supporting of prices of agricultural products is not good for our farm economy. It nullifies demand-and-supply impacts on prices and, unquestionably, has resulted in the building of large troublesome surpluses of the basic agricultural products that are artificially price supported.

Our section of the country is a feed-deficit area necessitating the inshipment of a heavy volume of grains and feeds used for livestock and poultry feeding. Government price supports have kept the price level of these commodities high. Poultry products and fluid milk are unsupported. By and large, farmers of the Northeast have spurned price supports on these products, because of a deeprooted philosophy that they want to run their own business without Government aid or interference and, also, because of a firm belief that artificial Government pricing disrupts natural and businesslike distribution and, accordingly, is detrimental rather than beneficial.

They feel, too, that any Government agricultural policy should be productive of equitable distribution of its benefits to all farmers regardless of where they may operate and that any policy which discriminatingly works to the advantage of one sectional segment of agriculture to the detriment of another section isn't in keeping with the American spirit of fair play.

Certainly agricultural price supporting has benefited farmers in the graingrowing belt with a reverse effect on the farmers of the Northeast, who must depend upon in shipments of grain for feeding livestock and poultry.

Northeastern farmers have another strong conviction based upon experience that Government price-support programs put Government into business competi tion with private enterprises. Literally speaking, our Government is in competition with private enterprise in every commodity groove in which price supported commodities move. The Commodity Credit Corporation, I am reliably told, is the largest nonfinancial corporation existing in our country today. Contributing no tax revenue to Government, it strongly competes with taxpaying private businesses.

It has been encouraging to note during the last year that national policymaking leadership believes that Government should get out of business. Government price supporting of agricultural products, however, moves Government more and more into business rather than out of it.

While conscious that the discontinuance of Government price-supporting programs would have far-reaching impacts, among them economic hardship for farmers, we in the Northeast believe that our farm problem can only be solved by removing such Government support, thus permitting supply and demand to determine price levels. Granted it is that such a retreat from artificial price supports would temporarily cause severe headaches for farmers. However, it seems logical that from the long-pull standpoint, such is the better course; in fact, the only course that offers a practical solution to the farm problem.

Switching from relatively high rigid support to a flexible pattern does not resolve the problem, but rather only compromises it. There will be overproduction of agricultural commodities with flexible supports, but not in the high degree that has developed from a high rigid supporting policy.

Overproduction of agricultural products must end. A flexible pricing plan keyed to a gradual reduction in the degree of supports until they become nonexistent seems under all circumstances to be the commonsense approach. The degree of reduction of supports should be substantial enough to realize their complete elimination at the very earliest possible date.

The price squeeze, which farmers are experiencing, is killing the incentive of many operators to keep farming, and this is outstandingly true among the operators of relatively small farm units and those who are not so fortunate as to possess ample capital to tide them over a price squeeze period.

Over the years, the stability of northeastern agriculture and its contribution to our general economy has revolved to a substantial extent around family-size farm operations. These, relatively speaking, small size farms are vitally important in our successful northeastern agriculture. They are seriously handicapped by a Government price-supporting program. Almost without exception, this class of farm operators seek the end of price supporting as a national policy and are willing to stake their future on a competitive pattern built around supply and demand competition.

Prices of feeds, to be sure, are considerably lower now than they were a year ago, yet the ratio as between feed cost and farm product income is not good and falls far short of providing earnings comparable to those enjoyed by other segments of our economy and by labor.

Senator HOLLAND. I am especially intrigued by this statement, on the last page of the witness' prepared statement. He did not read it. I want to ask him if he cares to comment more on it:

Over the years, the stability of northeastern agriculture and its contribution to our general economy has revolved to a substantial extent around family-size farm operations. These, relatively speaking, small-size farms are vitally important in our successful northeastern agriculture. They are seriously handicapped by a Government price-supporting program.

And then this:

Almost without exception, this class of farm operators seek the end of price supporting as a national policy and are willing to stake their future on a competitive pattern built around supply and demand competition.

Is it your experience, by actual contact with the small farmers in the northeastern area, that is a truthful statement of their position? Mr. DAILEY. Yes; it is.

Senator HOLLAND. Thank you.

The CHAIRMAN. What is your occupation?

Mr. DAILEY. Feed manufacturer.

The CHAIRMAN. Thank you.

Mr. DAILEY. Thank you.

The CHAIRMAN. Our next witness is Mr. Waldo.

Give us your name in full for the record, and your occupation, please.

STATEMENT OF ANTONIO G. WALDO, SECRETARY, CANASTOTA GROWERS COOPERATIVE ASSOCIATION, INC., CANASTOTA, N. Y.

Mr. WALDO. Mr. Chairman and gentlemen of the committee, I am Antonio G. Waldo, secretary of the Canastota Vegetable Growers Association.

The CHAIRMAN. Do you do any farming yourself?

Mr. WALDO. Yes, sir.

The CHAIRMAN. Can you highlight your statement?
Mr. WALDO. I am going to eliminate a portion of it.

The CHAIRMAN. I can give you assurance that the entire statement will be in the record at this point.

Mr. WALDO. There have been many proposals presented to you, but I daresay not many of them are basically for the preservation of the family-sized farm.

As my father before me, I have operated a commercial vegetable farm on the muck lands of the Lenox Sullivan Drainage District for the past 25 years with my principal crops, onions and potatoes and minor crops of lettuce and carrots.

I know many nonagricultural people are opposed to subsidies, supports, or similar plans which envision the payment of funds from the Treasury of the United States; but let us for a moment digress and take a look at what, under present legislation, we are supporting or subsidizing in nonagricultural pursuits.

First, the tariff is but another form of support for industry.

Second, the steamship lines are subsidized to the extent of 50 percent on the cost of constructing new ships which cost the taxpayer $48 million last year.

Third, a further subsidy is paid steamship lines to compensate for high labor costs; to that protection the Treasury wrote checks on our dear Uncle Sam to the extent of $100 million.

Fourth, the airlines were given a direct subsidy last year of $73 million plus $57 million for mail and free use of facilities, that cost the taxpayers $75 million.

Fifth, publishers are subsidized to the extent of $230 million annually on their second-class mail.

Sixth, industry is permitted to hold back from the Treasury billions in rapid writeoff for depreciation, oil depletion, and so forth.

Seventh, labor is supported by legislation for minimum wages, unemployment benefits, pensions, Wagner Act, legalized strikes.

Eighth, foreign aid has been checked out of the Treasury to the extent of about $75 billion.

There were many others, such as the bailing out of the banks on dead mortgages. We are not here to quarrel with these, but cite