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I heartily concur in the President's support for this constructive program.
The President indicated that for some States, milk program funds for the 1956 fiscal year are nearing depletion. I recommend that this committee take the action necessary to increase the authorization for the use of CCC funds during the present fiscal year from $50 million to $60 million. If this is done no State will find its program restricted by a lack of funds during the present school year. Any portion of this increase which is unused will revert to the Commodity Credit Corporation at the end of this fiscal year. .
The accelerated brucellosis eradication program authorized by the Congress for fiscal years 1955 and 1956 has received nationwide approval. _The States have materially increased their support of this work. Excellent results are being accomplished. We are recommending that the program be continued.
SUMMARY I shall now summarize the President's 9-point program for agriculture embodied in his message:
1. The soil bank, to which I have devoted a major share of my attention, will increase farm income; reduce surplus stocks; cut excess production; reduce storage costs; ease apprehension among our friends abroad; conserve soil, water, and timber resources; and strike a better balance of production and markets.
2. Surplus disposal recommendations will help to move CCC stocks out of the front door while the soil bank reduces what comes in the back door.
3. Strengthened commodity programs will improve price-support operations for individual products such as corn, wheat, rice, and dairy products.
4. Dollar limit on price supports, if the Congress sees fit to enact it, will enable our family farms better to compete with huge corporationtype units.
5. Rural development program will open wider the doors of opportunity for a million and a half farm families with incomes of less than $1,000 a year.
6. The Great Plains program will help promote a more stable economy in the agricultural empire between the prairies and the Rocky Mountains.
7. Research increases will help us find new crops, new markets, and new uses for our agricultural abundance.
8. Credit facilities will be expanded and strengthened to aid in the transition from war to peace and make the adjustment associated with a dynamic agriculture.
9. Gasoline tax, now paid by farmers to the Federal Government, would be refunded for purchases of gasoline used on farms.
The nine-point program offers no nostrums or panaceas. Our farm folks want none. Rather, it is, we believe, a sound, logical attack on our most urgent problem, the surplus. It strikes at both sides of the price-cost squeeze.
Certain parts of this program can be accomplished administratively, as the expanded pork purchase program and the announcement of higher support levels for soybeans and flax. Other parts can have an effect when enacted by the Congress, as provision for the gasoline tax refund.
A large part of this program's effect can be felt within the year, as the soil bank helps balance our supplies with markets.
Meantime, through expanded research and through the conservation reserve we shall be building our resources and increasing our store of knowledge for tomorrow.
Above all, this program offers convincing evidence that farm prices and incomes will be strengthened by a direct attack on the surplus problem itself.
I have attached, in tabular form, a summary which shows the impact of the recommended program as related to timing and geography.
And, if we may, Mr. Chairman, I would just like to run through that hurriedly. We have tried to prepare a summary, which would tell the story on each one of these recommendations which were embodied in the President's message. The CHAIRMAN. You may proceed, sir.
Secretary Benson. Thank you. The first proposal in the message is the soil bank acreage reserve. For cotton, new legislation would be required. Timing of implementation immediately upon passage of legislation. Area affected, the Cotton Belt. The major effect, payment this year on proof of compliance, reduce carryover by 2 to 3 million bales per year for 3 years.
In the case of wheat, the acreage reserve would require new legislation, would be immediately effective upon the passage of legislation. The entire country would be affected, west of the Mississippi River particularly. Payment this year on proof of compliance, reduced carryover we estimate by 200 million bushels per year.
In the case of corn, and I call your attention to the footnote on page 3, this assumes utilization of the acreage reserve for corn and rice. În the absence of this program, of course, the alternative suggestion would be passage of new legislation to eliminate acreage control on corn and rice and the establishment of price support on a permissive basis.
But the corn program under the acreage reserve, if it is felt that it does apply, would require legislation, would become immediately effective and would cover the corn area, primarily the Midwest. And the major effect would be payment this year on proof of compliance.
It would tend to reduce the carryover, we believe, by 300 to 500 million bushels, depending of course upon participation, and would tend to result in greater support for corn.
Rice: New legislation would be required. It would become available immediately upon passage of legislation, and, of course, the areas affected are the four rice States. Payment this year on proof of compliance. It would tend to reduce carryover, we believe, by about 6 million bags per year.
Now the conservation reserve, this also would require legislation. Implementation would be immediately upon passage of the legislation. The entire country would be affected. The heaviest acreage participation would probably be in the Great Plains and the heaviest payments
64440 -56pt. 8-2
probably in the Corn Belt. The major effect would be payments this year as costs are incurred, reduce acreage of feed grains, improve feed grain prices and ultimately livestock prices.
Now item 2, the surplus disposal, only partially, only partial legislation is needed for the sales. We would have to have legislation, I am sorry, to permit sales at less than support and to repeal section 304 of Public Law 480. The timing would become immediate where administrative authority exists. Otherwise, upon passage of legislation.
And, of course, it would affect the entire country, and we believe would help us to increase disposal of CCC stocks plus commercial sales for export.
On the next page, item 3, strengthening commodity programs, in the case of soybeans no legislation would be required. It would affect the 1956 crop, primarily, of course, the Midwest and some in the Southeast. And would tend to increase the income upon the 1956 crop.
Flax seed, no legislation required. It would affect the 1956 crop primarily in North Dakota, South Dakota, Minnesota and Montana, and would, we believe, increase income from the 1956 crop.
Wheat: Exempt from marketing quotas where the entire production is used on the farm. And there is already legislation pending in the Congress. This legislation is needed, of course. It would affect the 1956 crop in the entire country, but primarily east of the Mississippi River and the Far West. And would increase the feeding of wheat and reduce marketing quota violations. It would mean less control.
2. Authorize the Secretary to sell low grade wheat for feed. This would require legislation. Timing of implementation, possibly July 1, 1956. The area affected would be largely the Far West and the Northeast, where there would no doubt be the major purchases of wheat for feed. The major effect would be to increase the wheat consumption.
3. Expand noncommercial wheat area, that would require legislation. It would affect, of course, the 1957 crop, and the area affected would be fringe areas of wheat production. It would tend to reduce that area from controls, relieve farmers from acreage controls.
4. Extend exemptions for durum wheat. This would require legislation, would affect the 1957 crop and the State of North Dakota, and would increase the type of wheat, that type of wheat which is now in short supply.
Cotton: Elimination of Middling 78 as the standard grade for parity. This would require legislation, would be applicable to the 1957 crop, would affect the entire Cotton Belt and would place cotton on the same basis as other crops, and would have the effect of adjusting price supports.
2. Quantity allotments. This also would require legislation, would affect the 1957 crop in the Cotton Belt, and would tend, we believe, to make controls effective.
The third and last page, further strengthening commodity programs, the special milk program. This requires legislation. Timing, July 1, 1956 and June 30, 1958. In other words, it would extend the program 2 years and also provide funds for the balance of this year.
It would affect the entire country, and we believe would increase the consumption of milk and improve the health of our children.
Livestock, special pork purchase program, no legislation is required. We have the authority. The program is underway.
It affects primarily the Midwest, and we believe is assisting and will assist in relieving price pressures during the heavy marketings.
4. Dollar limits on price supports. That would require legislation, and of course would be implemented as soon as legally permissible, would affect the entire country, and would reduce underwriting of competition with family-size farms.
The rural-development program requires additional legislation. It would become effective immediately upon the passage of that legislation. Primarily the low-income areas would be affected and it would help to meet the problems of low-income families.
The Great Plains program which I understand was transmitted to the Congress yesterday, the soil bank and special ACP long-term commitments, this requires legislation the same as for the soil bank and the ACP on the timing, would affect particularly the Great Plains, and would help to stabilize agriculture in that area.
Research: This too requires legislation. It would concern the 1957 fiscal year, would, of course, affect agriculture both at home and abroad, and the major effect would be concentrated on new uses, new markets, new crops and lowering cost of production.
8. Credit: This too would require some new legislation, would be effective when enacted, would affect the country generally, and would provide a more adequate credit supply.
9. Relieve farmers of the tax on gasoline for farm use. This would require legislation, probably would become effective July 1, 1956, and would apply to the entire country and would reduce production costs by about $60 million to our farmers.
Mr. Chairman, thank you very kindly.
The CHAIRMAN. Mr. Secretary, on behalf of the committee I wish to first thank you for your kind remarks about the work done by the committee during the fall in holding the hearings throughout the country and pointing up the farm problem. I wish to also thank you for your offer of assistance.
Secretary BENSON. Thank you.
The CHAIRMAN. It strikes me that this committee will have no difficulty in getting together on a bill and having it passed on the floor February 15. I believe it is very urgent that the committee does take that stand, and, if possible, do nothing else until we accomplish it.
Now, Mr. Secretary, I listened to the President's message and also your statement very carefully, and one of the first questions I would like to ask you is this. Will you point out either in the President's message or your own statement any program that will give immediate relief to the farmers of our country.
Secretary Benson. Before I answer that, Mr. Chairman, may I ask that these charts at the back be incorporated in the record?
The CHAIRMAN. Yes, sir, that will be done. .(The charts referred to are as follows:)
Summary of the President's special message on agriculture transmitted to the Congress Jan. 9, 1956
1. Soil bank:
Payment this year on proof of com-
pliance. Reduce carryover by
years. 2. Wheat. Yes.
Entire country; major payment this year on proof of com
west of Mississippi pliance. Reduce carryover by 200
million bushels per year.
Commercial corn area, Payment this year on proof of com-
500 million bushels depending upon
participation, increase support.
Arkansas, Louisiana, Payment this year on proof of com-
about 6 million bags per year.
Entire country. Heaviest Payment this year as costs are in
acreage participation in curred. Reduce acreage of feed Great Plains Greatest grains; improve feed grain prices and
payments in Corn Belt. ultimately livestock prices. 2. Surplus disposal Only partially, for Immediately where ad- Entire country.
Increase disposal of CCC stocks plus
commercial sales for export.
lic Law 480.
Primarily Midwest and Increase income from 1956 crop.
some in Southeast.
Primarily North Dakota, Do.
South Dakota, Minne
sota, and Montana. (c) Wheat
Entire country, primarily Increase feeding of wheat and reduce 1. Exempt from marketing quotas where entire
east of Mississippi River marketing quota violations.
and Far West.
July 1, 1956
Far West and Northeast Increase wheat consumption. for feed.
would be major areas for
Fringe areas of wheat pro- Reduce area of controls.
duction, 4. Extend exemption for durum wheat.. Yes.
do. North Dakota
Increase type of wheat in short supply. (d) Cotton...
Entire Coton Belt. Place cotton on same basis as other 1. Elimination of middling 7 inch as stand
crops. Adjust price supports. ard grade for parity. 2. Quantity allotments.
Make controls effective,