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The CHAIRMAN. I understand that it might not be new money, but the Congress would have to replenish the Commodity Credit Corporation for such amounts as it has out for such commodities as you would make available to the farmer on these unplanted acres.

Secretary BENSON. It would be a portion of that. Of course, they would be sold in the market place.

The CHAIRMAN. I understand.

Secretary BENSo. That would bring in some cash. The difference would have to be made up, of course.

The CHAIRMAN. Isn't it true that when you make the contract with the farmer, as I understand from the message, to pay him in kind, the amount of cotton, let's say, or wheat that would be allocated to him, would be based on the price prevailing at the time the contract is entered into; is that right?

Secretary BENSON. That is one of the details on which our technicians are working.

The CHAIRMAN. Now suppose that wheat or corn were to rise in price, who would get the benefit of that?

Secretary BENSON. If the farmer held title to the commodity, he would get the benefit from it, I assume.

The CHAIRMAN. Now suppose at the same time that he exercised his right to take that commodity, the price of it is below the amount fixed at the time that he entered the agreement, who would bear the loss?

Secretary BENSON. The certificate, as we envision it, would be negotiable and cashable and would bear a dollar value, so it could be turned in at a local bank or some other financial institution, and the farmer would realize the dollars plus interest on it at the face value.

The CHAIRMAN. But, that certificate could rise in value if the commodity that it represents goes up?

Secretary BENSON. It might if the farmer wanted to take the commodity. However, it should be noted that we are still working on the details. These are not fixed yet.

The CHAIRMAN. That's right. And if it goes down, would he suffer the loss?

Secretary BENSON. No; apparently he would not, because he would be able to cash in the certificate at its face value in dollars. Of course, these are some details that will have to be worked out.

The CHAIRMAN. Yes; I understand.

Secretary BENSON. And we will want the direction of the Congress in it, of course.

The CHAIRMAN. In other words, is this not true: The value of that certificate would be fixed at the time of its issuance, depending upon the value of the commodity at the time that the certificate is issued? Secretary BENSON. Well, it might be the support level at the time on that particular commodity, more likely would be.

The CHAIRMAN. What I am trying to drive at, Mr. Secretary, is this: That if the certificate has an X dollar value redeemable either in cash or in grain, it would be necessary, it strikes me, that if the grain goes up, the certificate would go up in value, but if it goes down, it would have to remain at the original amount fixed?

Secretary BENSON. That's right insofar as fixing the original value is concerned.

The CHAIRMAN (continuing). When it was issued.

Secretary BENSON. It would not depreciate because it would have a dollar value.

The CHAIRMAN. That's right, so if at the time that the certificate becomes payable, the price of the commodity is below the amount that was prevailing at the time it was issued, then the Government would suffer that loss; would it not?

Secretary BENSON. Well, Mr. Chairman, it would probably be wise to tie it to the support level in establishing the face value of the certificate.

The CHAIRMAN. In that connection, Mr. Secretary, in order to get a program that you can put teeth in so that you know what you are doing, would it not be more advantageous to all concerned, that if in addition to the allotted acres you asked farmers to set aside, let's say, 10 percent more or 20 percent more, to make the payment of that certificate conditioned on the farmer participating in the program as a prerequisite for receiving price supports?

Secretary BENSON. I am sure the Congress will want to consider that approach very carefully.

The CHAIRMAN. The Congress will. I am asking you your view on that.

Secretary BENSON. We have felt that with the proper inducement, we would be able to get adequate participation without tying this to price supports or without compulsion, on a voluntary basis, in other words.

The CHAIRMAN. Now, in respect to the limitation of price supports, are you able to tell us now what you contemplate, what limitation you would put in dollars?

Secretary BENSON. We have no dollar figure in mind. We do have this study which we have just started to analyze and which will be made available to the committee, but certainly the level ought to be generous enough so that no family-type operation, commercial farm or otherwise would be adversely affected by it.

It is intended primarily to get at some of these excessively large holdings, some of which have absorbed some of our family-type farms in their operations, and in part because we have pretty well taken the risk out of their operations through price supports.

The CHAIRMAN. I wish to say that the record that was made during last fall is replete with evidence to the effect that a limitation should be put.

Secretary BENSON. Yes, our mail indicates the same thing.

The CHAIRMAN. And the limitation suggested as I remember it mostly was one of about $25,000 gross sales. Would you say that would be a fair figure?

Secretary BENSON. I would say that would be a bit low, Mr. Chairman, because we have family-type farms that are family operations, where their gross income, their gross returns, is much higher than

that.

It will depend a lot on whether that is applied to a single crop or to the total farm income. A lower figure could be used on a single crop probably than on a single farm.

The CHAIRMAN. Well, location of the farm, too, would have to be considered.

Secretary BENSON. Type of farming and so on.

The CHAIRMAN. Now let me ask you this, Mr. Secretary. Have you considered a plan to make that on a graduated scale the same as we have in the Sugar Act? You are familiar with that? Secretary BENSON. Yes; I am somewhat familiar with it.

The CHAIRMAN. The payments decrease as the amount of sugar produced on a farm is increased. Have you given consideration to a plan of that character?

Secretary BENSON. I can say we have given some consideration to it, Mr. Chairman. Possibly we have not given it the study that we should or can or will. We think it has some very serious difficulties in it from an administrative standpoint.

As a matter of fact, the difference-are you speaking of quality now or only quantity?

The CHAIRMAN. No, no; I am talking about this limitation on price supports as to the amount.

Secretary BENSON. The limitation on payments?

The CHAIRMAN. That's right, that is what I am talking about. Secretary BENSON. We haven't given that a lot of attention. The CHAIRMAN. Well, don't you think some attention should be given to it?

Secretary BENSON. I think it would be entirely appropriate.

The CHAIRMAN. I think it works very well as to the sugar program, and it is my hope that you will, let's say, give it immediate attention if we are to get a bill out February 15.

Secretary BENSON. We will be glad to do that and consult with you on it.

The CHAIRMAN. We have received much evidence, many views, on the question of having two price systems relating to wheat and rice. I wonder if you would be kind enough to give us your views on those proposals?

Secretary BENSON. We had a meeting of the wheat producers in this past week, and we have discussed this question with them in some detail. The question has also been before our National Agricultural Advisory Commission, which is a bipartisan commission, on several occasions. They have not seen fit to approve it.

However, the plan which the wheat growers are now considering and which they reviewed with us last week is greatly improved over the original plan which they submitted. I think it is something which we need take some further look at. I understand that there is wide difference of opinion among farmers themselves on this issue. The CHAIRMAN. Yes.

Secretary BENSON. And we feel, however, that with the program that has been recommended there is going to be a considerable benefit to these commodities that have shown some interest in the two-price plan.

The CHAIRMAN. Mr. Secretary, I believe that the record will indicate that a large majority of the rice farmers in the four States where most of the rice is produced favor a two-price system. Don't you believe that it might be well if we go into that phase of farm legislation, to give it a trial on a commodity such as rice where not too many farmers are involved and not too many States?

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Secretary BENSON. I think if the Congress determines to try it out anywhere it would be best to try it on a crop which is confined to a relatively small area and in which a relatively small number of farmers are involved.

The CHAIRMAN. Will you favor such program on a trial basis?

Secretary BENSON. I would want to study it a little further before I give it an endorsement.

The CHAIRMAN. If we continue studying we are not going to do it by February 15, you see.

Secretary BENSON. We will go right into it.

The CHAIRMAN. I wish you would, because if the committee will stand by me as I hope it will, I plan to start hearings next Monday or Tuesday, and have a bill before the Senate, if possible, not later than January the 25th.

Secretary BENSON. We did testify on this question at some length. The CHAIRMAN. Yes.

Secretary BENSON. I think before this committee some time ago. We made a pretty good record at that time. There are some new things we may want to add.

The CHAIRMAN. Well, Mr. Secretary, you will concede that this question of a two-price system has been before you for study, particularly with rice, for quite some time. As I understand you made a report that it would be very difficult to administer, and as I recall, the Department did not favor it so much.

Secretary BENSON. The foreign impact was one of the serious problems.

The CHAIRMAN. Yes; I understand, but it strikes me that we ought to try and protect our own farmers for a little while and let the foreigners take care of themselves.

In other words, I really believe that we have got just a little bit too much of certain commodities, and I want to say this: I believe that if it had been left entirely to the Department of Agriculture to sell the commodities abroad, that a better job would have been done without the interference we received from the State Department.

Secretary BENSON. We never do a perfect job down in the Department, but we do feel rather proud of the quantity we have been able to move in the last 2 or 3 years.

The CHAIRMAN. Yes. Now, Mr. Secretary, it is my hope then that you will give, that the Department will give, the two-price system for rice your immediate attention because, as I said, if you consult the gentlemen that accompanied us on this tour, it will indicate to you that the record is replete with suggestions from the rice growers, at least, and also from a good many wheat growers, that the two-price system should be given a trial.

Secretary BENSON. We will be ready not later than some time next week, Mr. Chairman, to consult with you further and give you our best judgment.

The CHAIRMAN. There are many other questions I would like to ask you, Mr. Secretary, but I am sure that my colleagues are waiting to ask you some questions, so I am going to suggest that they do so. Senator Aiken, do you have any questions?

Senator AIKEN. I have just 3 or 4. Mr. Secretary, since the President's message, I have heard some criticism that you may be sub

mitting to the Congress now a program which you disapproved only a few months ago, and I understand that many thousand documents are being sent around the country which, in effect, charge you with advocating a program now which you disapproved under date of September 30 last fall.

I would like to ask 3 or 4 questions which I think will bring out the difference between the program which was contemplated by S. 1396 and the one which you now submit to the Congress.

The first question is: Does your program contemplate-I refer to the soil-bank program-does your program contemplate a flat percentage reduction of cropland among all States?

Secretary BENSON. No; it will be entirely selective and voluntary, of course, and would not be uniform in all States.

Senator AIKEN. And it does not in any way contemplate a flat percentage reduction of cropland among all States, even carried down to the farm unit?

Secretary BENSON. No; not among all States or commodities. There would be freedom, there would be choice on the part of the farmer.

Senator AIKEN. That was my next question, whether your program contemplates a flat percentage reduction regardless of the type of farming, whether it is fruit or dairy or wheat or cotton.

Secretary BENSON. No; it does not.

Senator AIKEN. Does your program contemplate withholding all Government supports and payments from any farmer who declines to reduce his cropland acreage?

Secretary BENSON. No; it does not, Senator.

Senator AIKEN. Does your program contemplate acreage reserve features, is to be paid for in commodities, which would result in reductions in plantings? This reduction would come on the allotted acreage, which was not provided for in the bill which you disapproved.

Secretary BENSON. That's right, it would come on the allotted acres. Senator AIKEN. And you contemplate that for the first 2 or 3 years, at least, that part of the cost which would be paid for in commodities would be much larger than the cost of the conservation reserve program; is that correct? You said that you might use as high as a billion dollars worth of commodities.

Secretary BENSON. Worth of commodities, a large part of which would be recovered in the market place, sir.

Senator AIKEN. I realize it would not be all lost.

Secretary BENSON. No; of course not. We would use a commodity which is depreciating in value, to get at this reduction of the surplus. Senator AIKEN. And these commodities will be a loss unless they are disposed of.

Secretary BENSON. Yes; as I pointed out, about 8 years and you eat up the value of wheat through storage and other costs.

Senator AIKEN. Did the fact that last year Congress declined to direct compulsory cross compliance influence you at all in submitting a program providing for voluntary participation in the soil bank program?

Secretary BENSON. Well, Senator Aiken, the more we studied the problem of cross compliance, the more difficulty we saw in the way and the less beneficial results we saw might accrue from it.

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