Once you have used the certificate method for the handling of surplus grains, which I think is a commendable method, Mr. Secretary, it seems to me we might want to explore the possibilities, if nothing more or less than a pilot operation, of a food-stamp plan.

Senator Aiken is the major sponsor of that plan. I happen to be a cosponsor. I think the administrative machinery is available and I would appreciate if someone in the Department would give it some personal attention, so we might get a report back here that it has desirable features that might be incorporated in the bill.

Senator AIKEN. There has been so many references to S. 1396 and the Department's unfavorable report on it as of September 30, that I ask leave to have this bill, S. 1396, printed in the record.

If one will read it, he will find that the resemblance of this bill to the present proposal of the Secretary is about the same as the resemblance between dark gray and white. I won't say black and white.

Senator HUMPHREY. In fairness, this was a specific bill, and those of us who enter bills before the Congress know we are mighty lucky if it comes out with the title. The general principles of the bill are synonymous with the principles enunciated by the President. The acreage reserve feature is not in the bill. It wasn't any place until about 2 weeks ago. Suddenly it came forth. I am apprised that the American Farm Bureau supported that, and I think it is a very constructive suggestion.

The CHAIRMAN. Without objection, the bill will be put in the record at this point.

(S. 1396 is as follows:)

[S. 1396, 84th Cong., 1st sess.]

A BILL To establish a conservation acreage reserve, to promote conservation and improvement of agricultural soil and water resources, to stabilize farmers' income, to adjust total agricultural production to consumer and export needs, to maintain an abundant and even flow of farm commodities in interstate commerce, and for other purposes

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act may be cited as the "Conservation Acreage Reserve Act of 1955".

SEC. 2. It is the policy of Congress that farmers shall be encouraged to make the fullest and best economic use and conservation of the Nation's soil and water resources; that the first priority for use of such resources shall be to provide needed food and fiber for the growing population of the Nation; that adequate safety reserves of all staple commodities and products shall be maintained; that provision shall be made for full production of farm commodities required for all needed exports through normal channels of trade and for augmented exports to relieve starvation, shortages of clothing, and famine in other nations, to promote economic development, and to bolster other United States foreign economic and diplomatic policies; that these needs shall be met with sufficient but not excessive supplies, thus facilitating the even flow of interstate commerce; and that farm soil and water resources not required to fulfill the foregoing needs shall be conserved and handled in a manner that will improve their fertility and keep them in readiness to meet unforeseen emergencies as well as long-range normal future needs for increased farm production.

SEC. 3. As used in this Act

(1) The term "agricultural commodity" means any product of the soil whicb is produced from annual seeding and which is produced in significant amounts for commercial purposes.

(2) The term "Secretary" means the Secretary of Agriculture.

SEC. 4. (a) The Secretary of Agriculture (hereinafter referred to as the "Secretary") is authorized and directed to determine and proclaim, prior to November 15 of each year, a National Conservation Acreage Reserve for the succeeding crop year. The National Conservation Acreage Reserve for any crop year shall be a number of acres equal to the number of acres, if any, by which

(1) the sum of (A) the total number of acres determined by the Secretary to have been used within the continental United States for the commercial production of agricultural commodities during the crop year immediately preceding the year for which the National Conservation Reserve is being determined, and (B) the number of acres within the continental United States which were diverted from their normal use during such year by reason of the operation of acreage allotments and marketing quotas, exceeds (2) the total number of acres determined by the Secretary to be needed for the commercial production within the continental United States of sufficient quantities of all agricultural commodities to meet domestic and export needs for such commodities and to maintain adequate safety reserves to meet emergency needs for such commodities.

(b) The National Conservation Acreage Reserve shall be allocated among the several States in such manner that the conservation acreage reserve of any State shall be the number of acres which bears the same ratio to the National Conservation Acreage Reserve as (1 the total number of acres determined by the Secretary to have been used within such State for the commercial production of agricultural commodities during the year immediately preceding the year for which the State conservation acreage reserve is being determined, bears to (2) the total number of acres determined by the Secretary to have been used within the continental United States for the commercial production of agricultural commodities during such year.

(c) The conservation acreage reserve of each State shall be allocated among the several counties in such State in such manner that the conservation acreage reserve of any such county shall be the number of acres which bears the same ratio to the State conservation acreage reserve as (1) the total number of acres determined by the Secretary to have been used within such county for the commercial production of agricultural commodities during the year immediately preceding the year for which the county conservation acreage reserve is being determined, bears to (2) the total number of acres determined by the Secretary to have been used within the State for the commercial production of agricultural commodities during such year.

(d) The conservation acreage reserve of any county shall be allocated among the several farms within such county in such manner that the conservation acreage reserve of any farm shall be a number of acres which bears the same ratio to the county conservation acreage reserve as (1) the total number of acres determined by the Secretary to have been used on such farm for the commercial production of agricultural commodities during the year immediately preceding the year for which the farm acreage reserve is being determined, bears to (2) the total number of acres determined by the Secretary to have been used on such farm for the commercial production of agricultural commodities during such year.

SEC. 5. (a) The Secretary is authorized to enter into annual agreements with individual farm operators under which the operator agrees to put into effect on the specified number of acres in the conservation acreage reserve for his farm such soil and water conservation and improvement uses and practices as may be specified by the Secretary, and the Secretary agrees to pay to such operator a conservation reserve award with respect to each acre in such reserve in an amount equal to the value, based upon the parity price, of the customary landlord's share in the area where the farm is located of the commodities which the Secretary determines would be produced on such acre were it used for commercial production during the crop year for which the contract is made.

(b) The determination for the purposes of this section of the amount of any conservation reserve award shall be made by the local committee established under section 8 (b) of the Soil Conservation and Domestic Allotment Act of 1938, as amended, in accordance with standards promulgated by the county committee established under such section. Each such county committee shall determine and proclaim, for the purposes of this section, the customary landlord's share for each agricultural commodity commercially produced within the county. The determination of the county committee with respect to such landlord's share shall be final unless disapproved by the Secretary after public hearing held in the county after due notice.

(c) The Secretary is authorized (1) to provide in any contract entered into under this section, for a right of entry on the farm with respect to which such contract is entered into for the purpose of measuring the acreage in commercial production and ascertaining that grasslands and other resources are not being used for commercial production of livestock or milk, or products thereof, and (2)

to require that the farm operator certify under oath or affirmation that no acres included within the conservation acreage reserve have been utilized for commercial production during the period covered by the contract.

(d) No farm operator shall be eligible for any price support loans, purchase contracts, or payments unless there is in effect with respect to his farm a contract entered into under this section.

SEC. 6. Whenever any contract entered into under section 4 requires the institution or continuance of soil or water conservation or improvement uses and practices on any farm, the Secretary shall reimburse the operator of such farm for costs incurred in providing such uses and practices by making a conservation incentive payment to such operator equal to 50 per centum of such costs.

SEC. 7. The maximum amount of any conservation reserve award under section 5 with respect to any farm operator's unit for any year shall be $2,000, and the maximum amount of any conservation incentive payment under section 6 with respect to any such unit for any year shall be $1,000.

Senator HOLLAND. I would like to ask one question supplementing the questions of Senator Humphrey about section 32. The major part of the funds used 2 years ago in the cattle-purchase program, beef-purchase program, and those that are being used now in the hogpurchase program, are section 32 funds.

Has the limitation in the present law which limits to 25 percent of the section 32 funds to any particular year to any 1 commodity hampered the adequate carrying on of the 2 programs that you mentioned?

Secretary BENSON. I think not as yet, Senator Holland. We are still well within that 25 percent limitation. I hardly anticipate that it will, although if it does and if we find it is going to, we will certainly come to the committee.

Senator HOLLAND. The reason I ask the question is because of the way the program was announced. It came very close to the 25 percent in its original beginning and if it requires a larger amplification during the year, it would seem to me that the 25 percent limitation might be hurtful. I hope you will have someone look at that specifically and give us something for the record on it.

Secretary BENSON. Thank you. We are watching it closely. The CHAIRMAN. The report accompanying S. 1396 will also be printed in the record at this point.

(The letter dated September 30, 1955, is as follows:)

Hon. ALLEN J. ELLENDER,

DEPARTMENT OF AGRICULTURE, Washington, D. C., September 30, 1955.

Chairman, Agriculture and Forestry Committee,

United States Senate.

DEAR SENATOR ELLENDER: This is in reply to that part of your letter of March 11, 1955, requesting a report on S. 1396. This Department recommends against the enactment of this bill.

S. 1396 provides for the establishment of a conservation acreage reserve by the Secretary of Agriculture by November 15 of each year for the succeeding crop year. This national reserve would then be allocated to States, counties, and farms on the basis of a formula contained in the bill. Voluntary agreements would then be entered into with farmers which would offer cash payments to them for devoting the conservation acreage reserve allocated each farm to conservation purposes. No production from the reserve acreage could be utilized directly or indirectly for commercial puposes. Provision is also made for payments of up to 50 percent of the cost of the conservation or improvement of the acreage in the reserve.

While this Department feels that this bill would encourage some additional needed conservation its main purpose appears to be to obtain adjustments in agricultural production. We do not believe that it would be an effective means of obtaining adjustments. Although the bill provides a formula for determining

State and county conservation acreage reserves, the percentage adjustment of commercial acreage would be the same for all farms. This would not recognize the differences in the degree of adjustments required for individual farms and areas for either crops under acreage allotments or other nonallotment commercial crops.

The bill requires as a condition for payment that the land in the conservation acreage reserve not be utilized for the production of any commodity (including livestock and livestock products) for market. A program that is primarily dependent on this principle would probably be very difficult to disassociate with the idea of paying farmers for nonproduction.

The complex manner in which payments are to be computed would result in difficult administration and high cost of administration. Because of the methods of determining payments it is difficult to anticipate the funds that would be required. It is probable, however, that several hundred million dollars would be needed for the award payments only. This amount is exclusive of funds required for cost-sharing conservation payments and administrative expense. It is doubtful that such high expenditures to reward farmers for nonproduction of agricultural commodities would be acceptable to many groups.

The Department fully recognizes the need for effective use of the acres taken out of production of the basic crops as a result of the allotment programs and has developed a broad program to influence the use of acres diverted from allotment crops. The objectives of this broad program are to move production toward balance with markets; avoid the continued accumulation of excessive supplies of commodities under price-support programs, encourage wider use of soilconserving practices on diverted acres; and make available to farmers all research and marketing information which would assist them in determining what shifts to make and how to readjust their production to achieve maximum economy of operation.

To effectuate this program the Department has provided additional incentives through the agricultural conservation program to encourage farmers to conserve and protect land diverted from allotment crops; instituted an extensive educational program for the purpose of advising farmers with respect to making the wisest possible use of diverted acres; and utilized the Department's discretionary authority in connection with price-support programs to bring about a better use of feed grains and to encourage a sound livestock industry geared to our expanding economy.

A committee composed of representatives of the different agencies in the Department were asked to study the proposed legislation and report the probable effects of the bill. A copy of this report is enclosed.

The Bureau of the Budget advises that there is no objection to the submission of this report.

Sincerely yours,

TRUE D. MORSE, Acting Secretary.

The CHAIRMAN. Senator Williams. Senator WILLIAMS. Mr. Secretary, I was very favorably impressed with the recommendations as to the limitation on the size of these operations, and in connection with the mechanics of its operation I am wondering whether you will have anything in your recommendations which will prevent one of these large operators from dividing his operations into a series of corporations and thereby avoid the limitations intended.

Secretary BENSON. That is one of the problems we face. I think that is one of the problems we face from the standpoint of administration.

Senator WILLIAMS. But is a problem we will be confronted with. Assuming you have one operation which operates around three to four hundred thousand acres of wheat, it will be a simple matter to break that up into 20 to 25 corporations, whereby they would all come under the program and I am just wondering whether you have any plans to prevent that.

Secretary BENSON. We don't have any spelled out in detail. I will say that. It is one of the problems we recognize and are giving some

thought to. Of course, you could place a limitation on the amount. going to any one individual as well as to any one firm. In that way you will get at it pretty well.

Senator WILLIAMS. In the absence of having some plan, we are talking through our hats when you say we will limit payments.

Secretary BENSON. That is right. There will be a tendency to fragment the farm into small units.

Senator WILLIAMS. Then, in connection with the repeal of section 304, if that is repealed, as you suggest, does the Department contemplate recommending the sale of some of these surpluses to Russia? Secretary BENSON. We didn't have in mind the sale. I think the removal of this restriction would simply permit us to enter into barter arrangements with countries that are now prohibited under this particular limitation. We may or may not ever do any bartering with those other countries. We have had opportunities in the last couple of years where we could have moved some on a barter basis were it not for this restriction. All we are asking for is the removal of the restriction.

Senator WILLIAMS. The reason for removing this is that you might resume trading relations with Russia?

Secretary BENSON. Not necessarily Russia, but some of the so-called Iron Curtain countries where we have an opportunity to barter perishable items for durable goods we need in this country.

Senator WILLIAMS. In recommending the soil bank plan whereby you want to set aside 15 to 20 million acres in reserve, are you going to do anything to curtail the expansion of the reclamation projects which have recently been recommended? Will we at the same time be bringing new lands into production in some of these other areas? Or will that be suspended and held in abeyance pending the utilization of our current production capacity?

Secretary BENSON. The approval of any new projects that would bring great blocks of land into cultivation ought to be looked at very carefully at this time when we are burdened with these heavy surpluses. That is not in our department, as you know.

Senator WILLIAMS. It is still in the Government.

Secretary BENSON. Yes. We have pointed out the danger of bringing in blocks of land at this time.

Senator WILLIAMS. How many acres would be brought in, assuming the adoption of the Colorado River project?

Secretary BENSON. I don't know. I understood no land immediately, although I would have to check. There is a long-term possibility from a long-term standpoint.

Senator WILLIAMS. We are working on a rather long-range project here, and I was wondering if we would nullify the benefits to be derived from setting aside some of our present productive capacity by putting it into the soil bank, if at the same time we bring into production other new lands which are not now productive. I wonder if those two programs would be coordinated.

Secretary BENSON. We are carrying on some discussions with the Interior Department on that particular angle.

Senator WILLIAMS. Before we act, can the committee get any assurance as to the success of your negotiations with this other department? Secretary BENSON. We will be glad to report to you the results of our conversations.