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Senator HUMPHREY. And possibly it might be well to store some of our surplus cereal grains in Great Britain, with the Soviet having over 350 submarines and knowing how to run them?

Mr. PATTON. Yes, sir.

Senator HUMPHREY. It just appears to me that your point is rather well taken, Mr. Patton, that rather than deploring all of the surpluses we have, recognizing that there is some problem here—I do not want to say that there is no problem; there is—but rather than deploring all of it, does it not appear that it might be well to try to think in terms of how this could be usably used or constructively used ?

Mr. Patron. Yes, sir. I agree wholeheartedly.

In my opinion, if you put in a food cache of sufficient quantity to take care of the citizens of all towns of 20,000 or above, you might be faced with the embarrassing thing of having to put a price ceiling on certain commodities.

Senator HUMPHREY. Yes.

Mr. PATTON. And when you stop to think in those terms, of how little food we have in this country, and then think about wheatparboiled wheat is the oldest form of food, almost, in many areas of the world—we could store parboiled wheat for a long period of time, and should store it in countries where our friends are.

Senator HUMPHREY. I, by the way, have done some work on that, and have had some studies made on it and have recommended to the Department that some more research be done on it, and it would be good.

Now, I want just a final question, Mr. Chairman.

On this reduction of set-aside, will you have your men, your economists in your organization, look at what that means under the administration program? In other words, now, when we take, as I sense it, when you take out of the Commodity Credit commodities to pay for the acreage-reserve certificates, that, instead of taking these commodities out of what is supposed to be the surplus, you are going to take them out of the set-aside. You cannot play it both ways. If you have a set-aside, you have got a set-aside; and if you have a surplus, it is over and above the set-aside.

But, as I gather, this section 107 on reduction of set-asides, the administration's proposal, would be that when you pay for these certificates that represent food not produced on your acreage-reserve program, that, instead of the surpluses being used to pay for it, you would actually use the set-asides to pay for it, because you reduce the set-asides just as much as you take out of the Commodity Credit warehouses.

Mr. BAKER. Senator, we have examined

Senator HUMPHREY. Now, I want to say that I am not about ready to vote to reduce the set-asides. We just got through setting those set-asides 2 years ago.

Mr. BAKER. We examined that very carefully. You will remember that the set-aside was originally recommended as a device by the admintration so that the total supply of the commodity in the slidingscale formulas would try to set for some commodities a sliding-scale level of support a little bit higher than it would otherwise be without the set-aside.

The President's recommendation here means that they have now decided that they do not want to even have supports that high. And

this is consistent with their recommendation to reduce cotton supportprice levels by 3 cents. It also reduces cotton by another 3 or 4 cents by eliminating the set-aside before they eliminate ordinary Commodity Credit Corporation stocks.

It does the same thing for wheat, the same thing for corn, the same thing for rice, and the same thing for peanuts, if they were in the set-asides.

Senator HUMPHREY. Now, just for me to understand, then, it is not merely reducing set-asides; it is also reducing what you call drop-loan support price.

Mr. BAKER. That is right. This is just another device for pushing down prices in farm income.

The CHAIRMAN. Senator Young desires to ask a question. Senator Young. Mr. Patton, I noted in your colloquy with SenatorHumphrey regarding payment in kind to farmers doing soil-conservation work. Are you opposed to the principle of payment in kind, if some of the phrases were changed?

Mr. Patron. If it is adequate; if it is enough. But I honestly do not see, Senator Young, where it is going to do anything but depress the prices.

Senator Young. Now, if a farmer living out in a drought area did some soil-conserving work, would it not be well to pay him out of some surpluses that we might have in that area of grain that he might need!

Mr. PATTON. Yes, I think that would be a useful device.
Senator Young. You are not opposed to the principle of doing it?

Mr. Patron. Not if it does not lower farm income, Senator Young, and is not used as a device to attack the free market and drive it on down.

Senator HUMPHREY. Senator, I want you to know, I am not, either. I am just opposed—and I am sure you are after a careful study of it, to what happens when that price is pushed down by dumping.

Senator YOUNG. That is right.

The CHAIRMAN. All right. The committee will stand in recess . until 1:45.

(Whereupon, at 12:15 p. m., the committee recessed to reconvene. at 1:45 p. m. of the same day.)

AFTERNOON SESSION

Present: Senators Ellender (chairman), Eastland, Young, Thye, and Ilickenlooper.

The CHAIRMAN. The committee will come to order, please.
Will Mr. Healy step forward, please, sir. Have a seat.

Will you give your name in full for the record and your occupa-, tion, please. STATEMENT OF PATRICK B. HEALY, ASSISTANT SECRETARY,

NATIONAL MILK PRODUCERS FEDERATION Mr. Healy. My name is Patrick B. Healy. I am the Assistant Secretary of the National Milk Producers Federation, with oflices at 1731 Í Street NW., Washington, D. C. I am pleased to appear before this committee today to present the views of the dairy farmers of this Nation.

64440--56---pt. 8-12

Their views are of paramount importance in the development of agricultural legislation because dairying is the largest single segment of the American agricultural economy. The yearly cash income from dairying is greater than that of all other supported farm commodities and almost equal to their total.

Dairying is a national industry with operations in virtually every county of this country. Ninety-five percent of the total investment in land, buildings, and equipment required to produce, process, and market to consumers milk and dairy products is owned by dairy farmers.

The production and marketing of milk present problems which are unique and the most complex in the entire field of agriculture.

Our crop is bulky.
It is highly perishable.
It must be harvested twice each day.
It must be marketed every day.
Its production varies greatly with the seasons.

It requires production and marketing methods common only to itself.

For these reasons representation of dairymen requires knowledge special to that one field. Therefore, great care must be exercised when developing legislative programs which affect this largest segment of our agricultural economy.

It is undoubtedly true that the production and marketing of other commodities present unique and complex problems to the people who produce and market them. For this reason, we have advocated a commodity-by-commodity approach to the solution of the current farm problem.

The dairy farmers of this country, faced with problems which they cannot solve individually, have through their local cooperatives organized the National Milk Producers Federation and have insisted that it represent their views and desires to the legislative and executive bodies which develop and administer programs affecting dairying.

The federation represents solely the viewpoints of dairy farmers. Our bylaws require that at least 75 percent of our board of directors be active dairy farmers, the remainder being officials of farmercontrolled cooperatives.

The annual membership meetings of the federation are attended by dairy farmers from all sections of the United States. At these meetings national issues affecting dairy farmers are considered and resolutions are adopted representing the aggregate views of these dairymen.

I would like to digress here from this statement in view of some of 'he questioning which I noticed this morning, to show a map which indicates where our membership is located. We have members in every State in the United States, except Nevada, and these members are organized into cooperatives of dairy farmers.

Senator Young. Is Land o’Lakes Creameries associated with you? Mr. HEALY. Yes; they are one of our members.

The CHAIRMAN. Nevada seems to be the only State in which you do not have representation.

Mr. Healy. That is the only State in which we do not have representation. That is correct.

(The map referred to is as follows:)

[merged small][graphic]

Dark Areas Indicate Counties In Which

Almost 500,000 Member Farm Families Reside Mr. HEALY. The proposals which follow in my testimony are, therefore, what we in the Federation have been told by our dairy farmer members to tell you. These men, the most knowledgeable group in the field of production and marketing of milk in this country, have developed these proposals out of sheer necessity for immediate assistance.

We understand that the oral testimony to be presented today should be limited to six subjects: Price-support level, parity computation,

price-support limitations, two-price systems, surplus disposal, and soil bank.

It is our belief that within the limitations we can discuss necessary revisions in current farm legislation.

First, soil bank: Here again I would like to add this testimony was written prior to the introduction of the administration's soil bank bill, which we have not seen and have not had time to analyze for ourselves or for this committee.

The CHAIRMAN. May I suggest that you take a copy of it and give us an analysis of it, your view of it, the whole bill, if you will. Mr. HEALY. All right, sir.

WASHINGTON 6, D. C., January 23, 1956. Hon. ALLEN J. ELLENDER, Chairman, Agriculture and Forestry Committee of the Senate,

Senate Ofice Building, Washington, D. C. DEAR SENATOR ELLENDER: There follows our analysis of S. 2949, Soil Bank Act, which you requested that we forward to you for inclusion in the record of my testimony before your committee on January 18.

ANALYSIS OF S. 2949 While title I of S. 2949 is designed primarily as a program for cultivated crops, its enactment would affect all agriculture. The National Milk Producers Federation has given the bill careful study to determine its effects upon dairy farmers. The federation believes, however, that the suggestions outlined herein would benefit all farmers.

In subtitle A, section 103, the program should not be limited to wheat, cotton, corn, and rice but should be used for removing any agricultural land from production, including pasture. The program should be voluntary. Payments for soil-bank acres should be high enough to assure compliance and permit a free choice of land use between the various crops and between the use of acres for agricultural production and for the soil bank. Soil-bank acres could be computed on the basis of historical land use or on the basis of the reduction of allotted acres for wheat, corn, cotton, and rice.

If the program is voluntary and producers are allowed to decide for themselves whether or not it is in their best interests to comply with the program then the following words can be removed from section 103 (c): "unless the Secretary determines that it would be in the national interest to permit grazing and gives consent thereto." As drafted, a decision on the part of the Secretary that would permit grazing could have serious adverse effects upon dairy farmers and livestock producers. If soil-bank acres were used for grazing or for hay the result would be increased production of dairy and livestock products, Briefly, it would transfer the surplus problem of the grain farmer to the dairy and livestock producers who already are faced with low prices and with incomes which are inadequate. It should be pointed out that the failure to restrict the use of acres diverted from the basic crops has contributed to the present high production and consequent low price of dairy and livestock products. It should be further pointed out that the powers delegated to the Secretary in section 103 as in many other sections of the bill, are extremely broad. We should like to suggest that reasonable guides to the Secretary might properly be incorporated in the bill.

In section 104 it would appear that a different standard should replace the following : "of wheat, cotton, corn, and rice, respectively, of not to exceed 30 per centum of the national acreage allotment established for such commodity under the Agricultural Adjustment Act of 1938, as amended." The goal should be sufficiently high to encourage production adjustment to the point where the supply can be brought into a reasonable balance with demand at a price level equal to, or one that would approach, full parity. Furthermore, it is suggested that the limits within which individual farms may participate in the soil-bank program should be at the discretion of individual farmers, and that no limit should be arbitrarily established by the Secretary. If the rate of payment is established at the appropriate level, the goal will be attained without such limits.

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