THE SOIL BANK PLAN "The Secretary of Agriculture shall have power *** to provide for reduction in the acreage of any basic agricultural commodity, through agreements with producers or by other voluntary methods, and to provide for rental or benefit payments in connection therewith *** in such amounts as the Secretary deems fair and reasonable, to be paid out of any moneys available for such payments * * *"1 These words have a familiar ring. They are not the language of the present administration's soil-bank plan. They were not spoken yesterday. They constitute the wording of the original AAA legislation of early New Deal days which bears striking resemblance to the recently proposed soil-bank plan. The quoted language was employed by a Democratic Congress almost 23 years ago in legislation which was declared unconstitutional for other reasons. The principle of the soil-bank plan originated long ago, but it was opposed by the present administration as late as September 30, 1955. I have reference, Mr. Chairman, to a letter addressed to you on that date by Under Secretary of Agriculture True D. Morse, expressing disapproval of a Democratic soil bank plan, S. 1396. As one who is an enthusiastic supporter of conservation of our great natural resources, I am deeply interested in preserving and enhancing the fertility of our soil for the benefit of future generations. The soil bank plan deserves sympathetic consideration by this committee, but its details would have to be worked out with the greatest care to assure fairness to the farmers and to the taxpayers. For example, some farmers have asked me, "Will the farmer who is already practicing good soil conservation by shifting certain acreage to forage, trees, and water storage, be covered by the benefits of the soil bank plan?" If not, a good many farmers will claim they are penalized for following wise conservation practices. Problems of just compensation for land included in a soil bank plan will be many and varied. I hope the committee, if it acts on such a proposal will include as many standards as possible to guide the appropriate Government officials in the administration of the plan. I have no quarrel with a sound soil bank plan, but I do object to the fact that the President's farm message places so much emphasis on the soil bank and so little emphasis on the crucial farm problem today-that of depressed farm income. There is no clear promise of any net gain in income to farmers in the soil bank, or acreage reserve proposal. It would cost the Government about $350 million. If it involves a mere exchange of Commodity Credit Corporation stocks for production which the farmers forego, then it makes no contribution to the economic relief which farmers must have. RENEWED SUBMARGINAL LAND PURCHASES This We should not overlook the fact that we have at hand a type of soil-bank plan which would be available for use if the Congress were to appropriate funds for its implementation. I refer to title III of the Bankhead-Jones Act. law was enacted by Democratic Congress many years ago. It would authorize the Federal Government to acquire lands not primarily suitable for cultivation and to devote such lands to the prevention of soil erosion, to reforestation and other conservation practices. Submarginal land now producing crops that add to the pressures of existing surpluses could be retired under the Bankhead-Jones Act, provided funds were made available by Congress. Such lands could be improved for use in years to come when our requirements for agricultural products will be enormously increased. I hope the members of this committee will urge upon the Senate Appropriations Committee the wisdom of substantial appropriations for a submarginal land acquisition program of this type. A SEED BANK FOR THE SOIL BANK If the soil-bank plan materializes, there is likely to be an enormous demand for cover-crop seed for use on acres withdrawn from farm production. Growers 148 Stat. 81, 34. May 12, 1933. 250 Stat. 525, 7 U. S. Č., secs. 1010, 1011, 1012, 1018. of grass seed and other cover-crop seed, of which there are large numbers in Oregon, are confronted with huge surpluses and depressed prices. In many cases, they face the immediate threat of loss of their farms. If we should accept the soil-bank plan, there would be a serious possibility of a shortage, rather than surplus, of cover-crop seed. I am apprehensive that if our Government does not take immediate steps to create a reserve of such seed, prices of this essential item will skyrocket and the beneficiaries of such price increases will not be the farmers. I suggest to this committee the wisdom of a seed bank to supplement the soil bank. A program of this type would constitute a great stabilizing influence in the now unstable finances of our seed growers. It would assure adequate sup plies of cover-crop seed, at fair prices, for soil bank uses. PROFITS FOR PACKERS INSTEAD OF PRICES FOR PRODUCERS The President's farm message offered little encouragement to livestock producers. The President has said that the administration will institute timely and vigorous Government purchase programs when markets become glutted and prices disrupted, where assistance will be constructive. But experience has demonstrated that the administration's concept of timeliness and vigorousness makes programs left to its discretion of slight value to the farmers. The beef purchase program of 1953 did not guarantee any return to farmers and gave packers many weeks to shop the market for beef they supplied the Government. The more recent hog purchase program failed utterly to help the hog raisers. Although hogs were reported as bringing 50 percent of parity on December 15, 1955, and beef cattle only 64 percent of parity, the administration has not, to this day, taken any timely and vigorous action to improve livestock price levels for the farmers. It is abundantly clear that Congress must adopt a program which will assure livestock producers at least a return of all their costs. We cannot expect cattle raisers to subsidize any segment of our economy by continuing to sell cattle below costs of production. Nor can we expect farmers to continue to sell hogs at 10 and 12 cents per pound, as many hog raisers have been compelled to do in recent weeks. Because of the seriousness of the situation, I feel that we may have to resort to the use of direct income adjustment payments to livestock raisers. But if the adoption of such a program is politically impossible at this time, then I suggest that the committee act favorably upon mandatory Government-purchase programs which will assure decent prices to such farmers. On December 30, 1955, I joined 12 other members of the Senate in requesting the Secretary of Agriculture to reorganize the Department of Agriculture purchase programs so as to require bidders to certify to the Government that they are buying equivalent amounts of the same product in the open market at prices reflecting to the farmer at least the level of parity authorized by law for the basic commodities. Under the circumstances existing today, I believe that we should expand this suggested program so as to assure that all meat or other livestock products used by any agency of the Federal Government, military or civilian, are purchased originally from farmers at fair prices. REASONABLE INTEREST RATES FOR THE FARMERS Farmers operating modest-sized farms in my home State tell me that during these times of reduced farm income their problems of financing their farms are, at times, almost insurmountable. They tell me that they need, and need immediately, long-term loans at reasonable interest rates. A program of variable payments might well be included in such a loan program, that is, large payments should be permitted in good crop years and small payments in less prosperous times. Farmers feel that the Government should assist in the formulation of such a plan because after all, as a Nation we have a stake in the prosperity of the farmer. I agree with their views. We should initiate a program of reasonable financing of our farm enterprises. I know of no better investment of Government money. ers. STUDIES OF THE CONSUMER'S DOLLAR We know that the consumer has not benefited by reduced prices paid to farmAt some point in the transfer of products between farm producers and consumers, there is apparently an unreasonable extraction of profits. The housewife shopping at the meat counter can give us ample testimony on this score. In recent years, we offered in the Senate a resolution calling for a complete study of the consumer's dollar. I urge the members of this committee to renew the fight for such a resolution. I believe a disclosure of true facts concerning the consumer's dollar would show an unreasonable disparity between prices paid to the farmer and those paid by the consumer. Such a study would pay large dividends by way of stabilizing corrective action. DISPOSAL OF OUR FOOD SURPLUSES I have often said that it is unrealistic to view our farm surpluses as a detriment. Instead, we should regard them as an enormous blessing. Upon the basis of population-increase trends, it will not be many years before the food production we now regard as surplus will actually be required for consumption. In the meantime, it seems to me that we are falling far short of our obligation as a Christian Nation in our failure to share our food surpluses at home and abroad. Our school-lunch program could be expanded. Hospitals, orphanages, and charitable institutions could use greatly increased amounts of surplus foods. Again and again, we have received negative expressions from Government officials dealing in the areas of foreign relations and foreign commerce who tell us that it would be economically unwise to dispose of our surpluses to the needy-in fact, to starving human beings—in the friendly nations overseas. Historians of the future will look back on our shortcomings in this respect and will comment upon our inaction with amazement. I am wholly at a loss to understand why the feeding of starving people overseas would, in any way, disrupt international trade. They do not have the money with which to purchase food. If we adopt an aggressive and commonsense plan for bringing our food surpluses to them, they will find a source of new hope and we, in turn, will have the satisfaction of knowing that we have done what is right. I assure the committee my complete cooperation in its efforts to bring forth a farm bill that will meet the challenge of the farm problem today. I pledge support in bringing about the enactment of legislation that will bring our farmers fair prices and a fair share of our national income. The CHAIRMAN. Is there anything further? (No response.) The CHAIRMAN. If not, I wish to state that the committee will now recess until tomorrow at 10, at which time we will hear the National Chamber of Commerce, the Grain Sorghum Producers of Southwest Kansas, the Feed Grain Producers Association, Vegetable Growers of America, National Institute of Social Welfare, and the National Wildlife Institute. Without objection, we stand in recess until tomorrow morning at 10 o'clock. (Whereupon, at 5:30 p. m., the committee adjourned, to reconvene at 10 a. m., Thursday, January 19, 1956.) STATEMENT FILED BY HOMER L. BRINKLEY, EXECUTIVE VICE PRESIDENT, NATIONAL COUNCIL OF FARMER COOPERATIVES NATIONAL POLICY TOWARD AGRICULTURE The United States has always been a traditional export nation for agricultural products, but a national policy has gradually developed in the last 25 years that has emphasized the dominance by American industry of foreign and domestic trade at the expense of agriculture. This is evidenced by the following facts: 1. Aid and technical assistance by our Government to foreign nations has been given without relation to an economy balanced with industrial production in such countries, and has stimulated their agricultural production to compete in the markets of the world with the products of American agriculture. It has largely provided these nations with dollars to invest in the products of American industry. 2. In the guise of national defense and improved international relations United States foreign economic and political policy has restricted exports of United States agricultural products. 3. These policies have been a material factor in increasing and maintaining the burdensome surplus which now depress our agricultural markets both at home and abroad. 4. Our traditional foreign markets for American agriculture are being reserved by these policies of Government, for the agricultural goods produced in other countries including those receiving production aids from the United States. 5. These restrictions have taken the form, among others, of Government refusal to sell our agricultural products at competitive prices in world markets, direct and indirect interference with efforts of private trade channels to carry on commerce in agricultural products, insistence that United States agricultural exports must not interfere with markets of foreign countries whose influence we seek, and repeated statements that United States exports should be handled by private trade without Government assistance, even though such practice is almost impossible with most other nations of the world operating on a basis of Government trading. 6. Leaders of nonagricultural enterprises rather than leaders in the field of agriculture, are the main advisers of Government, which is not in the best interests of the agricultural industry or the Nation. Because of the foregoing we recommend: 1. Unqualified opposition to public policies which have the effect of reducing American agricultural production in order to deliver both domestic and foreign markets to the agricultural production of other countries. 2. Complete abandonment of restrictions on trade in American farm products abroad which have been or may be set up by our own country, thus helping to reopen the markets of the world to American farmers. 3. If American agriculture is to abandon traditional export markets and assume the role of domestic and residual foreign suppliers the policy should be frankly stated by our Government leaders and the costs charged to national defense where they properly belong rather than at the door of American farmers. In the field of domestic production, American agriculture has become a highly capitalized industry averaging more capital per worker than other industries and employing high requirements of cash and credit for current operations. farm economy is most vulnerable and sensitive to price and cost situations and credit policies. We therefore call upon those in control of the credit resources of the country to use a high degree of selectivity in administration of its program, for to do otherwise may force liquidation of agriculture and completely unbalance the economy of the Nation. The Finally, we deplore the tendency of the departments of government to single out cooperative and other agricultural business institutions for investigation and prosecution under antitrust acts while at the same time enormous business enterprises grow even larger through mergers and expansion. We further urge the Government and the farmers of the country to support in every legitimate manner the functions of cooperatives to supply credit, farm supplies, and marketing services, so as to reduce costs and enhance farm income through effective competition. The protection of the Capper-Volstead Act and the principles of marketing agreements under Government supervision should be fully utilized to bring an integrated farm economy under farmer operation and control. I'ARM PROGRAMS 1. The continued production of many farm commodities in excess of domestic and foreign demand has had and will continue to have a depressing influence on farm prices and income including some commodities not in current surplus. 2. The present income position of farmers is such as not to permit further compulsory reduction in many commodities. 3. Production adjustments alone will never provide a satisfactory solution to the current farm situation, nor can we have prosperity and economic stability in ågriculture until we can maintain a basis for maximum productivity in agriculture and rewards for efficiency in production and distribution comparable to those of other segments of our economy. Thus, while we move to bring production more nearly into balance with current demand and reasonable reserves, we must at the same time double and redouble our efforts to expand markets here and abroad, and to be more truly competitive with industry for the consumer's dollar. Among other requirements this will entail maximum expansion of economic and marketing research here and abroad and the willingness and means for its full application. 4. Marketing of surplus commodities must be handled in such manner as will strengthen the farm price structure and the private marketing system. 5. The national interest as well as that of agriculture will be served by expanded programs directed particularly to soil and water conservation, both surface and underground, on a nationwide basis. [S. 2949, 84th Cong., 2d sess.] A BILL To provide for the protection and conservation of national soil, water, and forest resources and to provide an adequate, balanced, and orderly flow of agricultural commodities in interstate and foreign commerce, and for other purposes Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, TITLE I-SOIL BANK ACT DECLARATION OF POLICY SEC. 101. This title may be cited as the "Soil Bank Act", and the term "this Act" when used in this title shall mean the Soil Bank Act. SEC. 102. The Congress hereby finds that the production of excessive supplies of cultivated agricultural commodities depresses the prices and income of farm families; constitutes improper land use and brings about soil erosion, depletion of soil fertility, and too rapid release of water from lands where it falls, thereby adversely affecting the national welfare, impairing the productive facilities necessary for a continuous and stable supply of agricultural commodities, and endangering an adquate supply of water for agricultural and non-agricultural use; overtaxes the facilities of interstate and foreign transportation; congests terminal markets and handling and processing centers in the flow of commodities from producers to consumers; depresses prices in interstate and foreign commerce; disrupts the orderly marketing of commodities in such commerce; and otherwise affects, burdens, and obstructs interstate and foreign commerce. It is in the interest of the general welfare that the soil and water resources of the Nation be not wasted and depleted in the production of such burdensome surpluses and that interstate and foreign commerce in agricultural commodities be protected from excessive supplies. It is hereby declared to be the policy of the Congress and the purposes of this Act to protect and increase farm income, to protect the national soil, water, and forest resources from waste and depletion, to protect interstate and foreign commerce from the burdens and obstructions which result from the utilization of farm land for the production of excessive supplies of cultivated agricultural commodities, to provide for the conservation of such resources and an adequate, balanced, and orderly flow of such agricultural commodities in interstate and foreign commerce. To effectuate the policy of Congress and the purposes of this Act programs are herein authorized to assist farmers to divert a portion of their cultivated cropland from the production of excessive supplies of cultivated agricultural commodities, and to carry out a program of soil, water, and forest conservation. The activities authorized under this Act are supplementary to the acreage allotments and marketing quotas authorized under the Agricultural Adjustment Act of 1938, as amended, and together with such acreage allotments and marketing quotas, constitute an overall program to prevent exessive supplies of cultivated agricultural commodities frour burdening and obstructing interstate and foreign commerce. SUBTITLE A-ACREAGE RESERVE PROGRAM TERMS AND CONDITIONS SEC. 103. Notwithstanding any other provision of law, the Secretary of Agriculture (hereinafter referred to as the "Secretary") is authorized and directed to formulate and carry out an acreage reserve program for the 1956, 1957, 1958, and 1959 crops of wheat, cotton, corn, and rice, respectively (hereinafter referred to as "the commodity") under which producers shall be compensated for reducing their acreages of the commodity below their farm acreage allotments established under the Agricultural Adjustment Act of 1938, as amended. To be eligible for such compensation the producer (a) shall reduce his acreage of the commodity below his farm acreage allotment within such limits as the Secretary may prescribe, (b) shall specifically designate the acreage so withdrawn from the pro |