SUMMARY

We believe the farm situation requires rapid adjustments of supply and output to what the markets will absorb. We look upon the soil bank as a promising approach to the adjustment, but with some reservations as to its effectiveness in making the adjustments. We favor the Government getting out of the commodity business by disposing of the excessive stocks it holds and staying out. We take no position on the two-price proposal.

We favor the limitation of price-support activities to their use as relatively short-time stabilization measures, and oppose the reliance on high price supports as a permanent program. We advocate the scheduled transition to modernized parity and its further modernization. We oppose the limitations on eligibility for price-support loans.

Thank you.

The CHAIRMAN. Thank you, Mr. Garver.

To supply the information that was referred to earlier in the hearing today, storage of wheat and cotton stocks as of December 28 costs $35.5 million a year for cotton and $167.5 million a year for wheat. The cost of storing a bale of cotton is $4.44 a year, which includes in-andout charges. This would be approximately 37 cents per bale per month. The cost of storing a bushel of wheat is 20.2 cents per year, which includes in-and-out charges. This would be approximately 1.7 cents per month per bushel.

Senator HUMPHREY. How much of that storage do they collect from the farmer when they take the crop loan? A portion of that is deducted at the time of the crop loan for storage, is it not?

The CHAIRMAN. No; I do not think so. I am informed that this is CCC inventory, CCC-owned commodity.

Senator HUMPHREY. CCC owned?

The CHAIRMAN. CCC owned.

Senator HUMPHREY. Yes. But on the farm itself he pays storage.

his own

The CHAIRMAN. You mean until he withdraws it for sale? That is right.

Senator HUMPHREY. What I am talking about is this: I think it is an important point for public information if not for committee information, because the average citizen is led to believe that when a farmer takes the crop loan he still owns the crop, and that the Government pays that storage. I have been amazed in going around the country to find out that city people do not even know that the farmer pays 42 percent interest on that loan. They have never been informed that the farmer actually pays a storage cost on his own crop loan and his own crop storage during the period of time that he has his loan on it, until such time as the Government may hold the commodities because of default on the loan or turn it over to the Government.

The CHAIRMAN. Those deductions are made, Senator, so long as the farmer has control of it?

Senator HUMPHREY. That is right.

The CHAIRMAN. He can select a seller. He can sell it at the going, prevailing market?

Senator HUMPHREY. Right.

The CHAIRMAN. He usually does it only if there is a profit in it.

Senator HUMPHREY. Right. But I do think for public information it shoud be made known that farmers pay a year's storage. I want to say that I have conducted some little inquiry into this, and I have not found one person in a hundred that knew that the farmer ever paid any storage costs on his own crops that were stored.

Senator MUNDT. Mr. Garver, I have one question.

Mr. GARVER. Yes, sir.

Senator MUNDT. On page 17 I quote this sentence:

In our judgment, the more nearly "parity," for whatever it is worth, is in line with predominating economic conditions the less effective it is as a guide.

I do not think I quite undertsand that.

Mr. GARVER. I am sorry. That is a mistake in either printing or composition. "The more effective" it should be.

Senator MUNDT. I would like to say, otherwise it vitiates everything you said in the paragraph.

Mr. GARVER. I stumbled on it. It should be "more."
Senator MUNDT. It should be "more"?

Mr. BOLES. I would like to have Mr. Lambert with me.

The CHAIRMAN. That is all right. You can have as many as you

want.

Mr. BOLES. That is fine.

The CHAIRMAN. Have a seat.

Now, would you give us your name in full and occupation?

STATEMENTS OF RAYMOND BOLES AND LLOYD LAMBERT, GRAIN SORGHUM PRODUCERS OF SOUTHWEST KANSAS, LIBERAL, KANS.

Mr. BOLES. I am Raymond Boles, from Liberal, Kans., and I am a farmer. And this is Mr. Lloyd Lambert, from Liberal, Kans., and he is also a farmer.

The CHAIRMAN. Proceed.

Mr. BOLES. I am Raymond Boles, from Liberal, Kans., and I represent the Grain Sorghum Producers of Southwest Kansas who raise mostly milo, that is, milo maize, a grain sorghum.

After arriving here in Washington, D. C., and a short visit around over the Capitol Building, I have definitely decided that they sent the wrong man. I am a farmer. They should have sent a lawyer or someone whose business it is to talk. I want to tell you for sure that at the present time I would rather be at home on a tractor.

The CHAIRMAN. Well, you need not worry. Some of us are farmers who sit around this table here. Senator Thye is one. I am one. Senator Anderson, I know, is a very successful one.

Senator ANDERSON. No.

The CHAIRMAN. Let us proceed.

Senator THYE. I will just assure you, Mr. Boles, if you act perfectly naturally, we need some of your common, ordinary good sense here, if you please. You just act naturally and go easily about it.

The CHAIRMAN. Pretend you are riding a tractor. Proceed.

Mr. BOLES. I live on the same farm that I was born and raised on, It has always been my fondest hope that I would continue to live there

but unless the agricultural situation improves, I am afraid that I will not be able to.

The price of grain sorghums this past year has been equivalent to or below production costs on an average crop. We raised almost an average crop in western Kansas this year. We have estimated that our average crop there was 15 bushels per acre. Our 10-year average in Kansas has been 18 bushels per acre; however, the Kansas average the last 2 years has fallen somewhat short of that-only about 11.

I have worked out examples as follows. Now, these are prices at Liberal, Kans.

Example 1: As it is at present, $1.54 a hundredweight, which is 86 cents per bushel; that is, for milo maize, or grain sorghum.

On 500 acres with an average of 15 bushels per acre at $1.54 per hundredweight, you would receive $6,450, and your expenses, on the other hand, would be, rent, one-third; cutting expense, $2.50 per acre: and other expenses, $6-that would include preparing the seedbed and planting and selling-giving a total expense of $6,400. Subtract that from your price that we received this year, and you would have only $50.

The CHAIRMAN. Isn't your rental there rather high? A third?

Mr. BOLES. A third rent is what we pay. We figured it on a third basis. If we did not pay the rent, we would have to pay taxes and interest on our investment, or interest to the insurance company, like I do.

The CHAIRMAN. When you say a third, if you produce 18 bushels, you have to pay 6 as rent?

Mr. BOLES. That is right.

The CHAIRMAN. All right.

Senator AIKEN. Is this produced on irrigated land?

Mr. BOLES. This is a dry-land example.

Senator AIKEN. Dry land.

Senator ANDERSON. On irrigated land, you might even pay a higher rental?

Mr. LAMBERT. Yes.

Mr. BOLES. One-half.

Senator AIKEN. Do you produce any other crops?

Mr. BOLES. Do we produce any other crops?

Senator AIKEN. Yes.

Mr. BOLES. In some places in my area we produce wheat, but our particular area is an old grain sorghum producing area.

Our area

on south through the Panhandle of Oklahoma and on into Texas and then some into New Mexico and Colorado, the high plain area, we produce grain sorghums. The elevators say that they have received about 2 bushels of milo maize to 1 of wheat in the last 5 years.

Mr. LAMBERT. That is right.

Senator AIKEN. Is this 500 acres you speak of in sorghum; is that for the community, or is that your own?

Mr. BOLES. That is a community average.

Senator AIKEN. I see.

Mr. BOLES. That is a community average, of 15 bushels per acre on the dry land.

Senator ANDERSON. I am sorry. You missed Senator Aiken's question. He said, is your farm 500 acres? Or is that a whole group of people farming 500 acres?

Mr. BOLES. No. I farm 500 acres.

Senator AIKEN. You farm 500 acres. Do you raise anything else

but sorghum?

Mr. BOLES. Yes. I raise some wheat.

Senator AIKEN. How much wheat do you raise?

Mr. BOLES. My allotted acreage at the present time is 525 acres. Senator AIKEN. What was it 2 years ago?

Mr. BOLES. Two years ago, that is, the first allotment?

Senator AIKEN. Yes.

Mr. BOLES. 598, or 597, I believe.

Senator AIKEN. What did you raise before?

Mr. BOLES. Before, I raised sorghums and wheat.

Senator AIKEN. How much wheat did you raise before you got your allotment?

Mr. BOLES. I raised at one time as much as 1,200 acres of wheat. Senator AIKEN. Then did you raise 500 acres of sorghum at that time?

Mr. BOLES. No, I did not. We have changed over from wheat.
Senator AIKEN. You have shifted from wheat to sorghums?
Mr. BOLES. From wheat to sorghums. That is right.

The CHAIRMAN. What you really did was to divert wheat acres to sorghum?

Mr. BOLES. To a certain extent. We still summer-fallow some; that is, lay out acres that do not have any crop on them, to conserve moisture.

The CHAIRMAN. How much do you receive for your employment, for your work, out of this $1,250 that you have on here, and the $3,000, those 2 figures you have indicated in your table?

Mr. BOLES. There is none.

The CHAIRMAN. Hired labor?

Mr. BOLES. No; no labor costs are included in this. This is my labor, $50, at the present price I received this year. These costs are machine costs only. That is, in machine costs, that includes gas and oil for our tractors.

The CHAIRMAN. And wear and tear?

Mr. BOLES. And wear and tear. These are taken by the Farm Management Association, which is an average of farms in our whole territory. If you are familiar with the Farm Management Association, I will not explain. But if you wish me to, I will.

Senator AIKEN. What price did you get for wheat this year?

Mr. BOLES. Our price on wheat this year-I did not raise any— and just offhand, what was it, Lloyd?

Mr. LAMBERT. About $1.95.

Mr. BOLES. $1.95.

Senator AIKEN. You sold in the open market, then?

Mr. BOLES. $1.93 to $1.95.

Mr. LAMBERT. That was on the loan.

Senator AIKEN. On the loan, $1.95?

Mr. LAMBERT. Yes.

Senator ANDERSON. You did not raise any wheat on a 500-acre allotment?

Mr. BOLES. No, sir.

Senator ANDERSON. What did you put in on that?

Mr. BOLES. We summer-fallowed the land and left it idle to conserve fertility and moisture.

The CHAIRMAN. Did you plant more sorghum?

Mr. BOLES. Yes. My sorghum acreage was increased this year. Senator THYE. Mr. Chairman.

The CHAIRMAN. Senator Thye.

Senator THYE. I did not get a clear understanding of the question that Senator Anderson asked of Mr. Boles, and that was, did you plant any wheat this past year?

Mr. BOLES. Yes. I planted wheat, but we did not have a harvest. We were too dry for the wheat crop.

Senator THYE. That is what I wanted to get into the record, that you planted it, but it did not survive the winter. The drought ruined it.

Mr. BOLES. That is right.

Senator THYE. And the net result was that you had to tear it up and plant it to milo maize?

Mr. BOLES. That is true to a certain extent. I planted 100 acres on ground that I had planted wheat on.

Senator THYE. You did?

Mr. BOLES. Yes.

Senator THYE. And then the rest lay idle?

Mr. BOLES. The rest lay idle to conserve moisture and fertility. Senator THYE. I see. But you did till it; you did work it up, so as to keep a dust mulch on top?

Mr. BOLES. Yes.

Senator THYE. I see.

Senator AIKEN. Did you carry insurance on the wheat?

Mr. BOLES. No. I guess even the crop-insurance program is out in

our area.

Senator ANDERSON. I do not think they operate around Liberal. Senator AIKEN. I see.

Senator SCHOEPPEL. Mr. Boles, I think you ought to have in the record that you are in the representative area, the upland area, where, unless you can raise wheat, the predominating crop in your area is grain sorghums?

Mr. BOLES. Grain sorghums; that is right.

Senator SCHOEPPEL. And if you miss on sorghum grains and wheat, you are out entirely.

Mr. BOLES. That is entirely right. That is absolutely right. However, we did raise some feed this year.

Senator SCHOEPPEL. I get that. But I mean, as a graze crop?
Mr. BOLES. Yes, and silage.

The CHAIRMAN. All right. Proceed with your second example. Mr. BOLES. The second example: 500 acres, at the same 15 bushels per acre, which was about the average in our community this year. We would receive $8,175, and the rent on a third of that would, of course, be higher, and $2.50 for cutting, and $6 per acre for planting expense, would give a total expense of $6,975, or a net of $1,200. That is, if we would have received the $1.95 per hundredweight, or $1.09 per bushel.

Senator HUMPHREY. Why did you select that figure of $1.95, sir!