The mechanism for handling such payments and insuring the actual retirement of the designated percentage of land already exists in the present State and county ASC committee.

In determining the provisions of the plan concerning the type of soil-building plants to be used, the flexibility of the present ASC program with its great variety of practices adapted to specific areas, based on past experiences, should be taken into consideration. In some areas the native or natural cover crop may bring about the desired results with a minimum expenditure of money. To limit the types of cover crops to be used may result in a shortage of seed which will be needed for the 25 or 30 million acres designated for the soil-bank

reserve.

To be successful and equitable, the percentage reduction would have to be applied universally in all sections of the country and on all types of farms regardless of size or crops grown. The base to which the percentage cut should apply should be the average of 1954-55 cropland actually in production on each individual farm in the United States. It is necessary that an average be used based on land actually in commercial production during the immediate past; otherwise abandoned and marginal land will be included in the base and radically distort the results. The ASC committees have the records and the ability to prevent inclusion in the base of such lands.

Because agriculture in the United States is dynamic, because new methods are constantly being introduced which increases potential output, it will be necessary for the Secretary of Agriculture to set annually in advance the percentage of land to be retired for the coming year. This flexibility is essential to provide for emergencies and to readily adjust for needed increased productivity.

The final program for stockpiling soil fertility which will be drafted must contain mandatory provisions, and it must apply to all segments of the agricultural economy. The basic farm commodities which have enjoyed Government supports are in the greatest difficulty at the present time. The growers of these commodities are already receiving agricultural conservation payments and price supports; and, with the addition of soil-fertility payments, the amount of capital available to these farmers will be further increased. With no restrictions, they can utilize this additional capital to further increase the production of basic commodities and nonsupported crops. Inasmuch as this problem of overproduction is a general one, the soil fertility plan must apply to all crops and not only basic commodities, representing approximately 25 percent of the national farm income.

It is most unfortunate that aids to stimulate production have been permitted to perpetuate the unbalance in the agricultural economy. A national soil fertility stockpile would rectify this unbalanced condition. It would make a vital contribution to the control of soil erosion, conservation of water, and stockpile a general reserve of soil fertility for emergencies and for future use of a rapidly expanding population.

We believe that the farm policies of the future should include constructive aid in maintaining and strengthening our entire agricultural economy. It should deal realistically with agricultural problems and avoid contradictory action, such as Government reclamation of new agricultural land even while it is obligated to buy unmanageable farm surpluses.

Past policy has only aggravated agriculture's outstanding problem of overproduction until farmers are drowning in their own abundance. It will require courage to reject the worn out piecemeal approach. Agriculture needs more than equality with the entire economy; it needs equality among its own members. This equality can only be brought about by dealing with the problem in its entirety.

STATEMENTS OF WALTER F. McCALEB, JR., CHAIRMAN, LEGISLATIVE COMMITTEE, VEGETABLE GROWERS ASSOCIATION OF AMERICA, BELLE HAVEN, VA.; AND JOSEPH S. SHELLY, SECRETARY, VEGETABLE GROWERS ASSOCIATION OF AMERICA

Mr. McCALEB. We want to take just a very short time to review briefly the general situation of agriculture, and to cite some of the recent trends. I am doing this to give background to the position that the association takes.

I think it is familiar to all of us that gross agricultural income from 1947 to 1955 has remained practically stationary. It reached the high point, I believe in 1951, and since that time has shrunk-$34 billion approximately is the estimate for 1947, and $33.3 billion for 1955.

During the same period there has been an increase in the cost of production of farmers of approximately 30 percent, and a decrease in net farm income in the same period, 1947 to 1955, of 31 percent.

I have 1 or 2 other figures to show you what has happened to the farmer. In 1947 the liquid assets of farmers were $18.5 billion. The total farm debt at that time was $8.5 billion. In other words, we had a favorable ratio of better than 2 to 1.

In 1955 there was a small increase in total liquid assets from $18.5 billion to $19 billion, but a more than doubling of the total farm debt. That has gone up from $8.5 to $18 billion.

During the same period you have had a per capita increase in the nonfarm income of approximately 33 percent, the same increase in per capita farm income has been only about 15 percent.

Now, I cite these bare facts to show that the farmer situation is getting progressively worse as compared to the balance of the economy. The next thing that I want to state is the essence of the position of the Vegetable Growers Association of America, with regard to the so-called soil-bank plans, of which there have been a number, and of which our association has approved and urged the adoption of one. First of all we conceive the main problem to be production of agricultural commodities in excess of the needs. That is, both the domestic and foreign needs, and I don't mean just the basic commodities. I mean total agricultural production.

The facts as we see them are that the productvity of agriculture in the United States is so great that we have just been drowning ourselves in our own productivity, and we insist and believe that the facts bear us out, that this excess productivity is not confined to the basic

crops.

It is present in all crops, and therefore we feel that any bill or any approach to the soil-bank theory which confines itself solely to the basic crops is definitely a mistake.

It is a further extension of the picemeal approach to agricultural problems which our association feels is the basic error of laws presently on the books.

In other words, instead of trying to solve the overall agricultural problem and dealing with it as one unit, you have taken each little sore and tried to deal with that on an individual, piecemeal basis. That, gentlemen, we feel is the basic error behind the present agricultural law.

The CHAIRMAN. I thought the soil-bank proposal, as submitted by the President and Mr. Benson, had two prongs to it; first, it dealt with the acres that were to be set aside for the bank, and on which some definite payment would be made, on the allotted acreage set aside, and then the conservation, soil-conservation acres.

Certainly the conservation acres would apply, wouldn't it, to acreage planted to vegetables and things of that kind?

Mr. McCALEB. Gentlemen, that is exactly what we want to see done. The CHAIRMAN. What makes you believe that under the

Mr. McCALEB. Because of the fact that the producers of the basic commodities are getting a special deal, as usual, and special consideration as usual, and that we protest against.

The CHAIRMAN. Well, of course the reason for it is and has been because of the fact you curtail production principally, and then the next was the storability of the commodity. That is what prompted, I am sure, the committee in the past to take that position.

Mr. MCCALEB. Senator, I would agree on the storability, but I would like to make this further observation: That there are many commodities that are storable that are not included in basics. For example, soybeans.

Now, as far as the economic importance to the American farmer is concerned, I believe that you can make a much better case for both the storability of soybeans and for the economic importance and for the geographical distribution than you can for some of the commodities that are presently in the basic commodities.

The CHAIRMAN. I wasn't going to argue on the grains. What I had in mind was principally as to vegeables.

Mr. McCALEB. Gentlemen, our feeling is that this two-pronged proposal of the President again gives special consideration and a special payoff, if you will, to the basic commodities. We feel that is unjust. The CHAIRMAN. But that is because there is such surplus. Soybeans are not in surplus now, from what we have heard. Flaxseed are not. Other grains that are used for feed, like oats and barley and the like, they are in surplus.

Mr. McCALEB. In considerable surplus; yes.

The CHAIRMAN. That's right.

Senator AIKEN. The purpose, Mr. McCaleb, of the acreage reserve part of the program is primarily-well, there are two reasons for it: To keep from increasing the surplus of those basic commodities, and also to keep them from putting several million acres into crops and grazing which will compete with markets which are already pretty well supplied for other commodities.

The second part of the program, as Senator Ellender has said, is a request for $350 million which would apply to all cropland everywhere, and that will permit contracts up to 10 years, I believe, with the annual payments over that period.

That part of it which relates only to corn, wheat, cotton, and rice, I think are the ones they mentioned, will be a year-to-year proposition as we continue it, but not to exceed 4 years, and that is the trouble our dairy people in the Northeast have. They don't understand that grazing is prohibitive, and crop production is prohibitive on these lands from year to year up to 4 years' time.

Mr. MCCALEB. Senator, we understand very well the heart of any soil-bank program must be to truly take that land out of production in the full economic sense of the word. That means no cutting for hay, no pasturing, and so forth.

We are fully aware of that, and agree entirely with that approach. We do not agree that a voluntary program will work.

Senator AIKEN. Well, would you approve of the bill which the Department disapproved of last year, which requires an even cut in all production land, regardless of where it is located, or what it is used for?

Mr. McCALEB. Definitely. That is the heart of our own proposal, that there be an equal percentage cut.

Senator AIKEN. Would you require the same cut, we will say, to a New Jersey tomato grower who has been using the same acreage year after year, as you would for the southwestern tomato grower, who last year put maybe 10 or 20 acres into tomatoes, from land which is taken out of some other crop?

Mr. McCALEB. We most certainly would, because there is no other possible way to make the thing work. If you place it on a voluntary basis, you are going to have exactly the same mess that you had-for example, in the potatoes a few years back you are going to have a certain percentage of your farmers that are not going to cooperate, and who are going to use the fact that many will cooperate, to feather their own nests, and you are going to have exactly the same thing, so long as it is on a voluntary basis.

Now, I had not intended to get to this at this point, but I want to pick a few flaws as I see them in the bill.

Senator AIKEN. I expect there are a good many. There usually

are.

Mr. McCALEB. Understand, we hope we are being constructive, Senator. Now, for example, let's consider these negotiable certificates. Now, negotiability immediately indicates to me that the average farmer needs money.

There is going to be a great deal of speculation in those, and I think that it is going to be a situation where the farmer is probably not going to get what he ought to get out of it.

Now, secondly I believe that the plan also provides that there can be payment in kind, shall we say, that the farmer can receive in lieu of selling his negotiable certificate, or getting cash for it, he can collect actually grain.

Now, what is to prevent a wheat farmer who is under this one-prong, in other words, this reserve setup, from going and collecting his 5,000 or 10,000 bushels of wheat and suddenly having a very tremendous yield on his regular wheatland? What are you going to do, paint it pink, or something?

Senator AIKEN. That would be a violation of the law.

Mr. McCALEB. I realize that, Senator.

Senator AIKEN. You don't think there is anything like that done today; do you?

Mr. McCALEB. I say that you are turning back to the farmer and giving him back physical possession of the wheat and his option; am I right? Isn't that what the plan contemplates?

Senator AIKEN. He can take physical possession of the wheat.

Mr. McCALEB. What is to prevent him taking and putting all that back into the combines this year?

Senator AIKEN. Just the law, that is all. I realize we have laws against arson, but people still set fires.

Mr. MCCALEB. Senator, you are putting a tremendous temptation to thousands of farmers who are hard up, and by giving them physical possession of a commodity-in other words, there is no way of identifying the stuff that they get back from CCC, no way of differentiating it from their own production.

What are you going to do about it? There will be the greatest increase in ostensible wheat yields, for example, that you ever saw.

Senator AIKEN. I don't think a very big percentage of the farm people do that, and I don't think that they violate the law any more than other folks violate the law.

Mr. McCALEB. I would agree to that.

Senator AIKEN. There are going to be violations, there is no use in disputing that. The certificate, of course, is made negotiable, so that the farmer can deposit it in the bank.

Mr. McCALEB. Our vegetable growers, don't believe that the average person appreciates how important vegetable production is in the American farm picture.

Senator AIKEN. You have had a good year.

Mr. McCALEB. Yes; splendid.
Senator AIKEN. Excellent.

Mr. SHELLY. In some places.

Mr. MCCALEB. Roughly 55 percent of farm income comes from animal products directly or indirectly, in other words the byproducts and so forth, and roughly 45 percent from crops.

Now, of that 45 percent, I believe in 1954, the last figures available, I think that vegetables accounted for about 5.4 percent of that 45 percent, and I think that food grains accounted for something over 7 percent.

Furthermore, we know that the basic commodities yield, in the way of farm income, less than one-quarter of what our farmers get. I want to tell you gentlemen that there is a definite feeling on the part of vegetable growers and other growers of nonsupported commodities that this is a further indication-this proposal of the President's is a further indication that all you have to do is to get yourself deeply enough in trouble and that they [Government] will keep on giving you special consideration.

Now, as I see it, we agree that it is highly desirable to get rid of this surplus, but we don't think that it is going to work the way it is

set up.

For one thing, I think it is inequitable. It offers entirely too much of, shall we say, a bail-out, a special deal for the man who has already put agriculture where it is, because we know that the 38 million acres that we diverted from 1953 to 1955 from the basic commodities have largely gone to destroy and create surplus situations in many other commodities.

I mean, of the other grains, the feed grains that are outside of the basics, of vegetables, of potatoes.

Senator AIKEN. Those are things they could get into quickly, Mr. McCaleb.

Mr. MCCALEB. Well, that, I think, should have been quite obvious. When you pull 38 million acres out, frankly we think the soil bank plan is overdue. Our organization has been urging a control of diverted acres for 3 years.

Now, at the time that you put the squeeze on acreages of supported crops, had you set up a soil bank on the acreage taken out of those crops, then you would have had a sound program.

Senator AIKEN. We tried to handle that with the ACP program, and appropriated about $50 million additional. That was totally inadequate to do the job, and I agree with you that we have to safeguard any program to the best of our ability. But no matter how well we