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Senator Young. But they have no acreage reduction program?
Mr. THATCHER. They have no acreage reduction program.
Senator Young. And no program to reduce production.

Do you not think it would be a bit dangerous to ask our farmers to further greatly reduce their production, and with no protection against imports of feed grains ?

Mr. THATCHER. I think it is unfair. I think it is unrealistic. I am friendly to Canada, and I am friendly to reciprocal trade. I am friendly to all of the things that we ought to do to have peace, but I think it is just an unconscionable thing to bring imports into this country to depress our supported products, and pile them up on the costs of our farm program.

I think what we ought to do is to set aside some elevators and put all Canadian imports in those elevators and label them, “Friendly elevators, for international friendly relationships and peace and everything else," but not assign the cost to the American farmer. Pay for the friendly relationships with Canada and pay for them openly and outright, and not put those costs into the figures about our huge surpluses, when so much of that surplus has been contribused from Canada. Now the public generally thinks our farmers raised all that stuff that is part of our present grain excess.

It is as though Burma were shipping rice into this country to get the support price, if Burma raises rice, as I guess they do.

The CHAIRMAN. Yes, in abundance.

Senator Young. Weren't import limitations in the form of quotas removed this year from oats and barley!

Mr. THATCHER. It was removed from oats and barley, and the day that that happened, our barley market froze at Minneapolis.

Senator AIKEN. Senator Young, will you yield ?
Senator YOUNG. Yes,

Senator AIKEN. We have the figures put in the record showing the imports for 1955 and previous years.

Mr. THATCHER. Barley imports from Canada down to the present time in this crop year are nearly 16 million bushels.

Senator AIKEN. According to this, imports of grain into this country were about a third as much in 1954 and 1955 as they were in 1952 and 1953.

Mr. THATCHER. That is correct, for those crop years 1953 was the highest.

Senator AIKEN. That is what I wanted in the record.
Senator Young. But what I am trying to point out is-
Senator AIKEN. Mr. Chairman-
Senator Young. Senator, I would like to ask a few questions.

Senator AIKEN. I did not want the impression to get out that they were constantly permitting more to come in.

Mr. THATCHER. We had a lot of Democratic imports coming in here. I want to get that on the record. We had a lot of Democratic imports from Canada, and a lot of Republican imports. I do not give a rap about which party it was, representing farmers. What I am concerned about is that these imports have come in and depressed our price. That is what I am interested in.

Senator Young. Imports have been reduced this year, because Canada did not have the oats to ship us.

Mr. THATCHER. And their market is higher than ours this year.

Senator YOUNG. That is right. And what I am trying to point out is that quotas have now been removed, and it places our farmers in a dangerous position, to reduce their acreage drastically, and have no protection left whatever, or practically none whatever, against imports.

Mr. THATCHER. I do not think the Congress has any right to ask our farmers to curtail production and leave that gate open. To be on the level with our people who raise these products, I think all of these imports should be simultaneously excluded the moment you make arrangements for farmers to cut their production.

Senator Young. And may I ask just one more question? Then I will withhold any further questions.

Would you be in favor of some kind of quality application to price supports, providing for some differentials in price to reflect quality ? For example, do you not think that it would be workable with wheat price supports if we provided 90 percent supports, say, or above, to farmers who seeded varieties of wheat which normally produce top quality wheat? Would that not be a step in the right direction?

Mr. THATCHER. I would go the other way. I would exclude from qualification for loans the varieties that you do not want. I would go the other way.

Senator Young. Exclude them entirely? Or would you lower their supports?

Mr. THATCHER. Well, if they are good for feed, I would put them in at their feed ratio. If they did not want them because there was too much feed, I would not take them.

Senator Young. Thank you. That is all.
The CHAIRMAN. Senator Anderson.

Senator ANDERSON. Mr. Chairman, I would like to question this witness a long time. We differ on a great many things, but I cannot forget that when I needed help badly in trying to gather up a few bushels of wheat to send to Europe, he was of tremendous help to

And I appreciate that fact. What I was going to suggest, Mr. Chairman, was, if you would approve it, that I would like to transfer my opportunity for questions to Senator Humphrey, who comes from his State and is very familiar with his problems.

Just let me say that I like Mr. Thatcher even if I disagree with him.

Mr. THATCHER. Well, I want to state for the record, I have a great regard for you.

The CHAIRMAN. Senator Thye.

Senator THYE. Mr. Chairman, most of the questions that have occurred to me at the outset have been pretty well covered. The only one question that I would like to ask of Mr. Thatcher, other than first making the statement that you made an excellent statement on the question confronting the farmers, in your answers relative to some of these problems, and what has brought on the problems

Mr. THATCHER. Thank you.

Senator THYE. And I believe that we need to look upon this surplus question in a different light and get a different message out to the taxpayers and the general public.

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me.

We have condemned the support program to such an extent that we have made it an evil thing in the eyes of the general public rather than a blessing with which we are blessed, because we have an abundance of food and fiber. We have no need of hungry people nor illclothed people, because we have the supply:

That needs to be said. We reduce the inventory both in the industrial plants as well as inventories of equipment at the close of World War II at any price that the public offered for it. And you have got inventories all over this Nation in the form of ammunition, military planes, and military ships. No one has made a public scandal of that. But they have made the farm-support question a public scandal.

Now, the question I would like to ask you, Mr. Thatcher, is this: How and in what manner should we set aside the diverted acres or idle acres, and in your opinion, what would be a fair and just compensation to the producer for laying idle acres, and how could we best go about determining what amount the Federal Government should pay as a rental for that diverted acreage? The farmer cannot lay idle acres, pay the taxes, pay the interest on the investment that he has, and then get no return in the attempt to reduce the overall agricultural plant.

How do we go about paying a rental, and how much should it be on an acre, whether it be wheat or cotton or whatever it might be!

Mr. THATCHER. In answer to your question, since I read in the papers about the plan to retire wheat acres, I have given a great deal of thought to that. Not for a million dollars a year—and I'd like to make a lot of money-could you hire me to administer that program.

Senator THYE. It will have to be administered; we will ask somebody to administer it.

Mr. THATCHER. I think it can be done in a better way.
Senator THYE. All right, that is what I want you to tell me,

Mr. THATCHER. I tried to translate the program to my own operation and I suppose every other man who has a farm has tried to do the same thing and I am sure you have.

I am already in the soil conservation bank in my own practices.

Senator THYE. Before you start, I am a general farmer, as I supervise. I have not been privileged to do much of the manual labor in all of my years on the farm because I have been with the land bank or I have been in Federal Government as well as State government.

But last year, 1955—it was not an exact wisdom on my part—but I was quite certain that the production was going to be in excess of what domestic needs were. And here is the example, that in the farm operation we did not produce or farrow one pig in 1955.

Even though the farm unit that was capable of farrowing :300 pigs in a year, even though we did not raise 1 pig, yet the pork market is glutted.

Therefore, the farmer cannot as an individual protect himself or protect the Nation's economy by his individual action. It has to be in the form of a national program.

Therefore, we have to lay down a program that will have to be administered, and if it is administered-and you said you would not handle it for a million dollars, and you have got about one of the most fertile minds to imagine and to project yourself of any man

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11 that I know in Minnesota, and if you are possessed with that ability paint and you would not handle it for a million, we are going to have to get : somebody to handle it for a lot less because we do not pay out that amount.

Mr. THATCHER. Let me give you the specific example of my farm. One man owns it and another is the tenant. It has been converted from a onetime wheat farm to a livestock and grain farm, which is sound conservation, as you know.

There are 100 head of cattle, and 500 acres of wheat is now down to 273 acres, some by choice and some by curtailment. The tenant owns all of the equipment. He has depreciation charges of about $1,500 a year. Most of his equipment relates to crop farming.

He is going to have that depreciation no matter whether we allow him 273 acres, or 150 acres. There are other costs, particularly tractor fuel. Even without any return on the investment to the owner, there must be paid enough on the acres taken out to compensate for the share of the depreciation on the machinery, and something for the man's time. If he is going to reduce his output, something will have to be done to raise his income.

You can meet that requirement for this acreage reserve, by an enhancement of the price of the wheat that comes off the fewer acres. That is one way to do it.

Or you can pay it out of the Treasury. That is another way to do it. In that case, I would assume that it would probably run to $12 to $15 an acre, if everybody is going to be cut in, with the man's labor and investment properly considered.

Or you can put an excise tax on the wheat like you do with other products such as sugar, tobacco or alcohol, and get that into the Treasury, so the Treasury would not be depleted out of the general tax funds. Those are the things that can be done.

I would rather see the use of excise taxes. I would rather see the consumers pay the right price for the goods they use, than the taxpayer.

Senator THYE. Mr. Thatcher, is our farm plant too large!

Mr. THATCHER. No; I do not think the farm plant is too large if the farmer was only working on the average 40 hours a week like labor.

Senator THYE. No; that is true, but I mean at the present time with the method of operation and the hours that the farmer is still of the opinion that he must work, you are going to have to put in some time unless a means of controlling that dairy cow is found because if you are the only man on that farm you either will milk Saturday and Sunday or have an awful mess in that dairy on Monday.

Mr. THATCHER. I think that is a very difficult question to answer.
Senator THYE. Our farm plant, is it too large?

Mộ. THATCHER. The Secretary of Agriculture said we are within 1 percent of balance of production and distribution.

Senator THYE. But you see last year, Mr. Thatcher, we asked the wheat producers not to produce wheat and they complied a certain percentage; some of them in order to remain solvent, had to convert to barley or in some instances they converted to milo or maize, so they got back into the competitive field with the feed grains.

And the man that converted from cotton and got into corn he nullified what the corn restriction in the commercial corn areas had endeavored in the reduction of the corn acreage.

64440—56-pt. 8-24

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Mr. THATCHER. Exactly as the United States Department of Agriculture recommended that he do; he did that.

Senator THYE. Exactly we laid down somewhat the regulations that the Department of Agriculture would administer under, because we enacted the regulations here in the Congress, but we are today faced with, I know of no other course of action, because I think we have got more wheat than we can reasonably handle momentarily, at least.

Mr. THATCHER. Part of it ought to be disposed of.

Senator THYE. I realize that we are going to have a terrible time unless we let you in on the Senate floor to carry the debate for us, and I do not know whether we are going to be good enough at the job to carry the debate on the floor to convince many of our colleagues that we do not need to reduce our overall acres.

Mr. THATCHER. Are we to assume we are never going to have a year

like 1934 and 1936 ? Senator THYE. That we must recognize, but I believe, Mr. Thatcher-or let me use this an an argument- I believe the opinion here will be to reduce the acres, the total overall acres and get some laid into idle acres.

I believe that that is our problem.

Therefore, I ask you, if that is our problem, could you project yourself over into our position and offer us a suggestion of how you would handle the idle acres that will be forced by the program and what compensation will we get for the idle acres that we are compelled by legislative proposal to do.

Mr. THATCHER. I will state what I stated 2 years ago before the House Committee on Agriculture. I do not believe it makes sense to produce something that nobody wants.

Senator THYE. That is right.

Mr. THATCHER. If we determine that 45 million acres of wheat land is all that ought to be used in producing the kind of wheat that we want, why do we not cut it to 45 million? Why does it have to be 55? Why not cut it to 45?

Senator THYE. What will we do with the balance of those acres?

Mr. THATCHER. Wait just a minute. That is only part of the problem. The Government must intervene if we have surpluses, or the market price will wipe out the farmer and we will not be doing what the President recommends to preserve the farm family on the land.

I don't think there is any such thing as half intervention. I think the Government should intervene intelligently like a businessman would operate, clear across the board or get clear out of it, one of the two.

Senator THYE. You mean clear across the board, by that you mean, from wheat?

Mr. THATCHER. All of the crops.
Senator THYE. As to all of the crops?
Mr. THATCHER. All of the crops.
Senator THYE. And try to determine the number of acres?
Mr. THATCHER. A general plan. I certainly do believe that.
Senator THYE. I would not differ too much with you there?
The next question, how do we compensate for not planting?

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