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idle or land in soil improvement crops not harvested or pastured; and, in addition, have about 24 million acres of land that is summer fallow and not producing a crop.

The CHAIRMAN. Is it not true that summer fallow is done by farmers in order to be able to plant !

Mr. GEHLBACH. And a good practice.
The CHAIRMAX. That is a necessity.

Mr. GEHLBACH. We do not question that at all. But we do question this, Senator Ellender: How effective would a program be that would allow farmers to place into an acreage reserve the 54 million acres that are already retired from crop production ? Are we going to reduce surplus if we merely pay farmers to place acres they are not now using for crops into an acreage or conservation reserve?

The CHAIRMAN. In regard to conservation reserve, it would have to be on a long term-he would have to sign a contract for 10 or 15 years. So your statement there would not apply.

Mr. GEHLBACH. But even for a conservation reserve, what will keep farmers from putting in their idle acres or their soil improvement croplands that they are already not harvesting!

The CHAIRMAN. The acreage reserve is to be put in a different category.

Mr. GEHLBACH. I know it is.
The CHAIRMAN. Entirely different.

The CHAIRMAN. That is to be practiced by the farmer from 1 to 3 years or such a time as we can consume or reduce our surplus; that is the purpose of it.

Mr. GEHLBACH. I understand, but I ask this question: We do not mean to be critical. We are trying to picture the soil-bank plan as we have proposed it, to be an effective program for agriculture.

The CHAIRMAN. All right; let us proceed.

Mr. GEHLBACH. And we put this question, and maybe Congress can do this in the implementation: How can we keep the present 54 million acres that are in soil improvement crops, not harvested for hay and pasture at the present time, or the temporarily idle land that is within the cropland, or the present acreage of summer fallow land that is in the various agricultural regions—how can we keep that acreage from becoming the proposed 25 million acres of acreage reserve and the possible 20 to 30 million acres of conservation reserve land, to where if it uses up the proposed 45 million acres and receives ill of this Federal money when farmers can actually increase substitute crops which in the past have been our diverted acres; how can we ever have an effective program? We

say it will not adjust production at all. It may even increase production.


Now we would like to take up the handling of present surpluses. It is very important that these surpluses not be brought back onto farms or into the market until we have an effective productionadjustment program.

İf farmers are paid certificates that would release Government surpluses, while at the same time they merely shift crop acreages instead

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of reducing overall production, we might find farm market prices going to even lower levels.

It is generally agreed that a 10 percent increase in the supply of grain is associated with a 20 percent decrease in price. Livestock prices show greater change in relation to supply than do grain prices. For livestock, a 10 percent increase in supply is associated with a 25 percent decrease in price. The untimely release of surplus wheat, corn, and other feed grains could seriously overexpand livestock production.

We fear that many believe our problem is Government-held surpluses; yet surpluses out on farms do more to depress prices than those held by the Government.

Shifting our Government-held surpluses onto the shoulders of farmers would only depress prices still further. The quickest way to defeat the real operation of a soil bank is to have these Government surpluses at reduced prices become the soil bank payment for land currently out of the production of basic crops.

The basic concept of storing surpluses as fertility in the soil, instead of commodities in warehouses, approaches the problem at its sources, at the soil.

The key to our agricultural problem is production adjustment, and it is through this means that the soil bank approach proposed to maintain net farm earnings.

At this point I would like to have incorporated into the record and for the use of the committee, three figure diagrams that I did not have the opportunity to reprint because my printing facilities could only take typing to prepare a statement for this committee, but this is a clipping of a reprint from the Prairie Farmer, soil bank article, that was published in the Corn Belt, out of Chicago, in March of 1955.

The CHAIRMAN. All right; that can be filed.

Mr. GEHLBACH. Could it be made a part of the record at this point?

The CHAIRMAN. Yes, sir; of the printed record.
Mr. GEHLBACH. Yes, sir.
(The clipping is as follows:)

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[Clipping from reprint of Prairie Farmer soll bank article, March 1955)

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Mr. GEHLBACH. I think the diagrams there are very illustrative of what we are meaning in our original soil bank plan as we have proposed it, as I appeared before the House Agriculture Committee on October 17, 1952.

And by the way, I have here, in my folder, the letter from a farmer in western Illinois when we asked to have a name for our proposalI have here the letter that named the proposal “the soil bank plan," you

should ever care to see it. We are not meaning to take credit for the name, necessarily. It isn't a case of who gets credit as to who started what. What we are meaning to testify before this committee for is to make sure that we can get the best, most efficient, and most simple agricultural program for the American farmer for all of the regions and not only for some one particular region or some one particular commodity.



We believe the following procedure might be more effective than the acreage reserve program as proposed. Instead of the acreage reserve being a part of the allotted crop acreage, make it an additional acreage, above a minimum base, of soil-building crops. This would prevent farmers from substituting acreage that is already in hay and pasture and in this way reduce all cash crops in oversupply.

Instead of the acreage reserve becoming complicated and tied in with individual crop acreage allotments, it must be simple and bold. The soil bank plan is concerned with the acreage of only one class of crops: the soil-building crops.

As these crops are expanded, the acreage of cash crops in surplus is reduced. An effective soil-bank plan can be just this simple. Why should the Corn Belt be excluded when the soil-bank plan could operate so well to adjust production? We dare not let farmers produce themselves into price destruction.

The soil-bank plan as proposed by the Soil-Bank Association would:

1. Establish a minimum base for hay, pasture, and soil-building crops for the various agricultural regions.

2. Offer incentive payments for soil-building acres in excess of this minimum base.

3. Establish the soil-building base for an individual farm in relation to soil class, and it would not be tied to an individual farmer's historical acreage:

4. Give all individual farms on comparable land classes a comparable proportionate base and give opportunity to earn soil-bank incentive payments for an additional acreage of soil building.

The CHAIRMAN. Would you apply that only to those you shift?
Mr. GEHLBACH. No, no.
The CHAIRMAN. To all of them?

Mr. GEHLBACH. The thing that bothers us tremendously is as folks are testifying in regard to the acreage reserve they seem to have in mind the high-yielding acre and shifting it out of production and think in terms they need a lot of money to shift that high-yielding

Our approach is this: Let us shift the low-yielding acres on land that needs soil building into the soil-bank plan. And we have lots


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of acres in this country-I am sure I know we do in the Corn Beltthat with lower yields and lower fertility make no profit at all—and we plan that this incentive payment, if we can outweigh the lowyielding acres and those that are making losses instead of profits-if we can shift those into fertility building and really make a bold shift of that type of land we will protect net earnings for farmers and then build fertility on the proper acres.

The CHAIRMAN. Will you answer my question? On the percentage you say that ought to be set aside for soil building, what incentive would you give for that-anything?

Mr. GEHLBACH. Yes. We would pay a dollar incentive.

The CHAIRMAN. All right. Would you increase the incentive as to more acres shifted to soil building?

Mr. GEHLBACH. No. Not on a sliding scale.
The CHAIRMAN. The same thing.
Mr. GEHLBACH. I would put it on one level.
The CHAIRMAN. One level?

The CHAIRMAN. That would have to be done on the voluntary basis?

Mr. GEHLBACH. One level for a comparable grade of land.
The CHAIRMAN. Would that be done on a voluntary basis?

Mr. GEHLBACH. We will come to our methods of bringing about compliance a little bit later in the statement.

The CHAIRMAN. Go ahead then.

Mr. GEHLBACH. 5. Provide incentive payments, that relate to the value of crops harvested per acre of cropland, to outweigh net profits and not gross profits per acre. This, I think, is well covered in the President's message.

6. Allow level, highly productive land to receive higher incentive payments on fewer acres, while rolling and less productive land would receive somewhat lower per-acre payments, but on more acres.

7. Provide commodity loans at levels adjusted to the degree of soil. building compliance on an individual farm.


Incentive payments should be designed so as to discourage overproduction of roughage-consuming livestock. For example, a farmer expanding his acreage of soil-building crops and using them for feed would be given only a first payment.

If this acreage were used solely as fertility, he would be given a fertility-reserve payment in addition to the first payment. A most successful way to direct America is the use of the American dollar.

You can legislate laws forbidding the use of forage acres for hay and pasture, but who will drive the cows out of the forbidden area at midnight? It would seem much easier to pay for the shift in land use after the shift is made and finally make the fertility reserve payment only if the forage were not fed.

The dairy cows eating this extra forage will have to show promise of a substantial profit or a farmer may send them to market and take his dollar-incentive payment today rather than milk cows and hope for a profit tomorrow.

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