from that which you would use to continue the practice of feeding livestock? Would you want to fence it off? Mr. JONES. We feel that the importance of curtailing our production is sufficient that that point is secondary, and that is why we put in "no utilization." If a man wanted to fence, of course, he could, under our proposal. The CHAIRMAN. But the "no utilization" would be only on the 20 percent that you say ought to be set aside for the bank? Mr. JONES. Yes. The CHAIRMAN. It does not envision all of your land that you lay in fallow? Mr. JONES. No. The CHAIRMAN. But you would want to maintain your right to utilize the land that is not in the land bank for purposes of feeding cattle? Mr. JONES. Yes. Senator AIKEN. What do you get for feed on that land that is lying fallow for a year there? You cannot get much feed. Is it volunteer wheat? Or what do they find to eat on it? You certainly could not get any grass in 1 year. Mr. JONES. There is no feed other than around the fence rows, principally. Senator AIKEN. There is not enough to amount to much there? Mr. JONES. No. It amounts to very little. Of course, the ground is plowed or tilled either late in the fall or early in the spring to form a dust mulch on top, and that dust mulch is supposed to preserve the moisture that has fallen during the winter and store it in the soil for the planting next fall for our winter wheat crop. So we are maintaining or attempting to maintain a dust mulch on top of the ground. Weeds that grow there are tilled by a tool such as a rod weeder, that is designed to take those weeds off the ground. The fallow end of it would not support one head of cattle, say, to 100 acres. Senator AIKEN. You would not have the problem that they would have in taking it out of production in Missouri or eastern KansasMr. JONES. No. Senator AIKEN (continuing). Where it would quickly come into feed? Mr. JONES. No; we would not. However, we wish to recognize that problem and say that if that were a substantial problem, we would be willing to go along with the program that controlled the numbers of animal units. Senator AIKEN. I think under the Secretary's proposal that he would have the authority to require fencing where fencing was needed. Mr. JONES. Would he pay for it? Senator AIKEN. That would have to be arranged. The CHAIRMAN. You would have to move that fence every year. Mr. JONES. Our land-bank plan also requests the Government to pay costs involved in seeding these grounds down to grasses that were required. Also in our area, we have certain dry sections in which we are not able to establish grasses, or it is very difficult to do so. But our stubble and volunteer wheat and a weed called cheat grass that comes into that stubble will protect it from blowing in those dry areas, and in such areas we would like to be able to classify that as land set aside in the land bank, but not to receive payment, or not ask payment, for seeding grasses down on it. The next portion of our program deals with pricing of commodities. We have undertaken to deal only with wheat. Our State supports the National Wheat Association's position in principle of a multiplepricing concept. We feel that full parity on 480 million bushels of our wheat, which is our present domestic consumption, and has been maintained at approximately that level for a number of years, is a fair return for that portion of our crop. We do not feel that this would in any way effect the price of bread to any great extent, since only 3 cents in a 20-cent loaf of bread is involved in the price of wheat. We would like, in our pricing system, to return to the 1910-14 base period formerly used under the old system of calculating parity. Under this new system, we are receiving a drop of 37 cents per bushel, and it does not seem to be a true appraisal of our conditions, when every day we are faced with the purchase of labor and goods which have increased in some instances over a period of 10 years as much as 130 percent. Senator AIKEN. Under that you might have some difficulty with the producers of other commodities. You see, the value of all farm commodities adds up to 100. Mr. JONES. Yes. Senator AIKEN. And the parity formula establishes the relationship of one commodity to another within that 100-percent total. Mr. JONES. Yes.* Senator AIKEN. Of course, when the parity price of one commodity is raised, it has the effect of lowering the parity price of one or more other commodities, and that is one of our major problems, because every commodity grower looks out for his own as well as he can. Mr. JONES. Yes. Senator AIKEN. And most of them do a pretty good job, and that is what makes it difficult for the committee. Mr. JONES. We are requesting the 1910-14 parity only for wheat. We did not mean that all commodities should return to it. Senator AIKEN. Well, they could not The CHAIRMAN. The only ones that would benefit from that formula at the moment would be cotton and wheat. Senator AIKEN. And cotton would not benefit too much. The CHAIRMAN. About a cent a pound. Senator AIKEN. About a cent a pound. Wheat would benefit somewhat. Mr. JONES. Wheat would benefit 37 cents a bushel, which is a very sizable sum. Senator AIKEN. That formula, which had the support of all the organizations, did have the effect of reducing the parity price of the grains and increasing the parity price of those commodities that were still produced by hand labor, more or less. The CHAIRMAN. Proceed, Mr. Jones. Mr. JONES. We also feel that our export market of 270 million bushels should be maintained at a price not less than 60 percent of old parity. We, of course, would like to see our export market in creased in wheat. After extensive investigation, we believe that we will do well to maintain what we now have. The inherent difficulties with any program of dumping wheat on the world market, thus raising the animosity of the State Department, we think could be overcome by putting a floor of 60 percent of old parity under the price. Senator AIKEN. That is about what it is selling for now, is it not, on the world market, $1.80 or $1.85, something along in there? Mr. JONES. The last wheat sold out of Portland under the Commodity Credit's price I think was $1.30 per bushel. Senator AIKEN. $1.30? Mr. JONES. $1.30. Senator AIKEN. For export? Mr. JONES. Yes. I think that hit a new low. We feel that wheat going into feed should be sold at a value equivalent to that of corn. I think that has been gone over by prior witnesses, and I will not elaborate on it. The CHAIRMAN. How would you arrange that? Would you take wheat on which you received support, assuming it were fixed at 90 percent of parity? Mr. JONES. We ask for 100 on the domestic market. The CHAIRMAN. Yes. That is the domestic? Mr. JONES. Yes. The CHAIRMAN. Now, your plan envisions 100 percent of parity on that part of your crop which is consumed domestically? Mr. JONES. Yes. The CHAIRMAN. And the rest of it is to be sold possibly abroad with a floor of 60 percent? Mr. JONES. Yes. The CHAIRMAN. And with the further understanding that wheat that is not consumed domestically could be sold as feed, provided you get an equivalent to what other feeds are obtaining? Mr. JONES. Yes. We understood that the corn man has been long concerned with a two-price system because he feared that cheap wheat might cut into his market, and we do not wish to alarm him over that. We would just like to tie our wheat to that price of corn, whatever it may be. Now we are producing barley. Cotton acreage, I imagine, that is diverted, is producing sorghum, and oats is up. The CHAIRMAN. Soybeans. Mr. JONES. And soybeans. All of those grains are competing with the corn men. Under our program, we would go back to the 1952-53 base and curtail the production of wheat and the rest of the feed grains to short the market 500 million bushels. The CHAIRMAN. In order to induce the farmers to enter into such programs on all grains, would you support all grains at a certain level? Mr. JONES. Yes. The CHAIRMAN. What would that level be? Mr. JONES. Well, we have not attempted to price grains other than wheat. We feel that should be up to the producers of those grains, to make their suggestions along that line. My personal opinion on it would be that they should be supported at 100 percent of whatever their parity might be." The CHAIRMAN. On all grains that they produce? Mr. JONES. Yes. The CHAIRMAN. Proceed. Senator AIKEN. You are not, however, advocating just the same multiple-price system as other witnesses have done, and which is supported by the National Grange, are you? Mr. JONES. These are the variations that I mentioned. Senator AIKEN. The same ones? Mr. JONES. I beg your pardon? Senator AIKEN. Would not Oregon and Washington get the short end of that deal? Mr. JONES. We certainly did not intend to. Senator AIKEN. No. I know. But we will say this: Suppose a grower in North Dakota raises 1,000 bushels and he sells that 1,000 bushels of hard spring wheat at-well, they have been getting what price? Around $2.15 a bushel? Call it $2.10 to figure easier. He would get $2,100 for that. Now, he would be entitled to full parity on 550 bushels, roughly. Mr. JONES. How many bushels did you start with? Senator AIKEN. 1,000 bushels. Mr. JONES. Yes. Senator AIKEN. He would be entitled to full parity on 550 bushels. Then we will say that the average price of wheat was $1.70. Call parity $2 for figuring here. The average selling price for the whole country is $1.70. I think that will be fairly liberal, with parity at $2. That means that the quota producer would get 30 cents a bushel more. That would give him another $300. Let me see. No. He would get 30 cents a bushel more on his 550 bushels. That would be $165, would it not? And he would get $2,265. Now, if an Oregon grower or Washington grower had 1,000 bushels and he sold it all for $1.70, he would get $2 a bushel for 550 bushels, which would be $1,100, and then he would get $1.70 a bushel for 450 bushels. That would be roughly $700. For 1,000 bushels of wheat he would get $1,800, and your Dakota or Kansas or Nebraska producer would get $2,265. There would be $400 or $500 difference there. Mr. JONES. We have that difference now, Senator. Of course, it costs us approximately $1 a hundred pounds to get wheat from the State of Washington, say, to the Atlantic seaboard here. And in the price-support system those differences are taken into account, not to that degree, but we are receiving less, of course, than your South Dakota grower. Senator AIKEN. You are getting less now? Mr. JONES. Yes. And under our program, on our rate of raising wheat, we would get approximately $1.90 a bushel for the average bushel that we sold which, of course, is considerably better than we are doing now or are faced with doing. So, also, we are recommending that we go back to the 1910-14 parity. I believe you were using new parity figures there, were you not, present-day ones? Senator AIKEN. I was using parity figures picked out of the air. The old parity figure was $2.50. 64440-56pt. 8-39 Mr. JONES. Yes; that is right. The CHAIRMAN. Proceed. Mr. JONES. The present program of disposing of our surpluses, we feel, has some very good points in it. We like such things as selling grains to needy families in the United States, and for school lunches, and programs of that type. We feel that our export market should continue to be pushed as it has been. But we feel that this surplus has to be reduced much more rapidly than programs of that type are going to do. And it was for that reason that we called for the removal of this 500 million bushels from our surplus of stored corn, wheat, and other feed grains to go into the market each year. A 20-percent reduction, according to our calculations, should leave us short this amount of grain, thereby removing these surpluses without depressing the feed market. I noticed quite a bit of comment about Senator Young's support of a program of putting surplus grains on the feed market, thus depressing the price. Under our program the feed market would be short this amount of wheat that we are proposing to remove from the surplus, and the price could be controlled by the agency putting it on the market. They could regulate that in any level they chose up to what the support market was. I would like to emphasize that point again, because I have not seen any program proposed before which would not, when they attempted to bring surpluses on the market, result in depressing the prices in the market. Our program, you will notice, calls for a percentage reduction that will leave the market short this 500 million bushels each year. And we feel that by shoving this grain into our own economy, we tend to build up our country rather than putting it abroad at sale prices to build up other countries. We have even seen a statement that we should sell behind the Iron Curtain. We feel that rather than to accumulate storage charges, interest costs, and depreciation on the taxpayer, or sacrifice this grain to some Iron Curtain countries, that it should be used to build up our own country. We also believe that these surplus grains could not be moved into the world market in excess of present quantities that are being moved without disrupting world markets, with accompanying difficulties with our State Department. Therefore, if we are going to solve our surplus problem, we cannot go heavier in export sales than we are already going without a disruption of our relations with certain other countries, such as Australia, whose economy is tied largely to wheat and wool, or even our Canadian neighbor, whose economy is tied to wheat and lumber. But under our program, we are not advocating or not requiringwe hope, of course, our foreign market will develop, but 270 million bushels a year going into the foreign market will establish our position so that this 500 million bushels will be moved out of surplus into our own economy without disruption of the foreign-trade situation. The moneys received from the sale of these grains to our own farmers would be put into a fund to pay the costs of the land-bank program. One and one-half billion bushels of feed grains we feel must be moved over a period of the next few years to get us out from |