should be required that the retired land should be planted to soil-building, conservation crops, for the time will come, with our ever-increasing population, when this land will be needed.

I believe that this program should be compulsory. It will be self-defeating if only half of the farmers participate. I know farmers quite well. They are like anyone else. If a farmer thinks that he can gain an advantage by a certain course of action, he will pursue that course no matter what the consequence will be to his fellow farmers. It is to the interest of all farmers that this problem be solved, and every farmer should do his part toward making the solution possible. Most farmers are accustomed to the functions of the county ASC committee and will understand its regulatory powers.

I think some provision should be made to portect the family-size farm. On such a farm it is his own labor that the farmer is paid for. This is not true of the large or corporation farm. There, the labor is a cost, an expense. But not so for the small farmer. Perhaps the size of the farm where the breaking point should be made would be hard to define, owing to various condtions. I believe that a limitation on the amount of money paid to any one farm would be a more practical way.

I want to express my thanks to you, Mr. Chairman, and gentlemen of the committee for giving me your time. I hope my suggestions will be of some value

I hope that you can work out something soon, for the 1956 crop year

to you.
if possible.

STATEMENT FILED BY THE AMERICAN COTTON MANUFACTURERS INSTITUTE Due to the very wide range of items manufactured by the cotton spinning and weaving industry of this country and the world, practically every grade and staple of cotton grown in the United States can be utilized, provided the price relationships among all the various qualities properly reflect the relative spinning value and performance of each individual quality. Accordingly, if cotton is to become and remain competitive both with synthetics and with foreign growths, it is imperative not only that the base price be realistic but also that the price relationships among the many qualities of the product be based on true value.

The price differentials on various qualities of cotton, or "differences" as they are known in the trade, should properly be established by the law of supply and demand. Regardless of the level of the base price support afforded under any support program of the Federal Government, the relationship of the support prices of the various grades and staples should be as free as possible to reflect the changing needs of the consuming establishments and the conditions existing when the crop is grown. Otherwise, cotton faces a very real competitive disadvantage at home with synthetics and abroad with synthetics and foreign growths. The present law establishes Middling %-inch cotton as the base grade for the support program, with premiums and discounts geared to this quality. At the time the law was originally enacted, it was logical that Middling -inch should be the base grade, because the futures contract was based on this quality, and it more nearly represented the average of the crop. Today this particular staple length is produced in very small quantities relative to total production in the country, and is one of the shortest staple cottons in common use. The great bulk of cotton produced and consumed domestically is of considerably higher value than this quality and therefore sells at a premium over it.

Because the base grade and staple (Middling % inch) is at the lower end of the value scale, a permanently artificial and distorted relationship is established between the better qualities of cotton and the poorer. This automatically means that in times when the better qualities are in surplus they command a lower relative price than the base quality, and market demand for the shorter staples is virtually destroyed. The logical result is that the bulk of the short staple cotton goes into the Government loan at an artificially high price in relation to the cotton constituting the bulk of the demand. With relative values distorted when the cotton enters the loan, and with a rapid buildup of carrying charges, this cotton has very little chance of being repossessed and entering normal channels of trade and consumption. Hence, both the Government and the cotton industry as a whole lose.

In order that the differences can properly reflect the spinning value of all qualities of cotton and in order to reestablish markets for all the qualities produced in this country, it is essential that the base grade and staple for purposes

of price support be set at approximately the average grade and staple of production and consumption in this country. In this manner the better qualities will assume normal premiums and the lower qualities will assume normal discounts. We understand that in considering a proper "base grade" for the cotton loan program, various groups have suggested either the "average of the crop" or "Middling 1 inch." Actually, either method would accomplish the basic objective of making possible a realistic and practicable adjustment in quality price differentials. However, to insure maximum efficiency of the loan program and the whole cotton marketing operation, it is our belief that a base of Middling 1 inch is preferable. Our primary reasons for this preference are (1) the "average of the crop" cannot be determined until near the end of the marketing season, meaning that the loan base could not be geared to any current crop; (2) the average of a current year's crop could vary materially from the average of a previous year's crop, making unrealistic and perhaps unfair to the farmers a loan based on "average of the crop"; (3) bearing in mind that both cotton merchants and cotton mills must plan their operation months in advance, rather serious problems could be created throughout the marketing structure by the uncertainty of the loan base from 1 crop year to another; (4) effective with the October 1956 futures market contract, both the New York and New Orleans Cotton Exchanges are changing over to Middling 1 inch as the basis for all cotton futures contracts. In the interest of the overall efficiency of the marketing structure, there is much to be said for having the loan base and the futures contracts geared to the same quality.

If the Congress determines that the loan base should be changed-and it is our strong hope and recommendation that this be done-it will then be necessary for the Department of Agriculture to establish differentials which reflect as accurately as possible the relative values of all grades and staples. A careful examination of historic differences will provide a realistic schedule of such differentials.

A program of this type would encourage the production of the better qualities of cotton which are most in demand, would insure that all stocks accumulated in the support program were more representative of the true supply-demand relationship-in time of shortage as well as in time of surplus, and unquestionably would improve cotton's position as it faces the serious competitive challenges of the future.

The CHAIRMAN. If there is no one else to be heard, the committee will stand in recess until tomorrow at 10 o'clock to meet in executive session.

(Whereupon, at 4:45 p. m., the committee recessed to reconvene at 10 p. m., Tuesday, January 24, 1956.)

(Additional statements filed for the record are as follows:)

STATEMENT FILED BY THE HONORABLE HARLAN HAGEN, REPRESENTATIVE IN CONGRESS FROM THE 14TH CONGRESSIONAL DISTRICT OF CALIFORNIA

I would like to submit my views on some of the proposals before your committee which have been submitted by the Secretary of Agriculture and others with respect to a legislative program for farmers in 1956.

It is very unfortunate that these proposals were not made earlier because in my opinion an inadequate time for their consideration will be had if they are to be acted upon early in this session of Congress. Matters of economic import are extremely complex and it is sometimes difficult to determine exactly what the effect of proposals will be until all elements of the segment of our economy most directly affected have ample time to analyze them. Inasmuch, however, as you have indicated that action will be taken, I submit my reactions at this time.

None of the proposals which have been advanced with strong backing touch the basic problem of crops with respect to which we have an export market, to wit, the problem of recapturing that market by more competitive methods of pricing for export sale. Some solution to this question is basic unless we are to reconcile ourselves to a lower level of United States production permanently or a temporary lower level while waiting for United States consumption to increase with our growth in population.

In my opinion, any propsal for diversion of acreage into a soil-bank program should be completely voluntary unless provision is made to base payments on the dollar productivity of each parcel of land. Unless this feature is in the law, the most efficient and productive farmers will be unduly penalized and if such a feature is not in the law, retirement of acreage should be accomplished strictly on a voluntary basis.

It is my understanding that you are considering programs for limiting participation in support loan programs on the basis either of volume of production or gross value of production. One method of accomplishing this would be to have a cutoff point of a certain amount of gross value beyond which no support loans would be available. Another method would be the decrease of parity level of the support loan with respect to increasing increments of production by a single producer-somewhat the reverse principle of the graduated income tax where the rates proceed upward. If you are seriously considering these proposals, which have merit, if properly devised, first recognition should be given to the problems of the farmer who is most valuable to our economy, both in terms of production and perpetuation of what might be described as an American way of farm life. I am referring to the farmer, who on the basis of past performance or admitted capabilities, is either earning or will shortly earn an income which permits a decent standard of living on the farm or the immediate possibility thereof a standard of living which is appealing to his descendents who should comprise our future farm population. In other words, levels of participation in the maximum support program should not be directed at farmers at the bottom of the economic pile nationwide, who cannot be made into substantial farmers without some kind of a program amounting to a social-welfare program. If basic commodity laws are used to help this latter individual almost entirely, we risk the danger of sinking those farmers who make the largest contribution to our society.

I am thinking now of the farm picture in California. In the light of the costs of farming under irrigation in California, I would suspect that the median farmer would possibly gross anywhere from $60,000 to $100,000 a year, in order to secure an income adequate to support himself and his family. To be certain that a program of cut-off and declining support values would not be destructive to the great bulk of farmers in California, such proposals should not be lower than some figure between $75,000 or $100,000 gross income. I would like to state also that any provisions of this character should recognize that the farmer who owns and operates his own farm should be treated equally with the landowner who operates a farm through tenants or sharecroppers. In other words, if there is to be such a limitation, it should apply to the owner of land whether he farms such land himself or operates it through the device of sharecropping and tenantry.

I am certain that there is a great deal of merit in proposals to base support levels on quality of product. Perhaps in this emergency situation, consideration should be given to rewarding producers of quality products with larger quota allotments to counteract the general reduction in prices which may occur as a result of downgrading the support on lower quality products for which there is no effective demand at present and past support levels. The purpose of such a program is to discourage production of commodities produced solely for sale to the Government and the existence of such a quota bonus would give added incentive to a shift in production, either to higher qualities of the same commodity or a complete cessation of production of that commodity.

I think consideration should be given to a requirement in the law with respect to tenant and sharecropping relationships that a support program will not be available except in the case of arrangements guaranteeing certain minimum protection for the tenant or sharecropper. I am certain that such a requirement would do much to help the economic status of that group of farmers who are in our lowest farm income-tax bracket. I think it is very apparent that some program outside the basic commodity program is necessary to improve the prospects of those farmers who are in a gross income-tax bracket of $2,000 or less. No tinkering with levels of support or similar aspects of basic commodity programs can greatly help such individuals. Their problem is rather one of education and social unlift generally; or the removal of that individual from the classification of a farmer. It is ironic that of the population in this country which has an inadequate diet and presumably could provide an increased market for farm products, approximately half of them are part of the farm population, I am convinced that another aspect of the farm problem which should be touched upon by your committee by way of resolution to the taxing committees

of Congress is the question of Federal tax on transportation. This tax should be eliminated. It is an unnecessary burden on farmers who have to ship their product long distances for sale. Initially, the tax was initiated as a method of raising emergency wartime money and as a discouragement of unnecessary transportation. Both of these justifications have since disappeared.

With respect to programs of buying pork in order to help the price of hogs, it has become apparent that such a program has failed because such purchases are made in the form of purchases of byproducts or canned products. These purchases are inordinately costly in terms of the removal from the market of the raw material which the farmer produces. It is not unreasonable to assume that an aggressive administration could devise means of purchasing fresh meat in the beef or pork categories for distribution directly into the school-lunch and other programs to the end that Government purchases do not largely benefit processors as contrasted with producers.

In considering any overall farm bill, consideration should also be given to the establishment of a program for Federal marketing orders for potatoes. It is my understanding that the potato industry has come to the conclusion that standards are needed for eliminating inferior grades of potatoes from the interstate market to the end that the producer receives the maximum return per unit of product. Members of committee are undoubtedly aware of these proposals advanced by the potato industry nationwide. This is a form of self-help which has worked very satisfactorily with respect to numerous commodities.

Finally, I would like to state that early and prompt action should be had on the House committee bill extending the Sugar Act with modifications. This proposal will assure your sugar producers a larger share of our expanding domestic sugar market and provide an alternate use of United States farm acres in many areas. Its adoption should do much to relieve some of the farm problem in such

areas.

Hon. STUART SYMINGTON,

CHILLICOTHE STATE BANK, Chillicothe, Mo., January 14, 1956.

United States Senator, Washington, D. C.

DEAR SENATOR SYMINGTON: The farmers of Livingston County, Mo., desire to submit the enclosed suggested farm program to you for consideration and action at an early date.

This program was drafted after extensive study and many meetings by the five-man farmer committee listed below. It was approved by the farmers of Livingston County on January 12, at an open countywide meeting with their instructions to forward a copy to you and other interested Members of Congress. We trust that you will find it contains some sound recommendations that you can use immediately in helping solve our farm problem. We urge you to act soon so that our farmers may see the economic results in 1956.

Sincerely yours,

LIVINGSTON COUNTY, MO.

MARION D. MURRAY.
HOLTON RICKENBRODE.
RALPH WIGFIELD.
EVAN HUTCHINSON
EDGAR POPHAM.

The following points are suggested for a broad framework of a farm program which takes the current problems into consideration while moving into the longrange program. These suggestions recognize the existence of (1) large supplies of grain owned or controlled by the Government (2) an economic condition which must be corrected immediately so as to increase the farmer's net income in 1956. This suggested program is built on the following seven specific recommendations:

1. To insure adequate supplies of food for the Nation produced at a fair profit for farmers, it is recommended that a total grain crop acreage allotment be established for each farm. The farmer will be free to make his own decisions as to crops planted. This will permit:

(a) Encouragement of good land use:

(1) Grain crops would be produced in the regions where they could be produced the cheapest with least land damage.

(2) Good rotations could be planned to take into consideration soil, slope, and amount of topsoil left.

(3) More efficient planning would be possible for the grain and roughage needs of the farm operation.

(b) Less Government interference with the farming operations. Only one land acreage measurement will be necessary to determine compliance with the total grain crop acreage allotment, as compared to the multiple measurements necessary under the present system of specific crop allotments.

(c) Greater acceptance by farmers because the program will be voluntary and based entirely on freedom of farmer action. The benefits from cooperation with the program will be such that a majority of farmers will want to participate and thus accomplish the intended results.

The total grain crop acreage allotment for the United States will be established by the Secretary of Agriculture, based upon his estimate of next year's domestic and export needs. The individual farm TGCAA shall be established by the county ASC committee and shall be based on land capability or cropping history, as desired by the landowner.

The following soil bank features are recommended:

(1) All cropland above this TGCAA shall be seeded to adapted grasses and legumes, or some adapted soil-building practice established which is recommended for the area, and the Government shall pay a reasonable share of the cost of establishing the conservation practice.

(2) To further encourage building of soil fertility for future production of food when needed and to further reduce current production and existing surplus supplies, the Secretary of Agriculture shall be authorized to furnish each farmer a quantity of Government-owned corn equivalents in an amount equal to his normal average production for each acre the farmer is willing to reduce below his TGCAA.

2. For compliance with this TGCAA each farmer shall be permitted to receive 100-percent-parity price for his grain in accordance with the following procedure:

(a) All grain for loan purposes will be based on its established feed value with corn rated as 100. This practice will encourage all surplus grains to flow into livestock feed channels with a feed value price relationship.

(b) All grains eligible for 100 percent parity support prices shall be stored in suitable farm storage or in commercial storage supported by warehouse receipts.

3. To prevent further accumulation of grain in storage, the Secretary of Agriculture shall advertise and sell by separate storage lots to the highest bidder once each month, or periodically, all Government-owned grain which is determined to be in excess of 1 year's domestic and export needs on that date. This will prevent unnecessary storage of grain above the national needs for a 12-month period and thus reduce administrative and storage costs. This periodical sale of Government-owned grain will help establish the price of free grain at a level which will encourage participation in the program.

4. Immediate inauguration of a maximum free school lunch program. At the present time, only one-third of our school children participate in the program. To achieve a maximum school lunch program, each schoolchild should have a wide choice of nutritious and high protein value foods, served cafeteria style in amounts according to each child's desires. We feed our children in our public schools mentally, and what better use could be made of our vast supply of surplus wholesome food than to feed them physically one meal each schoolday.

5. It is recommended that a food stamp plan be inaugurated immediately for the old age and other needy groups. This will be wise use of a portion of our present and future surplus food supplies.

6. The disposal of our excess food supplies through our churches to needy foreign nations which cannot buy from any nation should be continued and expanded. Full church control of distribution should be permitted with the Government acting as the donor.

7. Immediate direct economic action: The following specific recommendations are made to alleviate the current economic conditions confronting the farmer and are to be considered only as temporary measures to be used until the farmer is receiving 100-percent parity in the market place:

(a) A direct subsidy payment to the farmer on all hogs, 200 pounds and under sold for slaughter, which will insure parity for the producer.

(b) A direct subsidy payment to the farmer on all good to prime cattle up to 1,000 pounds in weight sold for slaughter which will insure parity for the producer.