We would do our utmost to move speedily and we feel, of course, this could add substantially to 1956 income. That is what we are all concerned about; to get some increased income for the farmer.

Senator MUNDT. Are you thinking in terms of 50 percent advance payment or more or less?

Secretary BENSON. We have felt it should not be more than that; probably it will be in the neighborhood of 50 percent of estimated total payment. The balance could be made after you completely checked compliance.

Senator MUNDT. Would that apply equally to the acreage reserve and other phases of the soil bank?"

Secretary BENSON. Yes, I would think so. The advance payment would be an annual thing. Of course, as you understand, we would assume, after the first year, we would have the thing in operation. If we had had any bad experience with the advance payment, it could be eliminated later in the second year. We may want to continue advance payments because it would help to provide funds for the purchase of seed, fertilizer, and other things, which the farmer would need to participate in the program.

The CHAIRMAN. Senator Symington?

Senator SYMINGTON. I am very new at this so if I ask a question that sounds elementary, you will forgive me.

Secretary BENSON. Welcome to the committee, Senator.

from a great farming State, sir.

Senator SYMINGTON. Thank you.

You come

As I read these figures, you have increased the parity on wheat and lowered it on corn, rice, cotton, and peanuts.

Secretary BENSON. No; corn has been increased somewhat. Senator SYMINGTON. Well, you have it here as 87 to 86.2 percent. Secretary BENSON. If you are figuring the dollars and cents, the dollars and cents have been reduced on all of them, I believe.

Senator SYMINGTON. Well, now, in the dollars-and-cents part, that interests me. As I am sure you know, cotton is our largest cash crop in Missouri. Not many people realize that.

As I figure it out here roughly with a pencil, talking dollars and cents, which you have brought out previously, sir, you have reduced wheat 4 percent, roughly; corn, 5 percent; and rice, 32 percent. You have reduced cotton 9 percent, the price in dollars and cents, as against 1955. I was wondering what the technical answer to that is.

In other words, if you divide $2.08 into $2, you get 4 percent, roughly, for wheat. If you divide $1.58 into $1.50, you get 5 percent for corn. Then cotton takes the big drop, from 31.7 cents per pound to 28.85 cents, or a 9 percent drop. I was wondering why that was.

Secretary BENSON. We don't approach these on a percentage basis. Senator SYMINGTON. I understand that. It is almost twice as bad for the cotton farmer as it is for the other farmers.

Secretary BENSON. You see, cotton has not had any reduction previously-I mean last year. One of the principal reasons for that was the fact that the 1954 act provided for a set-aside on cotton which improved the situation in our calculations for cotton. Therefore there was no reduction.

Now, this reduction which has been made is very much in line with what the cotton industry has recommended. They recommend, of course, that we move to the average grade and staple. That was, I

think, in the committee print. That would have given a reduction, as I recall, of around 114 cents-something like that. Then it was suggested some further reduction in the support level which would give us a total reduction of around 214 cents.

We had a consultation with some of the Senators around here at their invitation. It has been said that there was an agreement reached. There was no formal agreement. I was invited to discuss it with them. We thought we could get that 21⁄44 cents by moving to average grade and staple level.

This 822-percent support does not give cotton quite the same as we had in mind, but gives approximately the same. That was one of the things that guided us in this. I might say we have talked to some of the Senators from some of the cotton States, the industry itself, and it was thought this was a reasonable adjustment to help us to regain the foreign markets and also to regain what domestic markets we have lost. We hope to recapture a little of the domestic market also.

We think this is in the best interests of the farm industry, and yet the change is not enough to have too serious an impact on the cottongrowing areas.

Senator SYMINGTON. Then in all fairness and with a smile I can say there were no politics involved, in your opinion, at all in the greater price reduction on cotton?

Secretary BENSON. No; I am sure there was not.

Senator SYMINGTON. Thank you, sir.

Now, Mr. Secretary, if I may proceed to another concept.

As you know, the farmers in Missouri have had a right tough time. There was an article written last week by a woman who has been farming some years. Soon after she and her husband started farming, they were able to set themselves up pretty well. I don't know if you saw the article. They are members of the Farm Bureau and they have just about thrown up the sponge. It was in the Saturday Evening Post last week.

Secretary BENSON. I am sorry I didn't see it.

Senator SYMINGTON. If you would have somebody on your staff read it, I would appreciate it.

As I understand, corporate profits are up 32 percent; stock market prices are up 70 percent. Farm prices, I have heard varying figures on, but they are 27 to 40 percent down. I know that the war and the previous policies had something to do with it, and in all candor I ask you this is your fourth year in this job. When do you think that the policies you now have will begin to pan out so that the farmer's position isn't so deplorable, which I am sure we all agree on, as against the tremendous profits in some other segments of the economy? Secretary BENSON. That is a very good question, Senator. I am sure we have all been concerned over the decline in farm prices. The decline has been going on for about 5 years now, the major part of which took place in the early 1950's, as you know. We would all like to see prices higher, and we want to do everything we can that is sound, in the long run to help bring that about.

I mentioned earlier in my testimony that we have been very pleased with the improvement we have had in recent months. The parity index has gone up from 80 in January to 81 in February, then 82 in March. There has been some further strengthening of prices in the last 30 days.

Senator SYMINGTON. You say you mentioned that before. Does that mean you think parity will be higher in April?

Secretary BENSON. It is never safe to predict. We don't see the figure it comes out as an official report of the Department, but by following the commodity markets, there is indication that prices have been strengthening generally and should bring it up. Certainly, we hope so.

Of course, we are willing to do anything we feel is economically sound and good for farmers to get these prices up. It is not only a question of price, however. It is a question of income. You conceivably could have a program which would give increased price, but if you were cut back in your acreage to the point where your volume was down you might have less income. We have seen that in the case of cotton, as you know. The cut has been so severe that even with 100 percent of parity, a farmer could not get the type of income that he needs.

Our problem, then, as I see it, one of the major parts of it, is the expansion of markets and the building of markets. That is why we put so much emphasis on the marketing phase. The job is only half done when the commodity is produced. The other half of the job is marketing.

We have lost a good part of our foreign markets on cotton, I feel, in large part, because of our price measures. Producers are realizing that more and more. So we have to push for markets. A Government warehouse is not a market, so we are trying to do everything we can to push research in marketing and applied marketing, to push the exports of our products, the expansion of markets at home and abroad, and research.

I think the Cotton Council in their study came up with the conclusion that the two solutions to the cotton problem were greater research and some price competition-reduction in price. They have been outresearched and outpriced.

We had the same problem in butter and some of the dairy products 2 years ago. No one likes to see prices go down, but, to face it coldly, we must be competitive if we are going to get any prosperity in agriculture at all.

So we have tried to put the emphasis on a better job of marketing, expansion of markets, regaining of markets we have lost abroad. Then we hope, if we can gain those markets back, prices can come up again and acreage can be expanded. We have a tremendous potential market in this country, you know. Our diets are getting better all the time; we are using more clothes, too. From a longtime aspect, I think there is a favorable outlook.

We mentioned soybeans here today. We had very heavy stocks of edible oil at one time. We have pushed these products, and now the prices of soybeans and cottonseed are well above the support level. Senator SYMINGTON. Thank you, Mr. Secretary. Thank you, Mr. Chairman.

The CHAIRMAN. I desire to ask you a few more questions.

The President in his veto message gave four reasons which are the main reasons for vetoing the bill. I have covered the first one, which is 90-percent-of-parity price supports. The second we mentioned incidentally, that is, the dual-parity formula, which, as I explained to you a bit ago, was not considered to be placed in the bill on a perma

nent basis, but merely to give the Department an opportunity of studying a formula and coming up with legislation that would be more in accord with real concepts of a parity formula. We have been waiting for something on this for quite some time, as you know.

Now, the third objection was to the provision with respect to supports for small feed grains. I thought when we had your own experts before the conference that the administrative features of that provision were so worked out that the program would be administratively feasible. Am I correct in that or not?

Secretary BENSON. I don't know that I could answer that fully, Mr. Chairman. I was not with the committee on that.

The CHAIRMAN. Well, if you will recall, I invited your experts to be with us-Mr. Beach and Mr. Shuman. That is why we had them there, in order to make any proposal that we put into the bill administratively feasible. If there were any bugs in the proposals we were considering, we wanted to know about them so we could take them out. Secretary BENSON. Our objection, however, Mr. Chairman, was based largely on the economic effects of the program, rather than on the administration. We think, economically, it would have been bad to have mandatory supports under feed grains.

The CHAIRMAN. You are still of that opinion?

Secretary BENSON. Yes, very definitely. The more I study it the more I am of that opinion.

The CHAIRMAN. Well, now in 1953 the record shows that 61.2 million acres were planted in those feed grains and the support price was 85 percent of parity.

Then in 1954 the support price remained the same, 85 percent of parity and you had an increase in the number of acres from 61.2 million to 75.2 million.

Then, in 1955 you reduced the price support to 70 percent and still your acreage went up again to 78.8 million. The acreage figures I have used are planted acres in oats and barley added to grain sorghum and rye harvested for grain, and represent acreage planted for grain. How do you account for that?

Secretary BENSON. Well, as a matter of fact, Mr. Chairman, it is largely a question of dumping diverted acres from corn and wheat and cotton onto other crops. The farmer turned to the alternatives he had. In many cases, that was the production of feed grains.

The CHAIRMAN. Well, now, we had a provision in the H. R. 12 that would have done this. It would have given to the farmer his basic acreage related to the amount of acreage he planted in 1953, 1954, and 1955. That would have given an average for those 3 years of 71.7 million acres that could have been planted.

Now, under the program as the committee and as the Congress envisioned it, it would have meant that in order to be able to obtain the 85 percent of parity that we provided, the farmer would have been forced to plant only 85 percent of the base.

Would that not have decreased the production of the grains? Secretary BENSON. Generally speaking, our program on feed grains with the discretionary supports has worked very well. This, of course, as it was proposed in the bill, would have extended the controls to an additional group of crops. If we took acres out of those crops, then they would have been dumped on other crops, so your chain continues.

The CHAIRMAN. What crops, for instance, could they plant, let's in Kansas, outside of these small grains, which are produced in abundance?

Secretary BENSON. Well, I would have to check the particular area. But there is quite a variety of crops.

The CHAIRMAN. Well, you have in Texas and in Kansas and the Dakotas-there, as I have the testimony, were the places where most of this increased acreage was planted, and that was due to the curtailment of wheat acres.

Secretary BENSON. There would be an adverse effect on livestock people, generally, and then eventually there would be an adverse effect on producers of feed grains, themselves. The immediate effect would be to raise the price of feed grains. That would affect poultrymen, dairymen, and cattle people, generally.

The CHAIRMAN. You mean it would reduce the cost of feed?
Secretary BENSON. No.

The CHAIRMAN. How about the man who produces that feed? You wouldn't want to protect him?

Secretary BENSON. Yes, we want to protect him.

To continue, secondly, his income would be depressed because the effect of raising the support levels, and making them mandatory would have the effect of drying up the markets for those very feeds. That is very easy, too, particularly in the case of some of them because we have proven that you can produce rather effectively dairy products and also beef. If the price gets out of line at all the tendency would be for them to turn to forages and grass and less feed grains.

Senator YOUNG. Isn't cheap feed one of the major reasons why we now have so much beef and pork? Isn't an improvement in the price of feed grains one of the objectives of the soil bank?

Secretary BENSON. I think the soil bank will have the effect of reducing feed grains somewhat.

The CHAIRMAN. And increasing the price.

Senator YOUNG. Wouldn't your provision in the soil bank to raise the price of feed grains be objectionable to cattlemen?

Secretary BENSON. It is pretty difficult for the Government to step in as a referee between one group that raises the feeds and one group that uses the feeds.

Senator YOUNG. That provision would have done more than any other in the entire bill to help the small farmer. It is practically the only provision that appealed to the small farmer.

The CHAIRMAN. That is one of the reasons why we put that in the bill as the Senator knows.

Secretary BENSON. The farmer isn't prevented from entering into the soil bank. Why make it compulsory?

The CHAIRMAN. He can't get payments on a lot of acres now. Senator YOUNG. One of the reasons why the smaller farmer can't take part in the soil bank now is that he is already short of acres. Under this provision, if you had raised the support of feed grains to 85 percent of parity, which is not unreasonable, and pay the farmer to put 15 percent of his acres in the soil bank, he could have received a payment and been able to afford participation in the soil bank. I can see little now in the soil bank to attract the small farmer who is already short of acres.