Secretary BENSON. I don't think wheat has been forced out by competing products, like cotton.

Senator JOHNSTON. That result is because of the position the administration takes, particularly the State Department.

Secretary BENSON. No; I think not.

Senator JOHNSTON. Haven't we practically sold large amounts of wheat, then held it back, thereby allowing Canada to come in and sell their wheat?

Secretary BENSON. I think our record will hold up with Canada's and everybody else's. We have done an outstanding job in moving surplus farm commodities in the past 2 or 3 years. During the year, we have moved about 3,300 million.

Senator JOHNSTON. How much did you give away?

Secretary BENSON. We gave some away. I can give you a breakdown. There were some gifts, some trading for foreign currency, some sales for dollars. We have always tried to do the thing we thought was in our best interests.

We have moved large quantities; so much, in fact, that Canada has complained. I think we have to fight, if we are going to regain and keep our foreign markets. That is what we are trying to do, fairly and honestly.

Senator JOHNSTON. Have you not run into some trouble with the State Department in making sales?

Secretary BENSON. The State Department has the responsibility of looking out for our interests with other countries, and we have the interest of moving surplus agricultural commodities. We have had a number of conferences on that. I think we have a good working relationship with them at the present time.

Senator JOHNSTON. At the present time. What do you mean by that?

Secretary BENSON. Just what I said. I think it is better now than it has ever been.

Senator JOHNSTON. But you have had that trouble in the past, evidently.

Secretary BENSON. We have had differences, yes, but no fighting. Senator JOHNSTON. Differences because they didn't want you to sell, but wanted you to give other countries the opportunity to sell.

Secretary BENSON. They have to consider our relationship with other nations, and what it means to us. That is not so much our concern in the Department. Our job is to get rid of surpluses. But I must say they are giving us very excellent cooperation. I am much pleased with the setup we have. We have two committees operating, on which all agencies of the Government are well represented in the handling of these surplus items.

Senator JOHNSTON. Now, I notice you have in the President's veto message, I believe on page 3, "The multiple-price plan of wheat and rice would have adverse effects upon producers of other crops, upon our relations with friendly foreign nations, and upon our consumers." What do you think he meant by that?

Secretary BENSON. I think he meant something like this:

In the first place, the multiple-price plan would have introduced an entirely new approach in our programs. In the past they have been financed on the basis of the taxpayer's money. Presumably, that is on the basis of ability to pay. Under this program, it would be on the

basis of consumption, and the heavy consumers of rice, as we all know, and the heavy consumers of bread, are the low-income people. So the burden of cost would be placed on those least able to pay.

You mentioned the hardship on other crops. Under the program, we would assume there would be quite a lot of wheat that would move into the feed channels in competition with corn and other feed grains. Half the crop would be protected. The rest would move into the market. It would give them an unfair advantage with feed grain and

corn.

The other point-I think you mentioned a third one-there would be, we feel, some repercussions from foreign countries. They would look upon it as dumping. We have antidumping laws in this country. We don't permit agricultural commodities to be dumped in here. We assume there would be the same kind of law in other countries. We are told that would be the same if that bill had been passed.

I think the President is absolutely sound on those three objections he raised to the multiple price plan.

Senator JOHNSTON. What parity does wool get this year?

Secretary BENSON. I can't say, offhand, but wool is a special item, as you know. It is a deficit product. Congress has indicated that it is a strategic fiber and we produce only a small proportion of what we consume. The Congress has set a goal of 300 million pounds for production, and they have authorized us in special legislation to set a support level that will bring forth that production.

Senator JOHNSTON. What is that?

Secretary BENSON. I think it is around 106 this year.

Senator JOHNSTON. Where is wool grown?

Secretary BENSON. Wool is very widely grown. The rain States you are familiar with. The farm flocks produced very heavily in the Middle West, and the industry has been shifting east in the last few years. Cattle has been found to be more profitable in the Western States. Cattle has been increasing, therefore, and sheep decreasing, in the West. The wool has been moving east.

Senator JOHNSTON. But still very little is grown in comparison with the West.

Secretary BENSON. I'll let Mr. Morse comment on that.

Mr. MORSE. The increase has been largely on the smaller farms in the Middle West, and to the East. The decrease in production over recent years has been taking place in the Western States.

Secretary BENSON. I think you will find there has been quite an increase in production in the Eastern States.

Senator JOHNSTON. How about Utah?

Secretary BENSON. Utah has been-if you are insinuating

Senator JOHNSTON. I am not insinuating. I just want to know where the wool grows.

Secretary BENSON. There have been many States more important in production than Utah.

Senator JOHNSTON. Many people in Congress are interested in what they grow in their particular sections of the United States.

Secretary BENSON. This map will show by the size of the dots the relative importance.

Texas is the big State, 45 percent of the total wool production is in Texas. Excuse me. That is in millions of pounds. Out of a total of 133 million pounds, 45 million are in Texas.

Next is Wyoming; then Montana and California are about the same. Ohio shows 9 million.

You see, there is quite a bit through the Midwest. I presume that the Western States will still produce more than the total; that is, the States west of the Mississippi. But the very heavy production down through the Midwest is shown here, and that is moving into the East.

The CHAIRMAN. I see a little speck for Louisiana there. That means how much?

Secretary BENSON. 1.7 million pounds in Virginia; 400,000 pounds in Louisiana.

Senator AIKEN. Mr. Secretary, I think that since the enactment of the wool legislation, which ought to be extended at an early date. because you can't go in for sheep and build fences for just a 2- or 3-year period, the State of Utah has been losing sheep to a slight extent, and the States of South Carolina and Vermont have been gaining. If I recall correctly, South Carolina has, since the enactment of this legislation, set up a wool department, which is intended to encourage production of wool in that State.

I want to say this: Since the small dairy herds have become uneconomical-that is, herds of 8 or 10 or 15 cows-I have noticed that those people find it feasible to convert to sheep, which permits them to take a full-time job and make a good living off the farm, and at the same time maintain what was once a small dairy farm as a sheep farm now. I am not sure the program is perfect. I am certain that it didn't benefit the people in the Rocky Mountain States, where everybody thought it would be of great benefit. It didn't benefit those people. It is benefiting the small farmers of the East, and the sheep are moving east.

I have no further questions.

I would like to say, in regard to the reference of Senator Johnston to the President's message, I have been through it, and I can't find any intimation, inference, insinuation, direct or indirect statement, that he considered politics entered into the preparation of this bill. Senator YOUNG. Mr. Chairman, first let me say to Secretary Benson that I am deeply disappointed that the farm bill was vetoed. This committee and the Congress worked hard and diligently to enact the best possible farm legislation. We held hearings all over the United States, and the bill represented our views and those of farmers over the United States.

Secretary Benson, I disagree with the President, and with you, on most of the reasons for the veto. I would like to discuss just one of them with you. I know there are other committee members who want time here, so I will keep that in mind.

I may say, first, I certainly have no quarrel with you in raising the price support of wheat from 76 percent of parity to approximately 84 percent. That will help a great deal.

Secretary BENSON. I am sorry conditions didn't justify a dollarsand-cents increase, but it just didn't.

Senator YOUNG. Well, it raises the level 19 cents or so over what it was.

One matter I would like to discuss is that of dual parity. You were very much opposed to that; weren't you?

64440-56-pt. 9- -3

Secretary BENSON. Yes.

Senator YOUNG. Do you believe the major provision in determining parity under the modernized parity formula, that of using the average price for the previous 10 years, represents a fair basis for determining parity?

I might explain my views on this a little further. For example, farm prices now generally are about 81 or 82 percent of parity. Secretary BENSON. Eighty-two percent.

Senator YOUNG. If farm prices continued at that level for the next 10 years, that would become parity 10 years from now.

Secretary BENSON. I am going to ask Mr. Paarlberg to comment on that. He has been studying this parity matter. I don't look upon it as being perfect, by any means.

Mr. PAARLBERG. The overall relationship of farm to nonfarm prices would be preserved as it was during 1910 to 1914, so that even if the parity index should stay at present level for a long time, this doesn't mean that parity prices for all commodities would be correspondingly

reduced.

The 10-year period helps to adjust the parity price of 1 commodity as compared with another. But the overall relationship of parity farm and nonfarm prices remains tied to the 1910-14 base.

Senator YOUNG. Would you object to using the 1947-49 base, the same index labor and industry uses, as a base period? That is, using the modernized parity formula, but employing the same base period that labor and industry use.

Secretary BENSON. You mean leave 1910-14 as it is?

Senator YOUNG. You would leave everything in the modernized parity formula as it is, but change that 1 provision; instead of using the average prices for the 10-year period, substitute 1947-49 as a base period.

Secretary BENSON. I think it is important to keep this in one position, so we don't freeze it. I would want to take a good look at that and study it, Senator Young, before expressing a firm opinion on it.

Senator YOUNG. I would like to pass around the table the comparison of parity calculations which was prepared at my request by the Department of Agriculture. It shows how the modernized formula would be effected if we used the 1947-49 base.

Secretary BENSON. Mr. Paarlberg tells me it would have the effect of boosting the price in the neighborhood of

Senator YOUNG. It would boost prices a little bit. And that is a contradiction to a statement you made a moment ago, that the 10-year limit had little effect on the parity level which was established under the modernized parity formula.

Mr. PAARLBERG. The moving parity base, the modernized parity, has resulted in adjusting the parity price of wheat relative to the parity price of corn, hogs, or other commodities.

Senator YOUNG. What is the objection, then, to using the 1947–49 base?

Secretary BENSON. This is something we would have to study very carefully. This was a period when commodities were not in good relationship to each other, because of war conditions. It is a matter we would have to study very carefully, I am sure.

Senator YOUNG. Would it be wrong for agriculture to use that period when labor and industry use it?

Secretary BENSON. As I say, we would have to look very carefully at the price distortions that prevailed then.

Senator YOUNG. I firmly believe and all the facts and figures prove that using this moving average base of the previous 10 years definitely tends to pull down the parity price of all agricultural commodities. I think there is a great principle involved here.

Secretary BENSON. Haven't you introduced this in the form of a bill?

Senator YOUNG. No, I haven't. I wish you would study it, because it does arrive at a figure for most commodities about halfway between the old formula and the modernized parity formula. I think it would reflect a much truer value for all commodities.

The CHAIRMAN. Senator Mundt?

Senator MUNDT. I wonder, Mr. Secretary, if you wouldn't be willing to agree to send the committee a written report of your findings with the specific study on the points raised by Senator Young. I think they are of vital importance and if there are serious deficiencies, we would like to know what they are. It may be that there aren't any deficiencies. If the Secretary would examine them, perhaps we could have a discussion of this very significant aspect of the whole farm program.

Secretary BENSON. If it is the wish of the committee, we shall make a study and report to the committee. It will take some time, though.

Senator YOUNG. We had a provision in the bill that would require the Department to come up with a new parity formula by January 31, 1957. If you can accomplish that without legislation, it would be helpful.

The CHAIRMAN. I wish to say, as far as I was concerned, I did not think it was the intention of the committee to make the dual parity formula a permanent affair. We provided for studies to be made and reports to be made by your Department at a specific date, and with recommendations as to what should be done. The moment you came up to us with changes, it was my intention, I know, and I am sure the intention of the committee, to take heed of whatever studies you made that would reflect a better formula than that which we now have.

Senator AIKEN. I want to say that Senator Young has brought up a matter which has concerned me very much for a long time. I was against the dual parity formula, because I feel whatever formula we have should apply to all commodities, and not have 1 formula for 3 or 4 commodities and another formula for other commodities. Use of the dual parity formula has raised a point that it is unfair to let one segment of our economy choose this particularly favorable base period to work from, and let agriculture take another period which is less favorable to agriculture.

I think Senator Young has a very important point here.

I also think that certain changes in agriculture which have taken effect should come into consideration, such as the use of antibiotics, hormones, and things of that nature. I know it is hard, or almost impossible, to keep up with them, but I would hope this suggestion of Senator Young's would be studied.

Evidently, someone has worked out the results for him which give very fair results.