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COMMITTEE ON AGRICULTURE AND FORESTRY
ALLEN J. ELLENDER, Louisiana, Chairman
MILTON R. YOUNG, North Dakota
BOURKE B. HICKENLOOPER, Iowa EARLE C. CLEMENTS, Kentucky
KARL E. MU'NDT, South Dakota HUBERT H. HUMPHREY, Minnesota JOHN J. WILLIAMS, Delaware W. KERR SCOTT, North Carolina
ANDREW F. SCHOEPPEL, Kansas
COTYS M. MOUSER, Chief Clerk
THURSDAY, APRIL 19, 1956
UNITED STATES SENATE,
Washington, D. C. The committee met, pursuant to call, at 10 a. m., in room 324, Senate Office Building, Senator Allen J. Ellender (chairman of the committee) presiding.
Present: Senators Ellender, Johnston, Holland, Symington, Aiken, Young, Thye, Mundt, and Williams. The CHAIRMAN. The committee will please come to order.
First, I wish to welcome the new member of the committee, Senator Stuart Symington.
Senator SYMINGTON. Thank you, sir.
The CHAIRMAN. Secretary Benson, the committee thought it wise to call you today in order to discuss with you the proposals outlined by the President in his veto message, by which he intends administratively to increase the price supports on various basic commodities. As Chairman of the Committee I talked to a few members of the committee and suggested that it would be a good thing to have you come and explain to us how you propose to increase these price supports and to take up other matters that were discussed in the veto message of the President.
Now, as I came in, you informed me that you had a prepared statement that you would like to give.
Secretary BENSON. I have a very brief prepared statement, and I can run through it hurriedly and that will give you ample time, I think, for questions.
Thé CHAIRMAN. Would you mind interruptions as we go along?
Secretary BENSON. Whatever you think best. I thought it might be best to get that out of the way and then ask questions.
The CHAIRMAN. If you don't mind, if anybody desires to ask questions as you testify, we might have the record in sequence. That is, we can probably bring out some points as you testify in connection with your statement. You may proceed, Mr. Secretary. STATEMENT OF HON. EZRA TAFT BENSON, SECRETARY OF
AGRICULTURE Secretary BENSON. Mr. Chairman and members of the committee, I appreciate the opportunity to come before this committee to discuss the legislative proposals and the administrative actions outlined by the President in his Monday message regarding H. R. 12. My statement will be brief so as to allow time for questions and discussion.
I wish first to discuss the administrative actions which the President outlined.
Support prices for the basic commodities in 1956 will be set at a level of at least 8212 percent of parity. Tobacco will be supported as voted in the referenda in accordance with existing law. Other basic commodities will be supported as shown in the following table.
The CHAIRMAN. Will you tell us why this administrative action, to which you referred, was decided upon? What was the basis for it?
Secretary BENSON. We have had this under review for a long time. While we set some of these support prices back as early as June, we always look upon these as tentative and we watch the situation right up almost until as late as we can make any adjustments in them. For example, we set the support level on wheat back in early June as I remember. We have been reviewing and watching the situation all along, as the legislation was being considered. We were considering what might possibly be done administratively in the event we would not get the soil back particularly, which was the part of the program which we were particularly anxious to get as a means of getting at the surplus problem which faces us, and which we are all very deeply concerned with.
We recognize that in setting these supports, there is a matter of judgment but there have been these factors we have taken into consideration. In the first place, there have been in the past 3 months, particularly, or 4 months, some rather substantial improvements in farm prices generally. The index went up a point 2 months ago, went up another point a month ago, and there has been some further improvement in April.
Our policy, generally, has been set to set these supports as high as we could consistently.
The CHAIRMAN. Consistent with what?
Secretary Benson. Consistent with moving these products into consumption and not into storage, because we feel that a warehouse is not a market. When we err we try to err on the side of the farmer.
The CHAIRMAN. Mr. Secretary, my office obtained from you some figures indicating the normal supply of basics for 1956. I have before me such a docket, dated April 17. It is indicated that with the total supply of wheat at 1,943,000,000 bushels, the indicated price support level would be 75 percent of parity.
Now, with such a huge supply of wheat on hand, how is it possible for you to raise this support level and at the same time conform to your theory of flexible price supports?