It strikes me that the sheep people ought to try to strive to help themselves by trying to get good quality products so that they can get a good price for whatever they produce, so as to, in a measure, decrease the cost to the Government.

As you know, as I understand the law, the wool would be sold at whatever the market will bring, and the difference between what the market brings and what is fixed up here, through the Department of Agriculture, will be paid by the Government.

If those payments grow bigger and bigger, you may have a kickback from Congress because we would have to appropriate that almost every year, don't you see, and while you are starting with a new program, as a member the Senate Agriculture Committee, who has been serving on that committee for 19 years, my advice would be that the farmers get together and try to make that program work so that it will not cost the Government too much money.

Thank you.

Mr. Roberts.

STATEMENT OF DELMAR ROBERTS, PRESIDENT, NEW MEXICO FARM AND LIVESTOCK BUREAU, ANTHONY, N. MEX.

Mr. ROBERTS. Mr. Chairman and Senator Anderson and Congressman Dempsey, in the light of the testimony that has gone before, a lot of repetition might appear in my statement, and with your permission I will merely file my statement and comment on it just on the parts in it, just comment on it.

The CHAIRMAN. I will appreciate that, Mr. Roberts.

Mr. ROBERTS. We might save a little time.

The CHAIRMAN. I notice you are a farmer operating a 300-acre farm in Mesilla Valley in southern New Mexico.

Mr. ROBERTS. My impression-I am speaking primarily as a farm operator-I appreciate the opportunity of making this statement. The CHAIRMAN. Your statement will be printed in the record at this point, in the permanent record, when we have it printed.

Mr. ROBERTS. I think as we go into this program, one of the prime things facing the farmers today is this cost of production item, and we are faced with these high fixed costs, taxes, water charges, and a great many others that do not vary regardless of the size of income.

We are taking an awful lot of time in this country, it seems to me, discussing price supports. I do not believe any level of price supports, whether it be flexible or whether it be 90 percent, is going to work in this country unless we have implementing programs going along with that to support such a program.

Now, we have our State Department which apparently is not cooperating in the sale of our surpluses at any price.

We have our foreign-aid programs where we are spending quite a bit of money, we are sending technicians and all kinds of support to foreign countries, helping them produce the very commodities that we have in surplus here today. That is not going to help agriculture and solve our surplus problem in this country.

Now, it has been mentioned here, and I think you are familiar with this extra long staple-cotton program. We tried something there, and it did not work.

We asked Congress for 75 percent support on that cotton. You gave it to us. We thought we were going to compete with Egypt, so we got the 75 percent support, which put our level at that time in competition with Egypt.

We also started a self-help program whereby we assessed the producers of extra long cotton $3 a bale on a promotion program. What happened? Did we solve anything? We did not solve a thing. Egypt dropped the price down below us and keeps it there below us, so I do not know what level will work. Seventy-five percent in that case did not work.

Maybe it will take

50, 60, but I do know there is a level beyond which we cannot go as producers.

I merely use that as an illustration as to how a price-support program might react in the cotton business, and I am a cotton producer. Senator ANDERSON. I think you ought to make plain, Mr. Roberts, that the level was 90 percent, and you voluntarily asked that it be dropped to 75 percent in order that you would get competitive with Egypt. As soon as you did that, Egypt dropped its price more to get down below you.

Mr. ROBERTS. That is right.

We are under very rigid acreage controls on this, very rigid.
The CHAIRMAN. Have you any solution to the problem?

Mr. ROBERTS. I think it would help a great deal if we could share our problem with Egypt. We do not ask for Egypt to eliminate a 90,000-bale import. We only use in this country about 120,000 bales of that particular variety cotton.

Is it fair to tell the producers, "Now, you cannot produce but 30,000 bales in this country? We are going to import 90,000 bales," and expect us to compete under any kind of program that we can conceive of? I do not think we can do it.

I think it is only fair to say to Egypt, "We are going to share this. The producers are going to cut their acreage and we are going to cut imports."

The CHAIRMAN. Do you know our consumption requirements, what they are, for the record?

Mr. ROBERTS. About 120,000 bales annually in this country.
The CHAIRMAN. How much are we now producing?

Mr. ROBERTS. We are producing now between thirty-five, forty thousand bales.

The CHAIRMAN. What would be the limitation you would put on production; how many bales?

Senator ANDERSON. He was suggesting a limitation on Egypt. The CHAIRMAN. I know; you say our consumption requirements are 120.000 bales?

Mr. ROBERTS. Yes, sir.

The CHAIRMAN. And we produce from thirty to forty thousand? Mr. ROBERTS. Yes.

The CHAIRMAN. Your idea would be to let Egypt come in with just a sufficient sum, or whoever else produces, so as to fill our consumption requirements?

Mr. ROBERTS. We would like to see Egypt, Senator, reduced about 20,000 bales.

The CHAIRMAN. I understand. Twenty thousand bales? All right. How much production would you expect us to make available for the home market?

Mr. ROBERTS. Well, on that ratio we still produce 40,000 and import 70,000; is that what you are getting at, Senator?

The CHAIRMAN. Yes. Would you want to increase the amount to be produced by your own people?

Mr. ROBERTS. We hope we can get in that position.

The CHAIRMAN. I see. But how much, that is the point, because you know there is such a thing, we hear about a two-way street in trade. If you do not trade with foreigners they will not buy things we have.

Mr. ROBERTS. That will mean an increase to us to that extent; we need 120,000 bales. If we bring in 70,000 from Egypt, why can't we be increased up to 50,000, and there is your 120,000.

The CHAIRMAN. So you would want about 50,000 bales out of 120,000?

Mr. ROBERTS. Yes.

The CHAIRMAN. All right.

Let me ask you another thing: Would you expect a pricehow much would you expect as a price on that?

Mr. ROBERTS. Seventy-five percent of parity.

The CHAIRMAN. Seventy-five percent of parity?

Mr. ROBERTS. Yes, sir.

The CHAIRMAN. All right.

As a maximum?

Mr. ROBERTS. Yes, sir.

We have asked for that. We make no request to change that.
The CHAIRMAN. All right, proceed.

Mr. ROBERTS. Now, we come to the problem of what we are going to do with the surpluses, and that, to me, seems to be the crux of the whole situation. I think everybody here this morning, and you, agree to that.

The question of how are we going to get rid of these surpluses, are we going to subsidize the producers by various subsidy payments for one thing or another or subsidize them for not doing this and doing that, are we going to try to subsidize the Commodity Credit Corporation in such a way that they can move the stuff?

Now, the Secretary has considerable latitude, as I understand, in moving some of these surpluses on foreign markets, and he has not been too successful at it; and I question very highly whether subsidizing the producer to any great extent is going to solve this surplus problem.

Unless we find the markets-and I think one of the most essential things in support of any farm program is that we must have an aggressive program, fully participated in by all the departments of Government, in moving commodities into foreign trade. I do not mean dumping. We certainly are not in favor of dumping; but we have got to be more competitive on the foreign market.

I think that is one thing that is a part of any agricultural program that we work out in the years ahead.

We have been considering the soil-bank program considerably here in New Mexico, and I think probably we will have a position on it by the end of the month when we have our State annual meeting.

The CHAIRMAN. What do you think about it?

Mr. ROBERTS. I think it has a great deal of merit, Senator, and it has some possibilities.

The only thing in the back of my mind is what is it going to cost, and what rates are you going to make the payments on these acres that we take out of production.

If we are going to include water charges and taxes and, possibly, an income of some kind, where can that be when you consider how many acres we want to take out.

It is a tremendous sum, and I do not think if you go to a farmer and say if you come to me and say "Take out 10 percent of your land" that is 30 acres, and "now we are going to pay you those charges," that is not going to affect my operation one whit because the amount of money involved there might be $72 or $8 an acre, and in the operation of a farm that is not the answer, Senator. I mean, that is not enough, any more than a conservation payment.

The CHAIRMAN. Even at a minimum rate our estimates on what it would cost have run from a half billion to a billion and a half dollars.

Mr. ROBERTS. If we could spend that money, sir, in moving our commodities in one way or another into the markets, I think we would accomplish our purpose better, not that I am not in favor of the soil bank; I think it has some very good advantages.

The CHAIRMAN. Well, we have spent almost that in trying to move what we have.

Mr. ROBERTS. Yes.

The CHAIRMAN. We have marked off a lot of milk losses, losses on milk, losses on butter and cheese, and I think some eggs, too, and so far we have not moved as much as I thought we should.

We could move today $1,700 million, but it has been slow for the reason that the folks abroad expect us to give it to them. We have got to bargain with them.

Then, as you pointed out a while ago, we have the State Department to deal with. They are more interested in foreign production than in our own domestic farmers here.

So we will have to find some way to whip the State Department into line or get them to our viewpoint, if we can.

Now, that is going to be something to be worked on and determining how it is to be done will be difficult.

Mr. ROBERTS. If we want to consider some help, if we consider the proposal given some time ago about income taxes of farmers, we have

years and low years, and when we have those high years our taxes are exceedingly high; when we have off years, we are subject to the elements and the weather, and we have good and we have bad crop years, and our taxes hit us hard in a good year; and if something could be worked out so that we could more or less stabilize our income taxes, over the good and the bad, average them out, I think it would be a big help to agriculture.

The CHAIRMAN. If you could do that to agriculture, wouldn't you have to do it with industry and everybody else because it would be pretty difficult to write up-in fact, I do not know that it would be legal to write up a program on income taxes that would not apply to all the same.

Mr. ROBERTS. Well, that is true.

The CHAIRMAN. That is a problem.

Another thing, of course, such a problem would not come before our committee. You have to consult with the Finance Committee. Senator ANDERSON. But, Mr. Roberts, industry does have provisions for carrying forward and carrying back losses.

Mr. ROBERTS. That is right.

Senator ANDERSON. I think I read where a prominent industrialist had bought a motion picture group so he could get a $45 million tax loss in some other venture. That is not available to agriculture.

Mr. ROBERTS. No, sir.

Senator ANDERSON. It might be possible to work out a program of carrying forward and carrying back losses.

I would just like to throw in here a word and say that when you said. it was difficult to get things from the State Department, that Senator Ellender knows that I have been working in a group with Senator Eastland in an attempt to see if we cannot break down some of this resistanc to the moving of our products into other countries.

We have had meetings with the State Department people and meetings at the White House and it is a very, very hard thing to get anything actually done.

The State Department smiles at you most cordially, and never does a thing toward moving these surplus commodities.

They do have a problem, a hard and difficult problem. We are going to have to have a situation, I think, some day wherein the Secretary of Agriculture has the right to sell our surpluses where and when he pleases and at whatever price he deems necessary.

Mr. ROBERTS. We have arrived at this surplus situation over quite a number of years and I think we would be extremely optimistic if we thought we were going to move them out quickly.

I think the program we have has got to be long term in that respect, and as fast as we can do it.

Then I think, too, in this agricultural picture, there is a two-part program in this. Government has a responsibility to the farmers. and ranchers of the Nation and we have the responsibility, too. We can improve standards and qualities. You just mentioned them a minute ago. I am for that and I think we have a long way to go in improving our marketing facilities and improving our grades and our standards.

Mr. Cole brought it out in cotton on various qualities.

You have it in wheat. You do not have surpluses in some of the high grades of wheat. This durum wheat, and that type of commodity, you do not have surpluses; so we should try to balance these out and eliminate the production or cut the production, I should say, of those items that are not readily salable, and I am for that.

The CHAIRMAN. Well, I do not know whether I have stated this or not at this hearing-if I have, I will repeat it--but I find in these hearings, in several States of the Northwest, as well as the North, that in the production of wheat, where people who had made large sums, large profits, in contracts, contracting work, and in the professions, went out and bought farms. They did not ask how much it cost. They bought it. Instead of moving on it, they hired somebody to plow it, to disc it, to plant the farm, let it grow and then when harvesting time came, he simply hired a harvesting combine to harvest it.