While this is not a direct problem of the livestock industry, it is certainly a most important indirect problem, and one which is and will definitely affect livestock production and market trends.

Early in 1952 when the livestock industry suffered severe price setbacks, a general movement developed through the West to urge that the Federal Government place some type of price supports on live cattle. This movement was strongly opposed by all of the recognized and established livestock associations under the leadership of the American National Cattlemen's Association. The New Mexico Cattle Growers' Association likewise opposed this movement and instead recommended that the industry attempt to solve its own problems through the development of better markets and a self-help program which would require a minimum of Government financial assistance.

The western cattle industry at the present time continues to feel severe economic pressure due to the relative high cost of production and the low price of cattle. We still believe, however, that this situation can be corrected to a major extent through an industry program to develop a greater demand for our product and in turn a firmer market for livestock. At least we can say without question that the livestock industry is in a sounder position today than it was 2 years ago. This is more than can be said for basic farm commodities which have continued under a Government price-support program.

The New Mexico Cattle Growers' Association is on record in opposition to rigid price supports on basic farm commodities. We recommend that flexible price supports be continued by Congress on a gradually reduced basis with the eventual hope of removing all price supports on the basic farm commodities and finally reverting to a free open market, which will allow each product to seek its own level of production.

We realize this is rather a blunt statement. On the other hand we have every reason and every example to believe that the current Government pricesupport program as well as the former rigid price program have both been failures. There is no question but that these price-support programs have led to overproduction of all the basic commodities. We can find no record in history of this Nation or any nation where the government has entered into the agricultural field with price supports and government regulations and made a successful program operate over a long period of time.

We recognize that farmers and ranchers throughout the country are not enjoying the same degree of prosperity as other business and industry. We know from actual experience that livestock producers in New Mexico are having an extremely difficult time in making ends meet under present economic conditions. We believe it is generally recognized that should agriculture continue under its present depressed state and even suffer more economic shock that it could possibly affect the entire economy of our Nation.

We feel compelled to point out, however, that all of these adverse conditions have developed under Government price-support programs for our basic farm commodities. While these programs have been calculated to stabilize the position of the American farmer they have in fact jeopardized his position because the entire program cannot help but encourage overproduction of farm commodities.

We do not believe it is the duty of the Government or the United States Department of Agriculture to guarantee the farmer a living. We feel that if more emphasis were placed upon research in markets and production; upon information and education; and upon disease control and related subjects that our agricultural problems would eventually work themselves out on a sound and lasting basis.

We view the present conceptions of price-support programs on our basic farm commodities with alarm because we are confident they will ultimately seek to destroy the livestock industry through overproduction. As production of basic farm commodities is reduced through Government control it is only natural that the American farmer and rancher will increase his production of livestock thus glutting our markets to the point that the livestock industry itself will be forced into a Government-control program.

The economic health of this country has never been developed and will never be developed through a Government guaranty to the American farmer or the American businessman or through Government control of supply and demand. This country has been made great through the development of free enterprise and free markets.

We believe that the present flexible price-support program, if adjusted on a sound basis with the ultimate intention of removing all Government supports

for agricultural commodities, will eventually lead to a free and prosperous agricultural economy. We believe this is the only ultimate solution over a longtime period.

With this in mind our only recommendation to your committee at this time is that Congress view this basic principle of free enterprise on a realistic basis and attempt to develop a farm program which will not lead to more Government control but rather to less Government control and free, competitive production and markets.

STATEMENT FILED BY DONALD W. HAMIL, STERLING, COLO.

My

I am Donald W. Hamil, of Sterling, Colo., testifying as an individual. operation is geared to the production of choice beef through the feed lot, to the production of a portion of the feed for these cattle, and to the production of sugar beets as a cash crop from irrigated land.

A farm program to be of any value to the farmer should have two purposes: To get a fair and equitable net income into the pockets of the farmer and to stabilize the market for farm products.

Net income is gross income less operating costs. For any farm operation to be successful it must have sufficient gross income so that it can absorb the operating costs and leave a fair return for the farmer to live on. Certainly the practical approach to the farm program is assistance in distribution, not curtailment of production, except where it is a conservation measure.

An aggressive farm program should include in its objectives: (1) expanded markets through export, improved diets, and new uses for farm products; (2) generous conservation payments to encourage reduction of acreage of marginal land in crop, and to lower operating costs; (3) flexible price supports to encourage consumption, not substitution, and to stabilize the price of a commodity throughout the year.

We must recognize that this country produces approximately 15 percent more agriculturally than it consumes. We are an export nation. To maintain a high gross income for the farmer we must find an outlet for this production. Research in marketing should be able to find an outlet for this 15 percent with two-thirds of the world's people going to bed hungry, and many of our American people living on an inadequate diet. This could be done through barter or price.

Medical science has proven that a high meat diet contributes to the good health of a nation. A high protein diet of beef requires 7 acres to do the job of 1 acre in a low-protein diet. Anything we can do to encourage the American people to eat more meat will not only improve the general health of the Nation but will also absorb a portion of our excess grain production. Our school-lunch programs, charitable institutions, and needy citizens should have access to a generous supply of meat so long as we have it available beyond the normal channels of consumption. A child educated to a high meat diet through the school-lunch program will continue to demand meat in his diet so long as he can afford it.

Generous conservation payments: Since our agricultural production is in excess of the market at the present time and a portion of this excess production was encouraged by the demands and needs of this country during a wartime period, we should consider measures in a peacetime farm program that would encourage farm operators to divert marginal land back into grass. This is an expensive process, especially in the low rainfall areas and will therefore demand a high incentive payment in order to get it accomplished. In our eastern Colorado area it takes 3 to 5 years to get a productive grass crop established on cropland. Not only should the loss of production during this period be considered in the conservation payment but also the cost of seed and the time for ad valorem tax adjustments. With these marginal lands back into grass we would bring our production closer to demand and also have these lands in better condition to stand the hazard of weather until we need them for crop production at some future date.

Generous conservation payments will also pay dividends in lowering the operating costs on many farms. On irrigated farmland, leveling and canal lining has very definitely lowered the cost of producing a crop. Less labor is required in irrigating lands that have been leveled. These two practices also pay dividends to the farmer in that he reaps rewards through better distribution of our most precious resource, water.

Price supports should be flexible. The price of a commodity should be at a level at which it would move into consumption, not storage. When the price tag on meat becomes too high, the housewife buys macaroni. When the price tag on butter gets too high, she substitutes with margarine. When the cost of corn gets too high, the cattle-feeder substitutes with milo, barley, or millet and, when these get too high, he replaces them in his formula with corn cobs and molasses. A price support on any commodity should be set at a level at which it would encourage consumption not substitution. A price support at a moderate level should also serve to stabilize the price of a commodity throughout the year.

In agriculture, we are still in the throes of a transition from a war to a peacetime economy which demands that we farmers and livestock operators have some adjustments to make. A farm program, which includes market research, an adequate conservation program, flexible price supports should help us to make these adjustments.

The American farmer enjoys a high standard of living because he has been able to adjust to changing times. He has placed emphasis on efficiency of production. A farm program geared to production for consumption, not substitution, will continue to give the farmer a fair and equitable income.

PRICE-SUPPORT PROGRAM

SATURDAY, NOVEMBER 5, 1955

UNITED STATES SENATE,

COMMITTEE ON AGRICULTURE AND FORESTRY,

Fort Worth, Tex.

The committee met, pursuant to recess, at 9 a. m., in the main ballroom of the Texas Hotel, Fort Worth, Tex., Senator Allen J. Ellender presiding.

Present: Senators Ellender (chairman) and Eastland.

The CHAIRMAN. The committee will please come to order.

To my right is the distinguished senior Senator from Mississippi, Senator Eastland.

I am very sorry that we do not have more Senators present. Quite a few promised to come, but I presume because of previous engagements they were unable to make it.

I am very glad to be here in Fort Worth to listen to the farmers, and I hope that from their testimony we will be able to obtain evidence that will be instrumental in assisting us to draft a lasting farm bill.

This is not new to me. As I stated to a group of you this morning, back in 1937, when I was in my first year in the Senate, I was very fortunate in being assigned to a subcommittee of seven Senators to hold hearings at the grassroots along the same line that we are now proposing to hold them, and from those hearings we were able to draft our present farm program, which lasted for quite some time, and remained on the statute books unchanged almost until the war came, and was then again amended last year when the flexible price supports were substituted for rigid supports.

Now, I wish to say that this committee is not here in order to have our great organizations vie with each other as to which has the best

program.

We would like to limit these hearings as much as possible to the views of farmers.

Most of the organizations have representations in Washington. They occupy offices there, and we hear from them, no matter what bills come up; they usually are there to express the views of their various members.

Now, I, as chairman, do not want to deny organizations the privilege of being heard, but I hope that they speak through their farmer members to us.

This will conclude the second week of our hearings. We have heard quite a bit of testimony from Minnesota, the Dakotas, Iowa, and then the Western States, Far Western States-Oregon, Washington, California, and nearby New Mexico.

The Chair would recognize Senator Eastland, if he has anything to say.