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Senator EASTLAND. No, sir, I asked you a question. Is it not true that they are earning adequate dollar exchange today? I agree with you about the tariff.

Mr. HAMMOND. That they are now?

Senator EASTLAND. Yes, sir.

Mr. HAMMOND. I cannot answer that question. Do you want me to proceed?

The CHAIRMAN. Yes, go ahead.

Mr. HAMMOND. Here is another thing that we were talking about awhile ago. Here is what we are concerned about. If a cotton farmer cannot produce cotton and sell it at the world market, to pay his expenses, he cannot do that.

The CHAIRMAN. He should stop producing it?

Mr. HAMMOND. That is right. That is the only thing he can do. That is the philosophy in this country. The automobile manufacturers, they do not produce.

The CHAIRAN. They have a different situation. All they have to do is to go to the Department of Commerce who tells them how many automobiles they might sell next year. They might tell them how many of the various products they produce that will sell. Then they can close the spigot, but the farmer cannot do that.

Mr. HAMMOND. That is what I am talking about.

The CHAIRMAN. The Lord has been mighty good to the people of Texas, the people of Louisiana, and the people of the North in that on the same acreage they have been able to produce many times more than what they produced in the past.

In the case of cotton you are producing more today on 17,500,000 acres than was produced years ago on 42 million acres of ground; is that not right?

Mr. HAMMOND. Yes, that is right. But still the farmer cannot produce something unless it pays his expenses, at least.

The CHAIRMAN. I have heard that before. You tried to explain that earlier, but I do not know many people, who have been planting cotton from year to year, who want to get out of the business.

Some of them have learned it and want to stay in it, because they cannot do anything else. If they shift out of cotton, they will go into something else that will be in competition with other crops that are in surplus. You cannot stop that, can you?

Mr. HAMMOND. NO.

The CHAIRMAN. Of course, you cannot.

I would like to ask you one question. Please answer it "yes" or "no" and explain it if you want to. Are you in favor of any law that would cause us to recapture our foreign cotton markets?

Mr. HAMMOND. Yes.

The CHAIRMAN. All right.

Mr. HAMMOND. Well now

Give us a prescription.

The CHAIRMAN. How will you do it?

Mr. HAMMOND. I do not know how to do it.

The CHAIRMAN. And you expect us to do it?

Mr. HAMMOND. Well, you are in a better position to do it than I am. You are familiar with the situation.

The CHAIRMAN. I have heard that this program that we now have on the statute books will eventually cause us to obtain 100 percent of parity at the market place. That is the plan, is it not?

Mr. HAMMOND. This one here? Yes.
The CHAIRMAN. That means cotton?

Mr. HAMMOND. Yes.

The CHAIRMAN. If we cannot get to sell cotton on the foreign market, on the basis of 90 percent of parity, how in the name of commonsense can you get it on the foreign market if it is at 100 percent? I want you to tell me that.

Mr. HAMMOND. Well now, there are ways, but everybody seems

The CHAIRMAN. I mean, without all of this aid, you know, from the Government. Of course, I think your plan envisions no Government subsidy or anything of the kind?

Mr. HAMMOND. Yes; that is right.

The CHAIRMAN. I want you to tell me how that can be attained without Government subsidies, because that is the point at issue.

Mr. HAMMOND. All right. I will tell you one way it could be done. I do not know whether it is politically possible.

The CHAIRMAN. This is a nonpartisan political committee, you know.

Mr. HAMMOND. I do not mean partisan political. Of course, your whole committee is composed of well, I will not go into that. The CHAIRMAN. Republicans and Democrats.

Mr. HAMMOND. We hope that the Committee on Agriculture in the Senate will continue that way, because we do not like for our farm program to be partisan. We want it nonpartisan. We want the Republicans and the Democrats, too, to be interested in the farm programs without getting politics in it. We hope that it will not develop into a political football.

The CHAIRMAN. Does your organization take sides in Washington? Mr. HAMMOND. What did you say?

The CHAIRMAN. Does your organization take sides in Washington? Mr. HAMMOND. Politically?

The CHAIRMAN. Yes.

Mr. HAMMOND. No; I cannot tell you.

The CHAIRMAN. Now, listen, do not tell me that. You know they do to get their programs enacted. [Applause.] All of the farm organizations are for their own programs, and they do their best to get both Democrats and Republicans to support their program.

That is why today, when we started, I stated that we wanted witnesses to testify on their own and not so much for the organizations. I am for all of these organizations. I am not against them, but when everybody tells you that your organization does not try to put over its program on the Washington level, you had better come and stay there for about 6 weeks and find out for yourself. All right, let us go ahead.

Mr. HAMMOND. I did not mean to bring that out. I did not mean to bring that out. I meant politically possible. I meant the Republicans and the Democrats both. We have got to have them to do this thing here.

The CHAIRMAN. I may have used the wrong word when I said politically, but they try to get Senators and Congressmen to see their way. If that is not polítics excuse me.

Mr. HAMMOND. We try to sell the Republicans and the Democrats, whoever it is, to go along with us.

The CHAIRMAN. In other words, you are nonpartisan?

Mr. HAMMOND. We are not-I get mixed up, too. I do not know which is Republicans and which is Democrats. That is, on our board of directors of the American Farm Bureau. I thought that our new president was a Republican, and he turns out to be a Democrat. There is one other thing I want to say.

Under this system, a support price could be provided for all storable commodities produced, including nonbasics, with a minimum cost to the Government. If a crop was overproduced and there was a support price, we will say, of 75 percent of parity, the producer would be privileged to secure a nonrecourse loan of 75 percent of parity on the commodity.

In the next season, when the farmers switched from the overproduced crop it would bring the commodity overproduced in line with the needs and at the same time the price of that commodity would advance to parity. This would result in a profit to either the producer or the Government and in no case result in a loss to Government. That is, if we get the right kind of regulations and good administration

The CHAIRMAN. And get the farmers to follow the program.
Mr. HAMMOND. Yes.

The CHAIRMAN. Because, you know, we have had flexible price supports on dairy products and it was said that the flexible price supports would discourage the production of dairy products, but I am here to tell you that instead of discouraging it this year and last year with nonflexible price supports on dairy products, we have the greatest production of dairy products in history.

Mr. HAMMOND. Yes.

The CHAIRMAN. So what becomes of that statement you just made there?

Mr. HAMMOND. Some folks think if you have an overproduction on some commodity, just lower the price and the production will go down. History does not bear that out, but the reason being with no controls whatsoever, these nonbasics, there is not anything for you to turn to if you have got an overproduction of cotton, you cannot do anything such as switching to grain or sorghum, oats or barley, but with this sort of a program and if the price went down on some sort of commodity, you could switch over to one that is in short supply. Now, then, this is all dependent upon good administration that would strive to keep the acres in production down to a figure that would only produce the needed supplies for domestic consumption and export, and it might take several years for the farmers to balance production as between the crops so as to eliminate some crops bringing above parity while others brought below.

It does not seem feasible to support the price of a commodity that is not storable, but under this proposed plan, producers of perishable commodities would be privileged to switch production from nonstorable to storable price-supported commodities, which in turn would bring the supply of nonstorable commodities in line with demand.

In relating this kind of program to the nut and fruit growers, it would take longer to make the change. It would be impossible to shift production of nuts and fruits as is done in annual field crops, but the marketing agreements program could be used until it was determined that it was more profitable to produce field crops than to produce tree crops. After having plenty of time to make this determination, then

certainly the tree growers would destroy trees if it were proven that for a term of years it would be more profitable to produce field crops than tree crops.

This program, if adopted, would retain and build up the productivity of the land, which would be available in wartime and other emergencies. Storing plant food in the soil for emergencies would be more economical than storing products of the soil in warehouses.

We do not propose there are some who are proposing that the Government lease the land from the farmer, even take it out, even lease the whole farm.

We do not think-I just want to make one illustration. Suppose that one farmer owned all the land and operated all the land in the United States. I do not think that anybody would have to go out and suggest to that farmer that he cut down his production under the existing situation. I think that that farmer would naturally cut down his production to the amount that could be sold at a profit.

Now, his reward for doing that would be a better price than the market price and I think that is all he should ask, and all he would want is an opportunity to get his production in line with a supply that will make him a profit in his farming.

The CHAIRMAN. You would leave that more or less to him?

Mr. HAMMOND. Yes.

The CHAIRMAN. That is what you would do.

Mr. HAMMOND. Yes.

The CHAIRMAN. You want the farmers to work out their own programs?

Mr. HAMMOND. Yes. Of course, we would have to have some help. It is difficult to compare 6 million farmers to 1 farmer. One farmer could solve this problem but you have got to have the help from the Government in some way to get all the others to comply.

The CHAIRMAN. What would you do with respect to diverted acres if the present program is retained?

Mr. HAMMOND. The very program

The CHAIRMAN. Diverted acres. In other words, if a man has a historical basis to plant, let us say, 1,000 acres of cotton or 1,000 acres of wheat, and then his acreage is reduced to say 700, what would you do with these 300 acres?

Mr. HAMMOND. He would be required-suppose we had taken out 20 percent.

The CHAIRMAN. Just answer that question, if you will. What would he do with those 300 acres?

Mr. HAMMOND. That he diverted from cotton?

The CHAIRMAN. That is right; or wheat?

Mr. HAMMOND. He could plant that diverted acres in any crop he wanted, provided he took out 20 percent completely.

The CHAIRMAN. But he has taken that out before he started. You said you would take it all out at the start?

Mr. HAMMOND. No, not all-you get mixed up on this thing and it is hard to explain because we are talking about two different things here.

The basics now-the only requirements for compliance with this soil-bank thing, is that you take whatever number, percent of acres, the Secretary declares

The CHAIRMAN. On the entire acreage?

Mr. HAMMOND. On the entire acreage.

The CHAIRMAN. And then let him plant what he wants?

Mr. HAMMOND. Yes.

The CHAIRMAN. Now, if you have the program that we now have on the statute books, in respect to acreage allotments, and marketing quotas for cotton and rice and other basics, it would probably mean a decrease in the acreage to be planted.

Mr. HAMMOND. Yes.

The CHAIRMAN. What would you do with that decreased acreage? Would you expect him to keep it out without compensation?

Mr. HAMMOND. We would only require him to take the 10 percent out of his total acreage, as to the nonbasics.

The CHAIRMAN. So that on the diverted acres, he could plant whatever he wanted to.

Mr. HAMMOND. On that portion that was not required to be taken out by the Secretary; and this illustration

The CHAIRMAN. In other words, take Louisiana or the great State of Mississippi. Suppose a farmer had 1,000 acres of cotton and 1,500 acres of other crops. That would be 2,500 acres altogether.

Your plan would envision the taking out of that production of, say, 20 percent of the acreage?

Mr. HAMMOND. Yes.

The CHAIRMAN. All right.

Now, if the present program stays on the statute books and the farmer who planted 1,000 acres of cotton is now reduced to 700 acres, that would be 300 acres that he could not plant to cotton, which he planted previously.

What would you have him do with the 300 acres? Would you let him plant corn on it to compete with the Iowa corn growers or would you let him plant any other commodity that competes with other protective commodities?

Mr. HAMMOND. Well, now, the illustration you make, Senator, he would be required to take out 350 acres completely and then go ahead. The CHAIRMAN. Yes, but he may want to plant the 1,000 acres of cotton. Would you want him to plant 1,000 acres of cotton?

Mr. HAMMOND. No.

The CHAIRMAN. And get the percentage of support price intended by the law?

Mr. HAMMOND. No.

The CHAIRMAN. What would you do with the diverted acres? It is a very simple question, is it not? What would you do with the diverted acres?

Mr. HAMMOND. If the fellow

The CHAIRMAN. I mean, in addition to your 10 percent or 20 percent or whatever percent you suggest be in the law.

Mr. HAMMOND. Well, now, let me see if I am straight on your question. This illustration, this fellow has 3,500 acres of land?

The CHAIRMAN. Right.

I assume that we take out 10 percent.

Mr. HAMMOND. 10 percent; that is 350 acres.

The CHAIRMAN. Yes; 350 acres.

Mr. HAMMOND. Now, then, you have marketing quotas on cotton; that might take out 300 acres of that.

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