The CHAIRMAN. The production in that year increased to 121,149,000,000 pounds of milk. The rigid price-support program of 90 percent was withdrawn and the following year the increase in milk production was from 121 billion plus to 123 billion plus and this year again with flexible price support the increase has been greater than the year before. It will be one hundred and twenty-three billion six or seven hundred million pounds of milk.

Do you believe that when prices are low that farmers have the tendency to plant more in order to try to make both ends meet? Mr. BOONE. That depends entirely on the alternatives the farmer faces.

The CHAIRMAN. Suppose weather is good and conditions are good. Forget about the weather. Suppose the weather is good and conditions are fair, what is the tendency of the average farmer when prices go down?

Mr. BOONE. If he sees an opportunity to shift to a product that has more promise he shifts. If there are no alternatives he may intensify the production of the commodity in question.

The CHAIRMAN. Is it not the tendency of the average farmer then to produce more to try to make both ends meet when prices are lower? Mr. BOONE. I think if there are no alternatives and if you have a general economy where there are no alternatives outside the farming industry such as we had in the 1930's. I don't think we are under those conditions today. One of the important things about price, I wouldn't contend that lowering price or support price would get immediate results and it is contingent on the alternatives, but I do think that the guaranty of attractive price is very effective in bringing new production in. I think it works that way probably more effectively than on the reverse side.

The CHAIRMAN. If you recall, when this skirmish in Korea developed-they do not want to call it a war but it really was a war-we had placed marketing quotas and acreage controls on wheat; had we not?

Mr. BOONE. 1950, but we withdrew them.

The CHAIRMAN. I understand, but why?

Mr. BOONE. I think the reason given was that we probably would need the production because of the new war.

The CHAIRMAN. Exactly.

Mr. BOONE. I don't think we did.

The CHAIRMAN. You do not think so, but the Government thought so and the farmers were asked to produce all they could. There was no limitation. Everything was withdrawn, all the acreage limitations, marketing quotas, everything was withdrawn because we didn't know what this war would portend. We didn't know whether it would last a year, 2 years, 3 years or 4 years, so your Government proceeded to take the lid off and started to go on and growing wheat and cotton and various other crops.

That request from your Government, together with fairly good weather throughout the Nation, had quite a little to do with the huge surpluses we now have. Do you agree?

Mr. BOONE. Certainly. I think there are other factors equally important and that is of course technology that we are taking advantage

64440-56-pt. 5- -2

of today. In my presentation here, Senator Ellender, I have recognized the Government has encouraged us to produce.

The CHAIRMAN. I think everybody realizes that, but why blame it on price supports? That is what I would like to know from you. Many witnesses come before us and say you have a big surplus which is because we had price supports when, as a matter of fact, your Government asked you to produce these things. We did not know how long the war was going to last.

Now I am glad the war ended, of course, all of us are. Soon after the war ended we put marketing quotas o n, and production was reduced by over 2 billion bushels the following year. This year you have marketing quotas; haven't you?

Mr. BOONE. Yes.

The CHAIRMAN. The production will be 860 million bushels. That is quite a decrease from the last year that you did not have marketing quotas, which was 1,169 million bushels. In other words, the last year you had no marketing quotas was 1953-54, and production was 1,169 million bushels. This year the marketing quotas' estimate is 860 million bushels. That is a difference of a little over 300 million bushels. Is that in the right direction?

Mr. BOONE. Your figure of 860 million, my thought was 960 million. It isn't too significant.

The CHAIRMAN. Those are Government estimates. It may be that the Lord will be good and send a little more rain or something to give you a greater production.

Mr. BOONE. In 1952 I believe on something like 15 or 16 million acres in Kansas we produced over 300 million bushels of wheat. The last 2 years under quotas it was something like 11 million acres and we produced in the neighborhood of 125 million bushels of wheat. That is a reflection of weather. Kansas hasn't contributed to this surplus in the last 2 years. It has been other areas, because of our weather.

The CHAIRMAN. What I am trying to point out is simply this, with the view of trying to get the facts, it is not so much the price supports that have created these surpluses as it is the demand from our Government to produce because we did not know how long this war would last. Mr. BOONE. I don't deny that.

The CHAIRMAN. I am glad you you do not because that is one of the things that has done it.

Mr. BOONE. The reason I say the Government has a responsibility in helping us get out of it

The CHAIRMAN. Of course. Do you agree that one of the most important things we must do now is get rid of the surplus?

Mr. BOONE. I think that certain reserves are necessary and desirable, but I do not think reserves of the nature and size that we have can be of any assurance or benefit to consumers and I am sure that they are a great hindrance to the farmer.

The CHAIRMAN. Now in presenting another farm program, do you believe that if the price supports, whether they be flexible or rigid, should have written in the law that support should be available to those who produce good merchantable marketable grain to be used for the purpose intended-that is, to make flour instead of chicken feed? Mr. BOONE. I certainly do.

The CHAIRMAN. Do you have a formula? What do you think we ought to do in that regard?

Mr. BOONE. For several years in our organization we have been talking about improving the grading standards and also perhaps discounting in the loan value the undesirable varieties because there isn't a demand for human food for them. I think we approve what has been done so far. We haven't gotten very far in the grading standards yet.

The CHAIRMAN. Have you any specific formula to offer as to what grain should be grown? Which are the best grains to be used for millers to produce flour, in fact, to produce commodities that wheat is supposed to produce for human consumption rather than to feed to livestock?

Mr. BOONE. It would be hard to recommend a detailed formula. We have in Kansas done, I think, a terrific job in education work on wheat varieties and I think that is the best answer.

This matter of strong-gluten and mellow-gluten wheat is a matter of balance. You can get a balance of strong-gluten wheats that will no longer demand a premium. To go out on a rigid detailed program might be disastrous and would make somebody's face red after a few years.

The CHAIRMAN. You are familiar with the fact, I presume, that many farmers planted their diverted acres into crops that produced more feed grains and that probably meant surpluses in feed and hurt those who grew grains solely for feed?

Mr. BOONE. Yes. I am principally a livestock man. I am familiar with that.

The CHAIRMAN. Have you any suggestion to make along that line? Do you think we ought to take diverted acres out of production so that nothing will be produced on those diverted acres that would hurt the farmer who grows grain for feed only, or the livestock man and others who may be affected by planting these diverted acres into crops that would hurt other segments of our farming society?

Mr. BOONE. Let me say this: I think our problem here is one of total agricultural production. Now I sympathize with the members of this committee because the thing you are suggesting that I make recommendations in are very difficult. How much can a farmer cut his production, and maybe at a lower price, and still keep operating? How willing are farmers going to be to go along with that type of program? I think it is a thing we must get done because when you divert acres from a supported crop and let it move into other fields you are tearing another producer's playhouse down. Actually I think that is our principal contention. We have urged the use of crosscompliance. Maybe our farmers wouldn't have stood for it. I think any effort we make must be a cooperative effort between farmers and Government.

If the farmers figure a way to beat this program in the long run, it won't do us any good.

The CHAIRMAN. I agree and I hope any program we put on the statute books will have the complete cooperation of the farmers. I have found, on this trip so far, very discouraging aspects of it. Many farmers use their diverted acres and plant on that, say, grain, and instead of using it for themselves-that is, for cattle or whatever they are growing-they put it in the loan and let Uncle Sam carry it. I have no respect for a farmer who does that. He should try to plant his acres to decrease the burden on the Government.

We pass laws in order to try and help the farmers of the country to get out of a sad plight, and it is my hope that if it is necessary for us to write rigid sections in the law so as to take out of production these diverted acres the legislation will really be effective. As I have said, the farmer may suffer for 2 or 3 years in doing that but if I were farming I would rather suffer 2 or 3 years than maybe 10 years. If we can get together and draft a program with which the farmers will cooperate to the fullest extent, we may be able to get out of the woods in the next 2 or 3 years.

In my judgment that is the only way we can do it. First we have to get rid of the surplus. We have our ideas on that but I won't discuss

it now.

Any further questions?

Senator THYE. I would like to ask Mr. Boone a couple of questions. Mr. Boone, which would be the best way of going about reducing overall agricultural production? Would it be best to put the price at a level that would discourage any excess production in various products? Would that be the best approach to it?

We as members of this committee must give consideration and thought when Congress reconvenes to how we can reduce overall agricultural production in the United States. I will say frankly the only reason I am down here from Minnesota today, much as I like to be with nice folks like you, is just to try to get the answer to a question that had us considerably disturbed all last year. You can be certain when Congress reconvenes we are going to again be faced with it, and when we come out to the grassroots, so to speak, we afford the man an opportunity to testify who normally would not be able to spend the money to go into Washington to appear before the committee and to be heard. When Congress reconvenes we are going to be busier than we are in the recess months and therefore we are here this morning seeking advice and suggestions as to the wisest and most advisable manner of approaching a reduction in our agricultural output. I know men who went out of pork raising last year because they anticipated that there might be an overproduction because of the favorable pork prices in 1954. Although they haven't a pig on their farm this year, we still have an overproduction of pork. Somebody else got into the business. The farmer individually therefore does not have much control over what the other man does.

So we in Congress must try to formulate a program that will bring about an orderly reduction of the farm plant. Therefore I ask you how do we go about doing this?

Mr. BOONE. That is a pretty big question.

Senator THYE. We are faced with it. We have it right here. We have the plowhandle in our hand. Either we are going to plow or we are not going to plow.

Mr. BOONE. We have to look at this from the standpoint of where

we are.

Senator THYE. We should also look back as the old man said, look back that you may have the wisdom to look forward with intelligence. That is why I look back. But looking back does not resolve the problem we are faced with except that it may give us the intelligence to achieve a solution in the future. What I am concerned about is that we have too much production. Therefore, I want to know from you

how do we go about reducing the output? Do we reduce the supports, do we put an orderly control over diverted acres or what do you recommend? I would rather concern myself with your recommendations than your observations.

Mr. BOONE. I think that under the conditions we are under that even though maybe one approach might accomplish this thing from where we are today, I think we will have to use more than one approach. I think there is something we can do in marketing, we are trying to do it in pork right now. Certainly, as I said before, we need to get the full cooperation between Government programs and farmers in reducing total output. As long as our economy is at a high level, I wouldn't predict how long it will be there, there is opportunity to make adjustments in agriculture because there are opportunities outside of agriculture.

Senator THYE. There are different schools of thought on the question of how to get production down, and the reason I pursue the question is that you represent a wonderful and large organization and you are speaking not only as President of the Kansas Farm Bureau, but as an individual producer. I pursue the question only to try to get a specific recommendation from you.

Congress has assisted by providing $1,700,000,000 to use in the international field in the attempt to sell our surpluses at prices reflecting the difference in the value of a country's currency as compared to ours. We have the school lunch program. We haven't, however, had local participation in the school lunch program to the full extent Congress intended.

We have done everything we could do in Congress by way of utilizing surpluses, except a food-stamp plan which would make surplus food available to the low-income group. The basic question is, therefore: Do we reduce the surpluses by a reduction in the farmsupport program?

The support is the mechanism to insure the farmer a certain level of income. That is what I see in supports. The question I would like you to answer is: Do we lower supports and force an economic condition that will reduce production, or what else do we do? I just would like to get that question answered.

Mr. BOONE. I suggest we use a multiple set of tools. I think we recognize that even though a thing might work as a farm organization leader and you as members of the Senate Agrirultural Committee, we have to govern our program within the limits of what is reasonable and what can be withstood by an industry.

Senator THYE. May I ask you this question: In your neighborhood if we reduce the supports and lower the price of a commodity or product by permitting the floor to go to a lower level, who is going to get hurt first in your neighborhool?

FROM THE FLOOR. The farmer.

Senator THYE. That is understood. I am trying to get an answer from Mr. Boone as to who in the neighborhood would be most apt to be put out of business if the price of a bushel of wheat is dropped or if the price of any product grown, whether it be oats or barley or rye or what it is, is lowered? Is it not the man with limited capital who could not survive many bad jolts of that kind? Is he not the