man who is apt to be informed by his creditors that they cannot carry him any longer? Perhaps he has to purchase something and he comes and wants to buy and he is told: "We can't give it to you on credit." He then is confronted with the fact that his unit is going to suffer because he cannot get the necessary feed or the necessary implements to till with.

Is it not the man with limited capital therefore who is apt to be closed down first?

Mr. BOONE. I think that is a natural assumption. In my area the price of cattle is more important than the price of wheat and the price of cattle isn't so good now. We have had 4 years of drought and high production cost. We are already in difficulty and it has not been price as much as weather.

Senator THYE. Let me ask you this-I am pursuing this thought because it does not do us much good to advance theories unless we sort of scratch into the theory to see if it can possibly operate. If your cattle prices are not the best, and if you have a lot of cheap feed on your hands, which is inevitably true if diverted acres can be planted to some other crop, is not that situation going to put the beef producer in further jeopardy when there is an ample supply of good feed and a gambling chance that the feed put through the animal might bring a greater net return than simply selling the feed on the market?

Isn't the livestock man faced with the possibility of being further depressed economically if you have an abundance of feed?

Mr. BOONE. I certainly agree to that and that is the reason we say our problem is one of total production.

Senator THYE. But I have to go back to this situation about which I am concerned. In my neighborhood I could take you up and down half a dozen township roads and show you young farm families and if you ask them, you find that 9 out of 10 are World War II or Korean veterans. They came out of the service, they were able to rent a farm, they got an FHA loan or a GI loan, they bought some high-priced machinery and first year's feed and seed and other necessary items to get into operation. The price starts dropping. Their returns are lowered, their credit is tightened because of a fear that they cannot repay. And the consequence is that ultimately they will be forced out of business if their farm income drops any lower and continues to decline. If they are put out of business, is that what you and I would want to see? You and I would not, of course, want to see it because it would take the heart out of a young couple at a time when you ought to give them encouragement.

That is what I recognize when the agricultural segment gets out of balance with the Nation's economy as a whole. That is the reason I am in Kansas today. I am down here trying to find the answers to this problem and I am trying to get them from you. Therefore, do we reduce our supports to reduce overall production, or do we establish a firm support with an orderly plan of reducing the number of tillable acres through a program of paying rental on acres we divert from wheat, corn, cotton or the other commodities? The livestock raiser has as much at stake as the dairyman or pork producer. If your plant is too big you are going to get excess production in livestock just as you have it in wheat.

Am I wrong in thinking as I think?

Mr. BOONE. I think that what I have tried to say in my statement is this: You can't use one factor alone in doing this job. I can see a lot of difficulty in a soil fertility bank idea, but it is for the very reason that you can't cut a farmer's price and production at the same time we are suggesting the soil fertility bank as a tool.

Senator THYE. Would you agree if this committee were to formulate legislation to pay a reasonable rental upon diverted acres so as to keep a diverted acre of cotton from going into corn, or an acre of wheat from going into some feed crop? You wouldn't condemn the committee for proposing such rental plan on diverted acres?

Mr. BOONE. I can't assure you what the position of the Farm Bureau would be in the future, but personally, I would not. I think that the difficulty of controlling production will be affected very much by the price level that is set in support. I think it will be complicated very much. I think there is one danger of too much payment through the soil bank plan and that is that it provides additional money and resources in agriculture to improve the production on the acreage you still farm. I don't know what levels there should be.

Senator THYE. Thank you.

The CHAIRMAN. Senator Schoeppel.

Senator SCHOEPPEL. Most of the questions and answers have covered the problem, but do you not feel that drought has had an impact in a lot of these agricultural areas?

Mr. BOONE. It has in Kansas and most of the great southwest, the plains area.

Senator SCHOEPPEL. There has been a disposition on the part of many farmers to double up next year to make the financial recovery, isn't that true generally?

Mr. BOONE. Yes. Where they missed a crop they did not feel they could sow grass and the weather wasn't good for grass.

Senator SCHOEPPEL. I think this committee recognizes that we have cut 55 million acres, which affects this State and other wheat producing States.

Going back to this soil rental situation, do you not feel that some reasonable amount, or a law providing for some rental at a fair price, would tide over many farmers who, because of drought and the fall of prices, are in economic distress? It might enable them to stay on their farms and meet some of their obligations, and put this diverted soil into better shape to produce if, as, and when we need greater production, and also provide something that will augment that income which, if not augmented or increased, will drive a lot of these younger fellows and marginal farmers cut low on acreage, out of business.

Mr. BOONE. Yes, I do. I think there is the opportunity to put just a little income in the farmer's hand and also perhaps reduce his operating cost a little when the land is not cropped that is put in a soil conserving crop. There is of course some cost and putting in the soil conserving crop but no harvesting crop.

Senator SCHOEPPEL. That is all.

The CHAIRMAN. Any further questions?
Very well, Mr. Byrne.

STATEMENT OF MARTIN J. BYRNE, PRESIDENT, KANSAS FARMERS UNION, TOPEKA, KANS.

Mr. BYRNE. Mr. Chairman and members of the committee, I am Martin Byrne of Topeka, president of the Kansas Farmers Union. Grass roots such as this are good. It brings Federal Government close to the people. We closed the annual State convention of our organization on October 28, 1955.

In the discussions we were faced with the age old problem of almost complete lack of direct bargaining power of farm families commensurate with business and labor.

This fact, of course, forces us to turn to Government in an effort to deal with problems farm families face. There are three chief concerns among the delegates:

1. Farm income is out of relationship with farm costs.

2. Disappearance of farmers from the land.

3. A more equitable method of production controls.

Our convention reaffirmed the traditional stand of our organization in favor of full parity for all family type farmers.

Immediate legislative steps which we favor toward our goal of full parity are:

1. Repeal the sliding-scale policy. We need to repeal and reverse the 1954 sliding-scale law. But beyond that, and I want to emphasize this, we need to repeal the sliding-scale policy which has been followed consistently by the Secretary of Agriculture, of forcing farm prices downward. Every time that he has had an opportunity under the law to do so the Secretary of Agriculture has used his authority under discretionary provisions of the law to force prices to farmers down.

The CHAIRMAN. You concede he acted within the law, do you not? Mr. BYRNE. Yes. As a direct result of this sliding-scale policy, the prices received by farmers for dairy commodities, for oats, barley, rye, flaxseed, soybeans, grain sorghums, and a number of other commodities, have been cut sharply below the levels of 1952.

To repeal this sliding-scale law of 1954 along with the sliding-scale policy which that law permits, we advocate passage by the Senate of H. R. 12. We believe this law should be strengthened by adding to the list of basic commodities which are eligible for 90 percent of parity supports the following: Milk and its products, feed grains and oilseeds, beef cattle and veal, hogs, poultry, and eggs.

We believe that enactment of such a law will be a step in the right direction toward full parity for farm families.

2. We favor enlarging the arsenal of tools that are available for doing the job of carrying out price-support operations. We favor the use, in workable combination, of commodity loans, production payments, direct purchases, marketing agreements and orders, and surplus removal purchases, to protect the incomes of farmers at full parity.

3. We believe that our Nation should make full use of the agricultural abundance that our farms are producing and can produce. We favor expansion of the school-lunch and school-milk programs, both to include more schoolchildren and to increase the amount of Federal help given to each meal.

We also favor better diets for our armed services, and for our public and private welfare institutions. But the biggest job we have in this respect is to provide adequate diets for some 8 million families in the United States with family incomes of under $2,000 per year. Many of our Nation's children are raised in those families. In this period where there is so much talk about surplus, it seems to be simple morality to use some effective method to provide adequate diets for all Americans. We favor a food-stamp plan, and endorse the bipartisan plan authored by Senators Aiken and Young and Humphrey of this committee.

Some of our farm commodities must be exported. We favor renewal of the International Wheat Agreement, which provides for orderly trade in wheat. We favor a world food reserve plan, such as advocated by the International Federation of Agricultural Producers, which would put ours and other agricultural nations' so-called food surpluses to work combating hunger and its partner, communism. We believe that these programs to make full and beneficial uses. of our agricultural abundance, would benefit the entire Nation far beyond their cost, and would completely eliminate our so-called "surplus" problem.

4. We believe that a ceiling should be put on the amount of benefits for which any one farmer should be eligible. The ceiling should be placed at the upper limit of gross income that an efficient family-sized farm can earn, which our last State convention program has established at $25,000 of gross income per year. This will do two important things: (1) It will limit the cost of farm programs to the public by eliminating overlarge payments to large-scale factory-in-the-field producers, and (2) it will aim the farm programs squarely at the objective of protection and promoting family-type farming.

5. We believe that adequate reserves against emergency needs brought on by weather and international uncertainties should be provided for by legislation, to be insulated from the market.

6. We do not believe there is now a real surplus when our food and fiber supplies are considered in light of existing human needs. We believe that full use of our food and fiber to meet human needs as I have already outlined would substantially eliminate the pressure of surpluses from our markets.

The farmers should not be forced to bear the cost of subsidizing expanded consumption and maintaining reserves of food if the public refuses to meet its responsibility to do so. We believe farmers should be given the machinery they need to adjust their production to the level that will assure prices at approximately full parity levels. We do not want to enforce scarcity upon the American people in order to get prices that reflect a fair relationship to our cost. Other major industries in our economy do use the weapon of scarcity to get the prices they want. The steel industry, for instance, does not bring to the market a single ton of steel beyond what it can sell at the price it sets. We do not want scarcity; it is completely against all the inclinations of farm people. But we cannot stay in business unless we can count on prices that are fair.

We farm families are willing to produce abundantly to meet all the needs of our Nation. Beyond the Nation's real needs, and the need for food in working for world peace, we do not think it is in our interest, or the Nation's interest, to continue to produce. There

fore, we recommend continuation and improvement of programs of acreage allotments and marketing quotas, with consideration being given to bushelage and poundage quotas replacing acreage allotments and quotas for wheat and feed grains at least. We favor the use of marketing agreements and orders for commodities to which these programs are suited. And we favor a conservation acreage reserve program as an overall device to equalize farm production with national needs. This will be a voluntary program of retiring surplus acres from current production, which will distribute the surplus problem equitably throughout agriculture.

The CHAIRMAN. Will you describe to the committee the familysized farm, not only for Kansas, but for the 48 States?

Mr. BYRNE. I think the best description I could give would be a farm which is large enough so that it employs the full labor of the family and where the labor of the farm family exceeds the hired labor that would be needed to operate that farm and at the same time give them a good income, a decent income, adequate income from the production of that farm.

The CHAIRMAN. Well, how would you apply that to a family, let's say, that has 25 or 50 acres? In some States, as you know, that is a big farm. How would you expect to provide methods by which a family would fit into the pattern you have described?

Mr. BYRNE. In a 50-acre farm?

The CHAIRMAN. Yes, the average-sized farm in Wyoming is 300 acres, Kansas almost 400 acres, in Louisiana it is less than 100. In writing a law don't forget we must apply it to the 48 States. A formula working for Kansas may not work for Nebraska or for Oklahoma.

Mr. BYRNE. What I want to point out and what we are concerned with is the reverse, that the family-type farm, the smaller farmers, are disappearing and I realize that a formula would be difficult to work out, but if emphasis could be placed on administration when the laws are being carried out, and there is always byplay and leeway in the law for the administrator so that the program, the results of the program were always pointed so that the family-type farm, smaller farmers, got the same benefits as the larger farmers, I think we could slow up and probably stop this disappearance of the smaller farmers. The CHAIRMAN. I am glad you realize the problem.

Mr. BYRNE. It comes up in our organization all the time for definition.

The CHAIRMAN. We would like to have from you a definite suggestion. You write the prescription and we will try to carry it through Washington.

Mr. BYRNE. I realize that.

The CHAIRMAN. It is an easy matter to also state "We believe farmers should be given the machinery they need to adjust their production to the level that will assure prices at approximately full parity levels." That is a fine phrase, but give us a prescription to put that into law. Mr. BYRNE. To ask for the things I mentioned here, which in effect would be price supports almost clear across the board, when a person does that I realize that when I do that I have to tie right up with the very strict and rigid controls. Secondly, after all of the controls have been exercised it is possible to exercise, whether we get them on a bushelage basis or unit basis, we think this would work better in the