areas where the crops are not sure every year like they have in western Kansas, where we may have a big crop next year and none for maybe 2 more years. After we have exercised that, and marketing quotas, and we have explored all possibilities for increased consumption, then I believe that we should take the acreage reserve plan, the conservation acreage reserve plan, which, in effect, would be renting from individual farmers on the part of the Government the land that would be diverted as a result of those controls and keep that in an acreage reserve so that in the future when we need it, which we undoubtedly would with our population increasing, it would be ready to be used, and in good position as far as fertility is concerned, and we wouldn't be working the land now and storing it someplace and having it used against us. The CHAIRMAN. To further your views as to the small family-type farmer, let's say in Kansas, I have been informed that a unit today may be 400 acres; a man has only 160 acres. What are you going to do about him? FROM THE FLOOR. Send him to Russia. The CHAIRMAN. Just a moment, please. Keep quiet. We are the ones asking questions here. The committee does not like that. Mr. BYRNE. Mr. Chairman, with the unit today, an average of 450 The CHAIRMAN. I am asking you this: You are proposing a unittype farm, and here in Kansas a specific unit may have been a good unit 50 years ago, but things have changed and mechanization has come in. To keep that unit-type farm that you speak of where a man has 160 acres, what are you going to do with him? Would you suggest a redistribution of land? Mr. BYRNE. No. The CHAIRMAN. What would you do? Mr. BYRNE. There is land being moved; the Farmers' Home Administration has had good experience. I believe if we could expand the Farmers' Home Administration so when this 160-acre farmer has an opportunity to enlarge his unit to bring it up to a unit that would be close to average that he could go into the market to buy land on the same basis as the fellow with money by being able to borrow money through the Farmers' Home Administration at a reasonable rate of interest, so he could at least compete for more additional land. There are units being sold all the time if he has a chance to buy. The CHAIRMAN. It would means liberalized credit. Mr. BYRNE. Yes. The CHAIRMAN. Now, I wish you would tell us, you are advocating a 90-percent price support on beef cattle, veal, hogs, poultry and eggs. Can you tell us how we can curtail production of, let's say poultry? Mr. BYRNE. I think the only way we could even approach it on poultry and milk would be on the-not on telling a person how many head of animals he could have but the pounds he could market. The CHAIRMAN. What would you do with the rest? Mr. BYRNE. There would be waste for a while. The CHAIRMAN. Who would suffer that waste, the farmer? The CHAIRMAN. How would that affect the profits? Mr. BYRNE. It would hurt him while we were getting the thing underway. The CHAIRMAN. Do you not think it would possibly pose an administrative difficulty beyond the control of the Government? Could we, in fact, work out a system whereby this could be administered all over the country? Mr. BYRNE. Senator, I think the method of support on that kind of commodity should be straight production payments similar to wool. The CHAIRMAN. You are providing supports at 90 percent of parity. Mr. BYRNE. I stated in another place that we should enlarge our kit of tools that we could use as a method of support. Maybe on wheat we can continue to use, or the cereals, we can continue to use the loan program, but on the perishables like hogs, and milk and eggs, that they just go into the markets and seek their own level and that the difference be made up in the direct payment. I realize the moment we ask for that we also have the responsibility to tie right in with that controls. Now I think this would be the end result: As they went into the market and sought their own level and the farmer was paid the difference in the direct payment, that there would be some increase in consumption as they moved into the market. The CHAIRMAN. But the Government would pay the difference. The CHAIRMAN. How much do you think a program like this would cost the Government? Mr. BYRNE. It would cost considerable. The CHAIRMAN. Do you think Congress could provide the money to carry out such a program? Mr. BYRNE. I believe so. The CHAIRMAN. You do? You ought to be in the Senate or the House. We are having a lot of difficulty today with the program we have, some say because of its excessive cost. When you look at the cost of the basics I think the record shows a little over $300 million. That is all we have lost on the basics. On the milk production a little over $700 million lost, potatoes $750 million. We have had a lot of kick by the taxpayers. I am wondering what would happen if you put this program of yours into effect whereby the poultry raiser, the hog raiser, the beef-cattle man would sell on the free market and then the Government would be called upon to pay the difference between whatever he can sell and what would be parity, or 90 percent of parity. Do you realize how much that would cost? Mr. BYRNE. Yes. The CHAIRMAN. How much do you think? Mr. BYRNE. I wouldn't have any idea. It would be substantial. The CHAIRMAN. You see, in proposing a program of that kind it strikes me that people who propose them ought to think them through. It is easy to say I have had a lot of witnesses say, "We want a hundred percent of parity." I ask you, "How would you do it." The answer is "That is your job." We don't get anywhere with that, don't you see. These production payments, as you know, have been criticized. You know we are trying them on wool. I hope it succeeds, I voted against it but I hope it succeeds. As you know, that is the old plan, a plan which was pretty severely criticized by many farmers themselves. They do not want it. You take beef-cattle people, or veal producers, I would say the vast majority of the people who testified before us in these hearings, I think certainly the Senators would agree, do not want support prices on beef. You can realize that in any price supports particularly when you make it 90 percent, you have to have some means of controlling production. Mr. BYRNE. That is right. The CHAIRMAN. I am wondering how you do that on beef. You cannot get cattle produced overnight. It takes about 3 years to produce cattle. What would be your method on beef? Mr. BYRNE. We have to go back to the unit or pound basis where a person would be given an allotment. The CHAIRMAN. So many pounds of beef to sell. Mr. BYRNE. Yes. The CHAIRMAN. Have you ever thought of the cost of administering such a program? Mr. BYRNE. Yes. The CHAIRMAN. How much would it take? Mr. BYRNE. Here is what prompts me to make the whole recommendation, and it is abstract. It is this: That we do live in an age where farmers are out in the commercial markets to buy the things they have to have in order to produce, much more so than any time before in my lifetime. The minute he leaves his gate he is up against bargaining power that is able to set price. Now he is in that situation. We do not have any great amount of bargaining power within agriculture itself. So the question is: He is part of the economy. He is a consumer and he is part of it. If the things he sells just on an open and free market are less than parity then he has to absorb it or the industry has to absorb it, if it is less than parity. If there is a production payment then the whole country is absorbing it and the possibility of raising money for the whole country to absorb it is much greater, it seems to me much fairer than if the industry itself has to absorb it because if the industry does it seems to me we are headed over a period of time to use up the capital assets and we will be in trouble. The CHAIRMAN. All that may be true, but the question that confronts the committee and confronts me is that if a farmer who produces cattle, hogs or poultry and eggs, must expect curtailment if he gets support. Mr. BYRNE. That is right. The CHAIRMAN. That is the crux of it. If you can give us a prescription to curtail production in a reasonable way you might get somewhere, but merely saying or asking for it without a specific remedy may leave us in the same position we were when we started the hearings. Mr. BYRNE. I would like to mention the conservation acreage reserve or soil bank referred to I think has great possibilities in curtailing production, but I believe it will take a whole kit of tools, Senator, to get the job done. I realize and I want to state that if we get high or rigid supports then we have to accept, I am talking about myself now, a hard-boiledthat is a poor phrase, but put crudely-hard-boiled production controls. I agree with you Congress would never leave the door open and the basis that we first discussed this without straight hard-boiled production controls coupled wtih acreage reserves and expanded consumption I think it could be worked out. The CHAIRMAN. You think it could be by that alone? Mr. BYRNE. I think with the acreage reserve, as the last thing probably would be used thinking in terms of continuity, the last thing, acreage reserve would be a clean-up proposition where the The CHAIRMAN. How much would you put in this acreage reserve, what percentage of the overall cropland? Mr. BYRNE. I think each year the Secretary of Agriculture should announce about how much, we wouldn't get it perfect, as you well realize, how much would be in the acreage reserve, it would be broken back to State and county quotas, and proceed from there. The CHAIRMAN. Would you expect payment on these? Mr. BYRNE. Yes. The CHAIRMAN. How would you work out a formula for that? Mr. BYRNE. I think the county committees, the committee system of the administration of the farm program of course should be given maximum latitude possible and that the formula should be some place close to cash rent or rent equivalent in that county. The CHAIRMAN. That would be in addition to the 90 percent support that you would want. You wouldn't include that to make the 90 percent? Mr. BYRNE. No. The CHAIRMAN. You would want 90 percent on practically all produced, plus rental, for any acres that are not put in production? Mr. BYRNE. Yes, you would have to do that to get incentive. The second thing is we are assuming that the acreage put out of production would not create the storage problem we are now wrestling with and that money would be available for acreage reserves. The CHAIRMAN. I hate to contemplate what that would cost the Government, but we have had estimates from one to as many as $3 billion, and maybe more than that. Any further questions? STATEMENT OF GEORGE F. ANDREWS, PRESIDENT, KANSAS LIVESTOCK ASSOCIATION, KANOPOLIS, KANS. Mr. ANDREWs. I am George Andrews, Kanopolis, Kans., farmer and stockman. Gentlemen of the Senate Agriculture Committee, Senators Ellender, Thye, Shoeppel, and Senator Carlson, the position of the Kansas Livestock Association has been outlined many times in the past. We reiterate our stand as being opposed to direct supports for livestock prices. It has not been possible to have a meeting of the board of directors or executive committee previous to this hearing. We would like to have the privilege of filing briefs within a reasonable time on issues we feel are important to the livestock industry. We thank you for the time and are willing to yield the balance of our time to be used as you see fit. The CHAIRMAN. I am sure that you have given thought to the situation. Do you know of any way by which, if Congress were to put support prices on beef or these other products, any kind of meat products such as cattle, veal, hogs, and poultry, production could be curtailed as to those who desired to have a support price on the products? Mr. ANDREWS. Frankly, Senator, I don't think we have ever been able to agree on any plan to curtail production anywhere near to the proposed amount. The CHAIRMAN. It is very impractical; is it not? Mr. ANDREWS. I think so, I would say so. The CHAIRMAN. Very hard of solution. Mr. ANDREWs. Yes, sir. The CHAIRMAN. I have been seeking a solution from those who advocated that plan, but so far we haven't gotten too much in results. Any questions? Senator THYE. Yes, Mr. Chairman, I would like to ask Mr. Andrews a couple of questions: Mr. Andrews, is there in your mind any thought that we may have an overproduction of beef if we have an abundant supply of cheap grains for feed? Have you given any consideration to that? Mr. ANDREWS. I am certain that usually happens, Senator. Senator THYE. If there were no control over diverted acres, is there a danger in your opinion of getting too much cheap feed and thereby threatening the livestock industry with excessive production? Mr. ANDREWS. I think, Senator, there would be a possibility of producing more feed than could be consumed by livestock. I think the price of livestock ties in pretty well with the price of feed, the proportionate prices of livestock ties in pretty well with feed prices. For instance, some economists claim that the price of cattle can be fairly well predicted 5 months previous to any date by taking approximately 15 times the price of a bushel of corn on the Chicago Grain Exchange. Senator THYE. There is no question but what it has an influence, but from the standpoint of those of us who are charged with the responsibility of trying to enact legislation that would offer an administratively sound program, would you recommend that we try to in some manner control the diverted acres and what those diverted acres might be used for? Mr. ANDREWS. My answer would be "yes." I think that we would have the possibility of burdensome surplus of a perishable commodity on the market with a burdensome feed supply. Senator THYE. Back in the extreme drought years, which is 3 years ago, the Government did have to buy beef in the attempt to keep the market from breaking. Because of the heavy movement of cattle from drought-stricken areas and the depressed condition of the market, the Government did step in and buy a lot of beef in order to keep the market from breaking. If you get an abundance of feed you might get yourself into trouble as a beef operator just as well as the dairyman or the pork man at the present time. Therefore, in your opinion, as a livestock man, you recognize the need of some administrative control over the diverted acres or time will catch up with you in the livestock business as well as it has caught up with the pork producer. Mr. ANDREWS. I think that is right. Senator THYE. That is all my questions. |