in a program here now. This will completely take the little farmer out if we stay with this very much longer, because it takes so much income now with taxes and things on the rise to even meet the lowest economy in life.

The CHAIRMAN. In connection with what you are talking about now, the small farmer; have you given thought as to the amount that should be paid, let's say, to a small farmer in contrast to a large farmer on diverted acres or any form of payment to a grower? Would you have that graduated or would you put them all in the same boat and let them receive the same payment on a per-acre or whatever formula we may decide upon?

Mr. PATTERSON. I presume you would have to have a maximum. You couldn't give 10 acres to one man and 10,000 to another.

The CHAIRMAN. I had in mind payments from the Government. For instance, we have had quite a few suggestions that on diverted acres in wheat and corn that on those diverted acres the Government should pay rental. The point I want to ask you is would you pay the same amount per acre to a man having, say, 400 acres as to one who may have 10,000?

Mr. PATTERSON. I think he should have a graduated program there. It seems to me we need to take as a basic point what it takes to have an equal standard of living for a family and of course there is investment possibly considered in and depreciation, but normally speaking, for the same quality of standard of living for one family, it is practically the same for another and that should be the foundation we should consider, what it takes for a standard of living for the family.

The CHAIRMAN. Let's say 400 acres is a family-sized farm in Kansas. To do that it takes dollars. Would you give that same to a large farmer up to 400 acres the same amount and then decrease the payments?

Mr. PATTERSON. It seems to me that would be logical, Senator.

The CHAIRMAN. That has been suggested by some and I would like to get your views as a wheatgrower.

Mr. PATTERSON. I would like to make this statement: We wheatgrowers want to get the Government out of our program as fast as

we can.

The CHAIRMAN. That is what I am striving for, too.

Mr. PATTERSON. It can't be done immediately. That is our thought that we get on our own basis back to the old merits.

Senator SCHOEPPEL. I have a couple of questions.

With reference to disposing of these surpluses that hang over the market, which I think you will concede is a depressing propositionMr. PATTERSON. Yes.

Senator SCHOEPPEL. And storage costs are mounting year by year, as we all know. This has given us some trouble in Congress, from those who do not see the necessity of continuing it. We have to watch what support we can get for the argricultural programs.

We have passed laws that provide that the Secretary of Agriculture, whoever he might be, has to operate under.

Now, as to disposing of these surpluses. The commodities that are in good storable shape, owned by the CCC he cannot, under the law, sell for less than 15 percent of parity. Now, would you advocate a change in that law?

Mr. PATTERSON. I most assuredly would.

Senator SCHOEPPEL. Would you advocate a change that would permit the Secretary reasonable leeway to dispose of those surpluses so long as we have a topheavy surplus, outside of a reasonable amount to carry over for emergency purposes?

Mr. PATTERSON. The sooner we do that the quicker we get out of the jam.

Senator SCHOEPPEL. You realize we would run into difficulty in corn producing areas, soybean producing areas and other grains?

Let me ask you this: The Secretary, again under law, by reason of the surplus situation was required to submit to the Congress a limitation of acreage on wheat, say 55 million acres. Under its program your group advocates you would be willing to hold to the 55 million acresI do not think it can be reduced more than that-a number of years until we get this thing whipped?

Mr. PATTERSON. We are advocating a bushelage allotment regardless of acres, we would have to have some regulation there for a time on the total number of bushels.

Senator SCHOEPPEL. In other words, you would advocate a change from the acreage factor to the bushelage factor?

Mr. PATTERSON. Two things enter in there. The fact is we can't find in the record anywhere where acreage allotment has ever given us controls if controls is what we have to have. Another thing, for weather conditions and such in some areas there are years we don't produce any wheat. Maybe they would like to have a lot more wheat one year and if they had a good crop carry it over for a stabilizing effect, the individual carry it over. That is the philosophy. But there would need to be, if the present supply is reduced, there would need to be some maximum bushelage.

Senator SCHOEPPEL. I am glad to hear you say that. When acreage was cut to 55 million acres, which of course the agricultural folks of this Nation passed on last June-whether they had the right of full expression or not is beside the point, or it is only one of the factors that entered into the discussion-nevertheless, they approved the 55 million acres. If we go to the bushelage factor, in this last year we produced a tremendous lot of wheat, and I think it is said that we lacked about 20 or 30 million bushels of producing what we produced on sixty some million acres. It would obviously come to this, namely, that if we went to a bushelage factor we would have to cut down on the bushels until we get these surpluses in manageable shape, would we not?

Mr. PATTERSON. You would have to put some limitations on the bushels that could be marketed.

Senator SCHOEPPEL. All right. If we do that, and we cut these agricultural units so low on the acreage factor, we will have a lot of farmers, and a lot of these smaller and newer farmers on the teetertotter, who won't know if they can stay on another year or 2 years. What would you suggest with reference to a bushelage factor as it concerns that class or group of farmers who are on the borderline, if any?

Mr. PATTERSON. I would like to make this statement before I would answer that, if you permit, Senator.

Senator SCHOEPPEL. Proceed.

Mr. PATTERSON. The areas where the wheat is grown, a lot of them are not suitable for other crops, feed and such. And the small farmer, whatever definition we might give to that for size of farm, should be permitted to use his acreage for whatever he sees fit, because lots of times he has a stock crop of cattle or hogs or sheep and he cannot raise feed crops due to better conditions, and he can raise wheat and normally in the wheat area if you have a wheat crop you don't have others and if you have the others you don't have a wheat crop. He could produce wheat for his own livestock needs or feed. I don't know if that would throw the livestock out of line. We think that should be given consideration.

Senator SCHOEPPEL. Under your system, would you do away with cross compliance, even under a bushelage factor, until we get the surplus down?

Mr. PATTERSON. It is a question whether the wheatgrower will ever take cross compliance.

Senator SCHOEPPEL. I am glad to hear you say that. We have had many advocating that and this committee will have to wrestle with it. Mr. PATTERSON. We voted marketing quotas in this time and there was strong sentiment 3 months before the vote and in my circulation since I have asked the question everywhere how does it happen marketing quotas went in when the sentiment was so strong the other way, and this is the answer to my surprise, that there is going to be more overseeing this year than we have ever had. We voted quotas so the price would be stabilized and we are going to raise the wheat. That is something to give consideration to. It is something I am just learning.

Senator SCHOEPPEL. Thank you.

The CHAIRMAN. Senator Thye.

Senator THYE. Mr. Patterson, I listened carefully to what you have had to say and knowing the complaint that has been lodged against the United States of dumping on foreign markets, I would like to ask you what we would be confronted with under the two-price system insofar as foreign countries are concerned? What would they say to us when we put in effect a two-price system here?

Mr. PATTERSON. Senator, in our thinking we are unable to see any difference between this and what we have now. We have a dumping program at the present time on wheat. It has to be subsidized, yes, but the only difference would be the marketman or exporter, the miller, would be selling this wheat and it would come through on a strict equality basis then rather than this terrible mixture we have got now. Senator THYE. I agree with you on the mixture. We held some investigations on that and I think that the situation is improving, but nevertheless on the question of a two-price system, whatever the world market would offer you could expect the wheat to be channeled in that direction after domestic consumption needs were filled.

As one who is sympathetic to the two-price system, I ask you this question because I am aware of the problem the State Department has in diplomatic dealings with the leaders of other countries of the world. What would be our problem in the diplomatic field and what would we involve our Government and State Department in if we entered into the two-price system?

Mr. PATTERSON. That would take some negotiating, Senator. I can see the foreign countries' attitude because we have subsidized the

entire world in the wheat market. Our side maintained the standard and held it up and I can see why they would want to object to our removing that subsidy from a world setup. I think educated people can iron that thing out. We have had the thing going on for some time that we wheat growers don't like and that is every time there is a market for wheat, no matter what we put up, Canada undersells us 5 cents a bushel and takes the market. They are good people up there, but we need to get organized on this thing and the International Wheat Agreement which we are in, all we are doing is subsidizing the rest of the world. We are letting them have the wheat and we sit back and take what is left if there is anything left. We failed to get in some ports. England failed to cooperate, I think, at the last session of the International Wheat Agreement.

Senator THYE. What do you grow in your particular area besides wheat? If you had no cross compliance to what could you divert your land?

Mr. PATTERSON. Well, the circle has changed. It has always been a wheat area and it was oats and wheat and some corn up until the last 15 years. Now it has changed to wheat, barley, and maize and of course alfalfa.

Senator THYE. The maize of course is equivalent to barley or even competitive to corn.

Mr. PATTERSON. Yes. If we had had favorable weather in Kansas there would have been so much maize the corn people couldn't have found a market.

Senator THYE. You see, you sort of pulled the rug up a little bit and showed some of the other problems.

Mr. PATTERSON. We know what they are.

Senator THYE. You said you did not want interference with diverted acres. That was your own statement.

Mr. PATTERSON. Correct.

Senator THYE. Yet you tell us in the next breath that if weather conditions had been favorable you would have produced so that the corn producers would have been hard put to have found a feed outlet. You see, you give us the problem. Now, then, if you say as a wheat producer you don't want anything to do with diverson and no control over the diverted acres, then how do you think we are going to get this farm plant down in its annual output so that we don't aggravate the situation in another area of production?

Mr. PATTERSON. It is more or less human nature, Senator, that when your income has been cut from one figure down 25 percent that you will make some other effort to again back that income if our wheat income is going to lose that top figure, then I think the wheatgrower is going to seek some other outlet regardless of what it does to somebody else. We know it will do something to somebody else, but we are still faced with the expense of operation and living and our income is diminishing. We think in our program if we could get full parity on domestic use of the wheat that would make it bear economic needs.

Senator THYE. I would agree with you. From the standpoint of farm income, you must have sufficient income or otherwise you are going to have to resort to either your savings or to credit, either of which will put the man with limited capital and credit out of business immediately. When I say immediately, I mean in the course of a

year or two. There is opportunity then for the man with substantial financial resources to pick up at a sheriff's or forced sale the other man's equipment, including the real estate. It doesn't necessarily follow that the overall unit output would be reduced. The only difference could quite well be just a change in ownership and management. That is what you and I are faced with today. We have to find the answer. The two-price system offers one avenue, but this avenue has certain roadblocks which we must overcome. The one is the diplomatic problem which we have already mentioned. The other is the question of diverting your acres. If you go into a competitive crop, you are going to multiply the problems of other producers.

Mr. PATTERSON. In the natural wheat area I don't believe there would be too many of the diversion crops.

Senator THYE. You answered your own question about maize when you said that if weather conditions had been favorable you surely would have put it on the market.

Mr. PATTERSON. If you had had the domestic parity plan you wouldn't have had that maize.

Senator THYE. I beg your pardon?

Mr. PATTERSON. If you had been under the domestic parity plan you wouldn't have had those acres of maize.

Senator THYE. That is debatable. You would say I probably can sell this many bushels of maize and I will gamble a little. Human nature being what it is, you sometimes have to have a stopper.

The CHAIRMAN. Will you answer one question: In your two-price system you spoke also of the wheat agreement. Of course if you had a two-price system you would do away with the wheat agreement, you would have to.

Mr. PATTERSON. Maybe not.

The CHAIRMAN. You would subsidize wheat both ways, subsidize it for sale abroad and also at home?

Mr. PATTERSON. I am not talking about a wheat agreement or subsidy.

The CHAIRMAN. It costs $50 million a year for the wheat agreement. That is subsidy.

Mr. PATTERSON. Yes.

The CHAIRMAN. You would not want that, too?

Mr. PATTERSON. We could do away with that part of it.

The CHAIRMAN. In other words, your plan contemplates payment to the farmer of 100 percent of parity or parity for his share of the domestic consumption and what he produces over that would be sold on a free market and you do away with the wheat agreement.

Mr. PATTERSON. That is right.

The CHAIRMAN. Thank you.

Senator THYE. I would like to put in the record-I asked for it just before I started the little colloquy with my friend, Mr. Patterson-information as to the increase in production of sorghums, and that of course takes in the crop that you referred to here in Kansas. In 1955 there has been a 94,113,000 increase over 1954 and 1953. That is in bushels. You see what the diversion was and you can predict what the anticipated diversion will be in the future. So therefore be a little sympathetic with us fellows who have to make a legislative determination on this diversion question.

The CHAIRMAN. Senator Schoeppel.