The CHAIRMAN. In that connection do you not think that the most of that job should be done by those who dispose of these commodities rather than let the Government get into it?

Mr. DAVIS. Yes, sir; I concur in that.

The CHAIRMAN. In respect to sales abroad, you recall that I as chairman of this committee appointed a subcommittee in order to find out whether or not there was any interference by the State Department in selling our surpluses abroad.

Mr. DAVIS. I believe you found there were.

The CHAIRMAN. I think Senator Young was on that committee and he can speak for the subcommittee; I think the record does reflect the fact that there has been some interference and, as a matter of fact, we have a State Department that seems to take better care of the foreign producers than our own producers here. That was the consensus, I think, of some of the members of that subcommittee. It is really an executive problem. We in Congress couldn't take any steps except maybe on the appropriations committee to deny their salaries or something like that, but we wouldn't want to go that far.

It is really something left in the hands of the executive department, with which we have nothing to do.

Now, you mentioned that on these acres that you set aside, say, the 10 percent, you would have the Government pay to the farmers the equal of 6 percent on the value of their land?

Mr. DAVIS. Yes, sir.

The CHAIRMAN. That would mean in the irrigated areas where you have land set aside and the land cost, let's say, $500, you would also give 6 percent.

Mr. DAVIS. $30.

The CHAIRMAN. $30. Here in Oklahoma where it costs $25, you would give them 6 percent, too.

Mr. DAVIS. On eroded land, yes, that is only worth $25 an acre. The CHAIRMAN. Would you place any limitation on the acreage? Mr. DAVIS. No, sir; I would not. I would like to make clear the reasoning we have behind that statement.

The CHAIRMAN. I would rather have just a follow-through with what I have in mind.

Mr. DAVIS. All right.

The CHAIRMAN. In other words, let us suppose a man has 40,000 acres. We have a lot of them-gentlemen farmers who maybe own a bank here in Oklahoma City or in some other places. Would you want to give that man the same compensation on his acreage as the man who works his farm, stays on the farm and gets his livelihood from the farm?

Mr. DAVIS. Of course the personal feeling is no, but the business angle would say yes.

The CHAIRMAN. When you say business angle, you mean as an investment to him?

Mr. DAVIS. That is right.

The one thing I want to leave here is that to me I think this is going to assist in helping to retain attractive agricultural units. It will give a young man that is in debt an opportunity to operate to capaciy. The man that is ready to retire, let him retire his entire unit if he so desires, and let the young man or the man in debt, to me I think to protect these smaller attractive units is quite desirable.

The CHAIRMAN. The committee has received some testimony both on the record and off the record, that our cattle surplus today is due partially to the fact that quite a few doctors went into business, quite a few dentists, quite a few bankers, and when the prices began to lower many of them had borrowed money on this cattle, bankers got worried so they dumped them on the market and down went the prices.

Do you think the same degree of protection should be given to a man who is not a farmer as a man who is a farmer, I mean a real farmer who makes his living from it?

Mr. DAVIS. That is class legislation.

The CHAIRMAN. I am asking your opinion. You say no. That is your answer?

Mr. DAVIS. That is right. May I make one other observation if I may?

The CHAIRMAN. Surely.

Mr. DAVIS. Since you mentioned cattle we have about 94 or 95 million cattle and that apparently is ample at the present time. If we divert from basic crops, 30 or 40 million acres then we could very easily have another 10 million head of cattle which will put usThe CHAIRMAN. You mean another 10 million?

Mr. DAVIS. Yes.

The CHAIRMAN. When, right away?

Mr. DAVIS. No.

The CHAIRMAN. In the course of 25 years?

Mr. DAVIS. I mean in the course of 5 years.

The CHAIRMAN. Five years. You don't think that would have a tendency to depress prices by having a surplus of cattle?

Mr. DAVIS. Yes.

The CHAIRMAN. If you encourage production of cattle by others, wouldn't it have a tendency to reduce prices and thereby affect the farmer who depends on those cattle for his own livelihood?

Mr. DAVIS. I think we are going to operate to capacity in all kinds of agriculture.

The CHAIRMAN. We are now, but look at the plight we are in. Our capacity today is so great. Let me put it this way: In the last 10 years our plant has increased capacity on the same acres 42 percent. That is why we have so much on hand.

As you stated, I am very happy we do have a surplus rather than a shortage.

I just want to ask you about price supports. As I understood you you want 90 percent support on basics.

Mr. DAVIS. Yes, sir; and straight across the board.

The CHAIRMAN. What do you mean by that?

Mr. DAVIS. Well, exactly what it says.

The CHAIRMAN. Straight across the board? Does that mean on all commodities?

Mr. DAVIS. Yes, sir.

The CHAIRMAN. Do you believe in the principle that any commodity that is protected or under support should be controlled?

Mr. DAVIS. I think this method of taking out 40 million acres out of the total agricultural factory will control it.

The CHAIRMAN. That is one solution you advance, but I am going back to discuss price supports. You say you want to put 90 percent support on all commodities.

Mr. DAVIS. Yes, sir.

The CHAIRMAN. That would mean basics?

Mr. DAVIS. Yes, sir.

The CHAIRMAN. That would mean any crop, poultry.

Mr. DAVIS. Yes, sir.

The CHAIRMAN. And all dairy products.

Mr. DAVIS. Yes, sir.

The CHAIRMAN. Turkeys.

Mr. DAVIS. Yes, sir.

The CHAIRMAN. All poultry.

Mr. DAVIS. Yes, sir.

The CHAIRMAN. All right.

Mr. DAVIS. I want to qualify that.

The CHAIRMAN. I want to get that from you. If you answer my questions we will get to the qualifications.

You concede that in order to give to the farmer this protection of a support price for his commodity he must agree at the same time to a reduction in production?

Mr. DAVIS. He needs to agree to it or assist in raising a fund which will take out competitive acreage.

The CHAIRMAN. I am getting to that. That is your next point I want to take up. That is the 10 percent.

Mr. DAVIS. Yes.

The CHAIRMAN. Do you think that in itself will do it?

Mr. DAVIS. It might need to be 12 or it might be 11 or it might be 14, but I think you can shut the factory down and bring the supply of total commodities in line with all of the good things that we need and maintain an adequate reserve.

The CHAIRMAN. That is what we are trying to do-find the right solution.

Going back to 90 percent price supports, you say you agree that any farmer who expects his Government to support him at 90 percent should be willing and ready to curtail production of that commodity? Mr. DAVIS. One of two ways; yes, sir. In our preference of course it is that the farmers assume half of this load.

The CHAIRMAN. Why the farmers? Why put it on the farmers? They pay income tax and tax on everything else. Why not apply the same principle to anything else?

Mr. DAVIS. You could if you so desire.

The CHAIRMAN. Why pick on the farmer for that?

Mr. DAVIS. I think I have an answer. I am happy you brought

it up.

The CHAIRMAN. I wish you would give it to us.

Mr. DAVIS. In the first place, the farmers themselves are to benefit from this program.

The CHAIRMAN. Not if you take it away from them through taxes. Mr. DAVIS. I will give an example: In 1954 the agricultural income was about $34 billion, roughly. That was 86 percent. Then parity would have been $40 billion. One-half of 1 percent on that would raise $500 million. Under this setup the farmer would have been receiving 99.5 percent of parity. If we reduced total number of acres rather than getting-in other words he would swap $500 million for $6 billion.

The CHAIRMAN. That is all right if you reach a hundred percent of parity. You would make that difference. That is easy. But your solution here is, first cut 10 percent of the acres.

Mr. DAVIS. If that is the amount that the economists think, that is my recommendation.

The CHAIRMAN. Whatever it is, 10 or 15 or 20 you want to do it that way.

Mr. DAVIS. Yes.

The CHAIRMAN. And also you want to give him 90 percent price support on what he produces on the other acres.

Mr. DAVIS. I think it needs to be available; I don't think you will ever have to use it.

The CHAIRMAN. We may have to and if we put that in the law it may be necessary to use it. Let's not take a chance. Let's see how it would work:

How would you control production of chickens, poultry, or cattle? How would you do that?

Mr. DAVIS. I think it will come automatically.

The CHAIRMAN. You think so?

Mr. DAVIS. Yes, sir; because

The CHAIRMAN. You would be surprised at how many people might go in the business of raising cattle if you supported them at 90 percent. Mr. DAVIS. If there are 40 or 50 million acres retired completely from production then apparently there would not be sufficient acreage left to expand considerably.

The CHAIRMAN. Well, they might grow more feed by using more fertilizer. They might get better land on which to grow fodder. Mr. DAVIS. Yes, sir.

The CHAIRMAN. You would be surprised at the gadgets a farmer can think of to grow more of everything.

Mr. DAVIS. I agree.

The CHAIRMAN. I have had experience with that in the past 19 years, you know.

Mr. DAVIS. I agree with you.

The CHAIRMAN. Beginning in 1937, I think it was, we produced from six to seven hundred pounds of tobacco per acre and now it is over 2,000 pounds. Suppose they did the same thing on feed that cattle liked. Wouldn't it have the tendency of increasing production? Mr. DAVIS. Yes.

The CHAIRMAN. Won't you get into trouble if you do that?

Mr. DAVIS. No, sir.

The CHAIRMAN. Why not?

Mr. DAVIS. Because instead of taking 40 million or 50 million acres out, take out 60.

While you are on that subject, I have a few facts here.

The CHAIRMAN. I would like to pursue this 90 percent price-support program. Now you think that you could control the production of poultry.

Mr. DAVIS. I think you could; yes, sir.

The CHAIRMAN. Just let me know how you would do it.

Mr. DAVIS. You will have retiring a substantial number of farmers that have been growers of poultry, growers of sheep, growers of swine, and they are out of the picture; they are retired farmers in a number of instances. If you reduce volume of grain that will automatically reduce the volume of poultry.

The CHAIRMAN. You mean make it higher?

Mr. DAVIS. Yes, sir; or even not make it available.

The CHAIRMAN. How about the poultryman who buys his feed and doesn't have acreage to grow his own feed in order to produce for poultry, but has maybe 2 or 3 acres, and can grow thousands of chickens on that acreage. Would you want to deal with him? Pay him 90 percent of parity on his production?

Mr. DAVIS. Yes, I think that is all right because he has to in turn pay the man from whom he buys the grain a comparable figure.

The CHAIRMAN. Of course he would be protected by the Government at 90 percent and I imagine the Government would have to take over all he can't sell at 90 percent.

Mr. DAVIS. I couldn't think there will be any over. To me we are going to use the same principle in agriculture by shutting down the factory just like John Deere or International or General Motors.

The CHAIRMAN. I believe you are a little bit optimistic about that. Mr. DAVIS. I would rather be an optimist than a pessimist, I assure

you.

The CHAIRMAN. That happens to be our position today, you know, but we are suffering and that is why we are here today in Oklahoma. Mr. DAVIS. Two or three other facts while we are on the subject you talked about. Facts we need to consider. Again I want to say we need to be happy we are living where we have too much than to be fighting over the biscuits. The thing to think about is the plight that we have. The population increase in the United States, 22 million approximately, more than a half percent. We hear a number of folks say that we are going to run out of food. For example, production is up 60 percent per hen since 1930. Chicken meat production per hundred pounds of grain fed is up 90 percent since 1930. Milk production per cow is up 25 percent, pork production per hundred pounds of grain 25 percent, cotton yields 60 percent up per acre, corn yields 74.

The CHAIRMAN. That is the average I gave a while ago, 42 percent overall. What is that period?

Mr. DAVIS. 1930.

The CHAIRMAN. Mine was the last 13 years. That is overall, 42 percent.

Mr. DAVIS. Number of acres under irrigation increased 41 percent since 1930 and potential increase is approximately 100 percent of total irrigated acres. Records show that American agriculture has prospered comparatively with other industries only in the times of war or immediately after the war period. Farm prices have declined 17 percent since 1951 and the present parity ratio stands at 86 percent for 1955.

This is below average of 1920 and the net farm income off $2.9 billion from 1951 to 1954 and cash receipts for farmers are off another 5 percent this year. Conclusions are in. Our technological advances cause continuous increase in agricultural production which our increase in population will not take care of. Decreases in agricultural prices do not reduce total production of agricultural commodities. Net result will be continued surpluses and depressed prices with American farmers taking a smaller and smaller percent of the national income. The CHAIRMAN. In that connection do you know that as of August of this year the farmers are getting only 40 cents out of the consumer dollar?