Mr. DUNAWAY. The 80-acre man is usually a very small farmer. The CHAIRMAN. But you have a lot of people on 80 acres in irrigated lands that will make as much as a man on 1,200 acres in this State.

Mr. DUNAWAY. That might be true but that was just an arbitrary figure I put in there. I stated that as an arbitrary figure. Forty acres or 20 acres might be big in irrigated country. On the Great Plains he might need 640 for a family-sized farm.

The CHAIRMAN. You can see the administrative problems that would come about. Even here in Oklahoma you would have to have a different pattern, would you not?

Mr. DUNAWAY. That is right.

The CHAIRMAN. It is not so easy, you see, to write a prescription to cure all the evils even in your own State.

Mr. DUNAWAY. Yes, I mentioned at the start it wasn't going to be painless.

The CHAIRMAN. Any questions?

Thank you, Mr. Dunaway.

(Mr. Dunaway's prepared statement follows :)

The Production and Marketing Administration crop allotments, made on a historical basis, are all wrong for family-sized farms. No farm with 80 acres, or less, of tillable land should be hampered by crop allotments. Take the hobbles off this type farmer if you expect him to survive. He contributes little to farm surpluses.

Historical allotments on larger farms are of questionable value at least. We suggest study of the following procedure:

When the Secretary has determined the amount of crop production needed to be produced, subtract from that amount the production expected from family-sized farms. He can then determine what percentage of all other land should be devoted to crops' production to get desired results. That factor applied to the crop acreage of any larger farm would determine the land to be planted to basic commodities in any year. All land not allotted should be devoted to soil-building crops and practices, else no price supports, or PMA assistance, for the year. Without crop allotments, the family-sized farmer will, on the average, balance his crop to conform with his labor supply, machinery available, potential market outlet, and family needs.

Allotments on historical basis are unfair to soil conservation farmers, because they fail to take into account the land-use adjustments and revegetation already accomplished by conservation farmers. Allotments on a percentage basis can take into account such adjustments.

In regard to farm allotments we cannot find a painless answer. If we expect to bring production in line with available market demand, we see no way to accomplish that purpose except through more effective and realistic production controls plus increased exports.

The farmers of America have voted overwhelmingly to give the Secretary of Agriculture full authority to do this, yet the value of past efforts has been negated by subsequent administrative rulings by the Secretary. For example, a crop-rotation farmer with a 40-acre wheat base was cut to 25 acres planting base. He put on some fertilizer and still raised the usual number of bushels. Payments for conservation practices on enterprises larger than family-sized farms should most certainly be limited to payment for permanent practices. Payment for recurring practices on family-sized farms may have a very definite value, provided the practice is part of a coordinated soil-conservation plan. Incentive payments, that pay an operator for sowing his own seed, are a travesty on justice, and would appear to be a subsidy payment on good farm on which the operator is already thoroughly sold. Farm subsidies, as a substitute for a fair price in the market place, are uneconomical, socially unsound, and call down unfair criticism on farmers.

Farmer A, had a 40-acre wheat base, his allotment was cut to 25 acres. His neighbor across the road who had never raised wheat was then informed that "Any farm could raise 15 acres." His corn acreage was cut from 60 acres to 45 acres, so he planted 15 acres of wheat on the land taken out of corn.

The first farmer then planted his other 15 acres to grain sorghum. Try to figure out what reduction was accomplished please.

Don't blame the farmer. When his potential production is reduced and the price structure pulled from under him at the same time, he sees disaster ahead. In our opinion, allotments should be in bushels or bales per farm, and excess production be allowed to be carried over to next year to be sold as part of the following year's allotments.

If you expect the farmer to survive economically hold prices at or near parity, and take necessary measures to reduce production of crops already in oversupply.

OUR PARITY FORMULA IS UNSOUND

Parity under the present law is that price for farm products that reflects the average price received for farm crops the last 10 years.

If we use a sliding scale for crop-support prices maintained at 75 percent of parity for 10 years, then parity itself starts a downward trend, and 75 percent soon becomes parity or 100 percent. This cannot be justified. Let's revise this.

NEWS RELEASES ARE MISLEADING

In computing the total income of farmers, they are charged as part of their income, the value of the lettuce and radishes from the home garden, eggs consumed from the poultryhouse, and rent on the dwelling on which they pay taxes. If it becomes necessary to jack up those income figures to higher levels, since the farmers wife is usually home nights, and New York City call-girl prices are $100 per night, lets add $36,500 per year on that score.

The total amount of farm income is of small moment. Let's calculate his net spendable income based on the Bureau of Agricultural Economics farm statistics 1953.

Disregarding the house rent charged the Bureau shows a total income (all sources) of $34 billion plus.

Total cash expenses, 22 billion plus

Net spendable 1953, 12 billion plus

Price drop 1954, 13 percent or 4.42 billion

Leaving net spendable 1954, 7.58 billion

Further 10 percent price drop in cash income 1955, 2.95 billion

Net spendable 1955, 4.63 billion.

No one contends farm expenses have dropped, yet news releases the first week of November 1955, charge a net income of 10.8 billion. We suspect the houserental item was raised and added to the 4.63 billion net spendable obtained from official figures of BAE.

EXPORTS AND IMPORTS

During 1952-53 and early 1954 the pork producers of America did a remarkable job of adjusting supply to demand and prices held near parity. Pork was not in short supply, yet we permitted importation of enough pork from Europe to break prices here back to 77 percent of parity, in order that Europe might get dollar exchange to purchase the product of union labor.

Let's be realistic if we expect agriculture to survive here in America. Agriculture has no Walter Reuther or John L. Lewis. The Secretary of Agriculture is our referee.

We plowed under cotton and pigs during the last depression. We're plowing under farmers now.

We have never questioned the Secretary's sincerity, but Billy Sunday stated "The road to hell is paved with good intentions."

Stop importation of farm commodities that are not in short supply.

TAXES

Oil com

Family farms, along with all agriculture, need income tax revision. panies get an exemption of 271⁄2 percent for depletion or reserves. Asphalt companies get 221⁄2 percent, and even a sandpit gets 5 percent. There are others inbetween these figures.

out."

Instructions for making income-tax returns, 1948, states: "Land does not wear Our computations reveal that a bushel of wheat depletes our soil by 30 cents per bushel, corn by 25 cents, and alfalfa $6.87 per ton. Even a steer sold from the land takes away fertility.

The Internal Revenue Department should be apprised of the truth and Congress advised to revise the law to permit tax exemption amounting to the value of plant nutrients sold from the land. This will be the greatest lesson in soil conservation that the farmers of America will ever receive a concrete example of what is happening to the fertility of each farm.

True, fertilizer purchased is a deductible item on income-tax returns, if any be purchased during the reporting year.

Why go to the expense of making PMA payments on fertilizer for certain practices designated by the State PMA committees? Give the farmer a depletion allowance to represent the amount of plant nutrients removed from his soil, based on actual production each year, and he will have funds to replace these nutrients where, when and how he chooses, based on sound land-use practices that fit his needs.

At present prices, most grain crops should have a depletion allowance of about 15 percent of parity. Cotton and livestock should be less.

SOIL CONSERVATION SERVICE

This youthful agency has been badly hampered by smaller appropriations than are justifiable, considering the size of the job to be done and the urgency for increased speed in accomplishing the desired end, id est: conservation of our soil and water resources.

Too many people are still of the opinion that terraces and ponds are the chief function of this agency. Too little emphasis is placed, by the public, on the land-use phases of this program. Each work unit must have on its staff an agronomist and farm planner, who helps the landowner make the proper shifts in land use and, at once, devise use for retired acres that will enhance the fertility index of the land and offer an increased income for the farm family.

Soil depletion is secondary only to soil losses, and soil technicians are a vital necessity less we continue to plunder expensively in our efforts to maintain and build up our plant food resources. SCS tries, on 58 million a year (onethird the price of a battleship), to save the soil and water resources of America. It can't be done that cheaply. For example, the Oklahoma County Soil Conservation District has work to keep a full-time soils man busy. Our soil man has to be shared with 4 or 5 other districts.

Soils chemistry and soils management are technical processes, indeed, and without proper guidance, few farmers, even college graduates are capable of instituting a safe, sure, economical soils program on a farm.

Most of our training in the past has centered around the most approved methods of extracting the last ounce of plant nutrients most cheaply. Soil-conservation practices are too technical and important to leave to the landowner. Each farm is a separate problem.

"Give us light and we'll find our own way."

FLOOD CONTROL

Flood control is of vital importance. Proper conservation measures on the land will materially lessen soil losses and water runoff. Detention lakes on the upper reaches of watersheds will pick up and hold the runoff satisfactorily to the extent that few, if any, floods downstream are necessary. This is being done safely on several watersheds in the Washita Valley in Oklahoma, which have encountered as high as 13 inches of rainfall in one 24-hour period with no flood results.

Truly big dams downstream look and sound big, but they only collect the soil losses and water runoff from upstream without taking adequate measures to use same, and offering no protection to upstream farmers.

Public Law 566 is a long step in the right direction but needs some revisions.

BUREAU OF ARGICULTURAL ECONOMICS

This bureau does a very able job of compiling statistics, which help guide other bureaus of the Department, but we feel the cost of living computation is causing unfair criticism of the American farmer.

A review of the items included in the computations reveal that food and clothing costs are included in the final index figures along with cars, television sets, insurance, rent, and the cost of having a baby.

The public has little or no information concerning the complexities of these computations. To the consumer, an announcement that the cost of living has risen another 5 percent means the farmer is getting richer faster.

In all fairness to the farmer, this department should release for publication statistics revealing how much food and clothing prices have varied up or down during a report period, separate from other items, constituting the cost of living, and showing that the farmer received only 41 or 42 percent of the total paid by the consumer for the food and clothing purchased, or if future releases continue as at present, reveal in that of the cost of living dollar the American farmer received about 9 cents.

Either of these methods will clarify the farmers' economic position to the reading public.

CONCLUSION

No land removed from crops production should be rented by the Department. It should be planted or sown to soil-improving crops only, even if the ASC cost participation were raised to such levels as are necessary to accomplish the purpose desired; the price structure maintained on the reduced crop quotas, reduced acres of crops planted on all but family-sized farms, quotas should be in units of production, and understand that the application of a sliding price scale means reduction of farm products by attrition of farm families and expansion of corporate farming in America.

The CHAIRMAN. All right, Mr. Bray, let us hear from you, sir.

STATEMENT OF T. A. BRAY, LINDSAY, OKLA.

Mr. BRAY. I am T. A. Bray of route 3, Lindsay. I own and operate a 345-acre dairy farm. I own 45 head of milk cows and have 35 heifers for replacements. Because of dairy-industry restrictions, I am only selling milk from 20 cows.

I do not think we have a surplus of food and fiber problems in this country. I think the whole problem in agriculture is a distribution problem. It is my belief that if all the foodstuffs in the world could be equitably distributed, every man, woman, and child in the whole world would go to bed hungry every night.

The CHAIRMAN. How would you distribute that? I came back 3 weeks ago from a complete circle of the world and the conditions you describe are prevalent in some places, but how would you distribute that? Would you want us to give it to them?

Mr. BRAY. I don't know those answers.

If I did

The CHAIRMAN. It is easy to suggest, see. It is easy for you gentlemen to come before us and say this ought to be done and that ought to be done. Just put it in phrases that sound good but the question is how to do it.

Mr. BRAY. I know that is the problem.

The CHAIRMAN. Sure it is.

Mr. BRAY. We all realize those things.

The CHAIRMAN. That is what we want from you. That is why we are here today trying to get the answer to the problems. It is fine for you to state it. We know the problem now. The question is

how to do it.

Mr. BRAY. That is something I don't know. I wouldn't know how to get the trade barriers of the world down to where we could do those things.

The CHAIRMAN. We have been working on it and somebody always thinks different from what we do.

Mr. BRAY. I think you boys are trying to do the best you know how to do.

The CHAIRMAN. That is right and it is kind of you to say that. I am sure I speak for the committee in saying we will make a noble effort even if we fail. Proceed.

Mr. BRAY. I do not believe reduced rates of price supports will help to keep down Government stocks. Dairymen along with other segments of agriculture production must have a fixed income. When the price of the commodity he sells is reduced, he tends to produce more to feed, clothe, and educate his family.

I keep a very careful and complete record of my income and operation costs. For the year 1954 my records show a net loss of $4,496.30 not counting any cost for my family labor. For the first 9 months in 1955 the expenses are $307.65 greater than gross income. I can understand why the dairymen are quitting.

The same system of bookkeeping shows I made annual net gains of approximately $3,500 before 1954.

My observation of independent farmers, not only dairy farmers, causes me to believe the marginal producers are being squeezed out of the producing industry. I am sure that farmers in my community want rigid price supports on all basic crops until we can work out something better. I believe the proposal to rent diverted acres will be a help if the rental price is adequate, to keep the acres out of production and out of the other producers' business.

If the Congress should pass supporting legislation for land renting I believe the law should definitely name the rental rate and not leave it to the Secretary to set the price.

I believe if all segments of agricultural production could have a similar treatment to what the sheepmen are getting we would all get well. The dairy farmers might all be Benson men if they could get some of that sheep treatment.

It is the belief of many farmers of my acquaintance, and it is my opinion, that the one major change that would help farmers most would be a change of Secretaries.

The CHAIRMAN. Thank you, sir.

Mr. Hague, please. Give your name and occupation, please.

STATEMENT OF LYLE HAGUE

Mr. HAGUE. I am Lyle Hague from north central Oklahoma, a farmer. I am one of the fellows, Senator Schoeppel, who sort of shifted over from Kansas.

Mr. Chairman, one of your first statments was you would like a minimum amount of repetition, and wanted as near as we could to offer solutions.

The CHAIRMAN. That is right.

Mr. HAGUE. Those two things are reasonably difficult. Of course, I am for an expansion of international markets, foreign markets. I understand some of the ramifications that you run into with international relationships and the State Department, that is part of their problem. But even so, I think we should do everything we could to furnish food to the world and I am sort of the opinion that we would be better off if we would take part of the money we are using overseas for other purposes and possibly unless it interferes with their agricultural setup we might even distribute some of this food instead of the money we are distributing.