Senator THYE. Had there not been this embargo, there would have developed an inflationary trend in the price of oils, such as linseed and cottonseed and soybean seed oil. The flexible theory was written to get a shift from, say, cotton if we were long, in that commodity, or shift from wheat, if we were long there, or a shift from corn, if it was long, to a shorter crop in the northwest such as flaxseed or soybeans. However, the pipelines are now full. I couldn't divert to any other commodity, and therefore the flexible philosophy rests only on the volume or the surpluses that exist in a given commodity. Therefore, having made this little explanation of my thinking may I ask you this question:

Is there any other recourse at the present time except reduction of the overall agricultural plant?

Mr. LOVELL. I would like to make one further point.

Senator THYE Cannot you answer the question whether or not in your opinion the farm plant is too big?

Mr. LOVELL. Before I answer that question, if I may, I would like to make one other point, since I know what the question is leading to and I want to be

Senator THYE. I am glad you anticipate what my thoughts are.

Mr. LOVELL. I would like to say one further thing. In the agricultural program to summarize must have a greater degree of flexibility must produce a product that is wanted by the markets and must not be supported at a detriment to the consumption of the commodity and if production controls are determined to be necesary they must be written so that they will work.

Now, your present production controls are no more production controls than the man in the moon. We are producing 15 million bales of cotton this year and if you plant next year you will produce another 15 million bales.

Senator THYE. The question is, do we amend the law? Here are five of use sitting, who serve on the Agriculture Committee, and we are going to have to express our wisdom in our votes. We are seeking information from the grassroots to determine what would be the best course of action and how we should vote to get on this course.

Therefore, I ask you this question: Is the number of acres tilled and harvested annually too great when we consider our domestic consumption needs and our ability to sell abroad? Now understand this, we have voted $1,700 million in Federal funds for the promotion of export sales in all commodities in the effort to recapture foreign markets or to expand existing foreign markets. We haven't failed you. We have also adequately provided for the school-lunch program. But the fact of the matter is that we have a year's supply of wheat on hand if we never turned a threshing machine wheel. We have practically, as you have stated yourself, a year's supply of cotton. We know that we have an ample supply of dairy products. Where do we go now then unless we reduce overall acreage?

Mr. LOVELL. Could I answer the question by a little bit in wording? Let's go back to see what happened. During the war and postwar period you constantly asked American farmers to increase production. They did not materially increase production. The number of acres in cultivation was not increased. I think it decreased. Production was increased by increasing productivity per acre.

Senator THYE. If I may interrupt, however, hasn't Congress been asked, through the appropriation of research funds, to help in expanding the productive ability of the individual and of his acres? We are constantly researching, and I wouldn't deny a needed penny for such work.

I want research work, but haven't we proven that at the present time, blessed as we have been with abundant crops. We can produce more than we have the ability to either consume or to export?

Mr. LOVELL. Correct. Could I finish my analysis, please?
Senator THYE. Yes.

Mr. LOVELL. I am trying to answer the question. When the postwar period was over and agricultural production in the rest of the world got on its feet the American plant was producing too much. We decided that they had to reduce production. Now, what would have been the right way to do it? The right way to have done it would have been to bring it back the same way it went up to reduce production per acre, because in so doing you keep your entire plant available and you can use it again in time of emergency. If you go out and immobilize a large section of your agricultural plant and you had a war you could not get that piece of land back into production fast enough.

I have asked a number of cotton farmers this question: In 1953 it was decided we were going to reduce cotton production 15 percent. If you had been told by the Government that you could sell 15 percent less bales of cotton next year than you did this year, what would you have done? The answer is consistently "I would have planted the same acres, I would not have poisoned a few extra times, not fertilized in case of doubt." You would have brought production down slowly and you still would have retained substantially your entire agriculture plant.

Senator EASTLAND. Now our exports have been cut in half, haven't they?

Mr. LOVELL. Yes.

Senator EASTLAND. Our cotton exports. That has been so because we have 90 percent support prices.

Mr. LOVELL. That is correct.

Senator EASTLAND. And cotton that went in the loan we have locked up and refused to sell it.

Mr. LOVELL. Yes.

Senator EASTLAND. That is, the United States Government.

Mr. LOVELL. Yes.

Senator EASTLAND. If the United States Government had met this foreign competition and had maintained our exports at a normal figure we wouldn't have a cotton surplus.

Mr. LOVELL. No.

Senator EASTLAND. I do not think there is any dispute. Cotton can be sold domestically at $1.05 of current support price plus reasonable carrying charges. Cotton for export can be sold at any price. It is just an administrative decision. The Secretary of Agriculture had wanted to dispose of it at these competitive prices and the State Department blocked him.

Mr. LOVELL. The past mistakes, regardless of where made, are made, and we have to start from where we are now.

Senator EASTLAND. We wouldn't have any surplus, would we?

Mr. LOVELL. No. I want to emphasize the point about controls. When you control production by trying to control acreage the farmer ends up spending more money per acre on the acres he has got, he increases his risk because he is spending more money per acre, and you do not control production. I think experience will bear me out you cannot control production by controlling acreage.

Senator YOUNG. Do you propose a unit basis?

Mr. LOVELL. Yes, sir; you have to put it on a unit basis.

Senator YOUNG. We have a lot of testimony favoring that position. Mr. LOVELL. In the State of Louisiana you have a lot of cotton acreage renting at a hundred dollars an acre because they know that everything that can be raised on that acre will be supported at a given price.

Senator EASTLAND. If you put that limitation, if you limit it on a unit basis that means that you have got to take every governmental step necessary to move it into consumption.

Mr. LOVELL. I quite agree. At one place, if I didn't say it I meant to say if you expect the farmer to move this surplus by production controls you are going to bankrupt him. The Government has to remove the surplus before any law will work. We should try to write a law that won't get us back into the same problem 5 years from now. The CHAIRMAN. You will give a prescription for that? Mr. LOVELL. I have given you what I think will happen.

The CHAIRMAN. In the statement you have already made?
Mr. LOVELL. Yes, sir.

Senator YOUNG. I don't want to leave the record as it is. Production controls are working reasonably well on wheat. This year production is a little over 900 million bushels, down nearly 30 percent from previous 5-year average. Our present production is about what our requirements are. We have a present carryover of previous years which is very large though.

The CHAIRMAN. I wish to also point out that in 1950-51 we had production controls and during that year we produced 10 million bales and year before we produced 16 million. We reduced it from 16 to 10. Then the Korean war came on and our Government said, boys, go to town and grow all you can, and we did.

We planted and during the season of 1951-52, produced 15 million bales plus. In the season 1952-53 15 million plus bales were produced, and the next uncontrolled year 1953-54 almost 1612 million bales were produced.

Mr. LOVELL. This year 15 million on the same acreage as 10 in 1950. The CHAIRMAN. This was pointed out, that the Lord has been good in giving rainfall and things necessary for most areas, not only for cotton but for the wheat growers all over this Nation also and that has been one of the factors that has certainly contributed to all of these surpluses.

Mr. LOVELL. The Lord hasn't been good to many sections of Louisiana. If you talk to them you will find they are hurt pretty bad. The CHAIRMAN. Any further questions?

Thank you very much.

The committee will stand in recess until 1:30. This afternoon we had hoped to get into the dairy phase, but I am informed that since we have 2 days of hearings for Alexandria, most of the dairy people

will come in tomorrow. That also applies to the rice people, as I understand. Most of them are to be heard tomorrow.

We will continue with cotton for a while this afternoon and after hearing from a few more witnesses as to cotton we will drop down the list to rice, since there are some rice folks here.

We will stand in recess until 1:30.

(Whereupon, at 12:25 p. m. the hearing was recessed, to reconvene at 1:30 p.m. the same day.)

AFTERNOON SESSION

The CHAIRMAN. The committee will please come to order.
Mr. Larche, please.

I am skipping around, gentlemen, in order to get all views on the cotton problem, as many views as we can, farmers as well as organizations.

STATEMENT OF JAMES E. LARCHE, WEST MONROE, LA.

Mr. LARCHE. I am James E. Larche, resident of Ouachita Parish, State of Louisiana. I own 170 acres of land in the hill section of the parish, of which 90 acres is open land and the balance in woodland pasture.

I raise cotton, corn, and small grains, feeding most of the grain to livestock. I do most of the work myself, hiring very little labor except for hoeing and cotton picking.

Cotton is my main crop, so therefore I am vitally interested in the cotton situation of our country. It is my main crop because there is always a ready market, it is nonperishable and there is a Government loan on it.

Also it is not as likely to be a failure with me as are other crops. I have farmed on this same place all of my life, except for 3 years in military service. Having spent my life on this farm, I hate to think of the idea that some day I might be forced to do something else for a livelihood. But it looks like, if something isn't done about cutting cotton acreage each year, that I might be forced to quit the farm that I like so well. Certainly I have no desire to do so. In other words, it is the feeling of my neighbors and myself that either rigid 90 or flexible price supports with acreage reduction each year just won't work. Regardless of what I am guaranteed per bale of cotton, if I don't have acreage enough to raise a bale I still haven't made anything.

It seems to me that the Eastland proposal, whereby we take a little out in price so as to sell our surplus of cotton, would work better than any other proposal I have heard. I realize that this is easier said than done maybe, but it looks to me like a step in the right direction. I know that a reduction in price sounds bad and is bad, but I think if we could reduce the price so as to compete with foreign markets and synthetic fibers we will sell a lot of our surplus cotton, and if we could get rid of the surplus we would be well on the way to having the problem licked. Surely neither rigid 90 nor flexible supports are doing anything and will not in my opinion do anything toward getting rid of the surplus.

Besides not reducing the surplus, it is encouraging people in foreign countries to grow more cotton. I think our price should be in line so as to compete with other countries. We must get out from under acreage control and the sooner we start working toward that goal the better off we will be.

The CHAIRMAN. Now, Mr. Larche, you are advocating that farmers should be permitted to plant all the cotton acreage they desire?

Mr. LARCHE. Not right now. We should work toward that end. It might take 10 or 15 years but certainly that is what I would like to work toward.

The CHAIRMAN. You say you have at present how many acres in cultivation?

Mr. LARCHE. 90 acres of open land.

The CHAIRMAN. What is your cotton allotment?

Mr. LARCHE. 25.8 this year.

The CHAIRMAN. How much did you plant before?
Mr. LARCHE. My highest planted was 43 acres.

The CHAIRMAN. What suggestion have you to offer to make it possible to give the farmers of your area and the farmers who have acreage similar to yours in size an allotment without increasing our surplus? That is the problem we have to face right now.

Mr. LARCHE. Sir, I wouldn't be able to say whether the surplus could be sold or not, but certainly if our price would come down we would be more able to compete with foreign markets.

The CHAIRMAN. Do you think we can grow cotton cheaper than you are now being paid?

Mr. LARCHE. Yes, sir; if I could have more acreage.

The CHAIRMAN. How much more acreage? That could be easily done if that is what you want, just abandon the whole program. Mr. LARCHE. Two or three acres wouldn't help with 25-acre allotIf I get 10 or 15 that would help. I could grow it cheaper. Senator EASTLAND. What is your allotment going to be in 1956? Mr. LARCHE. I don't know.

Senator EASTLAND. It will be lower?

Mr. LARCHE. Yes.

Senator EASTLAND. And still lower in 1957?

Mr. LARCHE. Yes. They keep cutting me and I will be out of the business. I can't go much lower.

The CHAIRMAN. What do you grow on the rest of your acreage? Mr. LARCHE. Corn and small grains and feed to livestock. I sell very little.

The CHAIRMAN. You sell it through livestock?

Mr. LARCHE. Yes, sir.

The CHAIRMAN. Now, have you a method to propose to us suggesting how we could give you more acreage and yet treat others all over the country in the same way? That is, not select a certain few. In other words, our difficulty has been to properly allocate the number of acres that the Secretary declares under the law are necessary in order to produce a given baleage, you see.

Mr. LARCHE. Sir, I don't know that I have one. It is only fair that each person should be cut a certain percent.

The CHAIRMAN. That is what they are trying to do and they base that on history. Can you think of a better one? Mr. LARCHE. I certainly cannot.