Over and dispose of the surplus points to administrative difficulties that would be as complex as we would have, as I foresee it, under a two-price method of marketing.

The CHAIRMAN. As I recall the main criticism was as to the difficulty of setting apart that portion of the crop which would be domestically used from that which was to be sold in foreign lands. There would be some difficulty in that there might be a little too much policing required to see to it that the rice was separated and that the buyers and sellers would not enter into any methods whereby there could be a little shenanigans there.

I am not saying it will happen but as I recall that was one of their main criticisms, that the difficulty of separating what the farmer was going to receive, say, at 90 percent of parity for home consumption and preferential customers and that which would be sold on the market at a lower price.

Mr. BLAIR. I would agree that that would be one of the difficulties. The job of policing it

The CHAIRMAN. The administrative feature is what they contended, and I believe that that is one of the main objections to any of these two-price systems.

Mr. BLAIR. As far as rice is concerned, if we used-there have been 3 or 4 plans suggested, one that most of us who have tried to study the plan favor, I think, would be a certificate plan in which the farmer would have a fixed value, or variable value certificate, which the miller would be required to acquire or acquire an equivalent certificate, if the rice was to go into the domestic market.

The farmer would have the alternative probably under the plans that I have seen proposed of selling his rice plus the certificate or of going to a commodity credit loan on his domestic portion from which the millers would have to procure their rice for the domestic market. The chance for shenanigans, if we want to call them that, it seems to come on the part of millers who might acquire rice intended for the domestic market and divert to, intended for the export markets and divert it to the domestic market.

The CHAIRMAN. That was, as I understand, the burden of their opposition in regard to administration.

Mr. BLAIR. That would be the difficulty of policing. On the other hand, there are a relatively few mills, 60 or 70 mills in the United States that would have to be policed. It wouldn't be an insurmountable job to run a close check. The rice millers themselves recognizing they face a decrease of about half in their total volume if something isn't done, have suggested that maybe some system of bonding or some system of setting it up so that if they couldn't prove the rice which they had purchased had been exported, they are required to pay a penalty up to the support level into Commodity Credit, or the Treasury, or wherever it was decided it would have to go.

The CHAIRMAN. You realize of course that if, let's say, a miller were to go to a farmer who produces a thousand barrels and assuming that 60 percent of that is for home consumption and preferential customers and 40 percent for export, he would take it all in bulk, not separate it there.

That was where, as I see it, the difficulties arose; that is, aside from the report that was given to us. I discussed it with some members of the Department of Agriculture and they pointed out those difficulties.

It appeared that unless you have a system whereby you could separate it and keep it separated you might run into many difficulties that could be insurmountable. That may in the long run further depress the price of rice.

Mr. BLAIR. I think that is exactly the point at which they might run into difficulties in their enforcement, but as I say, with only 60 or 70 mills to police, they certainly should be able to set up safeguards to assure that the rice which was intended for the domestic market went there and that which was supposed to go to the other place went there.

The CHAIRMAN. That is why I asked you for your answer to these criticisms, to have them available in the record.

Mr. BLAIR. Yes. I have 2 or 3 other items I should like to mention. One of these has been touched on already this morning and I would like to add something to it. That is the place, as far as our foreign economic policy, the State Department is concerned with our problems.

I was told last year by a State Department official in effect that the job of the State Department was to administer policies as they see it and they assumed that agricultural organizations, USDA and Congress would look after the farm interests in our foreign economic policy. In September of this year I was told by an official of the Ryukyuan Government on Okinawa that some 2 years ago when the Ryukyuan Government wanted to buy about 30,000 tons of rice they were told in effect by our State Department they should negotiate with Burma. Trying to check with our representatives there on Okinawa I found that they had received such a cable, that it was a classified document and that they could not reveal its contents, but in effect it had said you will negotiate with Burma for rice requirements.

A week later I sat in the office of the State Agricultural Marketing Board in Rangoon. I saw listed on blackboards around the wall the rice shipments which were due to go out on the boats arriving, how much rice they were loading and except for one small cargo, 2,500 tons, all was Communist bloc countries, U. S. S. R., Poland, East Germany, et cetra.

That is the situation that it seems to me our State Department is trying to, that is the kind of government and kind of operaion that our State Department insists that we stay out of so that they can carry on.

I talked last month or the month before last with a high official of the Philippine Government and he told me that his people were very much embarrassed last year after they had gotten permission to begin negotiations with the United States for some 300,000 tons of rice to read in the newspapers 2 or 3 days later that our State Department thought they ought to go to Southeast Asia to purchase their rice.

As nearly as I can quote, here is what he said: The United States is our best customer and we like to do business with people who do business with us. Our people like and want to use United States rice. We have to pay United States dollars wherever we buy. You can talk about Asia for the Asians as long as you want to but when the going gets rough we know who will be on our side. Those are almost his exact words.

It is difficult for me to see where we are making very many friends or influencing many people when we adopt policies which carry on in that direction.

The question was asked earlier this morning as to whether we could prove some of our suppositions and I certainly can't prove any of them because I don't have documentary evidence which would be the evidence we need. I do know that 3 years ago, long before we had Public Law 480, I was told by a person in the Department of Agriculture who was trying to help arrange for sales of rice to Japan, that he had spent 2 days arguing with the American Ambassador in Tokyo about whether United States should sell rice in Japan or not. That was when Japan wanted to buy rice for dollars, no aid programs involved. My feelings in the matter can be boiled down to this: If the United States agriculture and agricultural products are to be a weapon of foreign economic policy we ought to call it that and charge the bill to the State Department, or whatever other agency it should go to and quit blaming United States agriculture and support programs and that sort of thing for our situation.

Senator EASTLAND. You do not believe the American rice farmer should pay the entire bill for our foreign economic policy in Asia? Mr. BLAIR. No; our farmers should not be footing a substantial part. Senator EASTLAND. Rice farmers are getting the brunt of the thing in Asia.

Mr. BLAIR. Yes, sir. One other thing I would like to mention and then I will be through.

All of you realize the cost-price squeeze facing the farmer at the present time. There are two things I would like to suggest that in the rice industry might help to alleviate some of the problem, and I think probably it would help in some of our other places, too. One would be to have a congressional definition of area of production as it affects our wage and hour laws.

As most of you know now, it is so defined that if you are within a certain number of miles of a city of a certain size or the product comes from a certain distance, you cease to be exempt from provisions of the wage and hour laws. The same applies to irrigation systems which are used in irrigating rice where if the system is cooperatively owned or receives a share of the crop, it is exempt, but if they charge a cash rent for delivering the water it is not exempt. We have many irrigation systems on the break-even point today. Their costs have gone up. They are charging the rice farmer all they think he can afford to pay, they can't afford to go up again. They face the prospect of losing money or having to curtail services. That concludes my statement. I appreciate the opportunity of appearing before you.

The CHAIRMAN. Thank you.

Mr. Clay Terry, please. Give your name and occupation, please, sir.

STATEMENT OF CLAY TERRY, FRANKLIN, LA.

Mr. TERRY. Clay Terry, I am a cane farmer and a plantation manager.

The CHAIRMAN. Mr. Terry, I notice you have a written statement. Have you anything new in it that hasn't been mentioned?

Mr. TERRY. Yes, sir. My testimony is on general farm legislation and very little of it has been mentioned.

The CHAIRMAN. Proceed.

Mr. TERRY. In the interest of controlling farm production and conserving the soil, the farmers of St. Mary Parish, La., offer these views on general farm legislation.

We believe two things are needed to bring this about. One is a good legislative program which the Congress can enact. The other is a good public-relations campaign which the farmer must conduct. We believe a general farm law should incorporate the following points:

1. All crops should be covered. If the livestock people, or any other group of producers, elect to stay outside the farm program that should be their privilege; however, this should be determined by a referendum.

2. All agricultural products should have the same basic law. This law should set up the basic principles of parity, of support, of control,

et cetera.

3. The individual crops could have acts peculiar to the condition for that crop. Example: The same conditions do not apply for a product like wheat where more is produced than needed and sugar which is mostly imported.

4. To conserve and build the soil, the agricultural agencies of each area or State should prescribe a rotation that would maintain or build the productivity of the soil for any given crop. The agencies should include the experiment station, the Soil Conservation Service, the Extension Service, the Forest Service, the Fish and Wildlife Department, and the ASC people.

5. If these agencies determine that 60 percent of the acreage in that crop is the maximum amount that could be grown and still maintain the soil, then 60 percent would be the proportionate share for that crop for that farm.

6. Production histories for farms have been maintained for several years. A consumptive estimate for each product can be made and divided so that each farm can have its proportionate share of the market.

7. Each farm would have a proportionate acreage share and a proportionate market share. For the proportionate market share, the farmer would receive 100 percent of parity. For the difference between the acreage share and the market share, the farmer would not receive any direct Government payment. Example: If the acreage share for a cane farmer is 60 percent, he would be permitted to plant 60 percent of his net cultivated acres in cane. If this farmer had 100 net cultivated acres then he would be permitted to plant 60 acres of cane. If his production history showed that he produces 3,500 pounds of sugar per acre, then he would produce 210,000 pounds of sugar. If the market share for this farm is 170,000 pounds, then the Sugar Act payment would be on the 170,000 pounds of sugar. The farmer would receive the season's average price on the difference between 210,000 pounds, which is his acreage share, and the 170,000 pounds, which is his market share; but he would receive no Sugar Act payment on the 40,000-pound difference.

The CHAIRMAN. Are you suggesting a change in the Sugar Act? Mr. TERRY. No, sir.

The CHAIRMAN. That is an example.

Mr. TERRY. Yes, sir. But he would receive no Sugar Act payment on the 40,000-pound surplus.

8. The program would not apply to any direct consumption products sold directly to consumers; however any products graded, sorted, processed, or otherwise entering the trade would be covered.

9. The law should be written so that no group of producers could gain an advantage just because they are more numerous.

10. Some good agricultural land is being used for industrial sites and city subdivisions. We believe a similar amount of public lands should be made available to farmers.

11. We believe additional research is needed to accomplish the following:

A. To find industrial uses for farm products and byproducts. An example of this is the manufacture of newsprint from sugarcane bagasse. Two copies of the same issues of the Franklin BannerTribune are offered in evidence. One is printed on conventional newsprint, the other on newsprint made from sugarcane.

B. Uses, other than food, feed, or clothing, need to be found for the products themselves.

The CHAIRMAN. I have seen these before. One is from bagasse and the other from pine pulp. The bagasse looks better to me. I hope they use more of it.

Mr. TERRY. The newspaper editors tell me the keeping quality is much better.

It is felt that when only byproducts are used in industry, the grower may not always benefit to the extent he would if the product itself were used.

C. Uses for our idle acres need to be developed. Our marginal acres are being semiabandoned. If our population continues to grow, we may need those acres badly in the not-too-distant future. However, with farm income down, the proper care is not given them. If a system of management could be developed to make these acres pay for their maintenance and improvement, they would not grow up in brush or be washed or blown away.

The Louisiana Press Association asked me to enter the bagasse story in the record if I may.

The CHAIRMAN. I think I introduced it in the Congressional Record already, and if we have not, I will put it here.

Senator SCHOEPPEL. Did I understand you to say you wanted price supports on all products produced on the farm?

Mr. TERRY. No, my feeling is that we need two proportionate shares. We need an acreage share for our farm and then we need a share of the market.

Senator SCHOEPPEL. I understood that but I may have misunderstood you. What do you want covered by price supports, all products or just certain products?

Mr. TERRY. Just a portion of the product.

Senator SCHOEPPEL. Suppose I raise chickens on my farm, and wheat and corn and cattle and hogs; would you want all those covered if you raised them?

Mr. TERRY. Yes; I think each share of the market should be covered. If we need so many chickens, and I produce chickens, my share of that market ought to be a given amount.

Senator SCHOEPPEL. Do you envision there would have to be drastic production controls on those in order to fit into the scheme of regulated production and marketing?