As nearly as we can calculate, parity in Minnesota today is about 78, and at 78 our farm indebtedness has been increasing, and is about 10 percent greater than it was a year ago.

I think it is quite clear that these figures show that things are not good for agriculture in Minnesota, and so we are very appreciative of the chance to express some of our viewpoints in regard to it.

I consider it an honor and a privilege to welcome all of you here, and I thank you for the courtesy to be recognized at this time.

May the record show again my request that I be permitted to testify at some length when it would be more convenient for your schedule. Thank you, and welcome to Minnesota. [Applause.]

The CHAIRMAN. Thank you, Governor.

May I state, Governor, that it is my hope that the hearings that we will have here and all over the country may furnish the basis of a bill that we propose to enact some time in January, if possible, and I do not expect to have extended hearings in Washington.

In the meantime, if any of you desire to file a statement with the committee, it will be filed and put in the record, the same as if you had testified.

For the information of you ladies and gentlemen present, to my extreme right is Congressman Andresen-I suppose all of you know him; next is Spessard Holland, the Senator from Florida; the next is your Senator Humphrey, and then Senator Thye, Senator Young, and Senator Mundt.

As you may see, we are pretty well divided here. The Democrats seem to stick together and the Republicans seem to stick together on each side of me. It is possible that we should have a vote here today. It would be rather evenly divided.

Before opening this hearing to testimony, I believe it appropriate to briefly summarize some of the major reasons why the Senate Committee on Agriculture and Forestry is in St. Paul today, and why a series of grassroots hearings has been scheduled.

I presume that the vast majority of those present are farmers. Those of you who are not actively engaged in tilling the soil have, I am sure, a personal interest in the establishment of a sound and effective farm program. That interest and that objective are hared by each and every member of this committee, in fact by all Americans.

I need not review with you the reasons prompting these hearings. All of you know that farm profits are sagging-farm income is falling while operating costs are rising, or, at best, only standing still. Our markets in many commodities are drying up, even while our warehouses and granaries are bulging with stored surplus commodities. Our entire American farm economy is threatened, and a threat to the farm economy is a threat to national stability and the economic health of the entire free world.

There are several points I wish to particularly emphasize. The committee presently has before it 13 bills dealing directly and primarily with price supports for major commodities: 6 of these bills provide for a return to 90 percent of parity for the basic commodities; 2 provide for support at 100 percent; others propose (1) price support adjustments to discourage the production and accumulation of undesirable varieties or staples; (2) two price plans for wheat, and (3) a so-called self-help plan for dairy products. In addition some of

these bills would permit production payments; limit the amount of price support benefits accorded any farm; extent and enlarge the special school milk and brucellosis programs, and add additional commodities to the list of those for which support is required, such as soybeans, flax, cottonseed, oats, rye, barley, grain sorghums, hogs, eggs, farm chickens, broilers, turkeys, beef cattle, and dry edible beans.

These bills raise questions pertaining to support levels; to adjustments for table and variety; supports for additional commodities; and to various methods of support. I hope that these hearings will produce the answers to these questions.

These measures are suggestions, ideas, and possibilities which Members of Congress have submitted for congressional consideration. They are not exclusive of others. We are not here to ask what you think of any particular bill or resolution; we are here to get your general views, your thoughts, your suggestions, and your ideas as to the best way to cope with the farm problem. We desire to present to the Congress a good farm program. It is our belief that the way to start is to obtain the views of the men and women who have the most direct interest in such a program and who have the closest contact with the soil.

I wish to emphasize that these hearings are nonpartisan and nonpolitical. The membership of this committee cuts squarely across political lines. May I add that we are all painfully aware that the present farm squeeze is exerted in equal measure on both Republican and Democratic pocketbooks. We are not here to manufacture political issues nor do we wish to leave the impression that we want you to do so. May I further express the hope that the spokesmen for farm organizations will not use these hearings as a sounding board to further the cause of their respective organizations.

A large number of us were once farmers ourselves. Some of us are still actively engaged in farming. We all have the best interests of the farmer at heart, and, if our methods differ, our objectives do not. We would like for witnesses to bear these suggestions in mind. When you discuss price support, as I am sure you will, or any other measure designed to stabilize farm income, we would like to have specific suggestions-not only as to benefits which may accrue but in other respects as well. We want you to discuss and help us consider the factors of storability of products, ways and means of curtailing production, methods of enforcing any restrictive phases of a farm program, and the eventual cost of price protection to all concerned-the farmer, the consumer, and our Government. We want suggestions as to how to improve and increase our market outlets, both here and abroad-bearing in mind not only our domestic situation but our international responsibilities as well.

For many of you here today, this probably marks the first direct contact you have had with a committee of the Congress. Let me state that you are among friends with understanding. We are here to learn from you, and if our questioning at times should appear to be aimed at destroying your argument or your proposal, please understand that the most expeditious method of getting to the "meat" of any problem is to learn as much about it as possible. If our cross-examination seems to be adverse to the proposal you are advancing, please understand that the questioner may not be opposed to your idea or to you personally. Rather, he may be merely trying to develop as many facts

and as many viewpoints as possible. I personally know of no better way to get at the crux of a problem than to argue the adverse side. In that manner, all points are more easily laid bare.

This is the third series of national farm hearings that it has been. my privilege to attend. Eighteen years ago, as a freshman Senator, I crossed the country with a subcommittee of the Senate Committee on Agriculture and Forestry in search of facts from the farmers. One of those hearings came the Agricultural Adjustment Act of 1938. In 1947, as a ranking member of this committee, it was again my privilege to discuss with our Nation's farmers at the grassroots level their problems. It is my hope, and the hope of the entire membership of this committee that in 1955 you will again help us to the maximum extent possible; that you will furnish us with sufficient knowledge and facts that, as soon as Congress convenes in January, we will be in a position to offer to our colleagues a realistic and an effective farm program that will long endure.

Are there any members of the committee who desire to make any statement before we proceed?

If not, we shall call the first witness, Mr. LaVerne Ausman. Will you step forward, please, Mr. Ausman?

Mr. Ausman, will you give us your full name and your occupation?

STATEMENT OF LAVERNE AUSMAN, ELK MOUND, WIS.

Mr. AUSMAN. LaVerne Ausman, A-u-s-m-a-n; occupation, farmer; principally dairying; live in Dunn County, Wis.

Dairying has been our principal occupation for many years.

I live on a farm working in partnership with my dad.

The original farm has been in our family since it was obtained from the Government. My son is a fifth generation, so farming over the long pull is our business.

The CHAIRMAN. Mr. Ausman, I notice you have a prepared statement. Do you wish to read it without interruption or would you mind interruptions as you go along?

Mr. AUSMAN. It doesn't-I think my prepared statement might be a little long. I had not intended to follow it in detail.

The CHAIRMAN. Well, suppose you proceed as you see fit, and we will have the entire statement printed in the record at this point. Would that be satisfactory?

Mr. AUSMAN. That would be fine.

Senator THYE. Senator Ellender, I just wanted to call attention to everyone that your list here is alphabetical and, therefore, we bring into Minnesota a Wisconsin man at the outset. I just wanted to call that to the attention of all, that we are following an alphabetical list. Mr. AUSMAN. I feel very honored to have this opportunity to be here, feel more honored or also honored to start the thing off.

As you found a little bit about our background, dairying is our business, and has been our only source of income, and has been for many years.

As to our business for today, to say that all is well in agriculture would be trite. There are problems.

I am somewhat concerned about the great alarm which some people have pointed to in these problems, because in Wisconsin in dairying, I

find that we are still getting along and, in fact, this fall our position is improving some, especially in the fluid milk market, considerably

better.

I do not believe our condition is such as would warrant tremendous or adequate moves in any direction. I think that some definite things can be learned from experiences in the past.

As to price supports, I am not going to talk too much about it, because I feel that, no doubt, it will be mentioned considerably today, and I think it is much overemphasized.

Sometimes the controversy that has developed now almost into a shouting contest, in some instances, one way or the other-they seem to receive a lot of attention, and maybe we have neglected some things which, I think, could help Midwest dairymen.

The overproduction in basics, diverted acres from products has gone into grass, which has caused increased milk production, and much of our problem is in the produced milk in other sections of the country, acres diverted because of high price supports and production controls.

These high price supports, with them they have accompanied controls, and these controls are controls that really control production, and are not politically palatable, and many times are not introduced. I believe the greatest problem in the dairy industry, as I see it, is one of distribution.

The Federal Government, of course, cannot do all that. A lot of that is up to industry, and industry is making some wide and new steps in the business of distributing milk.

Here are some things that I think Government can do to help us distribute milk.

Federal milk marketing orders and milk sanitation codes which prohibit the free flow of milk between States definitely hurt us here in the Dairy Belt.

Federal milk marketing orders were set up years ago to insure an adequate supply of milk in major metropolitan areas.

Many things have changed since then. Our transportation facilities, our manufacturing know-how, and so forth, they are much different today. They have been revised in some instances, but many of these revisions only benefit the local producers.

We have developed here easily reconstituted milk powder, canned milk, which has had good consumer acceptance.

However, 52 milk marketing orders have provisions which say that this produced processed milk which we are producing here now, which is sold in competition with whole milk in milk marketing order areas, must be priced at our doorstep as class 1 grade A price.

Well, this puts us out of that market.

New York State, practically the whole State, is one of those in

stances.

We have a local plant which developed a new powder, but they cannot sell it in New York State because they cannot price it that way; it just cannot be done.

Milk marketing orders in New York State were designed to insure adequate production, and today upward to 50 percent of the milk produced in that State is in surplus, and it is going into manufactured products. I say this is far from what it was intended to do.

There are many orders-I am not going to go into them. I think that the milk marketing orders, as a whole, need in some cases drastic revision, and in most cases some review.

Then, many cities and States have erected barriers which are unrealistic. In some instances, they are in the form of health barriers— many of them.

The State of Wisconsin is now challenging the State of Tennessee in the Supreme Court because of a ruling that they should only allow milk produced out of the State of Tennessee to be sold in the State during periods of shortage.

Also included in that, I think, is the fact that milk will be priced, has to be priced, by the milk producers of the State of Tennessee.

In other words, what we are asking there is that we have the right to sell milk in any State in the Union; we set the price, which is cost plus transportation-I am talking about Midwest dairy plants-and I do not know what the results of this Court case will be, but it is one thing that is definitely hurting us.

Such things as these retard our new handling methods, and the savings to the consumer which we have.

Some cities require farm inspectors to reside in the city and be home nights, giving a limited distance to where the milk can come from, and also there are some cities which say that milk sold in stores must be priced at the same price as that delivered on the doorstep.

Well, we cannot increase store sales because if you can get it delivered to your door at the same price, you will take it that way.

So I propose here a Federal milk sanitation code which, if complied with, by the producer would permit the producer to sell milk anywhere in the United States, and that cities, local cities and States, could not bypass it, and create artificial barriers to keep our milk out. I understand the District of Columbia, the milk sold there for fluid consumption, there the producer must sanitize his utensils in steam.

Well, this puts us out, because maybe it is necessary there to sanitize in steam. We feel we produce we know we produce highquality milk here without doing that, yet such things are in existence. Secondly, I suggest a Federal grading program which would compel all dairy products to be graded according to quality.

We have this in meat and many other things. It would protect the consumer, it would not-it would increase sales, because there would be a demand for high-quality products.

The demand is there, but many times the consumer picks up a lowquality product and hesitates to try it again.

It would be the job of the distributor to see that the quality is maintained.

After he has, say, an AA label on butter, if it went into the store and lost some of its quality, that is his job to keep it revolving and keep that quality there; but the Government would guarantee it.

We have some of our manufactured products today, butter specifically, which are of such low quality that there is actually no consumer demand. The only demand is in Government, and that keeps them going, but it does not help the overall industry; it hurts the dairy industry.

We have a butter-grading law in Wisconsin-I understand it was discussed here in Minnesota-and it works very well. I think it is