The Connecticut Conference of Farm Organization which is made up of two representatives of all farm organizations in the State unanimously passed the following resolution:

The conference wishes to continue to support the present flexible price support program for agricultural commodities, with the hope that by this means it may eventually be possible for the Government to work itself out of agricultural supports.

Many people would have us believe that the flexible price-support system is the cause of the difficulty agriculture is in. They seem to forget that the flexible system has just begun to operate, and we should give it a chance to work to see if it will balance agricultural production

to use.

The CHAIRMAN. You heard me point out the figures of milk production under the flexible price supports for the past 2 years? Mr. DUDLEY. Yes, sir.

The CHAIRMAN. What have you to say about that?

Mr. DUDLEY. I will say that dairy products in storage have been reduced quite a bit, and agricultural prices over the past year are 2percent over what they were before.

The CHAIRMAN. Do you know why they were reduced?

Mr. DUDLEY. More have been used, production has lowered. The CHAIRMAN. No, no. You have less on hand. You have used more because we have given away more. You have sold more, yes, you have used some more for hog feed and cattle feed.

Mr. DUDLEY. That is true.

The CHAIRMAN. You knew that?

and

Mr. DUDLEY. The dairy farmers have been instrumental in working out their own problems by advertising, getting more into use. The CHAIRMAN. No; only in the last 2 years you have sold more of what you had previously.

Mr. DUDLEY. Sure.

The CHAIRMAN. You sold almost three-quarters of a billion dollars. worth. That is one reason why you have less on hand.

Mr. DUDLEY. Is that the purpose of production, to sell it, to get it into use?

The CHAIRMAN. The way you did it, though, was to pay 17 cents, I think it was, or 14 or 15 cents for dried milk, and to sell it for 1 cent to feed the hogs. That is how we got rid of a lot of it.

Senator AIKEN. The amount purchased this year has dropped well below the amount purchased last year. The production this year is possibly 2 or 3 million pounds more than last year, but this promotion program

The CHAIRMAN. You mean 3 billion pounds.

Senator AIKEN. One hundred and twenty-four billion pounds in all, roughly. The promotion program has resulted in this year's production being used up, whereas last year there was a 42-billion surplus of milk produced in the country, and a good share of it was purchased by the Federal Government. The total owned by CCC has been reduced now about to 100 million pounds of butter and 20 million pounds of powder and about 270 million pounds of cheese.

Mr. DUDLEY. I think that points out just what I have been saying here, under the high price support system we built up surpluses and lowered the prices on dairy products. And we have reduced

Senator AIKEN. May I interrupt? Speaking on the New England situation, when supports were dropped from 90 to 75 percent in April of 1954, where was a sharp drop in price. By August or SeptemberI think it was August-the price of milk had risen to a little above what it was for the month of the previous year when the support was 15 percent higher. All through that year the price of milk in the Boston milkshed was higher than it was under the period when they had 90-percent support the previous year. I believe that is true today. One reason there has not been a sharper increase in the price this year is that we got an increase last year and got it earlier than the rest of the country.

I believe it is estimated there has been about 15 percent incretase in consumption in New England, something like that.

Mr. DUDLEY. Something like that.

Senator AIKEN. During those 5 or 6 years when the milk producers were depending on the Government to be their market, they lost 14 percent of their per capita consumption, and they have recovered some of it-I do not know how much but quite a little of it since.

Mr. DUDLEY. That is what I tried to point out, that the dairy farmers have tried to solve their own problem by advertising and increasing consumption. The price has gone up along with it.

Senator AIKEN. Butter went down. The consumption of butter went down to just over 1 billion pounds, where it previously had been up to nearly 2 billion pounds. It will probably be up to 1,350 million or possibly 1,400 million this year, which is a big increase.

Cheese consumption has increased 14 percent, they tell me, over last year. As for milk and ice cream and the other products, I have not the figures in mind. So while we produced a little bit more, our consumption has gone up about 42 billion pounds of milk equivalent in the last 18 months.

Mr. DUDLEY. Yes.

Senator AIKEN. I give credit principally to the promotion program. The CHAIRMAN. Let us hope it continues. I merely want to read in the record here that the loss sustained on butter for this year, 1955, from sales was $173,314,388. The losses that year were the biggest any year since the program.

Then in the case of dried milk the loss sustained this year, 1955, was $117,784,928, which is the biggest year of any of the years in which the program was in force.

Mr. DUDLEY. Produced this year or in the past?

The CHAIRMAN. Produced in the last 2 years.

Mr. DUDLEY. That still proves my point, I feel.

The CHAIRMAN. But some of it was under flexible price supportsnot all under the rigid.

Mr. DUDLEY. If you have the supplies, the surpluses built up under the high price support program, and then the support price lowers, you are bound to have to market them under the lower price-support period.

The CHAIRMAN. I am not arguing the point with you, except to indicate, as I said a while ago, that the theory behind flexible price supports, as I understand, is that a lower price will mean less production.

Mr. DUDLEY. Over a period of time, yes, not immediately.

The CHAIRMAN. Over a period of time. I have found but a few. witnesses who testified other than that low prices bring more production, because the farmers who have the machinery and who have big farms are prone to produce more in order to try to make both ends

meet.

Senator AIKEN. I believe we have got to concede that the dairy program has been expensive over the last 3 years. Officials have given me their estimate before the Commodity Credit Corporation gets out of the dairy business the cost will be a little over a billion dollars, possibly $1,100 million. It has been very expensive but consumption had dropped, as you know, from 816 pounds of milk equivalent per person to 689 pounds of milk equivalent per person over a period of just a few years. Those were the years when dairy interests and cooperatives did not have to hunt markets. They just turned it over to the Government and they lost a good share of the market. Now they are beginning to get it back. They have just about gotten the consumption in balance with production today.

Dairy products are the outstanding example of how consumption can be increased over the last 2-year period.

Mr. DUDLEY. Do you not think that the dairy industry is on the right track then to help solve their own problems?

Senator AIKEN. I think if the dairy industry has the courage to stay on that track that they will have the best years of their lives just ahead of them.

Mr. DUDLEY. I have another point that I would like to bring out here in regard to diverted acres that may upset all of this, if I may be allowed to present my testimony, or do you have any more questions?

The CHAIRMAN. Nobody is stopping you. Go to it.

Mr. DUDLEY. To get rid of the surplus commodities already on hand it will be necessary to limit production of the basic crops now under price supports. Some control of the acres taken out of production must be exercised or they will be planted to crops already in adequate supply and cause difficulty in those crops.

The CHAIRMAN. Have you any reason to believe that is not being done?

Mr. DUDLEY. I do not believe there is much control over the acres taken out of production.

The CHAIRMAN. I am talking about lowering the acreage just what you said there-you are talking about control of production. That is being done every year now.

Mr. DUDLEY. But they are planting those acres to other crops that are going to cause distress in those crops, if it is allowed to continue. The CHAIRMAN. But you are talking about diverted acres now? Mr. DUDLEY. Yes.

The CHAIRMAN. I understood your statement to refer to a decrease in the production by acres of the crops that are protected.

Mr. DUDLEY. Yes.

The CHAIRMAN. That is being done, you know.

Mr. DUDLEY. Yes, but if they are allowed to continue they are going to get surplus in other things, and if they are allowed to be put into grass or alfalfa or legumes, they will produce more dairy products and compete with us dairymen and upset the balance.

The CHAIRMAN. We are talking about two different things. I am not talking about the diverted acres, sir. I know something has to be done with that. I do agree with you thoroughly. The point I am trying to make to you is that under the program as now written and as it was prepared before or administered before, efforts are being made to reduce these commodities that are in surplus by reducing the acres.

Mr. DUDLEY. If something is not done with the acres I cannot help but feel they will be planted to some other crops.

The CHAIRMAN. You are talking about diverted acres. with you. Go ahead, proceed.

I agree

Mr. DUDLEY. It seems to me that the soil fertility bank plan is a feasible plan to take these diverted acres out of production and store fertility in the soil. A rigid check on those diverted acres should be made, for we dairymen in the Northeast would hate to see these soilbuilding crops harvested and turned into milk. If such a thing happened milk surplus would be worse than the wheat or cotton surplus.

I believe Secretary Benson has done a splendid job in trying to straighten out the agricultural situation. His policies are sound and he should be highly commended for not deviating from his principles of what he believes is best for the American farmer.

The flexible price system will do the most, of all the plans dreamed up, to reduce surpluses and put farmers in a position to produce what the market wants at a fair price.

High rigid-price supports or compensatory payments will both lead farmers into a completely socialized agriculture. Other countries that have socialism have less production, a lower standard of living and their farmers are not happy.

Agriculture is the most important industry of the country and it should not become a political football whereby politicians try to gain votes by promoting unwise and unsound schemes for farmers. Farmers know that the way to get a good income is production from the whole farm times price less expenses.

Farmers want to continue to farm under the free-enterprise system which allows them the freedom to run their own business, a system which has made this country the greatest country on earth. I hope you gentlemen will use your influence to keep it that way.

The CHAIRMAN. Can you name us a few of the politicians you are talking about?

Mr. DUDLEY. No, I do not care to name any.

The CHAIRMAN. Come on, name them. If you know any of them on the Agricultural Committee, name any one of them.

Mr. DUDLEY. I am not referring to the Agriculture Committee. I know a lot of you are doing a fine job, but I know that there are some people

The CHAIRMAN. You name me anybody that you know of in the Senate who is trying to play politics with the farm program.

Mr. DUDLEY. I do not care to.

The CHAIRMAN. Of course you do not. Why do you say it in your statement then?

Mr. DUDLEY. I could not name them, because I do not care to have it put in the record.

The CHAIRMAN. Why not, you are a free American-nobody will put you in jail for that.

Mr. DUDLEY. All right. I think anybody that is advocating a rigid 90-percent-support system.

The CHAIRMAN. Is a politician?

Mr. DUDLEY. It is one of those people that are trying to use that as a means of getting votes.

The CHAIRMAN. I am doing it myself.

Mr. DUDLEY. Well, all right. I still cannot see how if you have high, rigid supports, encourage uneconomical production of something, that the country does not need, will solve the problem. I think these people that are going around advocating this are just getting the country and the Government into a worse mess than they are right now.

The CHAIRMAN. Are you finished?

Mr. DUDLEY. Yes.

The CHAIRMAN. What would you thik of a program that would offer a premium to farmers to produce commodities that are readily salable and readily usable, say, like wheat that is readily millable, that would not be a drag on the market?

Mr. DUDLEY. Anything that is easy on he market, we do not need any kind of a Government program to encourage the production of it, the market price will take care of itself.

The CHAIRMAN. You think so?

Mr. DUDLEY. Yes.

The CHAIRMAN. I am glad you think that way. you were not with me on these hearings.

I am sorry that

Mr. DUDLEY. I have heard a lot about that. I have heard many statements saying high price supports on wheat have caused the production of unmillable wheat, just feed wheat, because production per acre is more, you get a higher price per acre.

The CHAIRMAN. Of course you know under any program, be it price supported or, in fact, any law, we always find somebody who gets around that law and tries to defeat it.

Mr. DUDLEY. That is right. I agree with you 100 percent.

The CHAIRMAN. You know that?

Mr. DUDLEY. Yes.

The CHAIRMAN. It has been proposed by many people, and we have a bill pending before our committee now, to offer an inducement to farmers who will plant, let us say, millable wheat that we are short of now. Do you not think it would be a good idea to do it?

Mr. DUDLEY. I think that is a good idea if the supports on the lower grades of wheat are reduced to discourage it.

The CHAIRMAN. On the lower grade. I agree with you. Sure, that is what we had in mind.

Mr. DUDLEY. I agree; I am glad to hear that. I think that is a good idea.

The CHAIRMAN. What I would like to do or suggest, and the measure that we have that we are now considering and which I hope may become the law, makes the price-support program so low on these commodities that are unsalable, like wheat for chicken feed, that it would not pay them to produce it and the poultry growers of this area might be able to get in on some of that cheap feed. Would you not like to see the same thing with cotton?