the farmers wou'd like to get across through the farm bureau and the organizations are that farmers do not want sympathy so much as they want understanding.

In our resolutions, if I might name just a few of the props which we have approved without going into detail, a few of the props which we believe that Government can help farmers achieve a little bit better their slice of the economic pie.

At one of our meetings the suggestion was made that the Farm Bureau should bend its efforts toward repealing the law of gravity and thus lighten the load of the farmer's work. Of course we do not go along with that.

However, we do not think, either, that either the Farm Bureau of Congress can change economic law, but we do think they can help in some respects.

These props that we have approved are, briefly-most of them have been mentioned-milk-marketing orders, school lunch, special schoolmilk program, brucellosis eradication, ASC, and SCFS programs, small watershed development, et cetera.

There are two others that I would like to have another gentleman mention just briefly, if I might, when I get through. Those are the research program and the price level.

In all of our community, county, and State meetings, we estimate that we probably had better than 3,000 participants, and to my knowledge no one of them has come out in favor of high rigid-price supports. The CHAIRMAN. You mean here, from Vermont?

Mr. WALLACE. In Vermont.

The CHAIRMAN. You do not have anything here that you would have a price-support program for; is that not true? You do not produce grain, you do not produce cotton, you do not produce anything except maybe the dairy products.

Mr. WALLACE. That is right.

The CHAIRMAN. You have consumers for all of the milk. I would not see why it would be advantageous to the farmer to vote for anything—I mean, for price supports of any kind.

We

Senator AIKEN. We have some tobacco acreage allotments. also had wheat allotments until we became a noncommercial State last year.

Mr. WALLACE. A year ago a number of our farmers were much disturbed when the price supports on dairy products were dropped from 90 to 75 percent of parity. However, at the annual meeting this year we find most of them have found that did not hinder the dairy farmer. It was, in fact, in his favor. And so the county farm bureaus, in adopting these resolutions for flexible price support, most of them mentioned the fact that the dairy price situation has improved since the support price, or the cut in the support prices on dairy products. Along with that, which perhaps does not come into the national agricultural picture, is the attitude of the Farm Bureau, which is for voluntary promotions, that is, voluntary advertising and other promotional projects. We feel very definitely this is the way farmers can help themselves, through promotion programs, not only in the dairy-products field but also in the other farm products which we grow here in the State of Vermont.

We did have a couple of other resolutions which, indirectly, have to do with our production costs. One, opposed to any increase in Federal

gas tax. Another, which deemed certain changes in the Taft-Hartley law in regard to secondary boycotts. We think there have been certain instances where secondary boycotts have hindered the free movement of farm products to the consumer, and we very definitely feel such things should be stopped because they can get to influence us here.

The CHAIRMAN. I wish to say that before I left Washington to come here, I issued a statement calling on all organizations, the Farm Bureau, the Grange, and all of the main ones, to try to get together, so that they could come to Washington early in January with a united front on the farm program. If they can do that, we will go to town. I hope you do it.

Senator AIKEN. If you do that, you will have heaven. Mr. WALLACE. One further comment on the resolutions. We are very much in accordance with the statement made previously here on acreage diversion. We feel very definitely some of these acres that are taken out of the production of the basic crops will get into dairying and poultry, and thus serve as subsidized competition to products which we grow, which are on a relatively free basis.

The CHAIRMAN. I was just remarking with Senator Aiken here that it just depends on where the Farm Bureau is located, as to whether or not you want 90-percent price supports.

In Georgia, it is 100 percent for 90 percent. They grow cotton. there and products that are subject to the support program.

I am not trying to criticize anybody but, as a rule, you get decisions made on how the people in the local community are affected.

Mr. WALLACE. But we sit in this meeting, that will be held in about 2 weeks, where each State president will throw into the common pot the opinion of his own particular State, and then the American Farm Bureau will come out with something from that.

Thank you.

I would like to relinquish my spot here to Arthur Packard.

STATEMENT OF ARTHUR PACKARD, JERICHO, VT.

Mr. PACKARD. Mr. Chairman and gentlemen, I am a dairy farmer, milking about 30 cows.

I am not going to refer to some of the subjects I have in mind because those subjects have been covered

The CHAIRMAN. Yes, sir; all right.

Mr. PACKARD (continuing). But I would like to speak of research which we are interested in on price movements. I will just go over that briefly.

We believe that much of our agricultural research stopped during the Second World War, and agriculture since 1945 has been depending too much on Government price supports. And even though it has been, in many instances, helped, it has in some instances raised the price of farm commodities to where we cannot export at profitable levels. We believe it is good for a Nation to engage in international trade.

We likewise believe in a sound, prosperous nation; all segments of society within the nation should be able to trade with each other, but we realize that this can be accomplished only when there is a fair price relationship that exists between all groups. A fair price relationship does not exist today within the United States. I refer to the farm

economics, as published by the New York State College of Agriculture, in which it was published in July, and I am taking the January prices.

It says the index of farm prices at that time were 223. The index of the cost of farming was 338. The index of the earnings of factory workers was 633.

When you have a disparity like that it is pretty tough to try to carry on and feel that everything is O.K.

We believe the most prosperous Nation in the world, the United States, should practice abundance and not scarcities.

This problem of fair-price relationship between groups goes much deeper than curtailing the acreage of wheat or corn. It is a momentary problem which can only be solved by research, and much more research. It has now been over 20 years since real research has been done on a monetary system, and during these 20 years every experiment has been tried on production controls and agriculture still suffers from a poor price relationship with other groups.

The Farm Bureau asked for a stable price level through an improvement of the monetary program. Most of our farm mortgages are paid in periods of war, and most of our foreclosures occur in periods of postwar.

We of the Farm Bureau do not believe that success should come to only those farm people who are born the right time in the century, nor does the Farm Bureau think that milk strikes are the answer to unfair price relationships.

We do think that research on a monetary system would allow farmers to produce freely without Government supervision, and it would allow all of the people who work to thrive in a fair, free-enterprise system.

The CHAIRMAN. Thank you, sir.

We will next hear from Mr. La France.

STATEMENT OF MORRIS LA FRANCE, RANDOLPH CENTER, VT.

Mr. LA FRANCE. Mr. Chairman and gentlemen of the committee, my name is Morris La France.

The CHAIRMAN. Give us something new, if you have it.

Mr. LA FRANCE. The only thing I can see is that there be a quota system in the Federal marketing orders. If we were paid for our class 1 milk and for our class 2 milk and allowed to have our share of the class 1 market, if we cut out our class 2 production, then an individual could do something about the present situation.

The CHAIRMAN. How would you attain that end, now?

Mr. LA FRANCE. We are paid for our class 1 milk, and we are paid for class 2, but it is figured on the milkshed. So if an individual cuts production today, he cuts his class 1, he cuts his class 2.

It is the manufacturing milk which is hurting us financially.
The CHAIRMAN. The which?

Mr. LA FRANCE. Our class 2, or our manufactured milk. If we could be assured of our share of the class 1 market, even though we cut our production, then the individual could do something about it. The CHAIRMAN. I understand that. But the question is, how would you figure it, so that the production of class A would be what the trade demands?

Mr. LA FRANCE. We have our Federal orders, and they have the records, and it is feasible. I believe it would mean more bookkeeping, but most of it does, anyway.

We get paid a blend price for our milk, so much for that, that is used for fluid purposes, so much as is used for manufacturing purposes. If we would just be assured of the same percentage, be assured of our fluid market, even though we cut our production. In other words, if we could cut our production and still retain our fluid market

The CHAIRMAN. The class A?

Mr. LA FRANCE (continuing). Then an individual could do something about it.

The CHAIRMAN. I well understand what you want, but now the question I am asking you is how to attain that; how would you do it? Mr. LA FRANCE. You would have to do it with an amendment to the Federal order. That is all.

Senator AIKEN. How much milk do you make, Mr. La France ?
Mr. LA FRANCE. I will average about 800 pounds.

Senator AIKEN. You would not cut out all class 2?

Mr. LA FRANCE. An individual could-some individuals might cut out most of their class 2. Some would cut out none.

Senator AIKEN. How would you decide who was to cut out?
Mr. LA FRANCE. That would be the individual's own decision.
Senator AIKEN. If you were the average-

Mr. LA FRANCE. No one would have to do it. If we were paid for class 1 market and paid for the manufacturing milk, then an individual could do as he wished. Many would cut their class 2 production to the point where it would bring it in to much closer balance of supply and demand. I am not the only one in the country that is talking about this perhaps the only one that has mentioned it in the Federal order areas but I know there has been discussion throughout the country of a grading or quota system.

So far as I can see, there is no other way that would enble an individual to do something about the situation.

I have not gone deeply into the quota system in my statement, but there are different sources of getting the information.

The CHAIRMAN. Your whole statement will be placed in the record, and we will give it study.

Thank you ever so much.

(The prepared statement of Morris La France is as follows:)

In the beginning I would like to make a few general observations about the farm problem.

It is indeed a fine commentary on our present civilization that a group of people that has provided food and fiber so abundantly and so reasonably for our whole Nation should now be made to suffer for their industry and good work. By any Christian standard, an abundant food supply should be a blessing. It is, in fact, becoming a curse to those of us who have produced it.

I believe it to be true that very seldom is there a so-called balance of production. By the very nature of agricultural hazards, there either is not enough or too much. Obviously from the Nation's food interest, a plentiful supply is desirable; to the farmer it is disastrous because a small surplus sets the price for the total output. This is not true of other segments of our economy. In this testimony I shall limit my remarks, as much as possible, to dairying which has been my business for 22 years-the last 12 as owner and operator. There is today general agreement that dairymen are under financial strain due to the prices they receive being out of line with the prices they pay. There is, I believe, general agreement that this situation will not be remedied until supply is more nearly in balance with demand. Here the agreement ends.

The philosophy behind present Federal action is that lower prices will discourage production and bring about the desired balance which in turn will be followed by better prices. Flexible price supports have so far failed to improve prices of milk or milk products. The reason is that flexible supports flex down when there is a surplus, the only time when supports are needed. While forcing some people off the farm this lowered price tends to increase the production of the farms trying to stay in business. The farmers costs remain the same or go higher and as prices drop, bore production is needed to meet them. This effect tends to keep milk production stable or on the increase in times of falling prices. A study of the comparison of milk prices and production over the past 30 years proves this tendency of inverse effect.

Dairying is a long-term operation. It is expensive to establish and takes years before it is operating smoothly and efficiently.

Once established the tendency is for dairymen, in periods of low prices, to exploit themselves and their families, to seek employment off the farm, to mine their farms, and to use all means at their disposal to stay in business. In other words, they subsidize their dairy operation. This is happening today at an alarming rate to the detriment of farm families and the communities in which they live.

An impoverished, overworked farm population cannot build or maintain healthy communities. It is not necessarily the most efficient farmers who stay in business. It can be a small operator with full-time work off the farm. It can be one who has made no improvements in buildings and who has incurred no major debts. In fact, in our area (depending on the wholesale marketing of milk) it is possible that the larger farms are having the hardest time because hired help is necessary and must be paid. Also, since these farmers are fully employed on the farm, it is most difficult for them to earn money from other

sources.

Now, there is one other way. A quota system should operate effectively in Federal order markets and benefit all dairy areas because as production of surplus or manufacturing milk was cut in the order areas, the prices of manufactured products would certainly rise.

Some of the oldtimers remember a rating plan handled by dealers many years ago. This was not popular. Today, however, we have our Federal order and an administration to handle the records. I do not claim that this quota system would be without problems, but I believe that it is the only solution available so far to bring production into line with demand. The present policy will ultimately financially ruin enough dairymen to bring about the proper balance which, of course, will be followed by too little production, since demand will continue to increase as population increases. Under a quota system more good farms would be kept in operation and able to produce the increase that will surely be needed. A quota plan would allow every producer his share in the current market according to his recent history. There would be no limitation on production, but surplus production is effectively discouraged because only this average realized surplus-disposal price is paid for surplus mills.

The CHAIRMAN. Our next witness is Mr. Dean Smith.
Give your full name for the record, please.

STATEMENT OF DEAN SMITH, RHODE ISLAND ASSOCIATION OF
FARMERS, INC., LAFAYETTE, R. I.

Mr. SMITH. Mr. Chairman and members, I am from Rhode Island. I am representing Mr. Stroberg, who, because of illness in his family, is unable to attend. He is a dairy farmer.

We do have agriculture in Rhode Island, in spite of what some people may think.

The CHAIRMAN. What is it, principally?

Mr. SMITH. We have dairy, potatoes, and poultry, and market gardening. We do quite a lot of market gardening.

The CHAIRMAN. Do you can much of the produce?

Mr. SMITH. Most of the produce, sir, is sold on roadside stands and to local markets.