(1) The year 1954 for the poultry industry was one of overproduction, low prices, and general losses to most producers, disaster to many. Without price supports, and with the free play of supply and demand, the pressure of low prices has caused the adjustment of production which was necessary, and 1955 finds the poultrymen again in a healthy condition-production more in line with demand and satisfactory prices prevailing. Efficient producers have weathered the storm and marginal producers have had to drop out. Picture if we may what might have taken place had a price-support program been undertaken for eggs and poultry meat in 1954 (if such indeed were actually possible to carry out). Temporary price benefits would have kept marginal producers in business and encouraged efficient producers to expand. The adjustment of production to fit demand would have been postponed, a period of unregulated excess production would very soon compel Government controls, and the poultry industry would be sick for a long time to come.

(2) What has happened to butter? A price support of 90 percent of so-called parity level for butter led to an accumulation in Government hands that finally became insupportable. The commodity was pricing itself out of the market in competition with margarine. The prodigious efforts of the Department of Agriculture to cope with the insoluble problem of surplus disposal of butter finally led to a reduction of the support level to 75 percent. Whereupon the commodity commenced to regain its competitive position in the market, Government stocks gradually moved into consumption, and the fallibility and futility of the uneconomic 90-percent support level for this commodity was pretty well demonstrated. A return to 90-percent level in butter could only lead to a repetition of the problem with even more staggering results. We venture the opinion that a further gradual reduction in price support for this commodity from the present 75 percent level will be in the long run best interest of the dairy industry. (3) The history of price-support operations in potatoes is one of the most spectacular debacles in all the years of national farm programs, so unhappy that it is repugnant to all concerned to look back upon. A high price support encouraged production to the point of unmanageable surplus and delayed the evolutionary adjustment of production to a declining national demand.

Now we have from the beginning had a strong aversion to Government price supports in principle. The resultant troublesome surplus problems are an inevitable consequence of price supports set at levels high enough to encourage production in excess of the dictates of supply and demand. Yet we cannot condemn our Federal Government for undertaking some sort of support program for agriculture following World War II. All-out production of food for wartime demands had been an urgent necessity and was adequately met by American agriculture. The fear of a price debacle similar to that following World War I was a very proper concern of Government, and the objective to cushion the decline in agricultural prices to enable an orderly adjustment from war production to peacetime needs was a laudable one. Whether the program adopted and carried out up to this time was right or wrong, at least we may say that a catastrophic deflation of agricultural prices following World War II was avoided and very possibly agriculture over all has benefited in some measure. Despite a decline in gross national farm income, farm income per capita has declined only moderately. Farm population has declined while production efficiency has steadily increased. Values of farm property continue at high levels, an indication that agriculture is not in serious distress, and farmers continue to view their economic future with optimism.

We hold no crystal ball from which we can present to your committee a magic formula for a new superior farm program. Many of our country's best thinkers and agricultural economists both within Government and without, have labored on the so-called farm problem and failed to find a sure answer. We can only offer our humble thoughts and suggestions, hoping that these matched with the abler recommendations of others may contribute to some betterment in our Government's farm program.

(1) Despite our fundamental objection to price supports in principle, we do not now advocate a sudden jettisoning of the existing support program. We feel certain that 90 percent level supports were continued longer than would have been desirable, and we would now advocate gradual and consistent downward revision of price-support levels year by year in the direction of their ultimate elimination. The present flexible support program is in the right direction. A return to 90 percent level because of unenlightened political pressure would be a betrayal of the best long-range interest of agriculture and of the country.

(2) We commend the Department of Agriculture for its assiduous efforts to find export outlets for surpluses without outright dumping that would be disruptive of orderly international trade. We also approve other surplus disposal programs to relief purposes both domestic and foreign, school lunches, etc., and recommend extension of these outlets insofar as dislocation of normal trade channels is avoided.

(3) We believe the Federal Milk Marketing Administration programs have been helpful and should be continued so long as satisfactory to both consumers and producers.

(4) We commend the expanding research programs of the Department of Agriculture, both in the field of marketing, to improve efficiency of marketing procedures, and in the field of new uses for agricultural products.

(5) We approve of Government purchases of an agricultural commodity in an extremely depressed price period within the limits of storability and prospective disposal programs, as illustrated by the recently anounced program of purchase of a quantity of pork products for special school lunch and other purposes.

In conclusion, we see no quick or magic solution to the farm problem. We feel that time, patience, and persistence are needed, that every change that is made should be in the direction of dependence on free markets and minimum intervention of Government, meanwhile pressing every resource to increase efficiency of production and expansion of markets. The problem of working out of the existing colossal Government holdings of agricultural surpluses is a Herculean task that will try the best brains our Government can hire; it will also take time, perhaps many years. Let us not yield to pressures for unrealistic unenlightened legislative cures that will cause us to move chaotically backward instead of patiently forward.

We thank the committee sincerely for the privilege of appearing at this hearing. The CHAIRMAN. Is Mr. Cramton here? (No response.)

Mr. WARE. My name is Ware. Mr. Cramton has gone home. He would like to file that brief.

The CHAIRMAN. That may be done.

(The prepared statement of Cyrus E. Cramton, Castleton, Vt., is as follows:)

My name is Cyrus Cramton, of Castleton, Vt. I am speaking as one of the Vermont dairy farmers supplying the New York milk market-the greatest milk market in the world. About 8 percent of Vermont's milk output goes to supply that market.

I operate a dairy farm in Castleton, Vt., and have been shipping milk to the New York milk market for the past 38 years from this same farm. I welcome this opportunity to express my views before you in order that you may get the opinion from one who ships to the New York market. In addition to carrying on my own farm activities, I am president of the Fair Haven Milk Producers' Association, Inc., having a membership of 215 producers all shipping to the New York market. Our organization is a member of the Metropolitan Milk Producers' Bargaining Agency.

Our producers believe that we should be producing for the consumer's stomachs rather than for Government storehouses. We believe that the hope for the future rests with:

1. Successful efforts to aggressively educate consumers to the values of milk in the diet. Research and educational activities of the Government agencies should be adequately supported to assist in accomplishing this aim.

2. Advertising efforts of producers and distributors should be continued and encouraged. An effective job of advertising requires a firm and stable foundation.

3. We are opposed to a high fixed price-support program. We believe the best long-run interests of producers will be served by a flexible pricesupport program for dairy products and the so-called basic crops. These price supports should not be at levels which will unduly encourage excess production.

In closing on behalf of our 215 members, let me sincerely thank you for this opportunity of presenting our view here.

Senator HOLLAND. I think the record ought to show that this is the first dairyman who is in one of the southwest counties to comment on the New York milk market, and, therefore, this is a contribution.

Senator AIKEN. That is right, they have a division over there. We will hear plenty about it in Utica.

The CHAIRMAN. We will next hear from Mr. Pero. Will you give us your full name for the record, please?

STATEMENT OF JOSEPH G. PERO, MANAGER, PERO ORCHARDS, MANCHESTER, CONN.

Mr. PERO. Mr. Chairman and gentlemen, this is probably going to be a little bit different from what you have heard, I hope.

The CHAIRMAN. We have seven more witnesses to hear from. It is now 10 minutes to 5. And we just got notice that the weather has cleared all right and instead of having to go by car from here to Burlington the plane is going to come and meet us here, so because of that we will be able to remain here until after 5 o'clock to accommodate those who have not been heard.

Mr. PERO. I wish to make clear to the committee that the following testimony reflects only my personal opinions and I am not representing any group or organization.

I have been a fruit and vegetable grower for nearly 40 years and I believe that I am most familiar with that branch of agriculture. Today our industry is sick from low prices for our products against continued increases in cost of production. The fruit business requires large investments in buildings, storages, machinery, and orchards, and every crop we grow we carry on an all-out gamble with the elements.

We are affected by everything that comes from the skies, winter kills, late frost, droughts, too much rain, hail, hurricanes, and floods. Disaster has hit us several times in the past 2 years and it now becomes a question of survival. I believe we are an important part of the economy of our country and important enough to ask for some action. by our Government for our survival.

I wish to say that in 1938 we were wiped out, our buildings were shattered and our trees, 90 percent of them, were uprooted, a very, very sad state of affairs. It took me 10 years to recoup from that 1 blow. And in the recent years we have had a number of hurricanes, not so severe, but if you should walk up through those orchards, following a hurricane, you would say, "Boy, you have a lot of nerve to stay in this business."

I think the pattern has changed somewhat in New England and along the eastern coast. It has come to the point where we have to make a decision whether we are going to stay in this fruit business and struggle along or ask for some protection somewhere, somehow.

I submit the following suggestions for your consideration: We need disaster insurance for the protection of our crops. Insurance at a minimum cost to growers and if necessary contributed by the Government. Loss of taxes through disaster would warrant some expense to the Government. When I say "contributed," I mean that

the Government would foot the administration expenses of that program, not the actual cost of the insurance, because we are willing to pay for this insurance, but we want it at a minimum cost. We could get it through some agency, such as Lloyd's of London, but we cannot afford to pay their rates. They will insure anything.

We can at the present time get hail insurance, and we are taking out hail insurance, and it has been some protection. This year especially we were hit by hail and we did collect. But never is it enough to overcome the damage.

At the present time I do not know of any crop insurance for fruit and vegetables.

Seasons vary in fruitgrowing and action is needed only in overproduced years to overcome possible losses.

This is another suggestion for surpluses.

In surplus years I suggest Government purchases for school lunches, State and Federal institutions, and institute the food-stamp plan for charity aid. Expand these programs with a businesslike distribution that will encourage consumption rather than waste.

I want to follow that by stating what happened in the past when the Government did buy some surplus apples. They were ordered into storage, into institution storages which were not cold storages and were dumped in cellars. Much of that fruit went bad. For instance, I had occasion to unload some apples into a cellar at one of the institutions, and it was just overrun with rats. I do not believe they used those apples in any form, because they were not any good.

Any grower or farmer does not like to see that kind of waste. We are not that greedy. We just want to see the stuff consumed properly. Through school lunches it can be consumed because we have at the present time a demand for apples by the schools. They are coming to us and buying them. They have a very small budget to work on. They cannot afford to spend very much. I know that those children would use a lot of apples if you would only get the apples to them and get them to them fresh. Do not get them all wilted and shriveled up.

I could expound on that, if you had the time. I will not take up any more of your time for that.

We have lost our foreign trade on fruits and apples especially.

Open up foreign trade by a workable trade agreement with nations that would buy from us. We have lost our foreign trade in fruits and it is my opinion that the great difference in money exchange may be a great factor.

Unload our stored surpluses at once and retain only enough for an emergency. Give it to the underfed people of the world and the cost would be less than the present wasteful storing.

If we must have Government supports I am for flexible supports to be instituted only when they are needed.

I know there are people across that never have apples that would like to have them if they could buy them. Possibly one reason they cannot buy them from us is the great difference in the money-exchange program. We call it a dollar. And over there it is a bushel basket full of something and I do not know what you call it. The countries are so far apart that they cannot buy from us.

Another thing, perhaps we ought to lower our barriers of trade. We restrict their products coming into this country, and we have no exchange. That is about all I have to suggest.

I will just conclude by saying, in conclusion, we as farmers should try to regulate our own production and stay somewhat in line with current demands. Regulate our own industry, seek the least governmental controls possible and all Government programs should be for extreme purposes only.

What I am asking for in this suggestion is disaster insurance. I call it an extreme purpose. It is to cover something that we are badly in need of.

The CHAIRMAN. Do you think that you could get the farmers to pay premiums sufficient to pay damages? That has been the trouble. We have worked on an insurance program on many of the crops for quite some time. We have never been able to find a formula whereby it would be inviting to all the farmers in a locality to participate. It seems that you get only 1 or 2, and maybe 4 or 5 percent of the farmers in an area to take it up. Of course, it is not sufficient to pay the Government to go into that program.

Senator HOLLAND. For the witness' information, we began 3 years ago with the crop-insurance program affecting the citrus trees and their crop. It is now applicable in three counties of Florida. It has operated well. I suggest you get in touch with the Federal Crop Insurance Administrator. You can get all of the information about that from him.

Mr. PERO. I do not know how far I would get with them, because I am only a small grower.

The CHAIRMAN. You can get a lot of your growers together as the citrus people did.

Mr. PERO. Perhaps that can be done through our organization. I think it is important enough now in New England that something should be done. I can get out of the fruit business if I have to because I am in a location where I can go selling building lots, but I do not want to do that. My love is in the fruit business. That is what I want to do.

The CHAIRMAN. Your damage because of hurricanes has been in recent years, has it not?

Mr. PERO. It dates back to 1930. That was our worst blow. That was a very bad one.

The CHAIRMAN. Have they not increased?

Mr. PERO. Last year we had 3 hurricanes. Out of those 3 storms approximately 35 to 40 percent of our fruit went on the ground. Let us forget that part because what was left on the tree had more value. Even what we had on the tree was not perfect fruit. It was battered from hitting together. If you were ever in my place, I could show you that and you would say, "You are crazy to even handle the stuff. It is not good business." Fortunately, I am in the retail business and I sell most of my stuff direct to the public. I do not have to go to the wholesale market for its sale. If I did, I would have been broke a long time ago.

The CHAIRMAN. You make all of the profit by selling it.

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