The prices quoted below give a comparison in free competition and the use of gallon containers in Ohio as compared to New York State.

A simple average between New York order 27 prices and prices paid by Lawson's shows that the New York dairy farmer averaged $3.8501 per hundredweight for the first 9 months of 1955, while Akron, Ohio, producers received an average of $4.10 per hundredweight. This difference of 25 cents per hundredweight would have increased by $456.25 the extra income for 12 months of a New York producer who averages 500 pounds of milk per day.

It is evident that the higher fluid consumption rises, the higher the returns to the producer.

An official of one of the larger national farm organizations asks whether it is through ignorance that people do not drink more milk. Well, some people don't eat caviar, and not because they are ignorant. They just can't afford to buy it. It is the contention of those who understand the facts and disregard the dealer propaganda that many people in our land don't drink enough milk simply because they can't afford it at the high prices the dealer charges. Every mother knows the value of milk and certainly in the areas where it is priced fairly she uses it in sufficient amounts to adequately supply the nutrition her children require.

The consumer buys what he can afford. It's the price that guides his action more than any other factor. Witness the amount of fluid milk the people drink in the Akron area.

Increased consumption of fluid milk at lower prices would mean increased prices to dairymen through higher class 1-A sales. The burden of taxpayers paying for stored dairy surpluses could be done away with. This would help the whole national economy. At the rate milk is consumed in Akron, the United States would need 35 billion more pounds. This would create a greater expansion in the milk industry, with effects resulting in greater use of presently stored surplus grains. Let's drink the milk as nature intended. Let's not penalize the efficient distributor by denying him an opportunity in competition.

Congress, also, could well pass legislation whereby farmers would get the cost of production plus a reasonable profit, based on family-type farming, where all farm produce would be put on the market to sell instead of going into storage.

The CHAIRMAN. Your main difficulty seems to be in relation to your complaint as to the State laws. I am only sorry we cannot do too much to help you in that regard.

Mr. KORZENIEWSKI. I realize that.

The CHAIRMAN. New York will have to do that for you. Thank you, sir.

Mr. KORZENIEWSKI. Thank you.

The CHAIRMAN. Has Mr. Austin come in yet? (No response.)

64440-56-pt. 7—16

The CHAIRMAN. Is Mr. Alfred Van Wagenen here?

(No response.)

The CHAIRMAN. Is Mr. Robert J. Novins present?

Please come forward and give us your full name for the record.

STATEMENT OF IRVING BERGER, COUNCIL OF POULTRY ORGANIZATIONS OF NEW JERSEY, LAKEWOOD, N. J.

Mr. BERGER. Mr. Chairman and members of the committee, my name is Irving Berger. I am here in the place of Mr. Novins. I am a poultryman in Lakewood, N. J., and I represent the State council in New Jersey, comprised of a number of cooperatives. I want to thank the committee for the privilege to come before this congressional committee to express the opinions of the co-ops, of the poultrymen in the area. And I would like to give the other farmers that are here as much of an opportunity as possible, so as not to detain the committee, and so that they should be able to keep their plans that they have, and I will confine myself to a few brief remarks which I have outlined in this brief.

I want to point out before I read some of the statements in this brief that the price of eggs and of poultry in the industry has been established by most of the agricultural colleges as being, without replacement, about 47 cents a dozen. Taking into consideration replacement flocks, they would be somewhere at a price presently sold on the market.

Some of these items that I would like to read would be the things that we have brought a number of times to the attention for relief of the industry. And they would be as follows:

The first was the release of certain grains and feed ingredients to commercial poultry farmers.

It has been indicated that the United States Government and the Department of Agriculture is being faced with constantly increasing surpluses of grains. A release of a portion of these grains for animal food consumption would relieve the economic pressure in the poultry industry momentarily. It is also to be considered that part of the problem confronting the poultry industry today is created by the consumption of price-supported feeds as raw material to the production of a nonsupported egg product. Consideration is requested of the proposition that eggs are as much a basic commodity as any product and should be considered in the same light with other price-supported items.

Second, extention and liberalization of FHA loans to commercial poultry farmers.

I am sure that this committee is fully familiar with some of the views.

The CHAIRMAN. On the other hand, it does not come before our committee. It comes before the Senate Banking and Currency Committee. That problem does not come before our committee, I say. Mr. BERGER. Right. That is why I will pass this point.

There are two important points that I would like to make here: That is, the purchase by the Department of Agriculture of eggs for domestic and foreign relief programs. The Department of Agriculture through its own effort and through the efforts of other governmental agencies should encourage the use of eggs in school and hos

pital programs domestically, as well as to be used for lend-lease and foreign-aid programs.

And next, grants by the United States Government and by States should be encouraged for the purpose of extensive steps to determine additional uses and needs of poultry products. These grants should be considered in connection with the State universities, as well as private research and experimental laboratories.

Next it is respectfully submitted that the Senate Agriculture Committee confer with the committee of the poultry industry composed of actual commercial poultry farmers, operators, and organizations periodically to further the recognition of existing problems and discuss the solution of the same.

In view of what I have presented, I think I have given sufficient coverage to the overall brief. And I will send a more detailed brief to the committee for further study.

I would like to extend to this Senate Agriculture Committee the possibility of coming to our congested poultry area, so that many more poultrymen can express their views maybe a little more advisedly or broader than I have here, because I do not want to take any more time. I feel that the Agriculture Committee will probably give more time to the statements in the brief.

This is as far as I would like to take your time.

The CHAIRMAN. Thank you, sir. Your statement, that is, the one The CHAIRMAN. Thank you, sir.

The CHAIRMAN. Is Mr. Wesley Engst present?

(No response.)

Has Mr. Austin come in?

(No response.)

Did Mr. Van Wagenen come in yet?

(No response.)

We will next hear from Mr. Paul Smith. Give us your name in full for the record and your occupation, please.

STATEMENT OF PAUL SMITH, ASSISTANT COMMISSIONER, DEPARTMENT OF AGRICULTURE AND MARKETS, ALBANY, N. Y.

Mr. SMITH. Mr. Chairman and members of the committee, my name is Paul Smith.

I take it for granted that this committee is entirely familiar with the financial situation on the farms caused by the disparity between agriculture and the rest of our economy. I do not think that I will devote any time to that. I am going to talk about something that I think might help to improve it.

First, I have a few comments to make on the present setup, flexible price supports and rigid price supports.

If we adopt the premise that the Federal Government has the responsibility to assure its 165 million, and ever growing population, a plentiful supply of food at a reasonable price, we must admit that so far we are on sound ground. However, in order to sustain this, it means that we must have a surplus of the various food commodities at all times, never forgetting that the maximum consumption must be the minimum production, and in order to provide for a reasonable carryover against emergency, there has to be a substantial excess.

As of now, I know of no crop which is short. The problem now seems to be that the carryovers are excessive and in the case of many crops unmanageable.

Following the theory of the flexible price support, it would mean that the low parity would be applied to all these crops until the excess was terminated. In other words, without any further planning to control the surpluses other than the low parity when we have excesses, it would necessarily follow that the low parity would be the prevailing parity at all times. Particularly, this has been proven in the case of milk where the low parity has been in operation since April 1, 1954, although the output has increased.

The flexible price-supoprt proponents theorize that, in times of short supply, raising of the parity would increase production which would mean increased total receipts with a higher parity. However, marketing experience has taught us that in times of shortage there is need for artificial price stimulation. The law of supply and demand in these instances operates to the benefit of the producer and the price would be ample without any application of the parity provision. Therefore, we may conclude that flexible parity means the low parity that can be applied under the law on all our crops most

of the time.

The following are some reasons why rigid supports without further implementation are unsound. With 90 percent of parity it has been proven particularly in our basic crops that production, with favorable weather, exceeds the normal demand. This situation confronts the Federal Government today. If the parity price were continued at 90 percent and in the absence of an increase in export trade or disposal we would find ourselves with a terrific and unmanageable glut of all basic food products.

The problem is not as simple as the proponents of either of these two views would have us believe. Flexible supports-meaning low supports puts agriculture to such an economic disadvantage that it cannot long continue without bankrupting the farmer and affecting our whole economy. Rigid, or 90 percent, supports means using up our land resources to produce beyond our actual demand; and a continuance of this over any lengthy period, and with favorable production weather, results in huge surpluses that just simply cannot be managed.

That leaves us where some new plan for agricultural stabilization must be adopted. It seems to me that the plan that will come more nearly meeting the situation is a combination of the 90 percent, or rigid, parity support to the producer for growing his crops, plus free play in the market place in the merchandising of his crops. I am sure that, if there is a potential demand in this country for more of our food than is actually being consumed, the lower price which would result from putting more on the market would also result in translating that potential demand into an actual demand to the end that some surpluses caused by guaranteed prices to the grower would go into consumer channels. In other words, the farmer, for producing his crop, would receive a guaranty of 90 percent of parity.

I have no objection to that going to 100, if practical.

The consumer, on the other hand, would benefit by lower prices in the market place. To make up the difference, the Government would subsidize either the consumer or the producer, or both, to

the extent that the disparity between agriculture and the rest of our economy is partially or wholly eliminated.

This plan was first publicized by Agriculture Secretary Brannan during the Truman administration, and I believe that nothing has been advanced since then that will come close to meeting the complicated problems that confront us. This can be offered as a general overall plan, but I believe that many other things must be adopted to supplement the operation of this overall plan. Where commodities are local and perishable, I think marketing orders could properly be put into effect-both State and Federal or a combination of the two. But where a crop is nationally grown and the output of one State, particularly of nonperishable products, can be marketed in almost any other State, the Federal Government of necessity must be in the picture.

If this plan of operation, namely, free play in the market place plus 90-percent parity guaranty for the grower still results in excess production, then it would seem wise to invoke some sort of production control. Obviously, there is no point in using up soil resources to produce in excess of amounts that can be disposed of one way or another. This brings up the problem of how best to curtail that production.

The idea of paying farmers not to produce seems to be gaining widespread approval currently. This, in connection with the aboveproposed plan, would perhaps meet the situation provided the producer is placed on a unit-production basis rather than an acreage basis. The fallacy of curtailing acres has been pretty well shown up in the past. The smaller allotment in most cases results in more intensive operation of the remaining acres, resulting in no appreciable decrease in total amounts.

To summarize the above: If we put into effect the following plan it is my belief that the situation would be much improved over any single plan that has been suggested up to now:

1. Ninety percent of parity guaranty to the producer for all he

grows.

2. Free play in the market place, as suggested in the Brannan plan.

3. Marketing orders wherever they can be practicably applied. 4. Curtailment of production on a unit basis rather than an acreage basis.

The CHAIRMAN. Would you make the Brannan plan apply to all commodities?

Mr. SMITH. All commodities?

The CHAIRMAN. Yes.

Mr. SMITH. Some provisions of it, perhaps, but not necessarily. I believe in using the marketing order wherever it can be used and to the fullest extent that it can be used.

The CHAIRMAN. I presume such as we have now for the milk industry?

Mr. SMITH. That is right. Perhaps they might be used on other commodities, too.

The CHAIRMAN. We have been looking for a formula to do that, and so far we have not been able to find that, that is, to make it nationwide. Some are suggesting it. No concrete plan has been offered. Mr. SMITH. I want to point out that it is my feeling that neither