Mr. HEIMANN. Personally I am more worried about shortages than I am about surpluses. I have been living in New Mexico too long. Our trouble has always been shortages, especially when we first homesteaded here.

STATEMENT OF CHARLES JOHNSON, ALBUQUERQUE, N. MEX.

Mr. JOHNSON. Mr. Chairman and Senator Anderson, I feel like a small part of this agriculture, after listening to Mr. Heimann. I am Charles Johnson and come from 56 miles southeast of Albuquerque. I have farmed 200 acres with 100 acres of alfalfa and 100 acres of beans. That is a very poor combination.

I only run sheep and cattle on lease. I do not own the cattle or the sheep.

Senator ANDERSON. Are you pumping?

Mr. JOHNSON. I am pumping.

Senator ANDERSON. And how much lift?

Mr. JOHNSON. I have 120-foot lift.

The CHAIRMAN. How long have you had your pump

Mr. JOHNSON. The well was drilled in 1948.

The CHAIRMAN. How much has that lift increased since you first started?

Mr. JOHNSON. Only 10 feet in that length of time. That is not too much. We have a peculiar situation there in developing this new valley. It so happens that beans was the cash crop for many years before the irrigation was developed. Since the irrigation was developed beans continue to be the cash crop in that valley.

The other main source of income off of the farms has been dairy cattle. That is not with all of the farmers. They cannot all be dairymen. Not all of them can feed sheep or cattle.

We have not been able to convert to this livestock economy as yet. So we still have been depending on beans as our only cash crop.

We do have two other cash crops which are coming in. One is sugar beets, and the other is potatoes, in both of which we have a surplusboth of which are very difficult to expand.

Therefore, we are put in a difficult position because of this cut in bean prices for the last 3 years. We are down to the point now where we are even losing money if we plant them. In other words, we have lost our cash crop.

What are we going to do? We do not know yet.

The CHAIRMAN. Thank you, sir.

Mr. JOHNSON. I have one other thing that I would like to say here. The CHAIRMAN. All right, sir.

Mr. JOHNSON. On the national recommendations, one thing that I have learned here today, and from other reading, is that the problem of surplus is caused by overplanting and this is done by people who do not comply with the law of acreage control. The penalty is not severe enough to prevent people from planting too much corn and then paying the penalty, or planting too much cotton and then paying the penalty, and then putting these crops on the market, either as hogs or as extra cotton.

The penalty should be raised to such a point that these people will not overplant. That is the real problem. That is, as far as our national agriculture is concerned.

Another thing, our Secretary of Agriculture, Mr. Benson, has been putting things on the market in competition with crops when that should not be done. I do not know just how this is being done.

The CHAIRMAN. What crops?

Senator ANDERSON. What do you refer to?

Mr. JOHNSON. Well, like cheese, for example. Instead of taking this cheese off the market and keeping it in the Commodity Credit Corporation, why in that particular example he dumped it right back where it could be put into competition with us.

The CHAIRMAN. The cheese, as I understand it, that he disposed of was on the school-lunch program. You do not object to that; do you?

it.

Mr. JOHNSON. No, if it is put into the school-lunch program.

The CHAIRMAN. That is where most of it has gone, as I understand

Senator ANDERSON. I imagine that you are referring to that resale of cheese which was sold right back to the cheese people.

The CHAIRMAN. I recall that.

Mr. JOHNSON. In beans, for example, I do not know whether any of them have been put back into competition with us or not. It seems, however, too many crops are going into the Commodity Credit Corporation, and yet they are getting back into the hands of the people that want them. It is not performing the job that the Commodity Credit Corporation is supposed to perform, to keep them off the market in competition with the farmer.

The CHAIRMAN. Thank you.

So far as the list that I have before me is concerned, I have called every witness who asked to be heard.

I want to thank all of you for your patience, and for being present. I am sure that I speak for Senator Anderson when I say that we are both glad to have had the occasion to listen to all of you. Let us hope that from these hearings, and those we will have in the future, and those we have had in the past, we will be able to get something to better the farmer, at any rate.

I want to thank you again.

(Whereupon, at 3:40 p. m. the hearing was adjourned, to reconvene at 9 a. m. Saturday, November 5, 1955, in Fort Worth, Tex.) (Additional statements filed for the record are as follows:)

STATEMENT FILED BY SHERWOOD CULBERSON, PRESIDENT, NEW MEXICO CATTLE GROWERS' ASSOCIATION, LORDSBURG, N. MEX.

The historic position of the New Mexico Cattle Growers' Association has been in opposition to Government regimentation and Government control of the livestock industry. We recognize that your honorable committee is primarily concerned with the development of an overall agricultural program calculated to relieve the present position of the Nation's farmers. We feel confident, however, that since this hearing is being conducted in the heart of the western livestock industry you are interested in having the position of range livestock producers on the overall farm program.

We expect that the principal problem confronting your committee and the entire Congress at this time is the question of developing a more realistic and a better agricultural program so far as the basic farm commodities are concerned. We, of course, refer to such crops as corn, cotton, tobacco, wheat, and so forth.

While this is not a direct problem of the livestock industry, it is certainly a most important indirect problem, and one which is and will definitely affect livestock production and market trends.

Early in 1952 when the livestock industry suffered severe price setbacks, a general movement developed through the West to urge that the Federal Government place some type of price supports on live cattle. This movement was strongly opposed by all of the recognized and established livestock associations under the leadership of the American National Cattlemen's Association. The New Mexico Cattle Growers' Association likewise opposed this movement and instead recommended that the industry attempt to solve its own problems through the development of better markets and a self-help program which would require a minimum of Government financial assistance.

The western cattle industry at the present time continues to feel severe economic pressure due to the relative high cost of production and the low price of cattle. We still believe, however, that this situation can be corrected to a major extent through an industry program to develop a greater demand for our product and in turn a firmer market for livestock. At least we can say without question that the livestock industry is in a sounder position today than it was 2 years ago. This is more than can be said for basic farm commodities which have continued under a Government price-support program.

The New Mexico Cattle Growers' Association is on record in opposition to rigid price supports on basic farm commodities. We recommend that flexible price supports be continued by Congress on a gradually reduced basis with the eventual hope of removing all price supports on the basic farm commodities and finally reverting to a free open market, which will allow each product to seek its own level of production.

We realize this is rather a blunt statement. On the other hand we have every reason and every example to believe that the current Government pricesupport program as well as the former rigid price program have both been failures. There is no question but that these price-support programs have led to overproduction of all the basic commodities. We can find no record in history of this Nation or any nation where the government has entered into the agricultural field with price supports and government regulations and made a successful program operate over a long period of time.

We recognize that farmers and ranchers throughout the country are not enjoying the same degree of prosperity as other business and industry. We know from actual experience that livestock producers in New Mexico are having an extremely difficult time in making ends meet under present economic conditions. We believe it is generally recognized that should agriculture continue under its present depressed state and even suffer more economic shock that it could possibly affect the entire economy of our Nation.

We feel compelled to point out, however, that all of these adverse conditions have developed under Government price-support programs for our basic farm commodities. While these programs have been calculated to stabilize the position of the American farmer they have in fact jeopardized his position because the entire program cannot help but encourage overproduction of farm commodities.

We do not believe it is the duty of the Government or the United States Department of Agriculture to guarantee the farmer a living. We feel that if more emphasis were placed upon research in markets and production; upon information and education; and upon disease control and related subjects that our agricultural problems would eventually work themselves out on a sound and lasting basis.

We view the present conceptions of price-support programs on our basic farm commodities with alarm because we are confident they will ultimately seek to destroy the livestock industry through overproduction. As production of basic farm commodities is reduced through Government control it is only natural that the American farmer and rancher will increase his production of livestock thus glutting our markets to the point that the livestock industry itself will be forced into a Government-control program.

The economic health of this country has never been developed and will never be developed through a Government guaranty to the American farmer or the American businessman or through Government control of supply and demand. This country has been made great through the development of free enterprise and free markets.

We believe that the present flexible price-support program, if adjusted on a sound basis with the ultimate intention of removing all Government supports

for agricultural commodities, will eventually lead to a free and prosperous agricultural economy. We believe this is the only ultimate solution over a longtime period.

With this in mind our only recommendation to your committee at this time is that Congress view this basic principle of free enterprise on a realistic basis and attempt to develop a farm program which will not lead to more Government control but rather to less Government control and free, competitive production and markets.

STATEMENT FILED BY DONALD W. HAMIL, STERLING, COLO.

I am Donald W. Hamil, of Sterling, Colo., testifying as an individual. My operation is geared to the production of choice beef through the feed lot, to the production of a portion of the feed for these cattle, and to the production of sugar beets as a cash crop from irrigated land.

A farm program to be of any value to the farmer should have two purposes: To get a fair and equitable net income into the pockets of the farmer and to stabilize the market for farm products.

Net income is gross income less operating costs. For any farm operation to be successful it must have sufficient gross income so that it can absorb the operating costs and leave a fair return for the farmer to live on. Certainly the practical approach to the farm program is assistance in distribution, not curtailment of production, except where it is a conservation measure.

An aggressive farm program should include in its objectives: (1) expanded markets through export, improved diets, and new uses for farm products; (2) generous conservation payments to encourage reduction of acreage of marginal land in crop, and to lower operating costs; (3) flexible price supports to encourage consumption, not substitution, and to stabilize the price of a commodity throughout the year.

We must recognize that this country produces approximately 15 percent more agriculturally than it consumes. We are an export nation. To maintain a high gross income for the farmer we must find an outlet for this production. Research in marketing should be able to find an outlet for this 15 percent with two-thirds of the world's people going to bed hungry, and many of our American people living on an inadequate diet. This could be done through barter or price.

Medical science has proven that a high meat diet contributes to the good health of a nation. A high protein diet of beef requires 7 acres to do the job of 1 acre in a low-protein diet. Anything we can do to encourage the American people to eat more meat will not only improve the general health of the Nation but will also absorb a portion of our excess grain production. Our school-lunch programs, charitable institutions, and needy citizens should have access to a generous supply of meat so long as we have it available beyond the normal channels of consumption. A child educated to a high meat diet through the school-lunch program will continue to demand meat in his diet so long as he can afford it.

Generous conservation payments: Since our agricultural production is in excess of the market at the present time and a portion of this excess production was encouraged by the demands and needs of this country during a wartime period, we should consider measures in a peacetime farm program that would encourage farm operators to divert marginal land back into grass. This is an expensive process, especially in the low rainfall areas and will therefore demand a high incentive payment in order to get it accomplished. In our eastern Colorado area it takes 3 to 5 years to get a productive grass crop established on cropland. Not only should the loss of production during this period be considered in the conservation payment but also the cost of seed and the time for ad valorem tax adjustments. With these marginal lands back into grass we would bring our production closer to demand and also have these lands in better condition to stand the hazard of weather until we need them for crop production at some future date.

Generous conservation payments will also pay dividends in lowering the operating costs on many farms. On irrigated farmland, leveling and canal lining has very definitely lowered the cost of producing a crop. Less labor is required in irrigating lands that have been leveled. These two practices also pay dividends to the farmer in that he reaps rewards through better distribution of our most precious resource, water.

Price supports should be flexible. The price of a commodity should be at a level at which it would move into consumption, not storage. When the price tag on meat becomes too high, the housewife buys macaroni. When the price tag on butter gets too high, she substitutes with margarine. When the cost of corn gets too high, the cattle-feeder substitutes with milo, barley, or millet and, when these get too high, he replaces them in his formula with corn cobs and molasses. A price support on any commodity should be set at a level at which it would encourage consumption not substitution. A price support at a moderate level should also serve to stabilize the price of a commodity throughout the year.

In agriculture, we are still in the throes of a transition from a war to a peacetime economy which demands that we farmers and livestock operators have some adjustments to make. A farm program, which includes market research, an adequate conservation program, flexible price supports should help us to make these adjustments.

The American farmer enjoys a high standard of living because he has been able to adjust to changing times. He has placed emphasis on efficiency of production. A farm program geared to production for consumption, not substitution, will continue to give the farmer a fair and equitable income.