Mr. WELLS. Ten to twelve percent of our farm products are exported. At the same time about $3 billion of our farm income this year is going to be from exports. Since farmers are now on a higher price level they hate to see dollars disappear no matter what the purchasing power of the dollars may be.

Mr. MARSHALL. That 10 or 12 percent is the overall average which does not reflect the actual percentage exported of particular crops, for example, tobacco, cotton, and wheat.

Mr. WELLS. If you consider cotton, tobacco, wheat, rice, and California dried fruit the percentage averages closer to one-third. Mr. ANDERSEN. Are you going to give us the import situation now that you have given us the export situation?

Mr. WELLS. I do not have the import statistics with me.

Mr. ANDERSEN. I think it would be very valuable if we could see how much competing agricultural commodities have come in during the same period.

Mr. WELLS. Yes, sir; the Office of Foreign Agricultural Relations does maintain that.

NECESSITY FOR CERTAIN AMOUNT IMPORTATIONS

Mr. WHITTEN. I am like Mr. Horan, I really like slogans, particularly fine sounding ones, such as "More trade and less aid," which certainly appeals to us on both sides.

I would like to point out, for what it may be worth for the purpose of this discussion, a set of facts which were set forth in an article appearing in the Reader's Digest some years ago. This article pointed out that the United States has gotten to the point where it is almost 96 percent self-sufficient. A few years ago we paid $10 million a year to France for cigarette papers and we make our own. We used to spend billions of dollars a year for dyes and now we make our own. The same is true of optical lenses, where we were importing millions of dollars worth of those a year, and now we make our own. Rubber, mica, optical equipment are other examples. We formerly got nearly all our nitrate fertilizers. Now synthetic fertilizers have largely taken the market. Due to necessities which have caused us to supply our own needs we have gotten from about 60 percent self-sufficient to in excess of 95 percent. So, as much as we may wish to get rid of surpluses we have, we must figure out some way to buy something from other countries. Strategic materials is a partial answer. I believe we might well mport more raw materials and thereby slow down the depletion of our own.

Mr. HORAN. I think that is very helpful in the discussion.

Mr. WELLS. I am not trying to answer the policy question as to what you should do. I think this chart shows this is a desperately important subject for people who are interested in agriculture.

It is only during prosperous periods that we ship meats and dairy products abroad, and as purchasing power comes down our exports come closer and closer to being restricted to the staple commodities, cotton, tobacco, and wheat.

RETAIL FOOD PRICE AND CONSUMER INCOME

This seventh chart, Congressman Cannon, shows what 1 hour of factory labor would purchase at retail of certain standard foods in 1929, 1939, and for the first 11 months of 1952. Factory wages have climbed a little since 1952 and retail food prices are down a little, so that the current comparison is more favorable than this.

The first set of bars [indicating] shows how many loaves of bread an hour of factory labor would purchase.

QUANTITIES OF FOODS ONE HOUR OF FACTORY LABOR WILL BUY

Mr. ANDERSEN. First, so that it gets into the record, Mr. Wells, bring out a few of those facts as to what that chart does show.

Mr. WELLS. In 1929, for example, an hour's factory labor would buy 6.4 loaves of bread.

In 1939 it would buy 8 loaves of bread, and in 1952 it would buy 10.4 loaves of bread.

Mr. ANDERSEN. In other words, today the average factory worker can purchase 10.4 loaves of bread for 1 hour's work whereas in 1929 he could purchase only 6.4 loaves of bread for an hour's work?

Mr. WELLS. Yes; and I might add one small statistical correction. This is based on direct wages paid for factory labor. In addition, over the last several years certain retirement and other benefits have been added which are not included in current wage statistics.

FARMERS' PORTION OF CONSUMERS' DOLLAR

Mr. HORAN. We know that the farmer got not in excess of 3 cents in 1952 out of the cost of those loaves. As you go down that list in pointing your pointer to where the actual return to the farmer exists point out to us what the rest of the cost of that loaf of bread is, indicated by the cost of distribution and the other factors involved.

Mr. WELLS. Currently, the farmer gets no more than 20 percent of the price of a loaf of bread.

Mr. ANDERSEN. I doubt if he gets that much, but go ahead, Mr. Wells.

Mr. WELLS. It is actually around 18 percent. In the case of round steak 1 hour of factory labor would buy 1.2 pounds in 1929. In 1939, it would buy 1.8 pounds, and in 1952, it would buy slightly less than 1.5 pounds. I am under the impression that when I get the retail prices for February, you will find an hour of factory labor will buy at least as much as it bought in 1939. In studying these comparisons, remember, 1929 was a prosperous year for the United States while food was really at bargain prices in 1939.

Milk: An hour's factory labor bought 7.8 pints in 1929 at retail, 10.4 pints in 1939, and 13.8 pints in 1952. The farmer gets about half of it. About half of it goes to distribution costs.

Bacon: 1.3 pounds in 1929, per hour of factory labor, 2.0 pounds in 1939, and 2.6 pounds in 1952. The farmer may get as much as two-thirds of this.

Mr. ANDERSEN. That indicates, Mr. Wells, that the laboring man today can buy twice as much bacon for an hour's labor as he could in 1929, is that not a fact?

Mr. WELLS. Yes, sir.

Mr. ANDERSEN. And he can buy approximately one-third more bacon today than he could in 1939 with the same hour's labor.

Mr. WELLS. That is right.

Mr. ANDERSEN. Personally, I do not see what the consumers have to kick about when you study this chart.

Mr. MARSHALL. Mr. Chairman, it also indicates that from the commodities on the chart, that the greatest advantage, as I can read it, is shown to the consumer of those commodities that we have support prices for.

Mr. HUNTER. Mr. Wells, when you speak of steak, do you speak of the whole beef?

Mr. WELLS. I am talking about round steak. These are based on retail prices reported by the Bureau of Labor Statistics and this is round steak, not the whole beef.

Mr. ANDERSEN. I think you were on the subject of bacon when I interjected.

Mr. WELLS. Eggs: Whereas an hour of factory labor in 1929 would buy 1.1 dozen eggs, and in 1939 would buy 2 dozen, in 1952 it would buy 21⁄2 dozen. Farmers got about two-thirds of the average retail

Potatoes is one of those commodities where you could buy slightly less in 1952 with an hour's factory labor, about 22 pounds compared to 25 in 1939. You are aware that the potato situation fluctuates widely from year to year. Farmers got about one-half of the average retail potato dollar in 1952. And finally, oranges. An average hour of factory labor would buy 1.3 dozen in 1929, 2.2 in 1939, and 3.3 in

1952. Farmers got about one-third of the average retail orange dollar in 1952.

Mr. ANDERSEN. That would indicate, Mr. Wells, that the people dealing in oranges and producing them have established a pretty good marketing organization, does it not?

Mr. WELLS. Yes. Oranges is one of those cases where you have had a rapidly increasing production and where ways have been found to increase per capita consumption. But the citrus industry is still faced with problems as new bearing acreage continues to come in over the next several years ahead.

Mr. HORAN. That is the only item on your chart, Mr. Wells, that reflects the fact that in the foreign market the citrus industry has been invaded by the Near East, by Africa, and other areas. The hard-soft currency situation that both exporters and importers have to deal in when they export or import has excluded our United States producers from many foreign markets. Consequently that is a factor, as you look at that bar there, which indicates that you can buy more today than you could in 1939 because our production has had to telescope more and more into our domestic market.

Mr. ANDERSEN. Gentlemen, are there any questions before we leave this chart?

Mr. WELLS. This chart deals with specific standard foods because it is much more graphic than using some kind of a statistical average. Mr. ANDERSEN. Proceed, Mr. Wells.

FOOD MARKETING CHARGES

Mr. WELLS. This eighth chart shows our estimate of the total food marketing bill.

MARKETING COSTS INCREASE

Mr. WELLS. A year ago, for each dollar spent at retail, the farmer was getting about 50 cents. Today, he is getting somewhere around 45 cents. We estimate that in 1952 the over-all marketing bill for handling, transporting, processing, wholesaling, and retailing food increased 7 percent over 1951. And again, as far as we can see, there are likely to be some further increases in 1953. The chief thing I want to call your attention to here is that these are relatively inflexible charges. They increase during periods of inflation or prosperity and they tend to stick at or close to the new, higher level during periods of deflation or depression.

EVALUATION OF EFFORTS UNDER RESEARCH AND MARKETING ACT

Mr. HORAN. May I ask you a tough question here? At about the place where the pointer shows under the word "total" is where we instituted the Research and Marketing Act which was designed to help us cut down costs and increase the distribution and consumption of food. However, it would appear to me that the rising modes there on your chart have increased. I want to know at this time whether or not our work in research and marketing has helped the farmer or whether it has merely increased the security for people other than the farmer in the marketing of farm crops. Certainly, the work we have been doing in research and marketing has helped the retail outlets. We have done a lot of work in that field.

Certainly, we have increased the efficiency of transportation of perishables under Research and Marketing Act, and thereby cut down the liability of the handlers and common carriers in the transportation of foods. Labor I cannot connect with it except that we have made their jobs more secure by more efficient handling of food. Presumably, we started Research and Marketing Act to help the farmer and even the chart there. Beginning with the place where we instituted Research and Marketing Act does not indicate to me very much of a reduction in some of the things that we used to think maybe we might be able to reduce if we really studied them and paid some attention to them. Certainly, we have not cut down on the cost of shippers' liability and handling of perishables; certainly we helped the retail stores to cut down their overhead, but that has not been reflected in anything excepting an increase in the profits of the retail organizations, and certainly by making labor's job more secure we have contributed, I guess, to labor costs. It is reflected in the chart, at least.

That is a tough one.

Mr. WELLS. Without denying any of the statements, all of which I find myself in agreement with, I believe that the work under the Research and Marketing Act has been worth while. It has been of value to farmers.

Now, let me say this: under the Research and Marketing Act you are endeavoring to approach some most difficult problems through research, service, and education. This is a slow process. You are trying to start marketing work in a Department of Agriculture which