the present program, we feel probably there is a need for some flexibility, either that or an extension of the controls to other commodities. It certainly is not working in some instances the way it is. NATIONAL COMMODITY RESERVE Mr. WHITTEN. We are spending hundreds of millions of dollars building up atomic bombs and tanks, automobiles, planes, and all those things not necessarily to be used in the Korean war but as a means of protection for what may be facing us. Would you think that, if we spend as much as $100 billion in preparing for emergencies that military people say are dangerous, 2 billions of dollars' worth of food and fiber would be too large a reserve? Mr. BENSON. I am in favor of a substantial reserve of food products, but I would hope it could be done in a way so there would not be undue losses through spoilage and deterioration. Mr. WHITTEN. To some extent, you can do it by this revolving business, can't you? Mr. BENSON. Yes; you can. That is one example of what I think is an improvement in the present program. That has not been done before. We are trying to do it, and I think it is going to save the Government millions of dollars, just the revolving of corn stocks. Maybe we can do it in butter; I don't know. But we are studying We have only been at it 30 days, and we have set out some rather broad objectives here. We have not spelled them out in detail because we are not in a position to do it at this time. I appreciate your criticism, and I appreciate your comments and your desire to be helpful. it. Mr. WHITTEN. As I have said several times, if it were my desire to be purely political I would wait until the mistakes are made and then I could make more of it. By pointing out all that I can see now, if there is any merit in what I point out, at least you have a chance to make use of it. But there is a long story behind why the American people are afraid that a Republican Party in power will go for flexible support prices. Too frequently Republican leaders have advocated them. That has been contrary to the feeling of the member of this subcommittee. It has been contrary to the feelings of many Republican leaders on the agricultural legislative committee, including its chairman and the chairman and ranking Republican member of this committee. But there have been lots of others who have advocated sliding supports; and, quite naturally, that fact creates a fear in the minds of farmers. Mr. BENSON. I believe, Mr. Congressman, from what contact I have had with farmers and farm leaders over the country, that they would like to see a little more flexibility in the program. Since the St. Paul speech in which you indicate I suggested some more flexibility in the program, we have had a flood of letters running about 16 to 1 favorable to the principles announced up there. We have had dozens, I guess hundreds, of editorials come in from all over the country, farm papers and metropolitan papers, all favorable. One of the reasons for raising some of these issues was to start people thinking and find out what they want. We would like to know what the farmers of the country want in the way of a programimprove on the present program.? If they want continuation of the program as it is, I think they ought to express themselves. We need can we their counsel and their direction. That is one of the reasons we are calling in these committees to advise with us. We do not have the answers to all these questions. We feel we need the help from the industry itself. This 14-man committee that came in really developed this policy statement, and it was checked with several other people, and they were all in harmony with it as a broad statement of policy. When it comes to spelling out the details, that is going to take some more study. ACREAGE CONTROLS Mr. WHITTEN. There is a basic difference, as I see it, as against the act passed in the 80th Congress and the views expressed on the present law which provides for acreage controls. Now, I read in your speeches many references to freeing the farmer and his belief in freedom. Most of them do want to be free of the conditions that they lived under for years when houses went unpainted and they did not live like the rest of the population, all because of the way the law was written in Washington. The farmer was just as good a citizen. He worked just as hard but he did not have tariffs, nor minimum wage, nor supports. The other major segments did. I know cotton operations more than many others. With regard to cotton and I think it is typical of many others-cotton today is becoming a commercial operation. It used to be that if you wanted more cotton you just worked a little longer, planted a few more acres, used your own team and your own feed and seed. Today you have to buy high-priced, expensive machinery, insecticides, and fertilizers, and you end up with about $125 to $150 cost per acre. We believe, in my section, in the cotton-growing area, that it is much sounder to let the farmers themselves, freely and voluntarily, where there is no foreseeable market for a large crop, vote a limitation on their production. They at least save the $125-an-acre investment by not growing a crop for which there is no need and therefore no market. I think that you, as Secretary, ought to be defending American agriculture. I think you ought to be doing it regularly, because they are the only group that has been asked to expand production and grow huge crops for national defense with no assurance of a firm price. And the surplus that they have produced swings around the market and gnaws away the price they would have received under a normal supply. I cannot see that the present law takes any freedoms away from the farmer. If he wants these supports, he votes on himself a limitation on production. I say it is better to have some firm, dependable price at a level that would mean something, and let the farmer hold himself back, than to let the production go and let him get into trouble. Mr. BENSON. If every commodity group were in a position to vote as to whether they would like the price supports, and if they want them at what level, that would give more flexibility than we have now. Mr. WHITTEN. Flexibility, as used in advocating farm programs in the years I have been here, has had to do with the percentage of parity, not with the volume of production. DESCRIPTION OF PARITY Another thing, the public has been misled about this parity business. It has gotten to the point where they think of it as a fair price. My understanding has been that parity is intended to give to the farmer 100 percent of the same comparative gross purchasing power he had in 1909-14. At that time he had no expensive equipment to buy. According to the records, at that time 70 percent of his farm was land, and now only 45 percent of it is land. Now out of his gross purchasing power he has to buy all this equipment and all this expensive fertilizer, insecticides, and so forth. So if you gave him 100 percent of his gross purchasing power he had then, he is far from being on a comparative basis due to the fact that farming has become a commercial operation. Mr. BENSON. I would like Mr. Wells to comment on that. Mr. WELLS. We never explain parity as a cost of production. It is a purchasing-power concept and on the Mr. WHITTEN. And gross income. Mr. WELLS. It does attempt to give the sales value of farm commodities which will yield the same per unit purchasing power. Mr. WHITTEN. The same purchasing power. Out of his purchasing power he has to buy all these things for his farm which he did not need back then. It makes for a completely different story from that which is commonly believed. COMPARISON OF PRICE SUPPORT COSTS WITH SUBSIDIES AND EMERGENCY INVESTMENT Furthermore, this surplus that you ask the farmer to grow, has pushed down the price that he gets for the rest of the crop. I cannot see that any apology needs to be made whatsoever for the cost to the Federal Government of present farm programs, when you compare it with other Federal expenditures to meet the emergency conditions with which we have lived for the last 12 or 14 years. Mr. Chairman, I would like to request that a statement be placed in the record at this point showing actual losses since 1933 under the price-support program as compared with costs to the Federal Treasury for consumers' subsidies, business reconversion payments, and tax amortization, and similar subsidies. Such a statement should also show the Federal investment in military materiel as a reserve to meet the present emergency as compared with the dollar investment of the Government in food and fiber acquired under the price-support program, which is a reserve for emergencies also. (The information follows:) 1. Losses under price-support program: Basics (profit). Nonbasics.. Total (net)... 2. Federal expenditures for Consumer subsidies (losses) _ . Business reconversion payments (including tax amor tization)__ Subsidies to maritime organizations. Total... 3. Federal investment inMilitary materiel_ Food and fiber (CCC inventories). 1 Since beginning of program in 1933. -$13, 011, 290 1,077, 628, 515 11, 064, 617, 225 24, 204, 268, 768 3 40, 787, 864, 000 4 106, 000, 000 5 218, 716, 000 45, 316, 848, 768 6 129, 000, 000, 000 71, 118, 316, 908 2 From July 1941 through June 1949. Since end of World War II (V-J Day). Since 1951; prior year figures not available. From January 1947 through Mar. 4, 1953. Deliveries of military equipment and construction since Korea totaled $48 billion as of Dec. 31, 1952. There are still in the pipeline $81 billion of goods on order for which funds are available. (Source: 8th Quarterly Report of Director of Defense Mobilization.) As of Dec. 31, 1952 (values of commodities under price support loan not included). COST OF SUPPORT PROGRAM Mr. ANDERSEN. Mr. Whitten, if you will let me interject at this point. I want to call to your attention the fact which is well known, and I am sure the Secretary knows it, that since 1933 the entire net cost of the price-support program to the taxpayers of America is approximately $1,100,000,000. That is, if you do not charge against it the so-called wheat agreement, nor the so-called consumer subsidies during World War II, which had nothing to do with improving the price level to the farmer. The report of the outgoing Secretary, Mr. Brannan, shows that the price-support program averaged $56 million a year in cost to the taxpayers since 1933. Now, I do not think, if those figures are correct, that that is anything to be alarmed about. I think we could justifiably spend three or four hundred million dollars a year in this subcommittee to keep agriculture up to the point where it is prosperous. But I agree with you, Mr. Secretary, that we must devise means to carry out this program without waste of food. After all, the people of America will turn thumbs down on any farm-support program that means wastage in food. We saw that in the potato program. Mr. Whitten, will you continue? COMPETITIVE POSITIONS OF AGRICULTURE Mr. WHITTEN. I appreciate your remarks, Mr. Chairman. I want to say this, too, Mr. Benson. Every year I served as chairman of this subcommittee we had the Department investigated by special investigators. It was our purpose then, and it is our purpose now to save money. This committee, at my request had the Commodity Credit Corporation investigated, and many of the findings reported in the papers are based on the work of this committee. We were interested then and we are interested now in trying to improve the Department. But I want to point out one other thing here: We have been in the thick of the fight for years trying to keep a proper balance in this country because this is a highly competitive situation. My theory of this is that we have a people, we have land, and we have a Government, and from the start there has been competition as to how the laws were going to be written. And industry has been able to write those laws for many years. We had tariffs-check them back-before 1800. From about 1910 we began to have legislation protecting labor written into the law. I am not trying to take those things away, although I think that in many places changes might be made there. But somebody has said that the farmer has had a free and open market. He has and he did for 150 years. For that period American agriculture did sell at the market place for what it could get and what it got was so low that the farmers depleted 40 percent of the fertile land in this country, and we haven't got that land. Also, 80 percent of our timber is gone. We in this country must see that the farmer gets a fair enough price to be able to put back in his soil a fair share of what he takes out to prevent further depletion of our resources. How can we say that he and he alone out of his part of the national income dollar should be the only one that puts anything back in the land for all of us? For many years we did leave it up to the farmer to be the sole one to put a share of his income back and I cannot see why it is so wrong for all of us to make some contribution to what goes back into maintaining and protecting the soil, our very means of livelihood. Whether it be right or wrong, we had better do it in self-defense where the farmer is not doing it. And in many sections of this country they have not been. I do hope that we can be of help to you. This subcommittee has been interested in agriculture as such and I assure you that will continue to be my purpose. I will stress the viewpoints I have as strongly as I know how but they will be put on a business basis, not as a matter of personal difference at all. We wish you the very best success and hope in your deliberations you will consider the overall problem. Mr. BENSON. Thank you very kindly, Mr. Congressman. I am sure that I have the same interest as you have when it comes to giving protection to our land resources, the matter of conservation, and protection to the farmer. I have no other thought in mind than the welfare of agriculture and the welfare of this country. Mr. WHITTEN. Mr. Secretary, when I came here, a Congressman who had been here 30 years said there was never a new Secretary of Agriculture that ended up representing the farmer. Mr. BENSON. Is that a prediction, or Mr. WHITTEN. It is no admonition, but he told me that they either get interested in politics, or they have to give in on their viewpoint to get the labor vote, or for some other reason they end up representing anything but the interest of the farmer. I hope that you realize that there are three or four different competing sections of the country and agriculture certainly does not want anything unfair. But there is such a thing as keeping a balance, and you cannot handle this without considering how it fits into the pattern of about four major groups. Mr. BENSON. I would not be here today if I had did not have an intense interest in agriculture. That is my first interest, the agricultural industry. I have been part of it all my life and my sympathies are there. My experience is there. I have no political ambitions of any kind, and it is the welfare of the farmer that concerns me, the thing best for him. Mr. WHITTEN. So frequently the Department of Agriculture gets shunted aside as compared with some of the other problems, and this was true during the Democratic administration, so it is no reflection on the other side. Mr. BENSON. I do not have that fear from the contact I have had with the present Cabinet of the President. Mr. WHITTEN. I know it will be his earnest desire to do what is right. OUTLOOK FOR COTTON EXPORTS Mr. Secretary, I appreciate the action of the Department in placing a representative in the Far East under the Office of Foreign Agricultural Relations to help with exports, particularly cotton. Please give us a report as to the present outlook for such exports and describe what efforts the Department is making to increase exports. (The information follows:) |