modities should be entitled to some kind of support in depressed times. That would be permissive possibly but not made mandatory. Senator ELLENDER. Have you outlined a plan?

Mr. DAVIS. We have not.

Senator ELLENDER. Why do you not outline a plan? It is easy to say that and all of us have been confronted with that. I would like to have your views expressed on this subject. Senator AIKEN. The committee has been unable to find any formula that would cover that situation.

Senator ELLENDER. It is easy to shout from the treetops.

Senator AIKEN. It was pointed out yesterday and the day before that the Commodity Credit Corporation charter bill provides for the support of nonbasic commodities but in discussing the matter with officials of the Commodity Credit Corporation I find they would like to have something more explicit written in the bill than to rely on their broad general authority which is in the charter.

Mr. DAVIS. Answering your question, for the most part the fruit and vegetable people in the associations that are in our organization, and the livestock associations, have been against support prices for their commodities. In fact, they more or less have been against support prices in general, but at our meeting this last week when we were talking about long-range agricultural policy this was pretty much the sentiment that if a long-range agricultural policy is to include support prices for basic commodities, then our members think they are going to be driven to the position that all segments of agriculture should have somewhat similar treatment.

Senator ELLENDER. Can you offer any suggestion as to how it can be done?

Mr. DAVIS. Just this, that we want a study made of the feasibility of using a compensatory payment program for some of the perishable commodities. The problem is that you cannot store such commodities. They have to be moved immediately.

If the Government takes title, then the Government becomes the market. We would like to avoid that. The alternative it seem to some of our people is to let the products move in the market at some price since they are perishable and then compensate the farmer. We are not for that but we are for the study of that and all other methods. Senator THYE. I was going to say, Mr. Davis, that with a seasonal perishable product, just the moment you have a surplus the price starts tobogganing.

Mr. DAVIS. That is right.

Senator THYE. Unless you were to step in to support the price the season would end and the producer would have a tremendous loss.

Mr. DAVIS. I think that during the war there were times when the fact is the Government was ready to step in prevented the price from going downhill.

Senator AIKEN. It would be more economical to remove a small percent of the crop from the market in order to prevent a price collapse than it would be to let the price collapse and then undertake to reimburse farmers for the loss.

Senator THYE. That is what I contend.

Senator AIKEN. We have the dairy industry which is about the largest branch of farming and prices have been pretty well kept from

collapsing in that industry although costs have not been kept very closely in check. Prices have been kept from collapsing through marketing agreements which have covered about a third of the industry but which served to regulate prices for the rest of the industry. Could we not go much farther in the field of marketing agreements in supporting prices on nonbasic commodities?

Mr. DAVIS. We think that should be studied.

Senator AIKEN. I understood in the early part of your testimony you had reference to the extension of marketing agreements. You said we should exhaust every other means before resorting to price support. I do not think that statement is at all inconsistent with the provisions of this bill because when prices fall to the danger point where farmers are required to produce at a loss of-over a considerable period of time-it would indicate that the other means of supporting prices had not sufficed and it was time for support by the Government to come into the picture.

you

Mr. DAVIS. No, I do not think it is inconsistent with your bill. Senator ELLENDER. What I find difficult in supporting the price of these commodities is that in many cases there is no way by which could control these surpluses and if we are to keep on supporting prices and then not at the same time to be able to cut the spigot off, why a lot of the consuming public would have just cause to criticize the Congress for spending a lot of money to maintain prices on a commodity the surplus of which cannot be curtailed.

We often cite the case of the eggs where in we have on hand approximately $50,000,000 worth. Within the next few weeks some agency of the government is going to support the price and keep on storing them, notwithstanding the fact that there is already a large supply on hand. The consumer public finds it difficult to understand why it must pay 65 cents for eggs when we have a big surplus that could be sold much cheaper.

Senator AIKEN. I think it is interesting and worthy of mention here to consider the fact that the Commodity Credit Corporation was permitted under the wartime legislation to incur losses up to $500,000,000 in suporting the price of a nonbasic commodity and that as of the present time I understand that the total amount charged up against that $500,000,000 has been a little over $40,000,000, which seems to me a remarkably low price to pay for the support which has been given all of these nonbasic commodities in order to prevent collapse of prices.

Senator LUCAS. That is true, Senator.

Senator AIKEN. I was surprised to find out that so little had been actually charged up against the $500,000,000.

Senator LUCAS. I seriously doubt that you can justify that as a base for future consideration upon legislation.

Senator AIKEN. Possibly not because some of the commodities they have supported the price on, like powdered milk, for instance, European countries have taken off their hands at, I expect, a little profit, not much, but a little bit.

Senator LUCAS. You see, in your statement, Mr. Davis, you first say: If these commodities are to be supported, we believe that similar security should be provided in one form or another to the producers of all farm products.

Then you move right along and say:

To write into law, however, at this time that price supports are mandatory for all agricultural commodities, would, we believe, be a serious mistake. It could involve tremendous administrative problems and result in an outlay of billions of dollars in times of depression.

What I fear, and I repeat it again, is that if we try to take in too much territory in this bill and cover every commodity regardless of what it is, over which the Department of Agriculture can have no control whatsoever, we are ultimately going to lose the confidence of the American people in the basic farm program as it was written in the beginning and in my judgment operated very well. That is what I fear.

I am attempting to look far down the mountainside and not just for the moment.

What I want to do is to see a long-range program that will work. I do not want to see it cluttered up with a lot of commodities over which we have no control and this may mean the ultimate repeal of a great portion of this farm program. That is especially true if we should ever get to a depression.

Also, I believe what you say is true, that it would cost the Treasury billions of dollars. Your farm program would just go out of the window if that happens. The American people will not stand for it.

Senator THYE. Senator Lucas, do you think there would be some hope that the basic carry-over in a commodity could in some sense govern the plantings or amount of production in that commodity?

Senator LUCAS. It is possible. I certainly would like to see every avenue developed and explored to the end that we might find the right formula, but I am unwilling to continue this bill as it is unless we make some amendments even for another year.

I do not believe we should.

Mr. DAVIS. I think, Senator Lucas, that what you say is true. On the other hand, right now about all our basic commodities are in fairly good shape. I was at a series of six meetings with farmers in Florida about a month ago and most of their important commodities that were moving at that time were moving at prices way below parity. They told me that actually the growers were netting about 5 cents a box for grapefruit on the trees.

Farmers had attempted in one area to divert some of the land this year from potatoes which they thought would be in trouble, to cabbage. Well, the cabbage season in Texas and Florida did not have the staggered maturity that it ordinarily has and it all ripened at one time and they were giving cabbage away down there. They could not market it. It is our perishable products that in 1948 are in trouble and not our basic commodities.

Senator LUCAS. I do not want to be misunderstood. I know that agriculture is the most hazardous industry of all. I have always been willing since I have been in Congress to try to go along with legislative programs that would help remove many of those hazards but I do not want to go to the extent of removing so many of them that we may lose it all in the final analysis.

Mr. DAVIS. Certainly we do not want to lose that.

Senator LUCAS. I would like to ask one question. Senator Hoey and I were talking about it a moment ago. You said that in 1946 the seven basic commodities accounted for only 20.5 percent of the total

farm cash receipts in the United States. Where did you get these figures?

Mr. DAVIS. From the Bureau of Agricultural Economics.

Senator HOEY. In that connection, Mr. Davis, I know you mentioned the seven basic commodities which are of course covered by the act. What assistance does the Government give with reference to these other commodities now?

Mr. DAVIS. Well, none outside of Steagall commodities.
Senator HOEY. Potatoes are included there.

Mr. DAVIS. Citrus fruits are not under the Steagall amendment and fruits and vegetables in general are not.

Senator HOEY. You are speaking here just under this bill?

Mr. DAVIS. That is right. I have here the figures from which I worked this out if you want them for the record.

Senator LUCAS. We will put them in the record.

(The information is as follows:)

Comparison of cash receipts from all agricultural products and from basic

Basic are 201⁄2 percent of total. (It should be recognized that if farm value were used instead of cash receipts the percentage would be higher because of the corn used on the farm. It would also increase the livestock figure.)

Senator YOUNG. I think the problem with potatoes was that they were supporting the price too much by purchases rather than by loans and allowed those who did not restrict their acreage to actually increase their acreage to get the benefits that were brought about by reductions in other producing areas.

Mr. DAVIS. And your 90 percent of parity in other areas still made potatoes more profitable than anything else.

Senator AIKEN. One reason that potatoes cost more 2 years ago is that Senator Hoey's North Carolina potatoes failed to grow fast enough and they came on the market with the New Jersey potatoes and there was an oversupply of early potatoes which could not be used fast enough.

Senator THYE. That is a hazard of farming.

You may have a slow season in one part of the Nation upon which you are normally depending to supply a certain consumers' market and then the crop from that area comes on the market later to compete with that from another area.

You cannot overcome that, but that is the reason why we are attempting to seek a formula to help the highly perishable products and provide a balance on the more stable and broader aspects of agricultural production.

Mr. DAVIS. We are not ready at this time to recommend that there be anything put in the bill that is mandatory, because we do not believe we have any formula worked out. We do recommend that there be studies given to it and the farm organizations we think should study it, too.

Senator LUCAS. That is exactly what I was going to suggest.

It seems to me that any growers of commodities who desire to obtain benefits under proper legislation, with the full realization of the trouble that the Congress has had in trying to lay down a formula, ought to work overtime to try to bring in something constructive in the next year if they can, and you will find a very generous greeting if any one of these agencies can work out a formula that will protect the Treasury and at the same time protect the whole program.

Senator YOUNG. There has been some cost in the case of potatoes and I think some of the criticism which has been directed against the program is justified, but I wonder how much worse off the consumer would have been if there had been no support program at all. The very fact that there was a very high support level encouraged sufficient production. If it had not been for that, production would have been far lower this year and the consumers would have been paying far more than they pay now.

Potatoes on the west coast have been selling far over the support price and if you had not had some encouragement of heavy seedings last year, in my opinion, potato prices would have been far higher than they are now, and the consumers would have been worse off if we had not had such a program.

Senator LUCAS. That is why we need something that is basic and static.

Senator AIKEN. It seems to me we have to write something in the bill authorizing the Secretary to support the price of the nonbasic commodities and lay down the policy of the Congress that they should be supported, but the Commodity Credit Corporation which would be the agency to carry out the support program would like to have us be as specific as possible.

They have the authority now in their bill which will come up right away but it is an over-all authority and would subject them to criticism if they did not buy and criticism if they did buy.

In other words, they would be under constant criticism by somebody unless we spell into the bill, as far as it is possible, the instructions for carrying out this part of the program.

Senator YOUNG. I think some of these programs are a little bit too rigid. I can give an example in the case of potatoes. My potato growers in the Red River Valley called me shortly after the 1st of January. At that time the market price was $2.30 a hundred pounds. The support level was $2.65 a hundred ponnds. They were wondering whether the Department of Agriculture would be asked in to buy. I advised them yes, that really the Department would be required to support the price.

It was not long afterward that the situation reversed itself and potatoes were higher than the support level. If you have a program too rigid, the Department has to get in there sometimes when it is not advisable, when they know for themselves that the market situation will correct itself within a short while. I think there should be a