Secretary BENSON. A little less. Senator RUSSELL. Do you think that would meet with a favorable response on the part of the wheat producers? Secretary BENSON. I believe, Senator Russell, if they had an opportunity to choose between the present program and a program which would give them freedom, the great majority would vote in support of eliminating controls and fixing artificial price supports above the world level. The corngrowers did that. Senator RUSSELL. You did not cut them quite that low; did you? Secretary BENSON. No; but we are not quite as high, to start with, relatively. Of course, in wheat, I think we have had probably as great an increase in increased efficiency as in any other commodity that is grown, and I think the parity concept, as it applies to wheat, has less meaning than for most any other farm commodity. Senator RUSSELL. There is perhaps some substance to that argument, but what might grow out of that is you might put a lot of these 15-acre people out of business with that program. Secretary BENSON. There would be some of those who would quit growing wheat, who never had grown it in the past. There would be some marginal areas that would go back to grass, those who used to be in grass until the high payments during the war. I am not blaming anybody, Senator, because during the war we needed to do things to win the war, so the Government offered high incentives to get greater production. The war has been over for along time, but we have continued the higher incentives, so we have kept much of this land from going back to grass. The conservation reserve program will help them to make that adjustment, and I think we can justify the expenditure of funds through the conservation reserve, to help in this adustment. COST OF STORAGE Senator RUSSELL. Just about what are we spending a day now, on storage, for wheat? Do you have that estimate? Secretary BENSON. The overall cost is around $1 million a day. I do not know what portion of that is wheat. We could provide it. however. Senator RUSSELL. Well, I imagine that a very substantial part of it would be wheat, and that the bulk of it would be in grains. Mr. McLAIN. Some would be in cotton, Senator Russell, but the highest percentage of it is in grain. Secretary BENSON. Wheat would be the largest single item. PRODUCTION DURING ADJUSTMENT PERIOD Senator RUSSELL. How would you ever get rid of that surplus if you were to turn the farmers loose on production and still mainta'n the domestic market at least where you would get away from the allotments? How would you handle all of this 2 years' supply of wheat that you have on hand? Secretary BENSON. Well, I think we should realize to start with, this land is already, in some crops, in feed grains, or other crops, and we would not anticipate we may be some the first year. then it leveled out. would get any great increase. There We had a little the first year in corn, Senator RUSSELL. You do not think you would get as much production in wheat as you did in corn because you would drop your parity more on wheat? Secretary BENSON. That is true. Of course, the wheat we have in storage we could move it out. I think we must protect the domestic market and not let it go out in the domestic market while getting this adjustment. We can get it out. It would be effective. We are moving great quantities and there would be some of the production moving into feed in nonfarm areas. I think it would be fed very readily. You would be surprised. Senator RUSSELL. I would be surprised if you moved all of that wheat very rapidly. Secretary BENSON. It cannot be done overnight. Senator RUSSELL. If we released any restrictions on them, with all you have on hand, and tied up in Commodity Credit, I do not see how we could do it. DISPOSITION OF WHEAT INVENTORY Secretary BENSON. I would oppose bitterly any relaxation of the restriction against moving the present stocks into current consumption. We would have to continue the restriction which the Congress has provided, and work it off gradually. Senator RUSSELL. You are losing 50 cents a bushel now? Secretary BENSON. That is what it costs to export every bushel. Senator RUSSELL. And you would export it in competition with unlimited production and a lower support, and you would have to greatly increase your losses to keep it moving, wouldn't you? Mr. MCLAIN. When the domestic price drops, of course your subsidy immediately drops, just as it is with cotton, if you drop your domestic price. Your subsidy is the difference between the world price and the domestic price. If you drop your price 35 cents the usual production would be subsidized a lot less. It would not be our intent to affect the world market. Senator RUSSELL. Well, with the wheat you have on hand now you have a great investment in it. On some of this wheat you have nearly $2 per bushel invested in it. Mr. McLAIN. This is correct, but we are talking about the longtime pull on this thing. It would have to be worked off gradually, but this is going to be true with whatever we do. Senator RUSSELL. It would take a magician to get out of it without enormous losses. Secretary BENSON. Right. Senator DwORSHAK. In your control of wheat production, you have made your allotments on the basis of acreage and invariably better agricultural methods in the use of fertilizer have increased the yield two or three or four times what it was a few years ago. Now, have you revised your thinking about the desirability of using controls on the basis of an allotment on volume instead of in acres? Secretary BENSON. No; I have not. We have studied this several times. We have had our advisory committee study it, and each time it has been studied we back away from that because we think there are too many difficulties in it. I would like Mr. McLain to comment on that. Mr. MCLAIN. The reason is that it is still going to be raised, and if you get it raised and cannot get it marketed, what are you going to do with it? If farmers are efficient, they are going to keep producing efficiently. Senator DwORSHAK. You will not cut down production of wheat if you try to control volume? You will come up with more wheat? Mr. MCLAIN. This has been tried, you know, with tobacco, a volume control, and the farmers themselves threw it out after they tried it. This is the experience we have had. There are a lot of people that think it ought to be tried again. However, if you raise a commodity, what are you going to do with it after it is raised and you cannot market it? Senator DWORSHAK. I do not have the answers. I just make these inquiries to give assurances to myself. At this point, may I say I visited with the wheatgrowers and the farmers in my own county in Idaho, where several years ago they used to produce 10 or 12 bushels to the acre and now they get 35 to 40, and if you cut down the acreage allotments would you get more and more wheat? I do not know what the answer is. Secretary BENSON. I believe the answer is this: Let the market help direct the market, and consumption. BENEFICIARIES OF AGRICULTURAL EXPENDITURES There is a tendency on the part of many people, who perhaps look only at the totals, to assume that all of the substantial increase in agricultural expenditures represents larger payments or greater benefits for the farmer. Such impressions are unfortunate, since they do not accord with the facts. Actually, as you know, the Department conducts many activities which have multiple benefits and are not directly chargeable to the farmer. These include such programs as Public Law 480, which has foreign relations and defense aspects, food distribution, including school lunches, meat and other food inspection and grading, research and education, forest protection and management, soil conservation, market reporting, and regulatory programs. Expenditures for these purposes have increased 200 percent since 1953 and represent more than half the Department's 1961 budget. Senator JOHNSTON. Mr. Chairman, I agree with the Secretary that there ought to be some way to distinguish what we spend this money for without having it all charged up against the Agricultural Department and the American farmer. Secretary BENSON. In comparison, expenditures for programs predominantly for the benefit of the farmer, have increased 50 percent since 1953, the largest program, of course, being the price-support activities of the Commodity Credit Corporation. Of the $2.3 billion of estimated CCC expenditures in 1961, $1.4 billion represents outlays for storage, handling, transportation, interest, and operating expenses, very little of which goes to the farmer. I wanted to mention this matter briefly because I think it is highly significant in understanding our budget. Although it is not generally realized, half of the Department's expenditures are for programs which are not predominantly for the benefit of the farmer. Attached is a table for the record which shows these comparisons in detail in appendix IX. (The table referred to follows:) |