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Mr. BREEDING. Mr. Chairman, first may I thank you for this opportunity to present to this subcommittee a brief statement in support of H. R. 8059, which would provide for the establishment of the socalled domestic parity or two-price plan for wheat.

My bill H. R. 8059, and other similar measures, I believe, proposes a sound approach to the wheat producers's objective of attaining maximum production on the farm while maintaining the producer's income in a proper relationship with the other segments of the national


This objective would be accomplished by allowing the wheat farmer to deal more extensively in the open market place on the basis of quality, and by moving more wheat into export and feed consumption channels.

There would be established a marketing system whereby the farmer would be guaranteed, through certificates issued by the Secretary of Agriculture, on the basis of the farmer's average yield, full or 100 percent of parity for approximately one-half his crop.

In other words, the certificate would represent compensation to the wheat producer for the estimated difference between parity and the seasonal average farm price of wheat for his share of that amount of the Nation's wheat production which is estimated to be sold for domestic consumption, usually about half the country's production. Since premium or high quality wheat will naturally bring a higher price in the market place than a lesser grade wheat, the farmer will have greater opportunity to receive more per bushel for his wheat, based on quality.

For that portion of the farmer's production above his share of the estimated amount expected to be consumed domestically, he would sell competitively in the open market; thereby receiving prevailing market prices for wheat to be processed for export, feed or industrial


In addition, the system would be largely self-supporting since the money for the Secretary's revolving fund, from which the certificates would come, would be obtained from processors who will purchase the certificates for the wheat they mill for domestic food consumption.

That briefly, is the program, Mr. Chairman. I think the proposal would contribute greatly to placing the grain buyer and the farmer once again in the business of buying and selling wheat on the basis of quality; and, allowing wheat to move more freely in the market place without Government subsidies and severe controls, while protecting the grower's income to the benefit of the overall economy.

Another remark that I would like to make is that we believe with this program in an arid country where we practice summer fallow, perhaps in the western half of my State, that we would be allowed to grow wheat in a wheat year and, perhaps, carry it over for a year when we would not be so flush with grain, thereby stabilizing the economy of that area more.

That briefly are my remarks, Mr. Chairman.

Thank you.

Mr. ALBERT. We thank you, Mr. Breeding, for your remarks and your contribution to this committee, and your interest in the subject of wheat that you have manifested before the committee several times this year.

Are there any questions?

Mr. SMITH. Mr. Breeding, if we could get this on a bushel allotment basis, instead of acreage basis, do you think that it would tend to improve the quality of the wheat?

Mr. BREEDING. I most certainly do; yes.

Mr. SMITH. In other words, as it now stands, when you have got acres there is not much inducement to get quality wheat, is there? Mr. BREEDING. No, you grow all kinds of wheat. And there are all kinds of wheat grown in my district; yes, sir. So that is unfit for milling.

Mr. SMITH. Also, it would get away from the storage problem? Mr. BREEDING. To a great extent; yes.

Mr. SMITH. That is, the Government storing it. In other words, the bills contemplate that the farmer, if he raises in excess of his wheat allotment, he has to store that wheat at his own risk on his own farm?

Mr. BREEDING. Yes; as I understand, the grower would take care of this wheat of his, whether it is 1 year or 2 years or 3 years-he would take care of his own storage.

Mr. SMITH. It would be quite a saving, a large number of dollars to the Federal Government, too, would it not?

Mr. BREEDING. That is right. It could be stored on your farm, or in an elevator, too.

Mr. SMITH. And, of course, we know who is going to raise one of the biggest objections to a bill of this kind, it will be the elevator interests of this country, because there is no more lucrative business in the world than to store wheat in an elevator?

Mr. BREEDING. Yes. At the present time, Mr. Smith, the storage price of wheat is approximately 20, 21 cents a bushel for 12 months. That is pretty high. Maybe this would have a tendency to create lower storage prices which the farmer would then take advantage of, as furnished by the elevator, of that storage facility.

Mr. SMITH. Would this, also, necessitate that a wheat program would have to be built on each farm, instead of an acreage allotment set by somebody in Washington of a certain number of acres?

Mr. BREEDING. It could be set up on a bushel basis. As I understand it you would have to build up a history for your farm. Mr. SMITH. That is the history on that particular farm?


Mr. SMITH. As it now applies, average bushel yields are taken from all farms in account and there is a lot of inequality on that basis. Mr. BREEDING. Yes.

Mr. SMITH. It is always to the advantage of somebody on the upland farms?

Mr. BREEDING. Presently, you take an overall blanket policy for your county, and if you have a man growing 20 bushels and another growing 10, you strike a happy medium there to keep them satisfied. Under this program you would give credit for the growing of the 20 bushels, as I understand it.

Mr. SMITH. And it would get away from this inequality of different types of quality?


Mr. SMITH. How long do you think we should use as a base to establish this farm allotment in bushels?

Mr. BREEDING. Ten years.

Mr. SMITH. As they now use a 3 year, I am sure that you know, Mr. Breeding, that even farms within a distance of 4 or 5 miles of each other, one can grow a good crop of wheat, he gets rain, almost to the very hour, and he raises a big crop of wheat, and somebody across 4 or 5 miles away, has a bad crop year because of the difference in the soil and so forth?

Mr. BREEDING. That is the reason I think it should be over a length of a period of time, at least 10 years.

Mr. SMITH. I would, certainly, think that that is correct. And a 10-year average, to get away from those inequalities of rainfall out in our high plains area?

Mr. BREEDING. Yes. And we have the disadvantage out there of, perhaps, only raising 2 good crops out of 5 years. If you could string it out over a period of time and give a more even average over the years it would help.

Mr. SMITH. Do you know of anything that would have a tendency to stabilize the wheat farmer in the high plains than a bill of this kind?

Mr. BREEDING. No, I think this is the best that I have heard of; yes, sir.

Mr. SMITH. And we could even afford to take a less price per bushel, if we could be assured that we would always have a reserve on which to fall back?

Mr. BREEDING. I most certainly believe that. And I would like to see, if it is enacted into law, say, you were allowed 10,000 bushels of wheat for an example in 1 year, in 1958, and that you only raised 5,000 bushels of wheat, that you could carry that other 5,000, and add to your allotment for next year.

Mr. SMITH. If you had it in your own bins?

Mr. BREEDING. That is right, if you had it under your own hands, or with even paying storage in an elevator somewhere, certainly it would be in your possession.

Mr. KRUEGER. Will you yield there?

Then you are coming to a bushel control?

Mr. BREEDING. Yes, sir.

Mr. KRUEGER. Rather than an acreage control?

Mr. BREEDING. That is right. That is what this is. That is what this plan is, a bushel control plan; yes, sir.

Mr. BELCHER. Will you yield right there?

Mr. SMITH. Yes.

Mr. BELCHER. I am always for the two-price system for wheat. There is one thing that I do not believe you can do, at least, I see a lot of difficulty in trying to do, and that is to establish the bushel history on each individual farm, because I do not think you will have a 10-year history to each individual farm.

Under the soil-bank proposition they had to take the community average, which is unfair, as Mr. Smith pointed out, because 1 farm,

1 80-acre farm, may produce almost twice as much wheat as another. Yet, you more or less have to base that on the community average. However, I don't think that is any objection to the bill.

Mr. BREEDING. The reason I pointed out 10 years is that occasionally in the area I live in it has 5 or 6 years of drought. You just actually do not raise much wheat in it when you have a drought period, but I believe that a 10-year period would take in your wet and dry cycles, so that you would strike a happy medium.

Mr. BELCHER. I have no objection to the 10-year history. The point that I was making is that I do not believe you will be able to go down and set a normal yield on each individual farm or each individual field, as Mr. Smith suggested a minute ago.

I still feel you would be bound to the community average. Nevertheless, as I say, that is not necessarily an objection to the bill. The thing that has always appealed to me in this bill-under the present system a taxpayer who does not eat any bread at all pays for somebody else's bread bill. Under this system the man that eats the bread pays the bill.

Mr. BREEDING. That is right.

Mr. BELCHER. Whatever tax there is, is put directly on the user and not on the general taxpayer. I never understood that that didn't have a tremendous appeal to the consumer areas of the country.

Mr. BREEDING. I remember back in the early thirties we had that system where the miller paid the amount and they declared it unconstitutional, for some reason or other, and handed the money back to the millers. I had hoped that in this case that it would not happen that way.

Mr. BELCHER. As a lawyer I cannot see why this would be any more unconstitutional or as much unconstitutional, you might say, as the present system, and it has been upheld. I would, certainly, like to see a program work out where it could be supported and money for it be raised by the ones that consume and use the products.

Mr. ALBERT. Any further questions?

Mr. SMITH. Yes. One of the objections that this bill has always received, I understand from the Department of Agriculture, is the fact that it would be too hard to administer. What is your experience, Mr. Breeding, as a wheatgrower as to whether or not it would be more expensive to administer this bill or the present system that we use?

Mr. BREEDING. I cannot see how it could be any more expensive than the present. It seems to me it might not be quite as expensive. Mr. SMITH. In other words, if the Government wants to, it is much easier for them to go out and measure a bin than have a couple of men walk all over the fields 2 or 3 times a year to see about the acreage; is that not true?

Mr. BREEDING. That is true. And this year I understand they are measuring the land with chains instead of the fast method of using the wheels because the wheel was a little inaccurate.

Mr. SMITH. Do you have any idea how many people are employed in the county that you farm in, how many go out and measure this wheat by acreage?

Mr. BREEDING. Yes. About 20 men are employed to measure the


Mr. SMITH. That county that you are speaking of is no different than most of the wheat counties of Kansas, is it?

Mr. BREEDING. I would say it was probably smaller because it is one of the smaller counties of the State and the acreage of wheat is small compared to many of the other counties of the State.

Mr. SMITH. That is rather expensive?

Mr. BREEDING. It certainly is.

Mr. SMITH. It will be more so when they measure with the chain instead of the wheel?

Mr. BREEDING. That is true.

Where it took 1 man with the wheel

it takes 2 men with the chain. And it is much slower than with the wheel, a little more accurate, perhaps, yes.

Mr. SMITH. That is all, Mr. Chairman.

Mr. BELCHER. I cannot see where there would be any difference. My understanding of your bill is that a man will first receive his acreage allotment; in other words, you will first figure on the 10-year history how many acres


Mr. BELCHER. Of wheat that man has planted?

Mr. BREEDING. That is right.

Mr. BELCHER. Then you figure out the percentage of the domestic market, the percentage of that wheat that would be sold in the domestic market. You apply that percentage to his total acres and then multiply that by his average yield to determine the number of bushels upon which he can get a certificate. That is all a question of arithmetic in the office?

Mr. BREEDING. Yes; that is the way I understand it.

Mr. BELCHER. Once the certificate is issued the Government is through, the man raises any number of acres he wants to, he sells anywhere that he wants to, to anybody in the export market or in the domestic market. I cannot see why it would not reduce the number of employees.

Mr. BREEDING. That is what I have said.

Mr. SMITH. The Department has always talked about it is too hard to administer because they will have so many people going around checking up to see where this wheat is.

Mr. BELCHER. I cannot understand that. It looks to me like it is less of an operation in this than in the regular allotment program. Mr. BREEDING. I agree with you. I believe we could handle it cheaper.

Mr. BELCHER. You do not have to measure the man's field to see how many acres he raises.

Mr. BREEDING. You have had some past measurements and photographs that you take of the county, also.

Mr. BELCHER. Once you get the 10-year history established, multiply that by the number of bushels to get the certificate, then he can raise any amount of wheat that he wants to.

Mr. BREEDING. That is true.

Mr. ALBERT. Do you have any questions?

Mr. WATTS. I would like ask a question about the two-price system. I have always voted for it myself.

What protection do you have to keep the miller from milling the cheaper feed?

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