Mr. DAGUE. The Government gets the money back from the mills. Mr. BASS. What is the idea, why is this idea of paying the farmer in advance of the production? It has never been done in any other commodity. Mr. KRUEGER. To give him money to operate, I presume. Mr. Bass. To give him money to operate? Mr. KRUEGER. Probably. Mr. BASS. Very well. Mr. BERRY. We did practically the same thing in the National Wool Act. Mr. ALBERT. In what? Mr. BERRY. The National Wool Act. The operation of that act is not too much different from the operation of this bill, and we made-well, the certificates actually, they vary, they are different from this, but a wool producer may borrow an advance. Mr. BASS. But through the wool pool? Mr. BERRY. That is right. It isn't exactly the same. Mr. Bass. No, it operates in a different way. Mr. BERRY. It is the same principle. If these certificates are not made negotiable, then you would not have this problem confronting you. Mr. ALBERT. We would have exactly the same problem that any farmer with support crops has, if he has supported crops, he can generally go to the bank and get a loan to make his crop. Here you have an actual certificate which you could probably deposit with the bank. Mr. Bass. I think the Department officially would like to make a statement. Mr. ALBERT. Is this Mr. Shofner? Mr. SHOFNER. Yes. Mr. ALBERT. Will you come forward for a minute. STATEMENT OF WILLIAM O. SHOFNER, PRICE DIVISION, CSS, UNITED STATES DEPARTMENT OF AGRICULTURE Mr. SHOFNER. I just wanted to clarify 1 or 2 points about this particular bill as we see it and as we analyze the bill. I think there is some confusion here, some misunderstanding as to the timing of this thing. Under the bill as we interpret it the Department would be required to announce at the beginning of the marketing year preceding the year for which the quota applies the fact that a quota would be in effect or a food allotment would be in effect. For example, if this bill were in effect now, the Department would be required to announce by July 1 of this year, that beginning in the year which starts July 1, 1959, a food quota would be in effect. And then the Secretary does not announce the value of the certificates until June of 1959, when the wheat marketing year begins July 1, 1959, you see. So, at the time he determines the value of the certificate and the certificates are issued, the wheat crop to which they apply has been produced and is ready for market. And as we understand the bills, too, the certificates would be issued to the producers. The amount of the certificate is based upon his normal production of a past base acreage. I believe the bill provides that it is based upon the previous 3 years. Mr. BELCHER. Some of them are 5 years. Mr. SHOFNER. The bills vary a little bit. I had reference to this particular bill. Then once these certificates are in the hands of the producer the bill also provides that the transfer of the certificate's eligibility or standard of transfer are at the discretion of the Secretary. Ostensibly, then, the producer would be free to market his certificates at the time he sells his wheat. The bill, also, provides that the certificates could be redeemed by the producers, by the Secretary, and that the Secretary could operate a pool of certificates if he saw fit. So under this arrangement, you see, the producer would be given a certain quantity of certificates representing the Department's estimate at the beginning of the marketing year of the difference between the average farm price of wheat and 100 percent of parity for wheat. Mr. WATTS. The question we were discussing a moment ago is where the farmer undertook to raise a crop of wheat but failed. He would still get a certificate under these bills. Mr. SHOFNER. As we understand it he would. Once the certificate is based upon Mr. WATTS. History. Mr. SHOFNER. His past history, once he gets them, I do not believe there is an obligation that he raise a specific quantity of wheat. Of course, under the terms of a allotting these certificates, if it is based upon 3-year history and 3-year time, if he did not market wheat, he would no longer be eligible for it. Mr. WATTS. It would be a moving 3 years? Mr. SHOFNER. Yes, sir. Mr. WATTS. And probably there would be some provision or there should be, if the committee or the Congress adopted that type of bill, that he had to make an effort to produce wheat in that year. Mr. BELCHER. If he did not plant wheat he would lose his wheat history. Mr. SHOFNER. Yes, sir; in a period of 3 years his history would wash out and his part would be lost. Mr. BELCHER. If he was out this year, so long as he kept the 3 years down, that would cut him down one-third and the second year twothirds, and the third year he would be out of business. So he has to start producing wheat. Mr. SHOFNER. That is correct. Mr. JOHNSON. Who is going to pay the tax if he does not produce? Mr. BELCHER. There will be a lot of wheat grown in this country-do not worry about a shortage. The miller goes out and buys somebody else's wheat with his certificate. Mr. JOHNSON. Then he pays the tax on that wheat? Mr. BELCHER. Certainly; there is no problem there. Mr. SHOFNER. That is true. Mr. ALBERT. We thank you. Stand by and help us on the technical aspects of these bills. Do you have anything else you want to add, Congressman Berry? Mr. BERRY. I do not believe so. Mr. ALBERT. We wanted to thank you. Mr. BERRY. I want to thank you. I would say this: I sent out a questionnaire in my district, and I think probably 50 to 60 percent of the questionnaires that came back from farmers have written on the bottom, under the space provided for remarks, something to the effect that we should have a bushel allotment instead of an acreage allotment for wheat. I am sure it is safe to say that more than 50 percent stated that. Mr. BELCHER. I have had the same experience. How would you set up a bushel allotment under the present acreage allotment system? Mr. BERRY. I do not think you could. Mr. BASS. You could have a double allotment system, acres and bushels. In other words, you base his acres, of course, on the history, and then give him what you consider to be an average number of bushels, or the bushels that he will produce, and then he can either market, we will say, 50 acres or a thousand bushels, whichever would be the greater. Mr. BELCHER. All of us would have to overplant in order to know that he would get his full quota of bushels. They would have to be a violator always. Mr. BASS. You would not let him be a violator. You would restrict his number of acres to make sure that he did not overproduce. Mr. BELCHER. Supposing he underproduced? Mr. BASS. That is so much better-the market improves. Mr. BELCHER. But that particular man, though, is terribly hurt, isn't he? Mr. BASS. It makes a better farmer out of him. You will get his number of bushels. Mr. BELCHER. We had farmers in my area that did not produce over 50 bushels on a 100-acre farm; ordinarily that would produce 3,500. Mr. ALBERT. Let us keep the committee colloquy down as much as possible. We can do this in executive session. I would like to ask one question before you leave. I have asked it of the other witnesses on the subject. If the Committee on Agriculture decides to report an omnibus bill containing various commodities, including wheat, would you favor the two-price system as being in the wheat section of that bill? Mr. BERRY. I would, Mr. Chairman, very much. Mr. ALBERT. Thank you very much. Mr. BERRY. Thank you, gentlemen. Mr. ALBERT. Is there any other Member of Congress present who would like to be heard on these bills? Mrs. DOWNEY. I told Congressman Horan's secretary that I would get permission for him to file a statement. Mr. ALBERT. Without objection Congressman Horan, of Washington, may file a statement at this point in the record. (The statement referred to is as follows:) STATEMENT OF HON. WALT HORAN, FIFTH DISTRICT, WASHINGTON Mr. Chairman, I consider it a privilege to again present for the consideration of this committee, H. R. 5308, popularly known as the domestic parity bill. This bill is the product of the wheat industry of the Pacific Northwest, which industry is searching for a program that would, if this measure were enacted into law (1) Eliminate the program of acreage restrictions which are so burdensome a part of the law of 1938 and with which the wheat industry has great difficulty living in the Pacific Northwest where so much of our production programs call for summer fallow; (2) Set out a program that would give great promise of actually operating at no expense to the Government; and (3) Progressively remove the Government from its present key position as a part of wheat commerce at home and abroad. I do hope that the committee will give this bill every sincere consideration. Mr. ALBERT. I understand there are representatives of various farm and wheat associations here. I think all of you understand that the committee has set aside a period during which we hope that you may all be heard along with the Department and others the second week following Easter, that is the Easter recess rather, April 22. Is there anything else to be brought before the committee? Mr. FLOYD ROOT. I am in town now; if you would choose to hear from me, the National Association of Wheat Growers, I have this statement prepared. If you prefer I could come back later. Mr. ALBERT. I don't know whether it will be fair to you. I was not aware that you were going to be here to testify this morning. Mr. Roor. This statement includes the program of the National Conference of Commodity Organizations, and also the program of the National Association of Wheat Growers. Mr. ALBERT. Off the record. (Discussion off the record.) Mr. ALBERT. Back on the record. The committee stands adjourned, subject to the call of the Chair or until April 22. (Whereupon, at 11:35 a. m., the hearing in the above-entitled matter was adjourned.) |