ment, or it might be better if we did not have the 15-acre program from a long-term standpoint, but you know and I know how difficult it would be to change, legislatively, any of those existing situations which allow, or encourage, the planting of extra wheat. So we have that program.

We have then the domestic parity plan and we have your suggestion. As between the present plan as it now operates and the domestic parity plan, which would you rather have?

Mr. WOOLLEY. We think we would rather have the present plan with such weaknesses as it has, than we would the so-called domestic parity plan because we think that there is only one result that can occur with respect to the domestic parity plan. If it is going to work, it must result in the use of wheat for feed. Now we would like to see wheat used for feed, provided it was not unfairly subsidized in competition with other feed. But we think the way it is drafted, it would have the effect of doing this. We think you only have three alternatives: not to produce it, to export it, or use it for feed. We are using all the wheat in export that we can possibly expect to get exported. It does not seem to us that it is rational to assume you could export an additional bushel of wheat with the domestic parity plan. Then the only thing that is left is to use it for feed, and if you put a loan program on that is high enough to keep it from being subsidized for feed, then it is not going to move as feed.

Mr. ALBERT. Now we have bills providing for a $2-a-bushel minimum. Of course these are, so far as wheat is concerned, substantially the same as the freeze bill which we passed for all crops and which has been vetoed.

Mr. WOOLLEY. Yes; which of course is

Mr. ALBERT. And you did object to that prior to the enactment of that bill.

Mr. WOOLLEY. That is right.

Mr. ALBERT. So I do not think you need to elaborate on that.

Now the 3,500-bushel proposition, what do you think of that? Mr. WOOLLEY. Well, the 3,500-bushel provision for 100 percent of parity would have the effect of supporting the price for all wheat at 100 percent of parity, and this is not our program

Mr. ALBERT. Your idea would be that that be subject to the same objection as the marketing certificate, the 100-percent parity for domestic food?

Mr. WOOLLEY. Yes; it would operate this way. As I understand it, somewhere in the neighborhood of probably 55 percent of the production would be represented by the 3,500 exemption for each individual farmer, or rather, special provision for 100 percent of parity

on 3,500

Mr. ALBERT. Well, it would be about 50 percent under the domestic parity plan because normally food conusmes about half of the crop, roughly.

Mr. WOOLLEY. But in the case of the support price, just based on the 3,500 provision, that would then result in holding off sufficient wheat from the market that the price would have to go on up, and the net effect would be that you would be supporting the price of all wheat at 100 percent of parity. You take 50 percent of pro

duction off of the market and put it in the hands of Commodity Credit Corporation, and provide it cannot be released for less than 105 percent of the support price plus reasonable carrying charges, that would then freeze that much and hold it off the market with the net effect that the rest of it would go to 100 percent parity and you would have jacked the price up. By jacking up the price, you would then encourage the people who are not already taking advantage of the 15-acre minimum to go ahead and take advantage of it. You would also raise the incentive for people to increase yields to the maximum extent possible and thereby serve to aggravate an already aggravated situation.

Mr. ALBERT. Are there any other questions?

Mr. Belcher.

Mr. BELCHER. Mr. Woolley, you have three alternatives: Not to produce it. That means that the farmer will have to plant fewer acres. Well, the greatest complaint that I have is the fact that the allotments are too low already.

Mr. WOOLLEY. That is right; we agree with you.

Mr. BELCHER. So it cannot go that way.

Mr. WOOLLEY. We agree.

Mr. BELCHER. Exports. I think that every one of you agree that we have exported just as much of it as possible to export. That is out. Then your third alternative is feed. Every time you feed a bushel of wheat, you are not going to feed the equivalent amount of corn or other feed grains.

Mr. WOOLLEY. Yes.

Mr. BELCHER. Then the only solution for the wheat problem is the complicating of the feed grain problem; is that correct?

Mr. WOOLLEY. You have three possibilities, and we say-
Mr. BELCHER. We have eliminated the first two now.

Mr. WOOLLEY. And we say if you go the multiple-price plan that has been

Mr. BELCHER. I am going under your plan.

Mr. WOOLLEY. We think this

Mr. BELCHER. You are going to do 1 of the 3 things out of your plan. You are either not going to produce it, cut down the number of acres the planter can plant to whatever it might take to balance production with consumption-if you take the first alternative not to produce it, and that is going to be very painful

Mr. WOOLLEY. Could I comment right there on that point?
Mr. BELCHER. Yes.

Mr. WOOLLEY. It is our belief that there are many people who have gone into the production of wheat because of the governmental inducement in the form of price support. We think there are areas of the country that have alternative opportunities to grow crops that are growing wheat strictly because the wheat is being supported at a higher level than they can produce alternative crops in that particular

area.

Mr. BELCHER. I will agree with you 100 percent on that statement. Mr. WOOLLEY. We therefore would try to establish a level of price support that would be sufficiently under the cost of production of those. areas. They happen to be, incidentally, the high-cost producing areas. Mr. BELCHER. Could I interrupt you just a minute?

Mr. WOOLLEY. Yes.

Mr. BELCHER. Your first alternative of your recommendations is the present price-support program, coupled with controls strict enough to eliminate surplus and balance production with market needs in a reasonable period of time. That does not contemplate the elimination of any of these areas that have been producing wheat because it was the best subsidized crop they could produce?

Mr. WOOLLEY. You would have to give them their allotment in accordance with the history that they have obtained under the current law.

Mr. BELCHER. So you would not eliminate those fellows. The only one you would eliminate is the present wheat raiser with a wheat history.

Mr. WOOLLEY. No

Mr. BELCHER. In other words, you would not eliminate him, but you would have to cut his allotment in order to fulfill your first alternative here not to produce it. Well, I just doubt if we can cut those allotments any lower than they are now without a tremendous amount of complaints.

All right; then we go to the second one: Export it. Well, I do not see any opportunity to export any more than we did last year because we certainly cannot give away much more.

Then we go to feed; get down to feeding it. Well, for every bushel that we feed we are going to eliminate the equivalent amount of some other feed-it looks to me, that if we do that, we are going to complicate that farmer's problem, we are going to complicate the feed grain problem. If we solve the wheat problem by feeding wheat instead of corn, we are going to complicate corn; are we not? Mr. MARSHALL. As well as the livestock.

Mr. BELCHER. Off the record.

(Discussion off the record.)

Mr. WOOLLEY. With 2-billion-bushel carryover of wheat, which incidentally, Mr. Marshall-we were talking this morning down in the office said one person he was talking to put it this way: That is enough wheat to supply this country for 4 years for the food that it needs, just the food, and then have enough seed to plant for the next year. Now that is how much wheat it is. And some place, sometime we are going to have to produce wheat for the market.

Mr. BELCHER. Now to get to your second recommendation here, a lower level of price supports with no control of production, I do not know; I am not in a position to argue whether or not that might solve the problem, because that might have the tendency of eliminating the fellow that you say is complicating the program at the present time, and that is the fellow who lives in an area that is not a historical wheat-producing area and has gone to wheat because he could produce it under a guaranteed price that was more profitable than producing the crop that he has ever since the country opened. Now if you had a system that would eliminate the fellow who just went into wheat because it was profitable under a Government program, and let him go back into producing the crop he has produced ever since the country started, you might solve the wheat problem. But whether or not the farmers would accept this program over the present price program, I do not know.

Mr. JOHNSON. Mr. Belcher, what is going to happen to your wheat farmer while you are starving out these other farmers?

Mr. BELCHER. The fact of the matter is the other farmer got into the wheat business. He is a temporary wheat farmer. The fellow who complicated the wheat problem is a temporary wheat farmer. Ever since the country opened, he has raised something else, but along eame the Government and made it more profitable for him to go to wheat. He did go to wheat, and he starved out the wheat

areas.

Mr. JOHNSON. I am saying, what is going to happen to your wheat farmer while you are doing that?

Mr. BELCHER. Well, in my opinion

Mr. JOHNSON. Would not he have to go broke, too?

Mr. BELCHER. That may be true, but it looks to me as if, according to the suggestion as to program No. 1, he is going to go broke now. Mr. JOHNSON. This man who is thumbing in is not depending on wheat entirely like the wheat farmer

Mr. ALBERT. We are crowded for time, and colloquies between members of the committee can be carried over to executive sessions. Mr. BELCHER. That is right.

Mr. ALBERT. We are here to hear the witnesses.

Mr. WATTS. Mr. Woolley, can wheat be produced competitive to feed grains with no supports on either one?

Mr. WOOLLEY. I would prefer Mr. Marshall answer the question, if it is all right with the committee?

Mr. MARSHALL. Yes. In some areas, yes. It just depends. In the area in which I farm, Nebraska

Mr. WATTS. How many bushels do you produce per acre in your

area?

Mr. MARSHALL. Last year my wheat average was better than the 10-year average. I have been above the 10-year average of the area for several years. But the average is 24 bushels, the county average in my particular area. And I have a tight record on production of wheat in this particular area.

Mr. WATTS. And you can, in your area, then, produce wheat competitive with other feed grains?

Mr. MARSHALL. At the present prices of other feed grains.

Mr. WATTS. But that is a limited area of the country, when you consider all of the wheat-producing areas?

Mr. MARSHALL. This is right, and this gets back to the point that Congressman Belcher made, that these other areas cannot do that. Now there was reference made earlier to the fact that Oklahoma had some increased acreage in allotments. Now I would like to have Mr. Munn speak on that for just a second. Because this is true, but it is not in the wheat-producing area, it is back in the area where they have the alternative crops. And this is the point that was being made just a moment ago. And it is a high-production area where they cannot produce the wheat as cheap.

Mr. WATTS. It does not necessarily follow that where you can produce the most wheat per acre, it is always the highest quality wheat; does it?

Mr. MARSHALL. No. No; that is true.

Mr. WATTS. Mr. Krueger's section of the country, as I understand it, produces a high type of millable flour wheat. But at the same time, he does not produce too much per acre. But other sections of the country that produce a lower type of wheat produce more per acre. Is that true?

Mr. MARSHALL. That is right. I have some land in eastern Nebraska on which I have produced up to 60 bushels to the acre of wheat, but the quality is low.

Mr. WATTS. Well now, if you followed suggestion No. 2, a lower level of price supports with no controlled production, would you not have a tendency, maybe, to shift some of the production away from the areas where you produce a high quality wheat to the quantity producing areas?

Mr. MARSHALL. Well, in the area where I produced 60 bushels of wheat, I can produce 100 bushels of corn. If you produce 100 bushels of corn, then you get this relationship between crops

Mr. WATTS. In that area you cannot produce, then, competitive with corn?

Mr. MARSHALL. That is right.

Mr. WATTS. Now where you are producing your 24 bushels of wheat, can you produce any corn?

Mr. MARSHALL. Very little, practically none. It is not practical. You can raise a little grain sorghum, but you cannot raise corn. Mr. WATTS. Wheat is about the only crop you can raise ?

Mr. MARSHALL. That is right.

Mr. WATTS. And your thought is, then, if we have proposition No. 2, that the production of wheat would resolve itself into those areas that practically could not produce anything else?

Mr. MARSHALL. That is right. They produce it cheaper.

Mr. WATTS. Now I am interested in knowing-and I won't take any more time, Mr. Chairman-what tightening of the controls you are referring to under section 1 of your proposal?

Mr. MARSHALL. Well, we refer in our statement later on to the elimination of the 15-acre provision and the 200-bushel deal.

Mr. WATTS. That is one.

Mr. MARSHALL. And also, that if we are going to go the control route, that means the elimination of the 55-million-acre minimum national allotment now provided by statute-if we are going to go that route.

Mr. WATTS. That is two-No. 2. What else?

Mr. WOOLLEY. Put compliance on a planted basis instead of on a harvested basis.

Mr. WATTS. On a planted basis?

Mr. WOOLLEY. Instead of a harvested basis.

Mr. WATTS. You mean you get so many acres to plant, and if it does not make but a bushel to the acre, that is all you get?

Mr. WOOLLEY. That is right. It is on a harvested basis now. What can happen now is, a producer can plant excess acreage, and if he gets a poor yield on part of his acreage, he can plow down that partMr. WATTS. All I said was, you give a fellow an allotment, he can plant so many acres, and that is all he can plant

Mr. WOOLLEY. That is right.