law and the proposed substitute to wheat producers in the referendum provided by the bill, to be determined by them in light of existing circumstances and available alternatives at the time of the referendum. I might say parenthetically, you almost have to say that because there is no way to predict at this time what the then existing circumstances and available alternatives will be in such a referendum. For many wheat producers, the proposed substitute would be more favorable than the minimum mandatory program under existing law. For others who have relatively high costs of production per bushel or limited alternative land uses or both, the proposed substitute might not be as attractive as in the provisions of existing law. And very definitely the dollars and cents substance of the proposed substitute is completely dependent upon the level of income protection accorded simultaneously for corn and other feed grains.

Mr. ALBERT. We thank you for that statement, Mr. Baker. It is a real contribution to the problem.

Do members of the committee have any questions?

Mr. WATTS. I would like to qualify one thing. I arived here late, Mr. Chairman.

Do you mean that on all of the wheat that is raised, it should bear the same level of support even at export?

Mr. BAKER. That is the implication of our recommendation, Mr. Watts. But we see the necessity for dividing the total supply in two parts, the domestic marketing quota, the income protection for which would be carried out without cost to the Federal Treasury by market supply adjustment and pro ratio techniques and maintained at its whatever agreed upon support level by such methods, leaving the

Mr. WATTS. You do not necessarily mean then that the domestic for food consumption portion of the allotment would be supported at 100-percent parity?

Mr. BAKER. It would be supported at whatever the agreed-upon level would be. We would recommend that it be full income parity level support; yes, sir.

Mr. WATTS. And you recommend the same figures for the export wheat?

Mr. BAKER. Now, on export wheat, Mr. Chairman, we feel that we should not be exporting new wheat except to the extent that the Nation as a whole, in line with what Mr. Hill said a moment ago, feels that it is important to export that wheat and we would join with Mr. Hill, as we have the last 5 years, to do everything that is humanly possible to expand and develop new ways to do it. We would hope, through, that the net level of income protection available to farmers on export would be fully as high as that available on the domestic. Mr. WATTS. That is all.

Mr. HILL. John, on your table on page 4, if the farmer sold all his 10,000 bushels of wheat at 100 percent of parity at $2.38—I do not mean that. If he sold his 10,000 bushels of wheat at $1.78, the present law, or if he sold 6,000 bushels at $2.38, which way would he have the most money?

Mr. BAKER. According to what he could use the land for that he did not use for production of wheat.

Mr. HILL. But if he actually sold it, I figure out that he would have 20 percent more money if he sold all his wheat and took the lower

price.

Mr. BAKER. That is assuming that the land he did not use to produce wheat would not have any income at all? He would certainly use it for something.

Mr. HILL. Well, you are not going to let him do that, are you? He cannot use it. If he puts it in conservation, he cannot use it.

I just figured it up here, that if he sold 10,000 bushels of wheat at $1.78 he would have an income of around $17,800, and if he sold 6,000 bushels and go the full parity price at $2.38, he would only have $14,300, which means he would be $3,500 short in accepting the high price. I know that it has been working that way in Colorado.

Mr. BAKER. This would be the gross income from wheat sales only. Mr. HILL. That is right.

Mr. BAKER. But not the gross income from the land involved, or his capital equipment.

Mr. HILL. We are taking bushels, like you said, wherever he got the bushels.

Mr. BAKER. So you would have the alternative of the ACP program. you would have the alternative of conservation reserve, you would have the alternative of other livestock commodities and crops for the use of that land, his family labor and his capital equipment.

I would like to add right at that point, Mr. Hill, I think the members of the committee agree fully, we are all interested in maintaining an income-protection program of some kind, and I think we also know that we cannot continue to operate a program forever that is going to be building up the commodities and Government ownership, or that is going to cause anything like the huge expenditures out of the Federal Treasury for this year, the ones that were racked up as a bookkeeping matter against the farm programs this year. It means that my assumption here 55 million acres is probably not a realistic assumption, year in and year out, for the next 10 years, even under the present program if the floor price is left at 75 percent parity. That is why we say that the domestic part of the supply ought to be operated with a very strict market supply and pro ratio program, and then we ought to work with Members of Congress to get the best deal we can on exports.

Mr. ALBERT. Any other questions?

Mr. Baker, would an amendment to the domestic parity plan bills that have been introduced, providing that any farmer whose domestic food quota was translated into terms of acreage, and who did not plant any more acres than that, would have his entire base preserved, accomplish substantially what you are trying to do?

Mr. BAKER. If I follow your suggestion; yes, sir.

Mr. ALBERT. Under the plan, what we have is a domestic food quota which the farmer gets, and for which he gets a certificate that has a certain value based on normal yields and the estimated parity price at the marketing season, which gives him approximately 100 percent of parity on his normal production.

Mr. BAKER. That is right.

Mr. ALBERT. All right, from then on there is a free market operating, subject to price support being invoked if the situation requires it. Mr. BAKER. That is right.

Mr. ALBERT. All right. If you gave the farmer his domestic farm quota, and translated it into acreage, it would be something less than his acreage allotment, say 50 percent probably of his acreage allot

ment because 50 percent would be the approximate amount that goes into human food in the continental United States. If we had a provision in the law that any producer who desired to do so could plant only his domestic food quota, or the acreage equivalent thereof and would then be permitted to preserve his entire allotment and entire wheat base, as though he had planted his entire allotment?

Mr. BAKER. That certainly should be in there. I mean, if I get this last point, that certainly should be in the legislation, just as a similar provision is in the conservation.

Mr. ALBERT. Say a man had a 120 base, a 100-acre allotment, and a food quota that could be raised normally on 50 acres. He could plant 50 acres and preserve both his history for allotment and base purposes in the future?

Mr. BAKER. That certainly should be in there.

Mr. ALBERT. I think that is a good suggestion, and it would help bring down the volume of wheat if farmers took advantage of the provision.

Mr. BAKER. Indeed it would.

Mr. ALBERT. It would not hurt anything as I see it offhand. I would like to go into that further.

Mr. BAKER. And the proponents of the plan do not believe that any time in the near future, at least as long as we've got billion bushels on hand, that it will be possible to operate the domestic parity proposal without having in addition to the domestic allotment, a total national acreage allotment for wheat covering both domestic and export.

Mr. ALBERT. Right, there is no question about that.

Mr. BAKER. For as long as there is possible need for such a program. This is provided in our bill.

Mr. ALBERT. Right.

Mr. BAKER. The added provision that you are suggesting certainly should not have any objection-on anyone's part.

Mr. ALBERT. All it could do possibly would be to encourage a lesser production of wheat.

Mr. BAKER. Indeed it would. It would relieve them of the fear of losing some of their historic base.

Mr. ALBERT. Would you be in favor of an amendment to the conservation reserve program which would make that more attractive and give the farmers credit for going into the conservation reserve, if they desire to do so, on part of their allotment?

Mr. BAKER. Yes, sir, we have repeatedly so recommended, as you know.

Mr. ALBERT. That is right. I just wanted to get the record here straight on this.

Now as I indicated to previous witnesses, we are not operating in a vacuum. Anyone who has ever tried to put a bill through Congress finds that out pretty quickly. He cannot have all that he wants. You cannot always have what you are sure is exactly the thing that the country should have. But, don't you believe that this domestic parity plan offers a better way of getting wheat into the areas where wheat should be produced, not abruptly, but over a long period of time, without hurting too many people too drastically, than either the present program or a program that drastically reduces price supports quickly?

Mr. BAKER. Certainly the domestic parity proposal-I do not think there is any question in my mind that the domestic parity proposal is vastly superior to a 60 percent of parity floor or no floor at all. The comparison relative to the existing law is so close that it is, in a dollar and cents way, determined by what the existing circumstances are at the time you are making the evaluation-dependent on what kind of program is available for corn and grain sorghum, what the animal unit number situation is, what the export situation is, whether we do or do not have a Public Law 480 in operation. The choice, in other words, between these two alternatives is so close that supplementary considerations determine which would be the best way to go. Mr. ÅLBERT. Under the provision now being discussed if a farmer wants to reduce sufficiently he can get 100 percent of parity. This is consistent with the philosophy under which we have long operated our system of high-support prices, namely, the unwillingness of the producer to reduce his production.

Mr. BAKER. Mr. Chairman, let it continue to be so.

Mr. ALBERT. And now one other question has been raised-and that is that it is unfair to charge a wheat program, price supports, to consumers, and that the effect of the domestic parity plan is to make the consumer of bread and other wheat foods in the United States pay the entire cost of supporting prices to the feeders and to the exporters. What do you think of that?

Mr. BAKER. Several things, Mr. Chairman. In the first place, this unfortunate use by some-the witness yesterday, among others of characterizing the certificate plan, which we do not necessarily support, as the only mechanism that would make this operate, but to characterize the certificate plan as a bread tax is a very unfortunate use of words in my opinion.

In the second place, this proposal, as far as the domestic food wheat is concerned, is no different economically than the way we have operated the wheat program for 24 or 25 years. No one has ever seriously proposed that the domestic wheat program be operated any other way than protecting the farmers' return or the support price for wheat by means of market supply control or adjustment, which means that the processor pays a price for the wheat, and it goes through the marketing channel. To what extent the price of wheat has anything at all to do with the price of bread, which there have been some doubts thrown on in recent developments where when wheat falls in price the price of bread has gone up. And I do not want to necessarily get engaged in that argument, that it will always be so, but it seems there was a series of years when the price of wheat fell 4 or 5 times and the price of bread within 2 months would go up each timeas the bushel price of wheat went down.

More important, in terms of national consideration of this, Mr. Chairman, when Congress originally adopted, and several times has amended by raising the minimum wage, which we approved, we think it should be higher than it is now as a matter of fact. We have not worried that that increased minimum wage did not come out of the retail price paid by the consumer for the products produced with labor being paid the minimum wage instead of some lower wage. We have supported and continue to support laws of Congress protecting collective bargaining, organization of labor unions, and the protec

tion of their institutional requirements for engaging in effective collective bargaining. And whatever wages through effective collective bargaining they are able to obtain, those wages are paid in the price of the automobiles, the price of a ton of steel. This we think is correct. Mr. ALBERT. In other words, you do not think that the consumer has any right to expect a man to work for less than a living wage, or grow wheat for less than a living wage?

Mr. BAKER. Mr. Chairman, my feeling is that a huge majority of the American consumers fully understand this point we are discussing and are very much of the attitude you just expressed. Most of the consumers are not worried. They are more concerned with falling incomes-let me put it that way-and they understand better that things need to be done to keep incomes from falling, the farmers themselves, and everyone else, than they are concerned with maintaining stabilized prices for basic raw materials.

Mr. ALBERT. Any other questions?

You

Mr. Baker, we certainly appreciate your statement and we are happy that we have been able to conclude it without carrying over. have made a fine contribution to the committee.

Mr. BAKER. Thank you for your consideration, Mr. Chairman. Mr. ALBERT. I have here a copy of a statement in support of H. R. 10193 by our colleague Mr. Anderson of Montana. Without objection this statement will be inserted at this point in the record.

(The statement referred to follows:)

STATEMENT OF HON. LEROY ANDERSON, A REPRESENTATIVE IN CONGRESS FROM THE SECOND DISTRICT OF THE STATE OF MONTANA

Mr. Chairman, members of the committee, as the representative of 1 of the 2 congressional districts having the largest wheat production in the Nation, I appear today in behalf of my H. R. 10193, a measure to retain the support price at $2 per bushel for the 1958 crop of wheat, the same level as that prevailing in 1957.

I also appear as a wheatgrower, myself, who has had a lifetime of activity in the growing and marketing of wheat. I know from first-hand knowledge the various ramifications involved in farm economics.

This legislation is identical to that introduced by my Montana colleagues in Congress, Senators James E. Murray and Mike Mansfield, and Representative Lee Metcalf. They wish to associate themselves with me in support of this legislation.

Gentlemen, this is critical legislation for Montana, as well as to all wheatproducing areas of the United States. In Montana alone, our economy already is in a state of depression. For months we had the dubious distinction of holding the Nation's No. 1 position in percentage of unemployed.

Since Mr. Benson became Secretary, the annual national farm income has ranged from about $2 billion to about $5 billion less than what it was in 1952. This has led the way into our nationwide recession. The reduction of 22 cents a bushel which Mr. Benson has announced in the 1958 wheat support level will hit farmers another low blow, strike another rabbit punch at farm purchasing power and contribute further to the depressed condition of the national economy. I estimate that wheat farmers, in my district alone, will lose more than $20 million this year unless my H. R. 10193, or similar legislation, is enacted into law. Gentlemen, I strongly urge your favorable consideration of this legislation so vital to our agricultural economy.

Mr. ALBERT. If there is nothing further the committee stands adjourned until 10 o'clock tomorrow morning.

(Whereupon at 12 o'clock noon, the committee recessed to meet at 10 a. m., Thursday, April 24, 1958.)