proclaimed, that is permitted without payment of penalty under the certificate. Each farm operator who sells farm commodities shall obtain, from the county farmer committee, a within-quota or overquota certificate of sale for commodities that he sells, which shall accompany the commodity through channels of trade within the United States. Each such producer shall be issued withinquota certificates of sale by the county farmer committee upon payment to the committee of a farm income improvement fee of not more than 1 per centum of the parity income equivalent price all-commodity, up to the remaining volume for the crop year of sales shown for the commodity group and for the commodity marketing quotas on the face of the marketing quota certificate for such year. Each producer shall also be issued such overquota certificates of sale by the committee as he may apply for and require for the sale of farm commodities over and above the volume shown on the face of the marketing quota certificate of such operator upon payment of a farm income stabilization fee equal to the total of the number of units of each commodity covered in such overquota certificates of sale multiplied by 75 per centum of the parity-income equivalent price of each such commodity. The Secretary shall confiscate all farm commodities and products discovered if ownership cannot be accounted for by presentation of within-quota or overquota certificates of sale in the hands of the owner thereof. SEC. 4. Section 303 of the Agricultural Adjustment Act of 1938, as amended, is amended to read as follows:

"PARITY INCOME DEFICIENCY PAYMENTS

"SEC. 303. In carrying out the provisions of section 1 of this Act, the Federal Farm Income Improvement Board is authorized and directed to make use of the funds collected from sale of within-quota and overquota sales certificates under provisions of section 3 of this Act for administration of the provisions of this Act and to reimburse the Secretary for parity income deficiency payments he is required to make under provisions of section 1 owing to errors in forecasts in connection with determination of the farmwide all-commodity, the commoditygroup, and the individual-commodity marketing quotas, and the Secretary is authorized and directed to make use of funds available to him and any funds appropriated by section 32 of Public Law 320, Seventy-fourth Congress (49 Stat. 774; U. S. C. 612c), as amended, in making parity income deficiency payments required by the excess of the number of unemployment above 3 per centum of the civilian labor force. The Secretary and the Board are authorized and directed to make parity income deficiency payments to producers whose sales of any commodity, whose total sales of commodities within a group, and whose total sales of farm commodities do not exceed the respective marketing quota or quotas in amounts which, with respect to each such commodity sold, together with the proceeds from sale thereof, will provide a return to such producers which is as nearly equal to 80 per centum of the parity income equivalent price as the funds so available will permit. All funds available for such payments shall be apportioned to the several commodities in proportion to the amount by which each fails to reach the parity income. Such payments shall be in addition to and not in substitution for any other payments authorized by law. The Secretary is authorized to make use of funds available to the Federal Farm Income Stabilization Corporation for payment of his share of the parity income deficiency payments. Congress is authorized to appropriate to the Secretary such sums as may be required from time to time to allow him to reimburse the Corporation for sums advanced to the Secretary for making of parity income deficiency payments. The total of parity income deficiency payments made by the Secretary and the Board to any one farm operator in any one year shall not exceed $3,500. It is the intention of this section that in years, or in periods of less than a year, when the number of unemployed is less than 3 per centum of the civilian labor force, the entire cost of the farm income improvement program provided in this Act shall be covered by the farm income improvement fees and penalties paid by farmers, and in years and periods of less than a year when the number of unemployed exceeds 3 per centum of the civilian labor force, additional funds required by the Secretary of Agriculture to carry out the provisions of section 1 and of this section due to the reduced demand resulting from the excess of unemployment over 3 per centum of the civilian labor force."

SEC. 5. Section 703 of the National Wool Act of 1954 is amended by striking out "March 31, 1959" and inserting in lieu thereof "March 31, 1963."

is, cooking and salting for ultimate sale to the consuming public. The members of this association purchase in large quantities, and it has been estimated that the association annually purchases at least 75 percent of the total production of the extra large and medium type Virginia shelled peanuts.

The ePanut & Nut Salters Association is opposed to any legislation that will reduce peanut acreage, and thus reduce the supply of available peanuts.

Our only worry is the question of any possible reduction in peanuts. The growers grow them; the shellers shell them. We process them and sell them to the consuming public.

During the last few years, we have had several problems. One was some relief from the Tariff Commission, imports on peanuts. I think peanuts today are in rather short supply. And our purpose in coming here is to tell you that we would hate to see any legislation that would cut down the supply for the consuming public.

Other than that, we do not desire to go into the technicalities of the two bills.

Mr. MCMILLAN. Any questions?

Mr. ABBITT. Mr. Gravelle, as I understand it, section 2 of the billand that is on page 2-does amend the minimum acreage allotment clause of the present law.

Do I understand you to say that if that section were eliminated, that your association, as of now, would have no objection to the bill?

Mr. GRAVELLE. I would rather put it this way. I think you have some rather technical legislation that is being proposed. I was in hopes that the Department of Agriculture would have gone on first this afternoon, so we could have had detailed information as to what, in their opinion, this bill would do or would not do. And in the absence of any information in that connection, we would much prefer to just tell the Congress that we don't want you to cut down acreages, because we sell more peanuts if they are available.

Mr. ABBITT. I can well understand your not wanting to go into the technicalities. I wouldn't want to myself, unless the Department made a statement.

Mr. GRAVELLE. Yes. We were in hopes that the Department representatives would testify first.

Mr. ABBITT. But what you are mainly concerned with now is that section that deals with more or less modifying and doing away with the minimum-acreage allotment, as guaranteed-1,160,100.

Mr. GRAVELLE. That is right.

Mr. ABBITT. I might, for your information, say that a number of people have expressed to me the same feeling, and I think it is generally understood, among the people interested in this particular legislation-certainly those I have talked to-that if the bill were reported out, that provision would not be in it.

So far as I am concerned, I can speak for nobody else but myself, and don't pretend to. So far as I am concerned, that section is not necessary to the legislation. And I think the main reason it was put in there was, I understood, the Department had been harping on the fact that they could not get a good program so long as we had a guaranteed minimum, that they couldn't handle it or do anything about it.

The State that I happen to represent in the Congress is perhaps the one State that is more dependent upon agriculture than any other State in the Union. And although it was not possible for me to get an assignment to this great committee when I came to the Congress last year, nevertheless I have been keenly concerned about the growing and mounting crisis in agriculture. There is no question in my mind and I do not believe there could be in anyone's mind that the loss of purchasing power which farm families are suffering now and have suffered in the recent years has laid the basis for much of the current economic recession or depression, call it what you will, that now confronts our entire economy.

Anyone can readily understand that when millions of farm families lose their purchasing power, that this takes a heavy toll in lost demand for the products of business and industry. And with that problem confronting us and for that reason, we meet today here to consider that problem, a problem which is not just a problem for rural America, but a problem which must be solved if our entire national economy is to prosper and if we are to meet our commitments as a world power.

Mr. Chairman, the bill that I am appearing on behalf of today, H. R. 10966, has been introduced in similar form by my good friend from California, Congressman Roosevelt, who has introduced the H. R. 10967 and who comes from a district which is practically entirely a metropolitan district.

I think that is quite significant, Mr. Chairman. The bills that we are interested in and which we are now suggesting to this committee we believe speak in the best interest of both the rural parts of America and the consuming and metropolitan areas. There is no question in my mind, as I say, that this loss of prosperity which our farm families suffered recently presents a situation we must meet and it is for that reason that we are meeting here this morning on behalf of these bills. Mr. Roosevelt and I believe that our proposals are geared to the demands of 20th century agriculture and to the best interests of the farmer, the consumer, and the taxpayer. We do not contend that the specific language of our legislation embodied in these bills is in the best possibe form. We recognize that the members of your committee, without regard to party labels, have a vast range of experience in agricultural matters and that with that experience they can improve our proposals at various points.

We believe very strongly, however, Mr. Roosevelt and myself, that the basic principles of this legislation are economically sound and that they may serve as a depature point for improved farm legislation.

Since the bills include a provision for direct compensatory payments to farmers who comply with other portions of the program, I might say that this is a principle which was first suggested to the Congress almost 20 years ago. Mr. Ed O'Neal, the beloved and colorful late president of the American Farm Bureau Federation, proposed such a program in 1939 and again in 1940 in testimony before congressional committees. Mr. O'Neal asked for 85 percent of parity support floors on farm commodities with a $500 million appropriation that might be used to pay farmers the difference between 85 percent of parity and full parity, or the difference between the market price and full parity, whichever was smaller.

At about this time, however, World War II began. The demands of wartime caused us to place the accent on maximum food production. Farmers were encouraged to increase production and were given the assurance that they would be protected by a price-support program in the event of a postwar slump.

In 1949, after American agricultural production had helped to stave off a food shortage in Europe, it seemed to many authorities that we needed a new approach to Federal farm programs that would keep production in line with market opportunities and at the same time maintain farm income at a reasonable level. This was the background for a challenging proposal by the then Secretary of Agriculture, Mr. Charles Brannan, for a system of direct production payments to farmers in return for cooperation of farmers in a program designed to reduce the necessity of expensive storage and price-support operations.

I am very grateful, Mr. Chairman, I am gratified that the former Secretary of Agriculture, the distinguished Mr. Brannan is with us this morning and that he has kindly agreed to explain the technical principles of these bills and he will be before the committee in a matter of a very few minutes.

Before Congress could act on this proposal, we were involved in the Korean conflict and once again permanent action was postponed. At the end of the Korean conflict, a new Secretary of Agriculture was in office. The present Secretary I am sure is a devout, religious man who doubtless believes in his programs. The fact remains— and we are not attempting at this point to blame anyone-however, that net farm income has dropped 19 percent since 1952, farm surpluses have tripled and the cost of the farm program to taxpayers has skyrocketed.

Without attempting to lay the blame for this situation on anyone, Congressman Roosevelt and I have devised proposals which we believe are practical.

The proposals which are being suggested to your committee were summarized in a letter which we sent to the Members of the Congress under date of March 10, 1958.

Mr. Chairman, I think in view of the limited time and the fact that we do have a very distinguished witness to present here in a very few minutes, that I will ask you for unanimous consent at this point to file the letter attached to the statement which the members of the committee have which we sent out to the Congress under that date of March 10.

Mr. POAGE. Without objection.

(The letter referred to is as follows:)

FAMILY FARM INCOME IMPROVEMENT ACT OF 1958

We believe that the Congress should move now to develop a more satisfactory program for American agriculture.

There is little to be gained in arguing the question of who is to blame for the current predicament of the farmer. The fact remains that agriculture our largest and most important industry-is in trouble. Falling farm prices, rising costs, the paradox of surplus food in a hungry world-these are the familiar aspects of the problem.

Farm purchasing power is several billion dollars below the level of 5 years ago, or 10 years, or even 15 years. This is a painful experience, not only for farm families; it is equally painful for city dwellers who are unemployed because

the farmer is unable to purchase the industrial goods that his city cousin would like to produce. Lost farm purchasing power is a problem, too, for businessmen who see their sales dropping in rural areas.

In short, our entire economy suffers from the depressed condition of agriculture.

This costly problem can be solved by a proper Federal farm policy. It is our responsibility to formulate that policy. Each month that we delay means a loss of many millions of dollars to the American economy.

What kind of a Federal farm program would be of maximum benefit to the farmers and to the Nation as a whole?

We believe that any such program must take into consideration four major factors: (1) It must be of maximum benefit to the family-size farmer who makes up the great bulk of our rural population. (2) It must not raise food costs to city consumers. (3) It must not be unreasonably costly to the Federal Treasury. (4) In view of our position as a leading world power, a Federal farm policy should be related to our opportunities and responsibilities abroad.

With these considerations in mind and working with the assistance of experienced agricultural experts, we have drafted comprehensive farm legislation (H. R. 10966 by Mr. McGovern and H. R. 10967 by Mr. Roosevelt).

The following are the major provisions of this legislation:

(1) Building on the concept of "parity of income," it maintains returns to farmers at not less than 80 percent of full parity of income in relationship to comparable labor and investment in the nonfarm elements of society. Such protection is extended to all types of farm commodities, not just a few favored "basics."

(2) In return for this assurance, farmers would establish marketing quotas and other forms of market adjustment to remove the necessity of expensive price support and storage operations during periods of full prosperity. Quotas would be assigned so that farm marketings would clear the market during periods of full employment and prosperity.

(3) During years of less than full employment (when the number unemployed is 3 percent or more of the civilian labor force), farm prices would be permitted to drop while farmers continued to produce for market a volume equal to what would clear during full employment. To the extent that resulting prices were less than the parity prices set by the act, the differences would be paid directly to farmers in the form of parity income deficiency payments.

Such payments would, in effect, be a subsidy to consumers designed to offset declining consumer purchasing power by enabling the farmer to sell for less than he would during a period of full employment. This would be an excellent antirecessionary device.

(4) The benefits of the program are limited to family farm production. No farmer would be given more than $3,500 of parity income deficiency payments in any 1 year. Larger producers would be required to take greater cuts under the marketing restrictions of the bill.

(5) The Commodity Credit Corporation and its Board would be converted to a Federal Farm Income Improvement Corporation and Board. Five farmer members would be named to the Board by elected members of the State farmer committees.

It will be recognized that the above proposals follow in part some of the principles suggested by former Secretary of Agriculture Brannan in 1949. The Brannan principle has been operating through the National Wool Act for several years and has been extremely effective. With some modifications and adjustments, it can work equally as well with other farm commodities.

A more detailed discussion of the proposed legislation may be found in the Congressional Record of February 27, 1958, pages 2671-2673, under the heading "Family Farm Income Improvement Act of 1958."

We trust that you will be able to find time in your busy schedule to consider this proposal. We think it is significant that one of us is a representative of a predominantly agricultural district, while the other represents a metropolitan area. Our legislation is drafted with the best interests of both areas in mind. It is most urgent that the Congress move now in this session to meet the agricultural depression which is taking such a heavy toll throughout our entire national economy.

Very sincerely yours,

GEORGE MCGOVERN (First District, South Dakota).

JAMES ROOSEVELT (26th District, California).

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