American agriculture has been put through the wringer of a "cheap feed policy" the past 5 years which has had the inevitable effect of swinging the livestock price cycle to sharp extreme, forcing more family farmers out at each downturn.

If this committee never does anything more than expose and then correct the fallacy of cheap feed for livestock producers, it will have performed a great service to farmers as well as to the millions of consumers who want stable food supplies at fair prices.

Third, Congress can provide an assortment of devices, most of them familiar, to enable farmers to obtain a greater control over their own production, making the law of supply and demand work for farmers, instead of against them. I think that more consideration can be given to devices such as marketing orders, marketing quotas and conservation payments so as to give farmers a degree of bargaining power comparable to that which they face and contend with every day in the market place.

This brings me to consideration of H. R. 10966 and H. R. 10967, bills by Congressmen McGovern and Roosevelt to

establish a comprehensive family farm income improvement and protection program, to provide additional consumer safeguards, to enable farmers to keep market supplies of farm commodities in reasonable balance with demand therefor, and for other purposes.

I have read these bills with much interest.

I believe that these proposals meet the tests which I have tried to lay down for constructive legislation to reverse the farm depression and put American farmers back on the road to equal living opportunities.

Besides endorsing the major provisions of both bills, I earnestly congratulate the authors for having attempted to bring together the interests of producers and consumers in one recommendation. This is in great contrast to the tactics of the present administration which has attempted to set housewives against farmers by divisive talk.

American agriculture will be many years in overcoming the bad public relations created for farmers by the reckless and unfounded assertions emanating from Washington these past 5 years which erroneously told consumers that prices at the farm gate are responsible for their problems at the retail grocery store.

In this connection a word of praise is in order for the great work done by a subcommittee of this group headed by Congressman Anfuso, of New York, whose constituents include no farmers, but whose great interest in the farm problem led him to conduct hearings which clearly disclosed that retail and farm prices have been moving in opposite. directions.

The authors of these two bills have succeeded in recommending steps which would raise farm income substantially, yet provide safeguards to the consumer interest. In fact, they seem to start with the proposition that a strong farm income improvement program is of itself a benefit to the consuming public in terms of stable supplies, adequate reserves and, hence, reasonable prices.

I wish to commend their inclusion of a provision which would take into account years in which serious unemployment might result in a disparity for industrial and consuming segments of the economy. In

return for this safeguard of the public interest, they have very properly geared market supply levels to a full employment economy.

Moreover, the bills point the way to a farm program which, under conditions of full employment and prosperity, would require very small expenditures by the Treasury, if indeed, cost anything.

Another feature of the proposal would assure that the primary benefits of the program would go toward maintaining the family farm in America. This is not a new or revolutionary concept. I point out that Congress has recently seen fit to limit the amount of payments made to any one farm under the soil-bank legislation and that President Eisenhower has also expressed an opinion along this line.

In a special message to Congress on January 9, 1956, the President said:

I ask the Congress to consider making a dollar limit on the size of price-support loans to any one individual or farming unit. The limit should be sufficiently high to give full protection to the efficiently operated family farms.

I know that this is a difficult question in and out of Congress, but I also know that huge cash payments to big operators have given our entire farm program a bad name in many quarters and kept us from getting certain much needed support for strengthening the program. The major features of the proposed legislation include constructive suggestions for allowing farmers to vote on their commodity programs, as well as to help administer them as they once did before the farmercommittee system was put on an advisory shelf.

The proposed legislation would enable farmers to exercise responsibility for adjusting their production to the Nation's need for food and fiber, always taking into consideration ample reserves for defense needs or natural disaster.

The bills provide for the use of parity income deficiency payments to farmers as a method of farm income protection under conditions which might make such payments necessary. I emphasize that this method would be used in workable fashion with such other methods as price-support loans, purchase contracts, and direct purchases as used in existing programs.

This would give the farm program the type of flexibility I have often said it needs-flexibility of method to deal with different commodities and different conditions, rather than flexibility of price levels geared solely to supply.

Another desirable feature of the bills is their attempt to bring up to date the formula to be used for measuring and guiding the farm income improvement program. This feature parallels discussions, held recently by the National Conference of Commodity Organizations, in which the National Grange and the National Farmers Union have been participating.

There are many other specific features which could be commented upon, but there are other witnesses more competent to discuss the details of the proposed legislation. I would like to close by commending these bills to your thoughtful consideration again, as constructive steps toward a vigorous, workable, and dynamic farm program which would also be in the best interest of the general public.

Thank you, Mr. Chairman.

Mr. POAGE. Thank you, Mr. Brannan, we are very appreciative of your statement and of your work in agriculture and of your willingness to come and give us the benefit of your views.

From an elevator standpoint I know that we are going to have to take in milo that went into Government seal in a wet condition. It is going to come to us in a damaged form. I do not know what they are going to do with that, and that was just a month ago. But I am confident that we can store it to the place where it will be of value for alcohol.

But it certainly will not be of value, or much value, for livestock feed.

Mr. HARRISON. Can you make a statement as to what the condition is in Stanton County?

Mr. SMITHBERGER. I can give you the exact figures on Stanton County. I realize you have figures from all over this United States, but maybe I can give you a specific example. This was prepared by our county agent, together with the PMA office.

At the present time we estimate that we have 1,300,000 bushels of corn in Stanton County that is piled in outside rings. This is in outside rings, mind you, exposed to the weather as it is today. This does not include the crib corn in permanent shelter cribs. Approximately 500 cribs have been tested for sealing within the county. Of these 200 have passed, the other being too high in moisture. Of these 200 the moisture content has been about 20.3 moisture. The other 300 averaged 23 percent moisture, and many other cribs have been above 23, running as high as 28 percent.

The average damage in these cribs, and this was when it was tested, was 8 percent. Of those cribs that have passed inspection, many have been tested three times, and sometimes this moisture goes up and sometimes it goes down. Now that depends upon the weather. At the present time we are having a very rainy spell out there, we have had snow and rain, and the moisture is going up constantly on this stored corn. However, in view of the present weather conditions and the high moisture content of the crib corn, it is apparent that much corn will spoil this spring unless it can be processed in some way or used up rapidly. However, there is not enough livestock in the county at the present time to use it up fast enough. Some cribs that have been opened recently are already showing considerable spoilage, and as warm weather approaches much more spoilage will take place in this high moisture corn.

I am bringing this to you just as a specific example. This is our problem out there, and I know it exists over a large territory, not only in the State of Nebraska, but Iowa, Minnesota, and Kansas. I recently made a trip to Texas, the chairman's State, and I found down there that the elevators were filled with milo and wheat, and on the outside of the elevators there were thousands and thousands of bushels of milo piled right out in the open. Now that has to move in the very near future. On top of that, you are only 2 months away from a wheat crop, and if the weather continues anywhere near like it is today, we are going to have some very wet wheat to handle.

So while this is an emergency, and opening this plant is an emergency, I can readily see where we could use this plant to good advantage over a long period of time. Now from an elevator operator's standpoint, I am going to point out that in the 10 years that I have operated, we have had 4 years when we had grain that went out of condition in our county because of high moisture. In other words,

out of the 10 there were 4 years where this alcohol plant could have been used to a very great advantage.

I thank you.

Mr. POAGE. Thank you very much; we appreciate having your statement as one who knows things firsthand.

Now we have a representative from the Department of Agriculture present. I see several back there.

I wonder, Mr. Berger, if you would care to just get a group with you, and just make any comments you care to?

STATEMENT OF WALTER C. BERGER, DIVISION OF COMMODITY STABILIZATION SERVICE, EXECUTIVE VICE PRESIDENT OF THE COMMODITY CREDIT CORPORATION

Mr. BERGER. Mr. Chairman, we did not hear about this hearing until very late on Friday afternoon, and we really have not had any chance to go over the proposed bill. I would rather say that I would prefer to answer questions.

We have no opening statement prepared officially. The opening of the alcohol plants, of course, is no new subject to us over in the Department. It has been proposed and discussed a number of times. The long-range program of attempting to use alcohol for motor fuel has been discussed number of times. Of course, we have had the Commission's report, and there are definitely complications involved. For the record I will say that as Executive Vice President of the Commodity Credit Corporation, and having been affiliated with the grain and feed business all my life, I have never seen a corn crop, and I do not think anyone else has ever seen one; that is the problem we have staring us in the face this year. However, that does not happen every year. I am not worried about the stocks that we have carrying over from the year before last. The problem that we have staring us in the face for the balance of this year still-we do not know what they are going to be. I do not know that I have ever seen Nebraska, for instance, as my good friend in the grain trade has just testified, go so far into the year with so much moisture in the air as they have so far this year. They just simply do not seem to get around to doing some drying in the cribs, which we have put under loan up to the present time. We are not up to the level of our last year loans. I do not have the official figure, but I could put it into the testimony. There has always been one basic problem which the Commission has studied quite carefully, and are coming up with the suggestion, to the objections that I have had in the past in regard to attempting to make alcohol out of grain. When I was here during World War II, it was my responsibility to see that the distribution of feed supplies and grain supplies were sent around the country where we needed it. I remember the Omaha plant very well. It was one of our jobs to see that that plant had enough grain there every day to keep it running. And the same with the other alcohol plants we had in operation during that time.

But I also remember very well that as we got towards the end of the war, and we began to see that we were going to have enough alcohol to finish the job up, the distillers who were making beverage alcohol and whiskey were in with some quite definite information that you

could take the alcohol out of grain, and then the byproducts that they were saving out of the grain could be thrown back in the feed channels-in reality, you could just about take the alcohol out of the grain and have just as much meat, milk, and eggs left in the country as you had before because the byproducts do aid the assimilation and digestion of other feed commodities—when it is put back in the feed channel. I understand our research people in the Department say that that statement is too strong at the present time. But unless the byproducts, there is something done with them, such as the Commission has suggested, taking the proteins and making human food out of them-if it is thrown back in the feed channel, you do not do much about curing the overall grain surplus problem by running a few alcohol plants. Now if the two were brought in combination, then I could see a very definite help there.

As to the attempt to start this plant up in Omaha, or the one in Louisville, Ky., the gentlemen who have testified know more about it than I do, as to how quickly they could get the plant in production. I thought during World War II that that plant up in Omaha was only using something in the neighborhood of a top of 10 million bushels a year during that period. And if we started it up the 1st of June, and the 1st of July, attempting to handle the emergency situation, as it might be right now, we would likely do well if we got a million, a million and a half or 2 million bushels through the plant while this major problem was on our hands. Well whether that is worth it, when we have such a big problem on our hands, that is something you gentlemen have to decide. I would not want to officially make a Department recommendation on it one way or the other. But personally, with the responsibilities I have, in attempting to handle the crops we have on our hands, that we are taking under loan, I know it is severe, but I am wondering if that is going to help very much for a short time duration.

Mr. POAGE. Any questions of Mr. Berger?
Mr. HAGEN. I would like to ask a question.

This ethyl alcohol, it comes out of petroleum and comes out of grain and they are the same product?

Mr. BERGER. To tell you frankly, I am not that good an expert on the different types of alcohol. As I understand it, the petroleum alcohol is slightly different than that coming from the petroleum production and from the natural gas production. I thought there were 2 different types of alcohol coming out of that, 1 in which grain— grain can be made into either 1 of the 2 kinds, but as I understand, as to the petroleum, there is only 1 type of alcohol that comes from that. Now what the technical name is, I would not try to be an expert to say, Congressman.

Mr. HAGEN. One of the big markets where this alcohol is used is the synthetic rubber market.

Mr. BERGER. That was the big reason it was being produced in such tremendous quantities during World War II, was the rubber program. We were cut off from our supply of natural rubber, and, of course, there was large quantities used, as I understand it, in say the smokeless powder and some of the other chemical fields during the war that I am not an expert enough on to try to tell you. But I know it had a very, very high priority in keeping those plants