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inois Agricultural Association 



RECORD 



Volume 13 April, 1935 ;: Number 4 



AAA Livestock Feed 

 X Grain Amendment 





THE amendments to the Agricultural 

 Adjustment Act, as embodied in a 

 bill, Committee Print, under date 

 of March 5, 1935, are so ba- 

 sically important they cannot 

 be minimized. 



In studying these amend- 

 ments, so we can make proper 

 comparisons with present con- 

 ditions, we must keep in mind 

 the economic conditions and 

 problems with which we were 

 confronted in 1933, when Con- 

 gress enacted the Agricultural 

 Adjustment Act. With this 

 background we can understand 

 more readily the need for these 

 amendments. They have grown 

 out of the experience of near- 

 ly two years' administration 

 of the Adjustment Act. 



By 1933, surpluses of al- 

 most all, if not all, agricul- 

 tural commodities had accu- 

 mulated to such an extent that 

 practically every storehouse 

 and cooler in the United States 

 was filled and overflowing 

 with them. One effect of these 

 cumulative surpluses was the 

 steady decline in the price 

 level of farm commodities. 

 The low point in this price 

 level was reached just prior 

 to the enactment of the Ad- 

 justment Act. 



When the Adjustment Act 

 was passed, there seemed to 

 be no outlet for these sur- 

 pluses. Therefore, it was in- 

 evitable that drastic action 

 was necessary to control the 

 output of farm products, at 

 their production sources, if 

 price levels , were to be im- 

 proved and maintained. 



As a result of the adjust- 

 ment of production, in which 

 the vast majority of the Amer- 

 ican farmers participated, 

 coupled with serious drought 

 and insect pest damage in 

 certain areas, surpluses of 

 most basic farm commodities 

 now have disappeared. We are 

 not confronted now with the 



problem of surpluses. A much simpler 

 problem now is before us, namely, that 

 of maintaining proper adjustment of pro- 



The information contained in the accompanying article 

 is a summary of 67 pages of evidence presented by Earl 

 C. Smith, President of the Illinois Agricultural Associa- 

 tion, in hearings before both the Senate and House Agri- 

 cultural Committees at Washington two weeks ago. The 

 so-called livestock-feed-grain amendment described in the 

 article was approved in principle in the last annual meet- 

 ings of the Illinois Agricultural Association and the 

 American Farm Btu-eau Federation, by the National Agri- 

 cultural Conference, and was supported before both Agri- 

 cultural Committees by Secretary Wallace and Adminis- 

 trator Davis when appearing before the reflective com- 

 mittees in support of the administration amendments to 

 the Agricultural Adjustment Act primarily intended to 

 clarify the licensing provisions of the Act. 



There is now spending before the Senate and House 

 Agricultural Committees at Washington the proposed 

 amendments to the Agricultural Adjustment Act. The 

 I.A.A. considers of major importance the so-called live- 

 stock-feed-grain amendment. Its purpose is to provide 

 greater simplicity, more effectiveness and permanence in 

 the administration of the Act. 



Possibly of greater importance, the amendment gives 

 authority for the levying of limited taxes upon feed grains 

 and livestock to maintain prices at parity. Under the Act 

 as at present, authority for the levying of processing taxes 

 is limited to the difference between average farm prices 

 and parity prices on any basic commodity. This was all 

 that was needed at the time of the passage of the Act in 

 1933 as all farm prices were far below parity. Unless the 

 Act is amended so as to maintain prices at parity or above, 

 effective administration of the Act will become impossible 

 until such time as the increased prices result in increased 

 production, which, in turn, will break prices and again 

 provide an opportunity for the levying of taxes according 

 to the spread between the average farm price and parity 

 prices. Every thinking farmer will recognize the desirabil- 

 ity of providing authority to the Secretary of Agriculture 

 to keep prices at parity after all of the efforts and sacri- 

 fices that have been made by the thousands of farmers 

 to secure the present improvement in the price level of 

 farm crops. In extending this authority, the amendment 

 provides that maximum processing taxes levied shall be 

 limited to $1.25 per hundred on hogs; 30 cents per hundred 

 on cattle; 20 cents per hundred on sheep and Jl^ per 

 hundred pounds of butterfat. These comparative levies 

 are in exact proportion as the different classes of live- 

 stock consume com. Taxes levied under this provision 

 may be lower than the limits set forth above, but must 

 always be levied in the same proportion of relationship. 



As this article is being written, the grain livestock 

 amendment is receiving a great deal of attention through- 

 out the country and is being seriously attacked by the 

 large cattle producers of the western range states and by 

 many dairymen of the north and eastern sections of the 

 country. 



Fanners who want to see prices of basic farm crops 

 maintained at parity or above should let their representa- 

 tives in Congress loiow of their interest in and support of 

 the livestock grain amendment pending in Congress at tlie 

 present time. 



duction of basic farm crops to market 

 needs and demands. 



While I am supporting every amend- 

 ment to the Agricultural Adjustment 

 Act, as embodied in H. R. 5.585 and in 

 S. 1807, I am depending upon my asso- 

 ciates in the organized agricultural 

 groups to file with you detailed deposi- 

 tions as to the indisputable value of 

 those particular amendments. 

 I am confining my testimony 

 to amendments contained in a 

 bill. Committee Print, under 

 date of March 5, 1935, which 

 would provide producers of 

 feed grains and livestock an 

 opportunity to cooperate in the 

 most practical, efficient and 

 simplest manner for maintain- 

 ing permanently parity prige 

 levels for these products. 



By specific reference, may I 

 recall to this committee the 

 testimony of Administrator 

 Chester C. Davis, when he ap- 

 peared before you with his 

 analysis of the amendments 

 proposed in H. R. 5585, at 

 which time he said that "cer- 

 tain other amendments with 

 which we are in entire accord, 

 have been proposed by repre- 

 sentatives of farm organiza- 

 tions. One proposal made by 

 the farm organizations is that 

 processing tax provisions be 

 made more flexible. Farm 

 leaders have pointed out the 

 desirability of a program to 

 permit the adjustment and 

 stabilization of livestock sup- 

 plies through control of feed 

 grains. . . . We are in accord 

 with the general principles 

 involved." 



By specific reference also, I 

 refer this committee to that 

 portion of the report of the 

 National Agricultural Confer- 

 ence dealing 'with the adjust- 

 ment of livestock and feed 

 grains. This report was 

 presented to you last week by 

 Mr. Clifford Gregory, Chair- 

 man of the National Agricul- 

 tural Conference. I specifical- 

 ly allude to that section of Mr. 

 Gregory's report which corre- 

 sponds to the amendments now 

 appearing in a bill. Com- 

 mittee Print, under date of 

 March 5, to amend Sections 



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