226 GENERAL FARM PROGRAM 



and I am undecided that it does not work — but assuming that you 

 bring down production by lowering price the farmer is going to turn 

 around and see what commodity he can produce, which he can reahze 

 the price best to his advantage. So, he will go into the production of 

 that commodity and it will not be very long until that commodity 

 begins to go up and immediately we will have to look at it and say well 

 we will put a stop to that; we will lower the price on that commodity. 

 The farmer then will turn around and say he must produce some other 

 commodity, or he may look backward where he was then producing 

 the other commodity, and say he will go back to producing commodity 

 number one because he can get more out of it and can do better in 

 that. So he goes back to that commodity, and we look at that and 

 find there is a surplus again, so we lower the price again. 



The effect will be, Mr. Chairman, and Mr. Hope, I am afraid, that 

 we will be following the farmers around, lowering prices, so the farmer 

 will be coming back to the same commodity again and producing a 

 surplus and we will then have to begin to step down prices all around 

 the board. 



You see, if we do not have the objective up here to continue to shoot 

 at, and if we are always putting the emphasis on supply and demand 

 and trying to regulate it by prices, I think, since we are now in an era 

 where we have the capacity to produce, which is unprecedented in 

 our history and experience, we are going to get ourselves into the 

 position where we will have to step down the prices on practically all 

 agricultural commodities. Now, one further point, if I may just 

 conclude? 



Mr. Hope. Yes. 



Secretary Brannan. The offset philosophy, as we have tried to 

 express it, and again I say I am not sure we have fully expressed it as 

 perfectly as we should like to, but by increasing the price on the things 

 in short supply we will induce the farmers to move into those com- 

 modities. It is just the opposite approach, really; we are trying to 

 induce people to go into long supply,and then support the price by 

 giving them an inducement. 



Frankly, the very objective of high meat production, why meat was 

 put in the preferred class, for the very logical reason that it comprises 

 one of the principal sources of income to the farmer. Dairy products 

 and meat, and you can put one first and the other second and it 

 really does not make any difference, but between the two of them they 

 contribute about 25 to 30 percent to the farmers income. 



Now may I make just one other point before we go on, so there 

 can be no misunderstanding — and I do not thmk you have misunder- 

 stood, Mr. Hope — and that is that I would like to refer again to the 

 second paragraph in my original statement, in which I admitted, as 

 any person who puts up any formula must admit, that it may work 

 some maladjustment in specific commodities. I think it may work 

 some maladjustment, in my formula, as it has worked some mal- 

 adjustment in the price on hogs, and therefore we put in the reference 

 to the corn-hog ratio, and where there is a maladjustment, we would 

 go back and take up with reference to a reckoning place and a corn- 

 hog ratio, or the feed ratio, and then so we would not have any 

 arbitrary approach, let us have this 2-year lag so there can be nothing 

 arbitrary about it. 



Thank you for letting me finish. 



