GENERAL FARM PROGRAM 237 



that in 1950 we may have marketing quotas and acreage allotments 

 for wheat where you will support the entire crop at $1.88 on wheat 

 that is raised on the allocated acreage? 



Secretary Brannan. May I have that question read? 



Mr. Andresen. As I understood you 2 weeks ago today, I think, 

 you stated that you would give complete coverage under the support 

 loans for all wheat, tobacco, and cotton that was produced on the 

 allocated acreages; is that correct? 



Secretary Brannan. Yes; that is right, sir. 



Mr. Andresen. How can you get cheaper bread and flour to the 

 people if you support the price at $1.88 a bushel on wheat? There 

 will be no overflow going into the market to bring the price down 

 because you are supporting the entire crop raised on the allocated 

 acreage. 



Secretary Brannan. Well, Mr. Andresen, is it entirely clear in jour 

 mind that in the case of wheat, tobacco, and cotton we do not propose 

 to use production payments, that we propose to use the same loan and 

 purchase agreements as we have today. 



Mr. Andresen. Yes. 



Secretary Brannan. All right. 



Mr. Andresen. Then it means that you are going to put a floor 

 under wheat at $1.88 a bushel, is that right? You are just going to 

 make a loan on the basis of $1.88 a bushel, is that correct? 



Secretary Brannan. You mean just as we do now? 



Mr. Andresen. Yes; just as you do now. 



Secretary Brannan. Just as we do now; yes, sir. 



Mr. Andresen. That will mean that you will control the price of 

 wheat and you cannot sell it under $1.88 a bushel, plus the carrying 

 cost unless you have special authority to dispose of it at less than that; 

 is that correct? 



Secretary Brannan. Yes, sir. 



Mr. Andresen. vSo, therefore, people who will buy flour or bread 

 cannot expect to get a very much lower price than they are buying 

 bread and flour at today; is that correct? 



Secretary Brannan. Well, take $1.88, and wheat is above that now, 

 and to the extent that the price comes down from whatever is the 

 market today to $1.88, or whatever the support price is this year, 

 theoretically the consumer should benefit. 



Now, on the matter to which Mr. Hope made reference and to which 

 I have made reference previously, somehow or other when the price 

 of wheat does come down to the farmer it is not reflected on to the 

 consumer, but for a theoretical answer to your question in relation to 

 the operation of price supports only, if the price of wheat comes down 

 it would theoretically be reflected on to the consumer. Now, it would 

 not go down to nothing, and I do not suppose anybody on the com- 

 mittee wants it to go down to nothing, or down to 2 cents a loaf for 

 bread. 



Mr. Andresen. I believe the Government paid a year or so ago 

 $3.30, and it has gone down to $2.21 a bushel now. 



Secretary Brannan. That is right. 



Mr. Andresen. So, that is more than $1 a bushel. 



Secretary Brannan. Yes. 



