GENERAL FAK:\I PROGRAM 423 



should have in any legislation a provision which will work toward 

 complete parity income. 



Mr. Talbott. I agree with that thoroughly, Mr. Chairman. 



Mr. Pace. There is one other thing I want to ask you. I want to say 

 that, in the event the production-payment principle should be adopted 

 by the Congress, I think you have made quite a contribution to the 

 plan in section 107 of your proposed bill. 



In the last sentence of that section, at the top of page 3, you provide : 



Compensatory payments shall be the dift'erence between parity prices and 

 regional averages computed monthly. 



Both of those suggestions are new, and I think they are most worth 

 while. As you explained this morning, we could have one farmer near 

 a great market and another man in a different region of the country 

 who is not within reach of a good market. The prices he receives 

 as against the price to the farmer near the highly populated area 

 might be quite different. Therefore, it should be determined on a 

 regional basis, although there might be some difficulty in working out 

 the regions. 



The next point is that it be calculated on a monthly basis. In 

 addition to the arguments you made this morning to support the 

 monthly basis, I want to suggest that it is also advisable to do it on 

 a monthly basis to keep the farmer from having to wait an entire 

 3^ear to receive his payment. 



And it is highly important. That is one thing that disturbed me 

 about the Secretary's suggestion : That he would get oply the market 

 price in the market place, and then he would have to wait, on the 

 average, at least a 3'ear before he received his compensatory payment. 

 That delay might be rather disastrous in many cases. 



We do not know that his creditors would be willing to wait for 

 that length of time for a determination of what his payment would be. 



Mr. Talbott. There is one other factor on the regional calculation 

 that I think should be given consideration. It is wholly overlooked 

 in the national averages. That is geography in relation to freight 

 rates. 



Certainly you men on this committee are familiar with what we 

 think is a very gross discrimination to the South and West on the 

 freight structure. Then you add to that the farmer who is 2,000 

 miles from his market as compared to the farmer who lives close to it. 



An illustration is a wheat farmer in Congressman Andresen's ter- 

 ritory close to Minneapolis. He is within (> or T cents a bushel in 

 terms of freight haul. But in Great Falls, Mont., that man is about 

 31 cents a bushel away from his market, which is a deduction in terms 

 of the price he gets. That same thing is true whether the eggs or 

 milk or whatever the commodity might be are under consideration. 



Mr. Pace. Are there any other questions on that point ^ 



Mr. Andresex. One thing that sort of irritated me was that, under 

 the present support loan on corn, in our section it is $1.36. But in 

 KentuckA' Mud Tennessee it is $1.63. Of course, T Iniow they figure 

 the fieiglit rate between Chicago and Kentucky, but we are discour- 

 aged from producing corn in the commercial corn area, and they put 

 a low loan rate on it and then encourage production in a noncommercial 

 area and tell them they can raise all the corn they want and they 

 will give them 20 or 25 cents more per bushel in support. 



