GENERAL FARM PROGRAM 435 



flexible price supports will help us make tbem in au orderly manner. This will 

 require authority to make prompt afl.iustuieuts in support levels in line with 

 current and prospective supi)ly-and-demand conditions. It will also require 

 flexibility in the choice of methods or programs that are designed to be most 

 effective' for individual commodities, tliat avoid waste, and that help bring 

 about needed adjustments in production, distribution, and consumption. 



AVe think it hij^hly significant that both the Democratic and Ee- 

 pnblican phitfornis specifically endorsed "flexible price snpports." 

 The farm program has been developed essentialh' on a bipartisan 

 basis. The long-time interests of farmers will certainly be jeopar- 

 dized if the farm program is considered pnrely on a partisan political 

 basis. 



As the members of this committee know , the I^-esident's Council of 

 Economic Advisers makes an annual review of the economic situa- 

 tion and reports their findings to the Congress. Their January 7, 

 1949, Economic Review, under a heading entitled "Farm Price Sup- 

 ports," contains the following quotation : 



Intercommodity price relationships must be kept consistent with basic trends 

 in demand and supply conditions. To the maximum extent possible, parity- 

 price relationships and stipport-price programs should encourage shifts to those 

 commodities that are most wanted. Rigid systems of suppoit. in violation of 

 this principle, can only lead to rigid systems for restricting output that violate 

 our tenets of economic freedom, that work against our objectives of maximum 

 production, and that in the end take away from farmers incomes through de- 

 creased volume as much as. or more than, they add through increased prices. 



The Agricultural Act of 1948 represents an important step forward in recog- 

 nizing the difficulties associated with overrigid supports. 



In his Budget Message to the Eighty-first Congress, President Tru- 

 man included the following paragraph relating specifically to farm- 

 price supports : 



As I said a year ago. price supports should be regarded "chiefly as devices to 

 safeguard farmers against forced selling under unfavorable conditions and 

 economic depression."' Tlieir purpose is to bring an element of stability into 

 agriculture. At the same time they shotild not place excessive burdens on the 

 Treasury and taxpayers or inliibit sliifts in prodtiction needed to meet peace- 

 time demands and to promote adequate conservation of our soil resources. The 

 postwar revisions in the price-supiiort programs, which take effect largely in the 

 tiscal year 19.")1. need certain amendments to make the price-support mechanism 

 ;ind the quota provisions more workable. 



A recent congressional appraisal of farm price-support policy is 

 to be found in the Report of the Joint Committee on the Economic 

 Report. As you know, this committee, which is lieaded by Senator 

 O'Mahoney, of Wyoming, and Congressman Edward J. Hart, of Xew 

 Jersey, is composed of congressional leaders of both political parties 

 representing both the Senate and the House. After holding several 

 meetings with the Nation's leading economic experts, and after re- 

 ceiving many suggestions from leaders of industry, labor, and agri- 

 cidture, this committee, on March 1, 1949, issued a report on their 

 findings. The following two paragraphs are included in their analysis 

 of governmental farm policy: 



In order to fit a prosperous and equitably treated agriculture consistently into 

 an economy seeking to operate continuously at maximum levels, agricultural 

 price .supports must be kept as floor prices ; not as a means of price fixing, nor 

 to guarantee a profit, but to provide a barrier against iiie sort of devastating price 

 declines which in the past have made agricultural depression the forerunner of 

 business and industrial depression. The real question is not whether farmers 



91215 — 49 — ser. r, pt. 3 6 



