442 GENERAL FARM PROGRAM 



mean that out of 150,000,000,000 pounds, 20.9 billion quarts would be 

 consumed as fluid milk. Costs of distribution would be relatively- 

 stable on a per unit basis. This leaves no place to get the diiference, 

 except from the taxpayer (20,930,232,550 quarts, at 6 cents a quart 

 would be 6 times 20,930,232,550 in cents, or $1,255,813,953) . It is 

 rather obvious, I think, that the wholesaler could not buy this milk 

 from the farmer without money, and the thesis is that the consumer 

 is not goino- to pay it. The proposal is that the Government pay it. 



Now. we have made a careful analysis of the cost involved. First, 

 the price of milk is going to have to be higher to the farmer. We 

 have assumed that the rise in production can be secured with a modest 

 increase in price. We have taken the Secretary's own assumption in 

 the decrease of the price of milk to the consumer from that volume 

 of production. From these assumptions the cost of this program 

 would be $2,480,000,000. 



Any reasonable calculation requires a set of assumptions. I submit 

 to this committee that this is the most realistic set of assumptions 

 that they have yet seen on this subject. Furthermore. I would re- 

 mind them that this applies to only one product. It applies, as a 

 matter of fact, to only one part of one product. We got the milk 

 produced and we distributed the fluid milk but the supply of all other 

 products would be likewise increased, the price would go down, and 

 the people who handled them would also have to have some place to 

 get the money to buy the milk. 



We have not paid all the cost involved on that commodity. We 

 have paid the cost of producing 150,000,000,000 pounds of milk and 

 distributed the 30 percent of it which is used as fluid milk only. 



(b) The problem of estimating the cost of this proposal is made 

 more difficult by our not knowing exactly what is being proposed. As 

 yet, no bill including the recommendations contained in this pro- 

 posal has been presented. Furthermore, evidently the proposal 

 changes from time to time. For example, when the proposal was 

 first made to the Congress, a figure of $19 per hundredweight was used 

 as the income support standard price for hogs. In a prepared state- 

 ment to this committee on Monday, April 25 on the estimated cost 

 of this new proposal, the Secretary used $16.50 as the support price 

 of hogs. A drop of $2.50 per hundredweight in the price of hogs 

 during a 3-week period is rather serious. It makes a difference of 

 $525,000,000. 



7. The income of American farmers should not be made dependent 

 upon annual appropriations from the Federal Treasury. No eco- 

 nomic group in this country would be willing to stake its future wel- 

 fare on such a precarious possibility. Farmers will not abandon 

 a sound program, developed out of experience, to chase after an "eco- 

 nomic mirage." 



That is all of the formal statement, Mr. Chairman. 



Mr. Pace. Mr. Simpson. 



Mr. Simpson. Mr. Chairman, I would like permission to insert this 

 telegram I received this morning in the record. 



We concur in the American Farm Bureau Federation position on farm pro- 

 gram to he presented to Agricultural Committee 10 a. m. Thursday. I hope you 

 are ahle to be present when testimony is presented. 



It is signed by Charles B. Shuman, president, Illinois Agricultural 

 Association. 



