GENERAL FARM PROGRAM 475 



ture up by any appreciable amount. We could get rid of our surpluses 

 and still have farm prices and farm incomes way below the cost of 

 production. If that is what he meant, that certainly would not inean 

 anything. 



I would like to haA'e you clarify that, Mr. Kline, as to just what you 

 meant. 



Mr. Kline. Your statement is quite correct. That is what I meant 

 by the 1)5 percent. Also important is the price it moves at and the 

 terms of exchange for agriculture in the economy. The point I made 

 is simply that there is a relatively fine balance on the use of livestock 

 products, on the demand for high quality" foods in America. It has 

 been a continuously narrow balance but a relatively narrow imbalance 

 is disastrous to agriculture. 



On the other hand, we could be in a depression and have a rela- 

 tively fair balance with otlier groups and all be in a very bad way. 

 The corn-hog ratio was not too bad in 1932, but the hog farmer was 

 not doing very well. He was doing very badh". 



Mr. PoAGE. I think that in trying to reconcile the effort to mini- 

 mize the necessity of doing anything on the one hand and on the 

 other side trying to magnify it as far as possible. We probably will 

 not get anywhere in a discussion of that nature. 



I do want to get down to one thing on which I need some assistance. 

 As I understand, you said here that "we," meaning the Farm Bureau, 

 "are convinced that the level of price supports should be tied to farm 

 supplies and that farm prices should be used in helping to guide farm 

 production." As I understand it, farm prices can be used in either 

 one of two ways to guide farm production. 



The Brannan proposal, as I understand it, attempts to encourage 

 production in the desired fields by making it profitable to go into those 

 desired fields. The Aiken bill, as I understand it. uses the same 

 technique to direct farm production but it proposes to lower the ])rice 

 so low on those connnodities that are not desired that it will force 

 producers out of them. Do vou agree with me on that philosophy of 

 the two bills, that that is their philosophy, or do you feel that I am 

 mistaken ? 



Mr. Kline. It is not inconsistent with it, but it is stated in a way 

 that is inconsistent with our thinking on it. "\Alien you say that prices 

 are to guide production, relative prices do have a very material effect 

 on the production of various agricultural commodities. It starts first 

 with the use of land. l^Tiat is wheat to be worth and what is corn to 

 be worth? So you plant either wheat or corn. It continues in the 

 use of feed grains. It includes, for instance, wheat and corn because 

 about 200,000,000 bushels of wheat equivalent goes into feed annually. 

 Shall I feed this corn or shall I not ? Then shall I feed it to hogs or 

 shall I feed it to cattle or do I get some more dairy cattle or do I feed 

 some lambs? It is all in the question of what I do with it. Price is a 

 very important factor in determining what ought to be done with the 

 feed. 



We think also that demand is an important and justified factor be- 

 cause we want to try to find out whether the public wants more pork 

 or whether it wants more beef or whether we can sell more high-quality 

 beef or whether we have to produce somewhat lower quality beef for 

 the public and how much we can sell of these various classes. There 

 is another point in it. 



