GENERAL FARM PROGRAM 483 



be ? There is. of course, a forward pricing provision provided in the 

 act at the discretion of the Secretary. 



With regard to thei crops which are covered by the flexible price- 

 support provision, first the grains are set at 72 to 90 percent if there 

 are either acreage allotments or marketing cmotas in effect prior to 

 the planting season. 



Second, the farmer knows that if he is successful in this operation 

 he will have the higher loan. But if the farmers are unsuccessful, 

 then it will encourage the use of the commodity competitive with the 

 other commodities. The farmer can then make the adjustment the 

 following year. 



We believe that amotmt of flexibility is probably going to be easier 

 to live with and in the long run, more in the interest of the producers 

 of the commodity involved than one with less flexibility. 



Mr. Hope. Do you mean he will be better off if he does not know 

 what the price is going to be when he puts his crop in than he would 

 be if he did know what it was going to be, when the price was ex- 

 pected to influence his planning? 



Mr. Kline. He know^s the range of prices. Furthermore, our whole 

 philosophy is that we want to avoid administered prices. 



We are not going to say to a farmer that wheat is going to be so 

 many dollars and cents next fall. We want to say to the farmer that 

 under certain circumstances he may expect the support price of wheat 

 to be in this range. 



Mr. Pace. Will the gentleman yield there ? 



Mr. Hope. Yes. 



Mr. Pace. Mr. Kline, let me contribute this much to the discussion 

 because I am not positive that you have the point Mr. Hope is trying 

 to make. 



To begin with, under the Aiken bill, when you submit quotas, the 

 growers have no information as to what the support price is going 

 to be. 



Consequently, they must vote for or against quotas in the dark. 

 The price, as Mr. Hope has said, is not fixed until you begin to har- 

 vest the crop. The first criticism Mr. Hope has of no forward pricing 

 is that you put the farmer to a vote with no information except a 

 scale of from 60 to 90 percent of what his support is going to be if 

 he does approve the quotas. 



The second is that if the philosophy of the Aiken bill and your 

 statement are to contribute toward the control of production or the 

 shift out of surplus commodities by price, how can a farmer shift 

 out of the production of a commodity when the price is fixed at the 

 harvesting time and the crop is already planted and matured. 



Is that right? 



Mr. Hope. Yes, that is right. 



Mr. Kline. First, with regard to the last question the aim is going 

 to be on the basis of the best possible figures to balance the produc- 

 tion of that year with normal supply. 



Second, the farmer does know when he votes on this quota that if 

 it is in effect he is going to get 72 to 90 percent of parity. 



He has in the bill the provision that if he votes it down the loan 

 is going to be 50 percent. 



91215 — 49 — ser. r, pt. 3 9 



