492 GENERAL FARM PROGRAM 



under the flexible schedule, without the 20 percent supplemental 

 support. 



Is that right ? 



Mr. Kline. Yes, sir. 



Mr. Pace. I have two questions on that. One is, do you think 

 acreage allotments, independent of quotas, really offer any control 

 on production? 



Mr. Kline. We think that they would, yes, because of the flexibility 

 in the price-support program and because of the certainty on the 

 part of the producers that unless they did get in and make the 

 acreage allotment effective they would get the lower level of sup- 

 ports rather than the higher one. 



Mr. Pace. Would they? That is the point I am making. Let's 

 take a hypothetical case and say that under the formula corn would 

 be at 75 percent of parity. Then if quotas were in effect it would 

 be at 90 percent of parity. 



Mr. Kline. That is right. 



Mr. Pace. And your proposal is, notwithstanding the adverse re- 

 sult of a referendum, that corn would be supported at 75 percent on 

 acreage allotments ? 



Mr. Kline. That is right. 



Mr. Pace. Assuming that you would have 95 percent cooperation,^ 

 that 95 percent of the producers stayed within their allotments, the 

 truth about the matter is that the other 5 percent would get about 

 74 percent of parity support. 



Mr. Kline. We do not propose any loan or support provisions for 

 the noncooperator. 



Mr. Pace. I understand that, but if 75 percent of parity is $1 per 

 bushel, those noncooperators would be able to sell their corn at about 

 98 cents a bushel, would they not? 



Mr. Kline. The history of the last few months would suggest that 

 they would not. We had a support price which varied from $1.39 to 

 $1.42 in the corn belt. There was a vast amount of corn that moved 

 at 70 to 90 cents a bushel. 



Mr. Pace. When was that ? 



Mr. Kline. All the way from the first of December through the 

 first of March. 



Mr. Pace. You mean this year ? 



Mr. EIline. Yes, sir. 



Mr. Pace. There is where you had an enormous production. 



The point I am making is that notwithstanding the fact that there 

 would be no direct support benefit to the noncooperator. he would 

 benefit from the support program up to a point, that if I had corn 

 that went to the mill and the support price was $1 and you were de- 

 manding $1 for your corn and I offered the man corn at 95 cents, he 

 would probably buy, would he not ? 



Mr. Kline. I should think so. 



Mr. Pace. Therefore it seems to me that it will to that extent 

 reward the noncooperator and that when you have that type of pro- 

 gram you are doing the very thing that you and I do not want to do. 



You make it beneficial to noncooperators. I have the feeling that 

 if the Government is going to give us support prices that we should 

 be willing to play ball to a reasonable extent with the Government 

 m return for the protection we receive. 



