GENERAL FARM PROGRAM 531 



tors could plan ahead with greater assurance, each in their respective 

 fields. We have discussed the make-up of the Board in greater 

 detail in appendix B. And I hope your committee goes into that quite 

 thoroughly, because "we have given it a lot of thought and study, and 

 Ave think such a Board could be provided that could do the job. 



Returning to the question of supports, we belieA'e the Congress 

 will make a serious mistake if it enacts legislation providing exclu- 

 sively for either fixed supports, or for flexible supports. Each has its 

 place in a well-rounded program. Believing wholehearted!}' in an 

 economy of abundance, in most instances particularly in perishables, 

 we prefer a flexible support which would rely in hirge measure upon 

 the level of price supports as a controlling factor in promoting shifts 

 in production from one commodity to another, rather tlian mandatory 

 acreage controls. Potatoes furnish an excellent illustration. An 

 unsound parity formula resulted in a support price which was too 

 high. Then came DDT, and improved fertilizer practices, which 

 materially increased yields, reduced costs, and made potato growing 

 at the support level so unusually profitable that it invited the produc- 

 tion of unwieldy surpluses. It seemed to be a clear case of the support 

 being too high. Obviously such supports could not be continued on 

 unlimited production. Either the supports had to be reduced so that 

 the excess potato production could be directed to other crops, from 

 which at least part of it came, or the acreage had to be cut down. If 

 the supports were too high, we believe they should be changed, rather 

 than limiting acreage with all the complications arising therefrom. 

 Clearly there is need for flexil)le floors. 



We do not believe it practical to apply the same rule for varying 

 support levels to all crops. The effect of supply on the j)rice level varies 

 too greatly. Here again discretion is needed to attain the stability 

 we seek. In the use of flexible floors, we also emphasize the need for 

 reasonable "stop loss'* provisions established at levels low enough 

 not to induce surplus, but high enough to prevent serious loss. Here, 

 too, the level should vary with different crops. 



On the other hand, it is extremely doubtful if flexible floors can be 

 relied on to accomplish needed adjustment in some other commodities. 

 In the present case of wheat, as one example, we find a tremendously 

 expanded production due both to high prices, and the urge of the 

 Government to raise this particular crop for war and postwar pur- 

 poses. In all probability' major acreage readjustments will be neces- 

 sary in the next few years. To hope to accomplish this on a sound 

 and equitable basis through reduction of support prices alone is simplj^ 

 not being realistic. It is inviting bankruptcy for thousands of grow- 

 ers who have made tremendous investments in complying with the 

 Government's request for wheat and more wheat. We should recog- 

 nize that many farmers cannot shift from wheat to other adaptable 

 and profitable crops. We are not attempting to predict how the 

 readjustments can best be made, but we believe that the same Govern- 

 ment which fostered the expansion so vigorously will probably be 

 able to find ways for aiding readjustment which will not leave a trail 

 of bankruptcies in their wake. 



We also feel that export crops are in a somewhat different position 

 from domestic crops. If supply and demand are to be the sole factors 



01215 — 49 — ser. r. pt. :> 12 



