GENERAL FARM PROGRAM 567 



confirmed by the Senate, charged with carrying out certain definite 

 responsibilities, we think we would feel a whole lot easier about the 

 way the devices would be used. 



Mr. Sutton. Just one other question : You made the statement that 

 if you set the support prices too high it would result in an abundance 

 or surplus of agricultural products. Do you not think that a low 

 support price would result in the same thing ? 



Mr. Goss. A low support price ? 



Mr. Sutton. Yes ; a low support price. In other words, suppose it 

 is fixed at 60 percent of parity, do you not think that the farmer is 

 going to ignore it, or perhaps not be as cooperative, and as a result 

 he is going to plant right up to the doorstep to try to bring about a 

 living condition for his family ? 



Mr. Goss. In some crops I think you may be right. Of course, we 

 have to have different approaches and plans, but we have never ap- 

 proved of a flat floor of 60 percent of parity. For many years we have 

 recommended a stop-loss floor below which the price would never be 

 allowed to go. We have stated tliat a stop-loss floor might be 

 60 percent for some crops, or it might be 80 percent on others, so that 

 you would have to have someone use discretion as to when to use the 

 stop-loss floor. 



What I have reference to is this : Thinking of potatoes, I think that 

 everyone admits that the support price for potatoes was too high and 

 we got too many potatoes. 



Mr. Sutton. Of course, you are speaking of an extreme case. 



Mr. Goss. Yes; and that is a case where the flexible floor would 

 have fit better than the fixed floor. If the floor is too high, the thing 

 to do is to lower it. 



Now there are other cases in which the floor can be too high. If 

 we have a parity formula too high on certain commodities, such as we 

 have had in some crops, or too low in others, a fixed floor would be 

 too high or it may be too low. I think the potato parity price was 

 too high. 



But there was an even more powerful reason : We learned how to 

 use DDT, we learned how to use fertilizer better, and we were able 

 to increase the yield tremendously. 



Now let us assume that the parity price had been all right, and that 

 the floor price had been all right as related to parity. With conditions 

 such as they were for potatoes, we could continue to increase yields 

 tremendously. This would result in lower costs and bring about too 

 much production. Eecognizing the possibility of such conditions, 

 somebody ought to be given the authority to make the flexible floor 

 flex at such times; to adjust the support level to where it ought to be. 



Mr. Sutton. Do j'ou think that could be made to apply to 

 agriculture? 



Mr. Goss. All agriculture? 



Mr. Sutton. Yes; the flexibility principle in support price? 



Mr. Goss. No; we should use it when the support level is so high 

 that it results in attracting too much land to the production of any 

 commodity. As I have stated, and as we have set forth in our testi- 

 mony, we doubt if the flexible floor could be used today for wheat, 

 or some other crops under conditions lilve we have now. We do not 

 think it would work in getting the adjustments we need. 



