584 GENERAL FARM PROGRAM 



STATEMENT OF RUSSELL SMITH, LEGISLATIVE SECRETARY, 

 NATIONAL FARMERS UNION 



Mr. Smith. Thank you, Mr. Chairman. 



In view of the ordeal to which the committee has subjected itself for 

 the past few weeks and the present hour, I think I will not attempt to 

 go through this prepared statement. I would like it to appear in the 

 record, but devote myself to a few minutes of general remarks. 



Mr. Pace. Mr. Smith, without objection your statement will be 

 filed with the Clerk for insertion at this point in the record. 



(Statement of Mr. Russell Smith is as follows :) 



Statement of Russell Smith, Legislative Secretaky, National Farmers Union 



Some of the questions before the committee in this hearing are pressing and 

 immediate, and the National Farmers Union realizes that is is necessary with 

 respect to some of these issues to make decisions at the earliest possible moment. 

 At the same time, we are convinced that the series of hearings that has been 

 conducted concerning the necessity for returning to planting and marketing con- 

 trols offers the opportunity for considering broader questions of the most direct 

 concern and most direct importance to the consideration this committee also is 

 giving to revision of price-support programs. We therefore will present to the 

 committee at this time certain views concerning both the immediate and long- 

 time aspects of the matter before you. 



Let us say, in the first place, that no farm leader or agricultural economist 

 seriously questions the necessity for preserving in the law the authority, on ap- 

 proval by the producers concerned, of the Secretary of Agriculture to require 

 adherence to acreage allotments or marketing controls, or both. This statement 

 may be made with respect to any of the general farm programs now in effect 

 or being considered by Congress. Regardless of which of these programs is 

 adopted or continued, or what combinations of them may be adopted, there ap- 

 pears to be every reason for retaining at least stand-by authorizations for such 

 measures in the law. 



The reason that this is true, of course, is that no satisfactory solution has yet 

 been arrived at to the problem of making proper adjustments of production 

 as between agricultural commodities. Obviously, such a means of adjustment 

 is not going to be devised so quickly as to remove the danger that insupportable 

 surpluses of some commodities may not develop. In the case of wheat, the com- 

 modity to which the committee is now giving its attention, the estimate is that 

 the carry-over his year will approximate 300,000,000 bushels. Some of our 

 Farmers Union people are inclined to believe it will be nearer 400,000,000 than 

 300,000,000. The best estimate of the carry-over on July 1, 1950, is somewhere 

 between 450 and 500 million bushels. Both estimates necessarily are contingent 

 on estimated domestic requirements and exports. In the case of the former, 

 it is estimated that this year's domestic needs will be in the neighborhood of 685,- 

 000,000 bushels and that this will increase to 700,000,000 bushels next year, where- 

 as it is expected that the probable 500,000,000-busheI export of this year will 

 decline to 450,000,000 next year. 



The National Farmers Union does not regard such levels of carry-over as in 

 any way dangerous or abnormal. It has been our stated view for some time 

 that the United States should, as a national policy, always carry even greater 

 reserves from year to year of agricultural commodities that can be stored. We 

 believe that the adoption and firm pursuit for a period of years of such a policy 

 would tend to minimize the influence of such a reserve on market prices. In 

 other words, if, say, a 600,000,000-bushel wheat reserve were carried over year 

 in and year out for 10 years, never going much beyond that figure and never 

 going much below that figure, it seems reasonable to suppose that the trade 

 generally would ultimately accept that reserve's existence as a continuing fact — 

 in that event it would no longer fear the unexpected dumping of large quan- 

 tities of wheat on the market. Since this fear is the predominant factor in 

 downward pressure on prices, it seems reasonable to conclude that its failure 

 to develop over a decade would, so to speak, quarantine that reserve from the 

 general price structure. 



