640 GENERAL FARM PROGRAM 



For example, we have been maintaining flax at $6 in order to get 

 some increased production. Flax gets the benefit of that. An un- 

 supported commodity, we will say wheat, that was taken at the world 

 market, would have a parity price much lower than that of flax. 



Mr. Kaseberg. Do we export flax? 



Mr. Pace. Not that I know of, but that has nothing to do with 

 this new parity formula. 



Mr. White. We have not exported flax in recent years. 



Mr. Pace. It is nothing but the actual respective market prices 

 and it was admitted in the hearings that if a commodity was out of 

 position, on the low side, and that thing starts working, it will run it 

 on down through the floor, and if a commodity is out of position on the 

 high side, the operation of that formula would push the parity price 

 through the ceiling. Why anybody wants that, I do not understand. 



Mr. CooLEY. Mr. Pace, I came in late. Do I understand that these 

 gentlemen are satisfied with the provisions of the law which will go 

 into effect in 1950, unless we take some action here? 



Mr. Pace. No, they have not said that. They have said that they 

 would be willing to accept the support price on wheat at 100 percent 

 of the new parity. 



Mr. White. In fact, they expressed dissatisfaction with the Aiken 

 law to take eft'ect in 1950. 



Mr. CooLEY. What do you mean by 100 percent of the new parity? 



Mr. Kaseberg. You misunderstood me, I believe. I said we will 

 be willmg to accept 90 percent of the new parit}^. That would guaran- 

 tee us cost of production. We do not want our profits guaranteed, 

 but we would like our cost of production guaranteed. 



Mr. Cooley. Do you mean 90 percent of parity on uncontrolled 

 and unlimited production? 



Mr. Kaseberg. No. 



Mr. Pace. They have proposed a domestic allotment plan in effect, 

 however. 



Mr. Kaseberg. We are talking about two things. 



Mr. Pace. They propose a support price on 500,000,000 bushels 

 approximately, which is the consumption in the United States for 

 food, and the balance of it would move at the world market price. 

 It is comparable to the domestic allotment plan for cotton. 



Is there anythmg else, gentlemen? 



Mr. White. May I make one more suggestion? I can conceive 

 of a situation in which the world price on wheat might be below the 

 domestic price on bailey and feed grains. Would that not complicate 

 your situation? 



Mr. Kaseberg. That is possible. 



Mr. Hope. Would that not equalize itself? You would shift to 

 barley if it would bring more than the world price of wheat. That 

 would be a desirable thing, would it not? 



Mr. White. Yes, it would be desii-able, but that would not work 

 out on a long-time basis where you had a big production of wheat on 

 hand if you could not sell it in the domestic market. 



Mr. Hope. Of course, in aU probability if wheat got down to where 

 it was below barley, you would feed wheat loretty extensively. If the 

 world price of wheat got down that low, I imagine there would be a 

 great deal of wheat fed in this country instead of being exported. 



