688 GENERAL FARM PROGRAM 



not been tried and we would confine ourselves to specific recommenda- 

 tions that we I'elt should be put into the law in order to set up its 

 operation and that after trial we would be in a position to come before 

 the committee again and make specific recommendations for changes 

 after some experience with the present farm law. 



Mr. Hope. Under the 1948 act, title II, that is to become effective 

 on January 1, 1950, the price-support level at which wheat would be 

 supported would be based primarily upon a formula which, in the 

 main, depends upon supply, and, with the present prospect? for a 

 wheat crop, the supply of wheat in 1950 -will probably be such that the 

 price-support level under the formula would go down to 60 percent, 

 or 72 percent if marketing quotas and acreage allotments were in 

 effect, and the Department is talking about an acreage allotment 

 basis which would amount to about a 20-percent cut, so that the 

 wheat farmer who took the average cut of 20 percent 



Mr. Pace. Twenty-six percent. 



Mr. Hope. Of course, I do not think that has been determined alto- 

 gether, but say it was 26 percent. You heard Mr. Wooley sav a while 

 ago that figures out to a cut of 81,000,000 down to 63,00*^0,000 to 

 65,000,000. So, just for easy figuring, let us say there was a 25- 

 percent reduction in acreage and a reduction in price level, assuming 

 the Secretary followed the formula and did not fix the support-price 

 level higher than the formula, as could well be, although he could go 

 up to the 90-percent figure. But, assuming he followed the formula, 

 which would mean the farmers would have 25 percent less acreage and, 

 on the average, that would mean 25 percent less production, we will 

 say, and they would have a price support of 72 percent of the transi- 

 tional period, which would be 5 percent less than the old parity, 

 amounting to about 68 percent of the old parity, you would have 25 

 percent less acres and a support price which was 68 percent of old 

 parity instead of 90 percent of old parity this year. Was there a dis- 

 position on the part of those present to accept that program for 1950? 



Mr. Hughes. I believe there was. They felt they owed to the tax- 

 payers, shall I say, who make it possible for the money to be appro- 

 priated to support this price — that they owed to the taxpayers and 

 to the Federal Government some assurance that they were going to be 

 able to keep the supply in line with the demand. Also, they considered 

 this additional 20-percent premium would be available on acreage 

 allotments without market quotas and possibly, it was our hope, we 

 would be allowed to operate for at least a year under acreage allot- 

 ments without market quotas, to see if we could accomplish that fact 

 without market quotas. If we could, then, of course, the Secretary, 

 before he announced his rate of support, would have the privilege of 

 setting that possibly above 72 percent of parity. We felt we would 

 rather prove our capacities before he would have to make that an- 

 nouncement, and we would rather it would not be mandatory. 



Mr. Hope. Do you think it would be any more or any less difficult 

 to get the reduction if you had price supports at 68 percent of the old 

 parity or at 90 percent of the old parity? 



Mr. Hughes. It might have a little influence. I hesitate to say 

 definitely on that, since we did not discuss that particular angle. 

 My personal opinion would be it would not make too much difference. 

 I could be wrong on that. 



