690 GENERAL FARM PROGRAM 



at a liigli rate, it might be pretty profitable business for him to dis- 

 regard the acreage allotment and just go ahead and plant wheat. 



Mr. Hope. Of course, you are speaking of acreage allotments with- 

 out any market quotas. 



Mr. Hughes. That is right. 



Mr. Hope. But would not he have less incentive in a time like this — 

 I am not saying this would apply over the years — at a time like this 

 might there not be a pretty strong sentiment on the part of a good 

 man}^ farmers to say, "We just cannot take this cut and also take a 

 cut in our support price"? And, if they knew there were just going 

 to be acreage allotments and not marketing quotas, it seems to me 

 there might well be a disposition to ignore them even more than there 

 would be in the case when the price support was 90 percent. 



I think we have both made our ideas perfectly clear on it, and we 

 do not agree; so I do not think there is anything to be gained by 

 discussing it further. But I did want to get your idea on that 

 particular point. 



Mr. Andresen. Just on that point, I have before me the figures on 

 what the 90 percent parity would be. Under the current parity, that 

 would be $1.95 a bushel; under the 72 percent parity, it would be 

 $1.48 a bushel, and under the new law that goes into effect next year. 

 1 think you are right in your conclusion that, if they only have acreage 

 allotments, the tendency would be, without market quotas, to go 

 ahead and everybody receiving the soil-conservation payments, which 

 would be the only penalty, to raise more wheat with a higher support 

 price of $1.95 as against $1.48. 



Mr. Sutton. Then you are defeating your own purpose, because 

 next year, instead of a 20-percent cut, you are going to cut him down 

 to a 60-percent cut. 



Mr. Andresen. That is true; but in the meantime you will have 

 tried out the act and Congress will have an opportunity to pass on it. 



Mr. Sutton. Then we definitely will repeal the act. 



Mr. Andresen. I do not know. I think it all depends on what the 

 situation is. on the amount of our exports and peace in the world and 

 our ability to collect taxes to send stuff out of the country. 



Mr. Pace. There are one or two questions I want to ask. Let me 

 say, first, my analysis may be incorrect — and you will correct me— 

 but it seems to me under the program you submitted you are definitely 

 tying wheat to a very low support price now and hereafter of 70 per- 

 cent of parity or less. To begin with, you say your national allot- 

 ments (acreage allotments) should be set at a production of 1 10 percent 

 of normal supply, so that would have the effect under the flexible 

 system of bringing your support permanently down to 70 percent, 

 and you would therefore operate, it seems to me, at all times between 

 GO and 70 percent on wheat. It may be that is what the wheat 

 growers want. Is that your analysis of your plan? 



Mr. Hughes. I would not say that. I would say this: That by 

 that 110 percent of a normal supply we felt we should assure the 

 consumer, especially in recognizing our possible commitments under 

 the international wheat agreement, that we should not set our goal 

 too low; that we should try to strike a kind of balance between what 

 we need and then to consider what might happen under adverse 

 weather conditions, with the thought if we could prove that we could 

 control supply so that it would meet demand, the Secretary would 



