896 GENERAL FARM PROGRAM 



The other progi-am has been the estabhshment of stable marketing 

 conditions in fluid-milk markets through the issuance of orders and 

 marketing agreements under the Agricultural Marketing Agreement 

 Act of 1937. This act permits the Secretary of Agriculture to issue 

 orders and marketing agreements in fluid-milk markets which fix the 

 minimum milk prices received by producers and establish the methods 

 of pooling sales. In some 30 milk markets of the United States — and 

 I might say there are several hundred secondary markets which are 

 tributary to these 30 milksheds of the United States^ — including the 

 principal cities of this country with the exception of the west coast 

 cities, these orders have been found to work fah'ly satisfactorily. 

 While these orders do regulate prices producers receive for milk in 

 city markets, they do not regulate the production of milk on the 

 individual farm. Therefore, they do not involve the individual 

 farmer in regimentation. Our people have continuously believed and 

 argued that the Agricultural Marketing Agreement Act offers the 

 basis for the most perfect voluntary cooperation in economic matters 

 between the Government and its citizens. Under the provisions of 

 this act the farmers vote in secret ballot to determine whether they 

 will accept the terms and conditions of an order. They can approve 

 an order, amend an order, or vote it out at anytime. They have, in 

 various sections, done each of these things. 



In our consideration of the general arm legislation now existing, 

 and that which vasij be proposed, we have been acutelv aware of a 

 number of features in the current legislation which, while helpful to 

 producers, do not adequately protect dairy farmers. 



One of these is the current method of computing parity and support 

 levels thereunder as set forth in title I in the Agricultural Act of 1948. 

 Another is the method of computing parity and support levels there- 

 nnder which will take eft'ect under ^itle II of the Agricultural Act of 

 1948 on January 1, 1950. 



As to the index of prices paid by farmers currently in use, in com- 

 puting parity, we believe this index is not adequate. While the 

 index includes prices paid by farmers for commodities bought, includ- 

 ing taxes and interest, it does not include an allowance for farm wage 

 rates. The costs of hired farm labor are a direct cash outlay and are 

 significant. Milk production is not subject to such a high degree 

 of mechanization as the major field crops. Over the years all agri- 

 cultural production has become mechanized to a greater or lesser 

 degree depending upon the commodity, and we expect the extension 

 of mechanization of production to continue. Dairying itself since 

 the 1909-14 base period has witnessed the introduction on a wide- 

 spread basis of the mechanical milker and minor labor-saving devices 

 such as cooling and cleaning equipment, better barn design, and over- 

 head manure disposal units. These, however, do not reduce the 

 labor expended in milk production proportionately as much as huge 

 combines, multibottom gang plows, corn pickers, and so forth, have 

 reduced the labor expended in producing major field crops. 



Dairying thus tends to remain far more of a handicraft industry 

 than the production of major field crops. For this reason, unless 

 account is taken of farm wage rates in computing fair price support 

 levels for dairy commodities, dairy farming will find itself at a steadily 

 increasing disadvantage with other major agricultural activities, 

 particularly the production of field crops. 



