GENERAL FARM PROGRAM 955 



Mr. Pace. Then how much, under the payment plan, would the 

 Treasury have had to pay out? 



Mr. Wescott. I would estimate less than half of what they did 

 pay out when they fmished the 1948 production. 



Mr. Pace. Do you agree with that, Mr. Case? 



Mr. Case. No. Past history has shown there is a very definite 

 level of potato consumption. It is kno^\^l to economists as an inelastic 

 demand. A lower price from the high support level, I grant, would 

 increase the consumption some, but you definitely reach a place 

 where a lower price does not increase consumption, as we have plenty 

 of past years to prove. You can reach a level in a free market where 

 potatoes bring nothing — that has happened in the past and could 

 happen again — and a proposal for compensatory payments or sub- 

 sidies on a crop like potatoes, if you have a limited surplus to handle, 

 but it has to be quite limited, will increase consumption some. Now, 

 by payments on beefsteak, you can easily expand the consumption 

 of T-bone steaks if you cut the price in half. You can do it in the 

 Case family. And you can expand the consumption of some of the 

 commodities, but there are definitely those commodities known as 

 inelastic demand commodities, of which cereals is one and potatoes 

 is another, where you camiot increase consumption. You reach a 

 level where reducing the price would not increase consumption. 



Mr. Pace. AYhat would be the payment cost? 



Mr. Case. Our payment cost last year would have beeu at least $1 

 a bushel, and we have had years with far less production when we 

 could not sell potatoes at 35 cents a bushel. 



Mr. Pace. Wliat would that be $440,000,000? 



Mr. Case. $443,000,000, I believe. 



Mr. Pace. You estimate the cost at over $400,000,000. Does 

 anybodv here have an idea that the United States Treasury has 

 $400,000,000 to put in one commodity? 



Mr. Cooley. Nobody has suggested that. 



Mr. Pace. That is what the^'' ask for. 



Mr. Cooley. No; they are not asking for that at all. If I under- 

 stand it, you are askmg for a program that will enable the potato 

 growers of this countr}^ to proceed to reduce production. 



Mr. Case. That is right. 

 ^ Air. Wescott. To bring the supply in line with the demand. 



.\lr. Cooley. To bring the supply in line with the demand; is that 

 right? 



Mr. Wescott. Yes, sir. 



Mr. Cooley. .-\nd you are willing to take as low as a 60-percent 

 support program? 



Mr. Wescott. Yes, sir. 



Mr. Cooley. Under certain circumstances? 



Mr. Wescott. Yes, sir. 



Mr. Hill. .\nd then they have already made the statement that 

 all they wish is the dift'erence between 60-percent parity and the 

 market price, which would change the whole pictiu-e entirely and not 

 rtm into anv sum of $400,000,000. 



Mr. Poage. It would be a difference of $135,000,000, the way I 

 figtu'c it. If you assimie that you would have sold those potatoes 

 for half of what yoti did sell them for, that wotdd have been 70 cents 

 a bushel. 



