GENERAL FARM PROGRAM 1111 



taken to get the job done? Before giving my recommendations. I 

 would like to briefly set forth our relationship to the balance of the 

 world. 



As I have pointed out, in the United States we have a seven times 

 turn of our gross farm income into national income. This is due 

 to our efficiency under which approximately one farmer produces 

 enough for six other workers. In the balance of the world it takes 

 one agricultural worker to produce enough for himself and one other 

 worker. The rest of the world, therefore, has an income approximately 

 two times its farm production. As a direct result, the 6 percent of 

 the world's population, living in the United States, has 45 percent of 

 the income in terms of dollars. 



Because of this difference in efficiency, on the basis of an hour of 

 work, the cost of living in the United States is about one-half that of 

 England and nbout one-eighth that of Russia. 



In the 20-5^ear period 1929 to 1948, the United States has required 

 approximately 3.1 percent of its national income in imports to supple- 

 ment our own needs. In the war period, 1942 to 1948, when we had 

 automatic tariff protection because of the lack of production in other 

 countries, we imported only about 2 percent of our national income. 

 During that period we had a 90 percent support price for many 

 agricultural products at practically no cost to the Government and 

 in turn to society. They sufl'ered only from the pangs of prosperity. 



The situation, however, has changed and the world is coming back 

 into production. The imports have had a definite effect on our farm 

 price structure. For exam.ple, in the years 1947 and 1948 we per- 

 mitted the importation of approximately 840,000,000 pounds of 

 fats and oils in excess of our exports. 



As a direct result, the price of fats and oils has dropped an average 

 of about 15 cents per pound. On the basis of 10,000,000,000 pounds 

 of fats and oils produced in the United States, this has reduced the 

 income from fats and oils about $1,500,000,000 and m turn was the 

 leading factor in reducing our potential national income over $30,- 

 000,000,000 since last September. 



The low price of lard, which is now selling on a basis of 11-cent hogs, 

 has had a repercussion on the livestock market. The result of it all 

 is that we are now faced with the problem of losing money on peanuts, 

 soybeans, flaxseed, and other items in the support program. Elimina- 

 tion of the net imports, with a tariff or import fee at the parity level, 

 "svould have maintained the fats and oils prices, and in turn the price 

 of other products which were indirectly affected. 



The fallacy of trying to curtail our production to meet this com- 

 petition can be illustrated by tung oil, produced from tung nuts in 

 six of our Southern States. Tung oil is a strategic material for war, 

 and in recent weeks the Communists have taken over the tung oil 

 area in China, our principal source of supply. 



Our domestic industry produces only about 20 percent of our needs. 

 But in spite of this limited production, importations from China have 

 forced the price doA\ai from 38.6 cents per pound under OPA price 

 ceilings to 19 cents per pound. Our producers face bankruptcy and, 

 if they discontinue their production, we will lose this source of strategic 

 material and become dependent on communistic Russia for our supply. 

 An import fee, quotas, or tariff, whatever you wish to call it, would 

 have maintained the price without any cost to the Government or 



