GENERAL FARM PROGRAINI 1127 



1933 in trying to control production. V)ut there is little evidence that we have 

 learned how to do it. To the extent that we have succeeded, we have reduced 

 farmers' volume and thus have reduced their farm income. We have tended to 

 build up vested interests in acreage quotas and so have prevented young people or 

 new farmers from getting started. As mentioned before in these hearings, the 

 possession of a tobacco-land quota is worth more than the land itself. One can 

 imagine the intolerable situation if this should extend into wheat, cotton, corn, and 

 other controlled crops. 



It is recognized, nevertheless, that the public cannot guarantee income to farm- 

 ers without requiring protection to their side of the bargain. We cannot perpetu- 

 ate the prosperity of large operators who raise huge quantities of unwanted com- 

 modities, for sale to the Government. This is ruinous to the family-type farmer 

 and ultimately will destroy any program. 



So it is not a question of whether we favor the presence or absence of any form 

 of controls. It is a question of whether the controls are good or bad; whether they 

 work well, or they do not; whether thej- shall be governmental or voluntary; direct 

 or indirect; negative or positive. 



The design and ])urpose of controls should be to lead agriculture by gradual 

 steps into a sound production pattern, so that controls and supports may no longer 

 be needed. Indeed, our farm plan may be likened to the European recovery 

 program; it may start with relief, l)ut it should be aimed at recovery. Its purpose 

 should be to make agriculture viable so that it may prosper without supports or 

 controls at the end of a period. 



This leads to the recommendation that aside from emergency measures to cope 

 with severe depressions, a orogram should embrace a well-designed plan directed 

 toward a definite termination date. 



Such a program will differ considerably from the blanket approach of the AAA 

 luider the acreage-allotment plan. This was intended originally to be flexible 

 and adjustable, but it worked out quite the contrary in practice. 



It is desirable that compulsory individual percentage quotas be replaced, as far 

 as possible, by supplying farmers with full information as to market and produc- 

 tion outlooks. 



With some commodities, it nrobably will be necessary in the beginning to apply 

 more definite and direct forms of production control, such as the "individual farm 

 plans" suggested bv Dr. John D. Black; or countv planning programs as begun 

 in 1938 under Howard R. Tolley and the B. A. E'. 



Dr. Black also suggests that production adjustments be encouraged by basing 

 a payment plan (somewhat similar to production or insurance payments) upon 

 total annual quotas for each supported farm product. The support system would 

 then cover only this volume of production, expressed as a fraction of the total 

 production plus any carry-over above normal. This is an example of the positive 

 type of control which amounts to a bargain between the public and the producer, 

 in contrast to the negative type which says, "Thou shalt not plant, etc." 



And, finally, it must be remembered that the degree of governmental controls 

 inevitably must varv in direct proportion to the level of supports and the cost of 

 the program. This will be the price that producers must pay for whatever they 

 get from the public. 



CONCLUSION 



To take an extreme case, it is clear that if unlimited acreage is put into grains 

 and row crops they can easih' bury the markets. Surpluses can be eliminated by 

 production-consumption adjustments provided our economy is prosperous enough 

 to absorb the resulting output of livestock and livestock products. 



We agree that the Brannan program is intended to encourage such desirable 

 shifts in production. It also attempts to bring price relationships up to date. 

 We think it needs careful anal\'sis for there is evidence that the mathematics of 

 the formula may turn up some surprising and contradictory results. 



It appears, for example, that the support prices of storable commodities may 

 be frozen at about the present high levels for several years, no matter what happens 

 to the rest of the economy. This is accentuated by the fact that production pay- 

 ments are added to the '"cash receipts from farm marketings." 



The support prices of perishables, supported by production payments, would 

 gradually go down, because their free market price would affect the 10-year 

 average price in column (4) of exhibit B (Brannan statement of April 7). This 

 would disturb feeding ratios and so require separate treatment. Farmers in the 

 Corn Belt would tend to sell their corn at the supported price, rather than feed 

 hogs at a big loss and hope for production payments to reimburse them, after a 

 long wait. 



