GENERAL FARM PROGRAM 1133 



l)y way of saying to you, Mr. Chairman, that I assume that is what 

 was in the minds of the committee in the Senate. 



I would hke to say further to you that the view that production pay- 

 ments or payments of some type was a feasible means of supporting 

 the price of wool has always been favorably commented upon in several 

 of the trade journals of the wool producers' industry and that, there- 

 fore, there seems to be some sentiment among the producers of wool 

 that this was one of the devices which might feasibly work in the wool 

 program. 



Mr. Pace. Mr. Secretary, are you prepared to give us an estimate 

 of what would be the cost of the program on wool in the event produc- 

 tion payments were used? 



Secretary Brannan. Again, Mr. Chau-man, I will say to this com- 

 mittee and to everybody else who asks for these kinds of estimates 

 that, of course, they depend upon the condition of the economy, 

 the activity in the market place for that particular commodity, the 

 availability of supplies of a competitive nature, specifically wool from 

 offshore sources, which are the primary som*ces for the American wool- 

 manufacturing industry, notwithstanding om- own production. 



I did not make an estimate with respect to wool in the supplemental 

 statement I made to you on April 25, so I would like to amplify that 

 ■statement by saying along these lines. 



If we were to assiune (1) that there was an estimated production of 

 around 244,000,000 pounds of wool and (2) that the price-support 

 standard in 1950 would be the estimated price-support standard which 

 we had talked about in our computations — in our suggested projections 

 of the price-support standard on the formula which we recommended 

 to the Congress in my initial statement before the committee — then, 

 Mr. Chairman, for want of a better point of cutting off, we will say 

 (3) that the price of the commodity fell 20 percent below the support 

 level and (4) that as a result thereof we were required to pay the pro- 

 duction payment on each and every pound of wool that was produced 

 during the period of time. 



The cost to the Government would run about in the neighborhood 

 ■of $20,000,000. 



Mr. Pace. What cost, if any, is attributable to the present wool 

 program? 



Secretary Brannan. I will try to give you a figure in just a minute. 

 The present support-price operation for wool has been probably one 

 of the most expensive programs, potatoes being the most expensive. 

 The wool program has been expensive. We have purchased all of the 

 wool under our support-price obligations from time to time. We have 

 stored it; we have classed it; we are engagmg in selling it, and we are 

 engaging in all phases of the wool-marketing operation right up to 

 the manufacturer's door. We have sustained losses through fire. We 

 have sustained losses through deterioration, and we are sustaining 

 losses of all kinds. It has proven an expensive type of operation. 



In 1948, the fiscal year, we wih have lost about $19,000,000. We 

 anticipate about the same level of loss in 1949. 



Mr. Pace. Mr. Secretary, to get the figures in the record, what is 

 the 1950 support price for wool under your proposal? 



Secretary Brannan. It would be 49.8. Ninety percent of present 

 parity is 40 cents. 



