1160 GENERAL FARM PROGRAM 



Without marketing quotas I would think the indination of the 

 farmer would be to increase his production because he will be getting 

 what would be considered a rather attractive price. He would in- 

 crease his production and there would be an outlet for it, we will 

 assume, because no matter how low the price got somebody would 

 consume it. Would there not be a tendency for the price to go down 

 further and further and the cost of production to become greater and 

 greater and the necessity for restriction of production to bring the 

 price up would become stronger and stronger? I would like to have 

 you comment on that situation. 



Secretary Brannan. Mr. Hope, if we are to assume that the pro- 

 duction of any commodity can run so far beyond the reasonable 

 consumptive capacities of the people, thinking of perishable com- 

 modities, that the production-payment plan would become higlily 

 expensive, then I think we would have to say that the production- 

 payment plan would become highly expensive in the course of 3 or 

 4 years from now. 



But it seems to me that when the supply of the given commodity 

 in the market place has flown out to the genuine demand at reasonable 

 prices for that commodity in the market place, the producers thereof 

 ought to consider some type of limitations upon their marketings or 

 their production, just as you now do for tobacco and peanuts and as 

 you have authorized us to get ready to ask the producers of cotton, 

 corn and what to do. As a matter of fact, when you speak of corn 

 the relationship of the marketed hogs is very close to corn. 



If we have marketing quotas or acreage limitations in corn it would 

 have the effect of preventing the oversupplying of the market to the 

 place where you would distress prices and cost the Government a lot. 

 I think theoretically it is entirely possible that you could produce 

 enough hogs in 2 or 3 years that it would depress the prices greatly. 



But I think when that time comes, just as it can come in some 

 other commodities, then farmers have got to take a look at their 

 own situation and do what is appropriate to be done about it. 



Mr. Hope. Then it logically follows that there would have to be 

 in the background some provision for controlling the marketing of 

 hogs or any other perishable commodity that might be involved in a 

 program of that kind. 



Secretary Brannan. Mr. Hope, I think that is right. May I also 

 say that under the purchase program the farmer gets the same dollar 

 for his production and therefore the impetus to go and produce in- 

 definitely is there just as strongly under the purchase program which 

 is now authorized as it would be the other way. The potential losses 

 to the Government are just as big under the purchase program as 

 they would be under the payment program. 



What causes the farmer to produce under either program is the net 

 return to him. Therefore it seems to me he would be just as attracted 

 to produce for $16.50, if that were the support level, if he got half 

 of it from the market place and half from the Government, as if he 

 got it all from either one of those two sources. 



You are confronted with that problem either way. It is one that 

 in my opinion is one of the fortunate problems with which the Amer- 

 ican economy is faced. When we think of most of the countries of 

 this world having a deficit production problem all the time, we are 



