GENERAL FARM PROGRAM 1209 



9. This percentage would then be multipHed by the price received 

 per pound to determine the payment per pound and then multiphed 

 by the number of pounds to get the total payment due the producer. 



10. Upon the announcement by the Secretary of Agriculture that 

 support was due the producer, producers holding the certified bills 

 of sale would present them as claims to the Government. Processing 

 of claims would begin immediately upon presentation of certificates 

 of sale by producers. 



For example; assume that the support price is 55 cents per grease 

 pound and the average price received, according to the Bureau of 

 Agricultural Economics, for the year in question is 50 cents per 

 pound. The percentage difference is 10 percent. Again, assume 

 producer A received 60 cents per grease pound. His payment would 

 be 60 cents times 10 percent or 6 cents per pound. 



Producer B receives 50 cents per pound. He is exactly on the 

 average. His payment would be 5 cents per pound (50 cents times 

 10 percent). Producer C receives 30 cents per pound. He is below 

 the average. His payment would be 3 cents. 



This percentage calculation is most important because it encourages 

 improved production and marketing; it encoiu-ages the producer to 

 get the highest price possible for his clip of wool; and it permits 

 support on the basis of the clean wool content and all wool in the 

 United States as well as throughout the world is bought and sold 

 and all duties are collected on the basis of its clean value and not on 

 the amount of grease, dirt, and vegetable matter in the wool. This 

 type of percentage calculation would cost the Government the same 

 as a straight across-the-board payment which does not have the 

 advantage of encouraging production. 



From the standpoint of our Government such an experiment with 

 wool would seem to us to be desirable because wool is an import 

 commodity for which the price is determined in this country by the 

 world market price for wool plus the existing tariff" duty. This pro- 

 gram would work equally well for mohair. 



We have pointed out the production-payment program: 



1.. Lends stability to the producer and to the market because the 

 producer, knows and the market is aware at the beginning of the 

 year what price level in general can be expected for wool and there- 

 fore the uncertainty in the mind of the producer is to a large degree 

 overcome. The producer may sell his wool at any time during the 

 calendar year. 



2. The program makes wool available to the highest bidder at all 

 times and is taken into business channels in the normal way and 

 utilized, thereby avoiding the creation of a stock pile to hang over 

 and depress the market at a later date and the true value of the wool 

 is arrived at by the deal or trade made between the producer and 

 the merchant. We believe it is the general consensus of opinion that 

 grease wool should not be stock-piled for strategic purposes, but 

 should be manufactured into fabric and clothing because of the time 

 required to convert wool into cloth. 



We also foresee other advantages in such a program: 



3. The program is automatic. There would be no necessity to 

 come to Washington and plead for a program after disaster has struck 

 the producer. 



4. It makes support available to the producers at the time when 

 price disaster strikes and when it is needed. 



