;[222 GENERAL FARM PROGRAM 



ment in business. In case the average sale price of all the wool sold in the United 

 States was less than the support price named by the Secretary of Agriculture on 

 January 1 of a given year, the Government would be dealing with every wool 

 grower in the United "States, whereas under a nonrecourse loan program pro- 

 ducers of any class or type of wool commanding a price above the support level 

 would receive no benefit payment and, therefore, no transaction with the govern- 

 ment. 



The production-payment plan would be most difficult to enforce, invite 

 fraud, and payments would not be available to growers for many, many months 

 and, perhaps, years after shearing time for the amount of the production payment 

 due' growers could not be computed until all the wood of a given year had been 

 sold. It has been necessary to carry certain grades or types of wool for which 

 no market was available for indefinite periods awaiting a market. Under such 

 conditions the amount of the production payment could not be determined until 

 a demand developed for the unwanted grades. It is very probable that such a 

 situation would frequently exist as it has since 1943 and the very purpose of a 

 support program and the Value of it to growers would be largely thwarted. 



It is difficult to visualize the Government calculating the amount of production 

 payments to producers using as a basis for computation prices paid to wool 

 growers by wool dealers and speculators which may or may not be full market 

 values, yet the "production-payment" plan as presented by the National Wool 

 Growers Association does just that. A more businesslike method would be to 

 reverse the procedure by making available to wool growers a "nonrecourse" loan 

 at support price levels determined by examination of the wool involved after it has 

 been graded, classified, and placed in merchantable condition by growers or their 

 representatives. 



At the present time there is an abnormal spread between the value of fine wool 

 and the value of mediiun grades. This relation, no doubt, is of a temporary 

 nature. The application of the "production-payment" plan would accentuate 

 the abnormal price relation now existing between grades. It would provide a 

 potent factor that would constantly be applied to growers in an effort to encourage 

 them to dump their clips at shearing time with the expectation that the Govern- 

 ment would make up the spread between the price realized from sale at shearing 

 time and the support price level that had been announced by the Secretary of 

 Agriculture on the preceding January 1. For this reason, it would always be a 

 bearish market factor. 



The operation of the loan program in 1938 and 1939 was an unqualified success. 

 It was so considered by growers and also by the majority of dealers and manufac- 

 turers-: We are informed it was operated at a slight gain to the Government. 

 Based on our past experience, it is our considered opinion that a "nonrecourse 

 loan" program is preferable to cither a "purchase program" or a "production- 

 payment" plan. 



On behalf of our 70,000 producer membership, we respectfully request your 

 careful consideration of our presentation. . 



Mr. Pace. Our next witness will be Mr. Clifford G. Mclntire, 

 assistant general manager, Maine Potato Growers, Inc. 



STATEMENT OF CLIFFORD G. McINTIRE, ASSISTANT GENERAL 

 MANAGER, MAINE POTATO GROWERS, INC., PRESQUE ISLE, 

 MAINE 



Mr. McIntire. My name is Clifford G. Mclntire; I am a potato 

 grower in Aroostook County, Maine, and am assistant general 

 manager of the Maine Potato Growers, Inc., at Presque Isle, Maine. 

 I am also a member of the special legislative committee of the national 

 potato council and am speaking today as a representative of the 

 council. 



(After discussion oft' the record:) 



Mr. Pace. You may proceed, Mr. Mclntire. 



Mr. McJntire. In previous testimony before this committee, on 

 Mav 4, 1949, the national potato council recommended, among other 

 things, that the flexible price-support system, allowing the Secretary 



