1232 GENERAL FARM PROGRAM 



Mr. HoLMAN. That is very true, sir, but we would have been in a 

 terrible position without having it. 



Mr. Murray. Would you not be in a terrible position today if we 

 did not have a support program? 



Mr. HoLMAN. We certainly would. 



Mr. Murray. Milk in my State has gone down 33 K percent, some 

 of it 50 percent. Where would we be if we did not have a part of a 

 support program? 



Mr. HoLMAN. We would be in a very bad position. By and la-rge 

 there are certain times of the year, almost every year, when we need a 

 support program. 



Now, I will skip very briefly over our experience with subsidies 

 during the war period. As I understand, there are four witnesses to 

 follow me this morning. 



We had plenty of experience with subsidies during that period and 

 most of it was rather ghastly, so far as the dairy farmers were con- 

 cerned. It began at a time when everybody had no objection to 

 46K-cent butter and arbitrarily the price was rolled down 5 cents and 

 a supplementary addition was made to the price which certain handlers 

 of the product had on the theory that they would pass that on to the 

 producers. 



As time went on it became more and more necessary for the Gov- 

 ernment, if it was going to hold the prices of such products as butter 

 down, to abnormally and unnaturally low levels, to supplement the 

 income or they could not obtain the necessary increases in production 

 for war purposes. As a result of that, the subsidies began to be paid 

 through the county seat organizations and got up as high as 17 cents 

 a pound on butter fat in addition to this 5 cents I have already 

 mentioned. 



Then it got as high as from 60 to 90 cents per hundred pounds of 

 fluid milk. During the entire war period, unless I am in error, the 

 Government paid out about $1,200,000,000 through the producers' 

 subsidy system. At the time when decontrol was put into effect we 

 had the abnormal situation of some of these products being depressed 

 to points below what they should be under normal conditions with 

 the public thinking that that was the natural price of the products. 



Then when the decontrol went off — and we asked for it to go off — 

 there came the rather shocking economic experience to the consumers 

 of seeing butter jump up 15 to 25 cents a pound and finally it got up 

 to around normal heights before it settled down. 



Mr. Murray. Will the gentleman yield right there? 



Was that not partly accountable to the fact that the price of the 

 byproduct, the dried skim milk, went all to pieces and down to 9 

 cents a pound? 



Mr. HoLMAN. I think the largest reason for it was the fact that the 

 Government's policy had driven butter out of production to a great 

 degree. We had to face the fact that we were producing about 

 600,000,000 pounds less of butter at that time than we would have 

 under normal conditions. It has taken us right up until this year to 

 make any real gain toward normal production. 



Mr. Murray. The butter plus the dried skim milk was fixed during 

 the war at $2.67 a hundred, so they both yielded about $2.67 a hun- 

 dred. Then after the war the price of the powder went down. 

 Naturally that would affect the price of butter, would it not? 



