However, it would seem that there are some improvements that can be made within the structure of continued price supports.

The whole idea that fluid milk must be produced near its market is outmoded. Milk is now being hauled several hundred miles and delivered in a fresh and wholesome condition. Fluid milk marketing orders should be amended to permit delivery of fluid and wholesome milk without penalty wherever prices justify the movement.

It is not justifiable to charge the consumer more for dairy products than is necessary. To do so curtails its use and helps to bring about the surpluses with which we are so much concerned. Surpluses at times are bound to occur, but we should avoid them as much as possible and be able to sensibly handle them when they do occur.

The support price for milk has been accomplished by the purchase of only three products, American cheese, butter and nonfat solids. This method of support has the effect of channeling surplus milk in the flush season to a comparatively few plants.

Casein has historically been a product made from skim milk in the flush season of milk production. Casein has not been supported as a product, with the result that our casein business has been lost to importers.

It might be a good idea to try to recover our domestic casein market. Forty or fifty million pounds of casein are imported annually. Since the amount of casein made from 100 pounds of skim milk is approximately 3 pounds, whereas 9 pounds of nonfat dry milk are made from 100 pounds of skim milk, we could replace by manufacturing our casein the manufacture of about 150 million pounds of nonfat dry milk solids. Other products that might be bought on the support program are cheeses other than American types and evaporated milk.

Other ways of avoiding surpluses would be to try to retain the foreign markets which we have developed, particularly on nonfat dry milk solids, and there is virtually an unlimited market abroad for this product.

It would certainly seem justifiable and wise for the Commodity Credit Corporation to reimburse domestic exporters on their exports so that they could maintain these markets. Our loss of these markets has contributed to a very appreciable degree to the accumulation of surpluses in Government hands.

Consideration should also be given to the development of new markets where we desire improved international relations and where our foreign competitors do not now deliver dairy products.

I refer in particular to such populations as India and other similar countries where food is a vital problem. Food might easily be a better instrument for international relations than dollars. Such developments would improve our position both at home and abroad and are important for consideration before we get too excited about lowering prices at home.

It seems inevitable that we must sooner or later return to the idea of flexible supports, for while I believe we must have support prices, it would seem that support prices should be directed more at farm income than simply at price levels.

In large crop years prices could well be lowered but they should be supported. One way that this could be accomplished would be through what has come to be known as a self-help program. Many dairy farmers are interested in such a program.

38490-53-pt. 4- 3

Certainly without Government assistance the dairy farmers are doing what they can to market more products easier and at less expense. However, the term "self-help program," in the thinking of many, includes a two-price program.

If dairy farmers are to engage upon such a program, they must have the help of Government and be assured that certain inequities will not be allowed to exist. For example, such a program could not work unless there were controls on the imports of dairy products. Also, the Secretary, in assisting in the development of a self-help program, must see to it that the inequities in the present milk marketing orders are removed.

There can be little doubt but that these orders have been abused and, if these abuses are not corrected, a self-help program would defeat itself. With the producers' interests clarified, a program might be developed which would be more flexible than the system we now have. The following, in broad outline, contains the important points to be given legislative consideration:

1. Set up a corporation similar to the present Dairy Products Marketing Association for handling all surpluses and collecting all payments if producers are to finance with their own funds the operations of the corporation.

2. Select a representative board from districts, giving consideration to the milk production in each district. It would seem that the Chairman of the Commodity Credit Corporation should be an ex-officio member of the board and be present or represented at every meeting.

3. The board should announce all support prices, using some flexible rule for its determination.

4. The corporation in its first instance should be financed by the Commodity Credit Corporation on a cash advance or guaranteed loan basis.

5. If the operation can be thought to be truly financed over the years by the dairy industry itself, then payments into the corporation fund should be made by the processors who participate in the program. These payments to be made on a flexible basis determined by the board.

We recommend consideration of an expanded self-help program along these lines. Such a program should facilitate the present support-price program. The Secretary would be relieved of the administration problem of determining the level of flexible prices.

The directors and the corporation would have limited objectives to fulfill and would save time, storage, and operating costs. The total cost of caring for the surpluses of dairy products would be reduced by the flexible provisions of the plan.

There is no queston but what the consumers of this country are critical of present methods of operating the support program. If a selfhelp program such as outlined could be made to work it should remove much of this present criticism.

I know that the dairy farmers who make up the membership of the Land O' Lakes creameries and its directors all appreciate the efforts of this committee in trying to find a better solution for the problems of the dairy farmers. We hope and believe you will find one and thank you for your efforts.

The CHAIRMAN. Thank you very much, Mr. Stone.

The next witness is Mr. John L. Olson, president of the Minnesota Livestock Breeders' Association.

STATEMENT OF JOHN L. OLSON, PRESIDENT, MINNESOTA LIVESTOCK BREEDERS' ASSOCIATION, AS PRESENTED BY VERLON WELCH, SECRETARY OF THE MINNESOTA LIVESTOCK BREEDERS' ASSOCIATION

Mr. WELCH. Mr. Chairman, as our president, Mr. Olson, found he could not be here this morning, he asked me to make this statement for him.

Mr. Chairman and members of the committee, I am Verlon Welch, secretary of the Minnesota Livestock Breeders' Association, with a membership of 2,990 registered cattle, hog, and sheep breeders, and commercial swine producers.

Mr. John L. Olson, president, is unable to be present today, and has asked that I file this following simple statement in behalf of the Minnesota Livestock Producers.

It is our belief that the whole support program should be reappraised with an idea of developing more flexibility in the program.

It is a fact that high rigid supports, particularly on feed, are aggravating the problems in agriculture today. We would further state that any program developed should not create more problems than it can solve or that will penalize the efficiency or self-reliance in American agriculture.

We call attention to the fact that any special program formulated now for cattle growers, for example, is favoring one group over another because the livestock feeder a year ago faced the same two-barreled loaded gun-high feed costs and lower prices—as do the western growers this year.

I wish to thank you for the opportunity to make this expression to this group.

The CHAIRMAN. Thank you very much, Mr. Welch.

The next witness is Mr. Alf Larson, representing the Minnesota Association of Soil Conservation Districts. Is Mr. Larson present?" (No response.)

The CHAIRMAN. We will return to Mr. Larson if he shows up at a later time. The next witness is Mr. Clinton Moline, president, and Mr. C. Turnbeck, secretary, of the Minnesota Turkey Growers Association.

9

STATEMENTS OF CLINTON MOLINE, PRESIDENT, AND C. TURNBECK, SECRETARY, OF THE MINNESOTA TURKEY GROWERS ASSOCIATION

Mr. MOLINE. I am the president of the Minnesota Turkey Growers Association and we represent approximately 3,500 turkey growers in Minnesota.

Twenty years ago turkey was a rare and special treat and could be served by only a few fortunate people in the higher-income bracket and usually only on Thanksgiving Day. Today turkey is very abundant and cheap. It not only is priced within the range of everybody's Thanksgiving budget but is used as a year-round, everyday food item.

The development of such an industry is possible only because of our free-enterprise system. This could not have happened in a controlled economy of parity prices and quota production.

The turkey industry has repeatedly gone on record as opposing any farm program which guarantees the producers any profit and re

quires quota production. Such a program causes stagnation of any industry to which it is applied. It tends to favor the large producer who benefits because of his large-volume base and assures his profit at this volume. It discriminates against the small producer and makes it impossible for any newcomer or beginner to establish himself because he has no base or quota.

The Minnesota Turkey Growers Association recommends the following program as most beneficial to the turkey industry:

1. Government support of turkeys only at a price below cost of production. Thus, supply and demand would continue to be the regulator of the size of the turkey crop. Growers would thus continue to strive to reduce production costs resulting in continued expansion of the industry, as well as reducing the prices of our product to the

consumers.

Figures from USDA, August 15, 1953, indicate country turkey prices at 87-percent parity, which is approximately 11 percent above farm-production costs. Thus, Government support of turkey prices should not occur until turkey prices drop below the production-cost figure of 76 percent of parity.

To insure supply-and-demand regulation of crop size, it is generally felt that the figure of 70 percent of parity be recommended as the support figure.

2. We recommend that research on all phases of agriculture be greatly accelerated. Research emphasis should be placed on animal and plant diseases, nutrition and crop production, marketing and the use of agricultural products.

Agriculture in general, as well as the turkey industry, is a very hazardous industry because of production and marketing problems. Greater stability and lowered production in costs can only be permanently attained through research. Lowered production costs with increased production are the only possible means to continued higher standards of living.

Figures offered by Milo Perkins indicate that agriculture spends only one-tenth as much for research as does other industries.

Research should be jointly financed by Government and the agricultural industries. The turkey industry, as well as other industry groups who recognize the importance of additional research, are developing programs to raise revenue within their own groups. Such funds would be used to supplement increased Government appropriations.

3. Increased statistical information on crop size as a method of stabilizing production. The poultry and turkey industry can vary production rapidly and as a result, a short supply and higher prices one year results in expanded production and lower prices the following year. Statistical information bringing production trends to growers would result in more uniform crop size, and growers would reduce their size of operations if statistics indicated the tendency toward expansion, or visa versa.

Statistical information should start with a breeder hens' survey on October 1 preceding production year, and continue with monthly hatchery reports of eggs set and poults hatched starting with February 1 continuing through June.

A detailed schedule of necessary statistical information has already been filed with the Bureau of Agricultural Economics.

The turkey industry wants to thank this committee for the work they are doing. We submit this for your approval.

The CHAIRMAN. Are you appearing also for Mr. Turnbeck?
Mr. MOLINE. Yes, sir. He is the secretary of the association.
The CHAIRMAN. Thank you very much.

The Chair notes Mr. Alf Larson is in the room at the present time and will call on him to present his statement at this time.

STATEMENT OF ALF LARSON, SECRETARY-TREASURER, MINNESOTA ASSOCIATION OF SOIL CONSERVATION DISTRICTS

Mr. LARSON. I am representing the Minnesota Association of Soil Conservation Districts and we met in a special session at the Lowry Hotel, St. Paul, September 30, 1953, and passed a motion to have Alf Larson, secretary-treasurer, present the following statement to the Committee on Agriculture of the House of Representatives at the hearing in Minneapolis on October 12, 1953:

We feel the progress of getting conservation on the land in this Nation is, in large measure, due to the unselfish work of the locally operated and locally controlled soil-conservation districts with the technical help provided by the Soil Conservation Service.

This setup has proven very satisfactory and efficient and we strongly recommend no changes be made in this arrangement.

We heartily endorse the proposals made in the Hope-Andresen bill with regard to upper watershed control.

That is our statement. We tried to make it short. We realize you gentlemen have a lot to go over. I would like to add a little bit to this. Particularly we have been hearing that some changes are to be made as far as the reorganization of the Agriculture Department is concerned, and we understand it is going to affect the Soil Conservation Service with regard to the regional offices. I believe if you are going to dispense with the regional offices you are going to curtail the work that we are doing, particularly now when you have appropriated $5 million for watershed or flood control in the watershed. We are going to need a lot of highly skilled technical help which we have, particularly in our regional offices.

The reason we do have those highly skilled technicians in our regional offices is because at the State level we do not feel we can have sufficient work to keep these men busy because they are considered high-salaried men. In all fairness to the Government which is appropriating the money, we feel if we can use them on a regional level we can keep them busy all the time. We want to encourage and urge that if any changes are to be made that you let this setup as we have it now, as far as the district and the State and the regional and the national level are concerned, and that no changes be made. The CHAIRMAN. We thank you very much, Mr. Larson. The next witness is Mr. Fred Rohe, president of the Twin City Milk Producers Association.

STATEMENT OF FRED M. ROHE, PRESIDENT OF THE TWIN CITY MILK PRODUCERS ASSOCIATION, ST. PAUL, MINN.

Mr. ROHE. Mr. Chairman and gentlemen of the committee, my name is Fred Rohe, president of the Twin City Milk Producers Association, St. Paul, Minn.