Moreover, the Eisenhower Farm Bureau soil bank proposal was designed almost exclusively to enable Commodity Credit Corporation to dispose of the stocks owned by it on the domestic commercial market. The small conservation reserve provided for in the proposal would not have lifted the prices received by farmers for nonbasic commodities above the already deplorably low support loan levels to which they have been progressively dropped over the past 3 years. First, the Eisenhower soil-bank proposal would not have improved farm income; and, secondly, it was designed and is still justified as a device to cut annual production of basics below annual market takings at support level so that existing Commodity Credit Corporation stocks could be reduced. WEAKNESS OF EXISTING LAW In addition to specific detailed weaknesses of existing production and marketing adjustment laws that are discussed in separate memorandums, several major weaknesses should be listed here. These are: 1. Except for the small conservation reserve of the soil bank, only a small select list of the basic commodities-wheat, cotton, sugar, corn, milk. peanuts, tobacco, rice, and a few fruits and vegetables-are eligible to use the devices: 2. Too little attention is paid to protecting the income base of small family farmers; 3. They are rendered cumbersome by inapplicable or unworkable gadgetry; and 4. The $450 million appropriation authorized for the small conservation reserve is grossly inadequate to the job assigned to it. BIBLIOGRAPHY 1. James G. Patton, address before National Farm Institute, Des Moines, Iowa, February 16, 1957. 2. Farmers Union statement to House Agriculture Committee, January 8, 1957, recommending needed improvements in conservation and acreage reserves. 3. Agricultural Adjustment Act of 1938, as amended. 4. Agricultural Act of 1956. 5. Eisenhower's 1956 message on agriculture. 6. Willard Cochrane, the Case for Controlled Production. 7. James G. Patton's January 1956 statement to the Senate Committee on Agriculture and Forestry. 8. Agricultural Marketing Act of 1936. 9. Legislative Analysis Memorandum No. 56-20, Voluntary Conservation Acreage Reserve, and supplements No. 1 and No. 2. 10. Legislative Analysis Memorandum No. 56-21, Marketing Quotas and Acreage Allotments, and supplements No. 1 and No. 2. 11. Legislative Analysis Memorandum No. 56-23, Marketing Premium Payments, and supplements No. 1 and No. 2. 12. Address before University of Wisconsin Farm and Home Week, Madison, Wis., February 5, 1957, by John Kenneth Galbraith, professor of agricul tural economics, Harvard University. TABLE I-Parity price ratio and increasing farm efficiency and productivity, 1946-55 TABLE II.—Sliding scale has not reduced farm production (when support levels were reduced, production increased, except where marketing quotas were put into effect) 1 Marketing quotas in operation in 1955 but not in 1952. 2 Acreage allotments in operation in 1955 but not in 1952. Source: Crop Production, 1955, published by Agricultural Marketing Service, U. S. Department of Agriculture. MARCH 15, 1957. RECENT LEGISLATIVE DEVELOPMENTS VOLUNTARY NATIONAL ALL-COMMODITY FARM MARKET GOAL AND CONSERVATION Legislative Analysis Memorandum No. 56–20 (For background information see Legislative Analysis Memorandum No. 56-20, revision 4; and for more recent legislative and economic developments see section 7 of Legislative Looseleaf Handbook) There has been considerable discussion of needed changes and improvements in the conservation and acreage reserves of the Soil Bank Act of 1957. The only two active legislative moves to bring about improvement are: (1) Those made in connection with the 1957 corn bill; and (2) The deferred grazing reserve for the drought area. The former was defeated by the House of Representatives. The latter passed the House and is pending in the Senate Agriculture Committee. BENSON'S RECOMMENDATIONS No change in existing legislation and strongly urged that Congress refrain from requiring him to make any changes in the 1957 acreage and conservation plans and regulations already issued by him. LEGISLATIVE DEVELOPMENTS ON LONG-RANGE IMPROVEMENTS As part of a comprehensive proposed Agricultural Act of 1957 (H. R. 6024), Congressman Lee Metcalf, of Montana, has proposed a national all-commodity farm marketing goal and conservation acreage reserve program as a substitute for subtitle A acreage reserve of the Soil Bank Act of 1956. The Metcalf proposal provides for the establishment of a national all-commodity farm marketing goal and conservation acreage reserve program. On November 15 of each year the Secretary of Agriculture acting upon the advice and recommendations of a Federal Farm Income Stabilization Board would be required to proclaim a national all-commodity farm marketing goal and a national conservation acreage reserve. The former would represent the total volume of all farm commodities at parity income prices that could be sold if the economy did not develop more than a 3 percent level of unemploy ment. From this estimate the Secretary would determine the number of acres of farmland expected to be required to produce the goal volume of commodities. He would substract this acreage needed for commercial production from the total number of acres available for such purpose including hay, pasture, and grazing land. The remainder he would proclaim as the national conservation acreage reserve. The all-commodity marketing goal and conservation acreage reserve would be apportioned by the Stabilization Board to States, counties, and farm families in accordance with standards set forth in the act. The family farmer would be able to rent his reserve to the Department of Agriculture for equivalent of net income plus land taxes and overhead costs and costs of land treatments needed to place the land in optimum conservation condition of that year. Each family would be issued an all-commodity farm marketing goal certificate specifying the volume, expressed in parity-income equivalent prices, of sales to which it was entitled in the year ahead. Each time the family wanted to sell something it would go to county farmer committee and obtain free of charge (within) goal certificates of sale. If the family wished to make sales in excess of its farm marketing goal it could purchase overgoal certificates of sale by payment of a farm income stabilization fee equal to 75 percent of the parityincome equivalent price for such excess. The Secretary of Agriculture would be directed to confiscate any farm commodity found in the ownership of any person, or firm, other than the original producer, if the owner did not have an equal number of goal certificates of sale accounting for the full volume of commodities found to be in his possession. SHORT-RANGE IMPROVEMENTS On January 8, 1957, Farmers Union recommended the following specific changes in the conservation and acreage reserves legislation and United States Department of Agriculture regulations for 1957. FARMERS UNION RECOMMENDATIONS 1. Any farm crop where the supply tends seriously to outrun demand at fair prices to farmers should be made eligible for participation in the acreage reserve. 2. Requirements for conservational treatment and preservation of reserved land should be applied to acreage reserve as well as conservation reserve. 3. Payments per acre under the acreage reserve should be raised to a more realistic figure that will more surely encourage widespread voluntary participation among farmers. 4. The 1959 expiration date of the acreage reserve legislation should be eliminated and the legislation be established as a permanent feature of our national family farm income improvement program (either as a separate supplement, as now, to the conservation reserve or consolidated with it in the manner originally contemplated by farmers union). 5. National average payment per acre under the conservation reserve should be substantially raised above the current limit of $10 per acre and graduated larger payments be provided for better grades of land so that superior farm land as well as the lower producing land will be attracted into the program. 6. Hay, pasture, and grazing land should be made eligible for participation in the conservation and acreage reserves. 7. Nonfarming land should be strictly excluded from participation in the conservation and acreage reserve programs. 8. Small farms should be made eligible for larger acreage and conservation reserve per acre payments than larger farms to take into account the greater relative cost of reserve participation to small farmers than to large farms. 9. Congress ought to insist upon strictly local enforcement of law protecting tenants from dispossession by landlord who place land into the reserves. 10. Vitally important is the continued preservation of the 105 percent of support level sales price required by existing law governing domestic distribution of Commodity Credit Corporation stocks. Congressional insistence on this last year is primarily responsible for the farm income-lifting effect of the soil bank. In connection with our appearance before House Agriculture Committee in connection with the proposed corn legislation on February 1, 1957, farmers union repeated these recommendations, urged that all farm commodities be treated alike, and suggested the combination of acreage allotment and acreage reserve programs should be applied in accordance with a uniform formula to all crops. Illustrative of this principle, the following table was inserted into the record: Illustration of how all crops can be treated fairly in acreage reserve-acreage allotment programs The same principle shown for the proposal under cotton, wheat and commercial corn would be applied to corn outside the commercial corn area, to other feed grains and to other crops for which there is a market supply greater than will sell for income parity equivalent prices. DEVELOPMENTS ON CAPITOL HILL ON SHORT RANGE IMPROVEMENTS Several Senate bills have been introduced to establish a base acreage for cotton in the neighborhood of 22 to 23 million acres, cuts below which would be eligible to obtain acreage reserve payments. Mainly, action on changes in the conservation and acreage reserves have taken place on the House side, mostly in connection with consideration of proposed commercial corn price support and acreage allotment legislation. The House Committee on Agriculture held several days of hearings in early January to hear witnesses, including farmers union and Secretary Benson, on the general subject of "needed improvements in the soil bank". These hearings were adjourned without further legislative action. House Agriculture Committee also held brief hearings and reported favorably a bill to establish a little conservation acreage reserve for privately owned grazing lands in drought-stricken areas by means of a deferred-grazing program to extend for 3 years after it starts raining. Bill was granted a rule and it was debated on the House floor on February 6, 1957. Bill passed by vote of 270 to 109. Several bills have been introduced in the House of Representatives to make changes in the conservation or acreage reserves or both: Enactment of H. R. 883 (Polk) would combine conservation and acreage reserves and raise the per acre payment. Jennings, Albert, Johnson (Wisconsin), McGovern, Watkins and Dixon (Utah), have introduced bills to add pasture and grazing land to conservation or acreage reserve or both. Several bills have been introduced to make eligible for acreage reserve payments cuts in cotton and tobacco land value to operation of quotas. On March 13, 1957 the House of Representatives defeated a bill recommended by its Committee on Agriculture to put into effect an acreage reserve program for corn and other feed grains substantially along the lines shown in the illustrative table placed in the record by farmers union at the February 1 hearing. Bill was defeated by teller vote. POSITIONS OF OTHER GROUPS AFBF recommended to House Agriculture Committee at early January hearings that Benson's 1957 soil bank plans be given an opportunity to operate for a full year as now set up before any changes are made in the legislation. AFBF recommended that cut in corn acreage in commercial corn area below 51 million acres be made eligible for acreage reserve payments. National Grange recommended improvements in the program very largely along lines recommended by farmers union. LEGISLATIVE ANALYSIS MEMORANDUM No. 56-20 (Revision 5, March 14, 1957) NATIONAL FARM MARKETING GOAL AND CONSERVATION ACREAGE RESERVE PROGRAM ESSENTIAL SEGMENT OF LONG-RANGE FARM PROGRAM The 84th Congress enacted legislation directing establishment of conservation and acreage reserves as 2 parts of a $1.2 billion per year soil-bank program. National Farmers Union continues to urge enactment of improving amendments in the Soil Bank Act to transform it into a more workable and effective voluntary national farm marketing goal and conservation acreage reserve program. Current legislative and economic developments concerning this subject can be found in supplements Nos. 1 and 2 to this memorandum and in sections 1 and 7 of the legislative handbook. NEEDED IMPROVEMENTS The conservation and acreage reserve legislation as enacted last year in the Soil Bank Act does not coincide entirely with our original recommendations made by farmers union nor does it provide the comprehensive all-commodity market supply adjustment program needed by the Nation. Farmers union recommended adoption of a comprehensive combined conservation acreage reserve, not the wheezing two-valve model now in existence. We still feel that a comprehensive consolidated program rather than the existing 2-way operation would be most effective for farmers and more understandable and less costly to the general public. However, we recognize that the division into two parts of the conservation acreage reserve is now established under existing law as an operating program. The acreage reserve, while it provides relatively adequate supply adjustment. applies to only the 6 basic commodities and 1 of them, peanuts, has been omitted by the Department. So for 1957 the acreage reserve is available to only 5 out of nearly 300 crops, and almost completely disregards conservation values. The conservation reserve, while it covers all crops except grazing land, and includes conservation values, does not adequately provide for supply-adjustment for any crop. While these programs provide incentive rental and conservation payments on the land diverted from commercial production, the legislation does not provide for an affirmative and workable program of marketing sharing for the land used for commercial production. Moreover, administration operating regulations and practices used in 1956 under the legislation have not come up to our expectations. Farmers Union views concerning improvements needed in the existing law and program were presented to the House Agriculture Committee on January 8, 1957. Our suggestions for major improvements needed in the existing conservation and acreage reserves are as follows: 1. Any farm crop where the supply tends seriously to outrun demand at fair prices to farmers should be made eligible for participation in the acreage reserve. Under current conditions this would aid many crops in addition to the six basics now covered. There is a great need to inaugurate acreage allotments for and extend acreage reserve eligibility with full adequate per acre payments to (a) corn outside the so-called commercial area; (b) to the other feed grains-grain sorghum, barley, oats, and rye; and (c) to soybeans, flaxseed, and similar crops. All research reports of the United States Department of Agriculture and the land-grant colleges on the statistical analysis of corn prices clearly indicate that the so-called corn problem cannot be adequately solved for corn producers nor fairly to other farmers by treating with corn in the commercial area in splendid isolation. We suggest that Congress seriously consider legislation directing the inauguration of a 1957 acreage reserve program for peanuts. 2. Requirements for conservational treatment and preservation of reserved land should be applied to acreage reserve as well as conservation reserve. Farm |