maybe acreage controls would work with some crops, but probably the unit control would work more effectively.

What do you think about using units instead of acres, I mean bushels, pounds, and bales?

Mr. BURWASH. From my own standpoint I could not go along with it, and I will tell you our own experience with the situation in the Corn Belt.

If we wanted to go along with the program we were allotted a number of acres. These were based on history.

I happen to have been one who had his toes stepped on under this program. We have a pretty general rotation. Corn is our profit

crop.

They had me down to less than 25 percent of my acreage in corn because I had been one who followed a rotation recommended by some of the State universities, and so forth, as opposed to some of my neighbors, and we are in a cash grain area, who had as high as 100 percent of their land in corn.

Now then, when the acreage allotments came out, my allotment was way down, and men who farmed, farmers who farmed a third of what I farmed, had the privilege of raising more corn than I had.

Now then, that is what happens. This creates dissatisfaction among farmers when you get into a situation like this.

Now then, as far as bushelage control is concerned, if that were implemented in our area, it would create again great dissatisfaction, and an administrative problem there that I believe would almost be unsalable because you would have farmers fighting each other and biting each others backs because we take pride in our ability to produce, in our land and fertility program, and so forth, and so on, and when a group of men sit up here and tell me that I can produce only 10,000 bushels of corn, and a farmer who farms next door to me, across the fence, he can produce 12,000, and I am convinced in my own mind. that that farmer never raised 12,000 bushels of corn all the time I have known him, and this occurs, and it occurred in the soil bank when they started determining payments per acre, and that sort of thing, great dissatisfaction arose because of the values placed upon the productive capacity of the farms.

Mr. POAGE. Well, doesn't that all simply go to the honesty and efficiency of the determination of what you have actually produced in the past? It raises the equity of a program based upon history. I have never believed that a program based entirely upon history was entirely sound. Would that not be the situation, whether your limitation is on acreage, or whether it is on bushels?

Mr. BURWASH. I think you would run into the same trouble either on acreage or on bushels.

Mr. POAGE. I think so, too. That is why I am asking. Certainly with bushels we have a more effective control, that is all I am trying to say.

Mr. BURWASH. Yes, that would be very effective; I am with you on that; yes.

Mr. POAGE. And if we put the control based on bushels I realize the same defects, the same errors would creep into it that would creep into the present program.

Mr. BURWASH. That is right.

Mr. POAGE. If you are given an unfair history

Mr. BURWASH. That is right.

Mr. POAGE (continuing). It is going to be unfair whether it is in acres or in bushels.

Mr. BURWASH. And a farmer is going to lie if his economic situation is in jeopardy-he is apt to the pressures are there.

Mr. POAGE. Well, to hasten on, that brings me to just exactly one of the questions I think we ought to discuss.

You have suggested, as many others have, and I know in all good faith, that we could, by balancing production and demand, in effect, give us the price which would be a "fair price," whatever we think that might be. Certainly it would be a much better price than we are getting today.

I want to call your attention to the impossibility of making that work for cotton, which is ofttimes our greatest cash crop in the United States.

As was pointed out this morning, and Mr. Shuman well pointed out, if you put the price of cotton too high in the United States, why, your consumer is going to buy rayon and not cotton, and the mills are going to run first one rayon thread out of eight, and then four rayon threads out of eight in cloth that sells as cotton.

So you simply cannot put the price too high on the domestic market and sell in competition with

Mr. BURWASH. The foreign market.

Mr. POAGE (continuing). And compete with synthetics.

Wouldn't your remedy be here if applied to cotton to be simply to drive us out of the cotton business?

Mr. BURWASH. Well, now, then, you get into another situation here. We do not have the answer because we are not cotton men, and I just got an education from a cotton man here.

Mr. POAGE. I realize that, but I am merely trying to present it to you. The program that will work for one commodity may not work with another.

Mr. BURWASH. Now, would you be in a better position as a cotton man if all the existing surpluses were frozen?

Mr. POAGE. My own view is-and I am only speaking for myself—I do not think practically or politically that this Nation can continue a farm program based on freezing the surpluses.

The President told us within the last 2 months that next year the storage of the surpluses would cost us $1 billion a year. I do not think this Congress is going to continue to put up $1 billion a year to carry the surpluses; and, consequently, I cannot believe that we can seriously consider a program that involves carrying these surpluses indefinitely because we have to cut down that cost to the tax

payer.

Mr. BURWASH. Well, my answer to that is, if I may interrupt, I think in my ignorance, that the cotton problem can be solved just as the corn would, if I am not mistaken, in that the freezing of this commodity, whatever it happens to be, we have a self-liquidating plan here that is dependent upon how much you are willing to pay the producer of these commodities to take additional land out of production. Now, you gentlemen in Congress can argue until from here to kingdom come on this, and still not hurt the farmer, as much, other than in his capacity as a taxpayer, because if you want to make a high

per acre payment to the producer, you can gather in some of these high-producing acres.

If your payment per acre is low, you can concentrate on the marginal and submarginal areas, and you will not get an acre out of

your

Mr. POAGE. I agree with you, you can do exactly what you are saying in regard to corn. You can balance your supply and demand. But the point I am making is, if you balance supply and demand at a high price on cotton, that you simply do not sell any cotton.

You can reduce the cotton production in the United States to where it should bring 50 cents a pound, but how many pounds are going to sell at 50 cents when rayon is selling at 26?

Mr. BURWASH. Well, in that respect, then, our idea of supply and demand relationship, as I see it, it would increase your supply because nobody is buying it.

Mr. POAGE. It would increase your supply and lower your price. Mr. BURWASH. And lower your price. Therefore, wouldn't you, as a cotton farmer, cut down your acres the following year?

Mr. POAGE. I think you have hit upon the thing which I discussed this morning, which I think is the crux of most of our difference of opinion.

I think this is the great difference of opinion which I have with Mr. Benson, and I do not think Mr. Benson is a man with horns or that he is just

Mr. BURWASH. No, what you are going to get at, because you are going to do the same thing that we in the Corn Belt are arguing about, our seed corn sales are really up this year among our seed companies. That might be of interest to you gentlemen. I think the farmers are anticipating a great, large, tremendous corn acreage this year. This is our cash crop.

Mr. POAGE. Well, I think that wherever you live in a cash crop country, whether it be corn or whether it be wheat or whether it be cotton or whether it be tobacco, and you see your price taken away from you, and you have no control, your answer is, of course, to try to produce more of the commodity in order to make up in volume what you lose in price.

That is true wherever you are producing a cash crop. I realize that you happen to be in a cash corn area, and that a large part of the corn area in the United States is not cash corn, but I think your cash corn area works just the same as the wheat area does, and just the same as the cotton area does.

But there are a great many people who believe that all you have got to do to reduce production of any cash crop is to lower the price. Mr. BURWASH. It does not work that way.

Mr. POAGE. They say that if you lower the price the farmers won't produce so much.

Mr. BURWASH. We might change to another.

Mr. POAGE. In Illinois you certainly do have something to change to. But if you lived in eastern Colorado, what would you change to? You are growing wheat. What do you change to when you stop growing wheat?

Mr. BURWASH. It beats me. Sugar beets, maybe.

Mr. POAGE. Well, you have controls on sugar beets, so you are not going to go to that then; and if you are living in perhaps eastern North Carolina, and you are growing tobacco, what are you going to change to? I mean simply this, whether you have a cash crop and do not have the ability to change it-you are fortunate in having the ability to change to two or three crops-but in most cash crop areas that ability does not exist.

Mr. BURWASH. Well, as we said previously, we are not too familiar with the problems that exist in other parts of the country. The surplus is in the feed grains to a great extent. That is not to eliminate cotton; I realize you have got a problem there.

Mr. POAGE. I will grant you that the feed-grain problem is a basic problem; I grant you it is a more serious problem than the wheat problem. I think the feed-grain problem is more basic to agriculture than any other because it involves our livestock and dairying and poultry, and it involves all of our high-protein programs, as I see it.

I think our feed-grain program comes nearer to being the key to all of the problems of agriculture than any other commodity.

Mr. BURWASH. Perhaps I should point out in our explanation of this program that we would make no payments for the mandatory acres we take out of production.

We do that with the belief, from our discussions with economists at Iowa State, and dare I mention it, and some, even some of those of the Illinois Agriculture School, that with a 1 percent reduction in the supply of a commodity you will get more than a 1 percent increase in price.

Mr. POAGE. I think that is unquestionably true, and I think it is something that has been so generally overlooked in most commodities, where you will get from 2 to 5 percent increase in price for a 1 percent reduction.

So, to my mind it is perfectly silly to reduce your price in an effort to bring down production. You ought to reduce production and bring your price up.

Mr. BURWASH. That is the way we feel about it.

Mr. POAGE. Because it does not take nearly as much a reduction in production as it does in price to achieve the balance.

Mr. BURWASH. This is based on the inelasticity of demand for agricultural products.

Mr. POAGE. I think you are exactly right on that.

Now, let me ask you how much land you propose to require the farmer to put in reserve without compensation, that is, to reduce his acres without compensation. Again I call your attention to the bill that was under discussion this morning, the bill which a great many of us have introduced. It requires a 10-percent reduction, without compensation; and then it allows an additional 30 percent if the farmer wants to

Mr. BURWASH. If the farmer wants it.

Mr. POAGE (continuing). And provides payment in kind.
Mr. BURWASH. Is your program optional or mandatory?

Mr. POAGE. Technically, it is optional. But if a man is going to get the benefits of a price support program, he has to participate in the program. There is no fine on him. He is not going to the penitenti

ary if he does not participate, but he simply will get the world price, and I do not think there are many farmers who are going to want to operate on that low price.

Mr. BURWASH. Oddly enough, when we were studying this we came up with an optional program similar to this with a limit of 25 percent on the amount of tillable acres that he could take out of production, with no payment, such as you are proposing here.

However, we got stomped on by the powers that be because they call it an incentive payment plan and, well, I am not familiar with how much at this time, how much we thought it would cost. I think it ran around $2 billion, 25 percent payments to the farmers per year, but that was prohibitive in their estimation, so we tried to come up with the other plan.

In other words, you are going to get cooperation-I agree with you, you either are going to have to buy it and get them in, or you are going to have to force them to come in, and have everybody be treated alike and receive the same benefits.

Mr. POAGE. Do you find the same objection to a direct or incentive payment that a great many others do?

Now, let me say to you that I am a member of the Farm Bureau, and have been ever since it was organized in the State of Texas, and I am still a member, and I pay my dues. I find no objection to the direct payment program.

Mr. BURWASH. We got into this discussion, and developed, in my mind, into a question of semantics, more than anything else. And I still feel that our original program had much merit, and I do not have the objection to what they discuss, or what they knocked us down for.

Mr. POAGE. I think you can pretty well understand that many of us feel that that kind of a program would enable us to solve what I think is a rather unique problem with cotton, by allowing a reasonably fair return and, at the same time, letting the cotton move on to the world market and move it into domestic consumption in competition with

rayon.

Mr. BURWASH. I see what you are after.

Mr. POAGE. And we do not see how else we are going to do it.

It is true that we presently have a subsidy on cotton which is costing the taxpayers $40 for every bale that is sold abroad. But it only goes to foreign mills. It enables foreign mills to buy their cotton cheaper than American mills by $40 a bale, which is right substantial. That is 8 cents a pound.

Now, do you see any difference in the morality, or see where it is thoroughly moral to subsidize the price of cotton goods in Japan or in Spain and refuse to do it in the United States?

Mr. BURWASH. None.

Mr. POAGE. I am taking too long, and I am very much obliged to you for this interesting discussion. You have given us a very interesting discussion, and I appreciate it, but some of the other members may have questions.

Mr. HOEVEN. Does your proposal apply to all surplus stocks held by the Commodity Credit Corporation?