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Some concern has been expressed that high-moisture grain is not marketable. This is not true. It is a marketable product. It has been estimated that almost 10 million bushels of high-moisture grain were sold in 1972 as a commercial grain. Most of this came from smaller elevators and even from farmers who sold to neighbors.

The fact that high-moisture grain is a more nutritious feed means that the farmer can lower his cost of production through its use. In fact, a current article in the Progressive Farmer has the headline, "Water Can Replace DES." As you know, it has been estimated that the removal of diethylstilbestrol from feed ingredients is bound to increase the farmer's cost of producing beef which could reflect itself in the marketplace. High-moisture grain can help replace some of that efficiency, if not all of it. I would like to emphasize to this committee that this can have a real impact on the price that the consumer pays for meat and dairy products.

Why should the Government participate in loaning money for onthe-farm grain storage? Many farmers, and especially livestock farmers, often use the limit of their regular loan sources in their normal operating costs. They have cattle to buy, large amounts of fertilizer to apply, seed to be purchased, farm equipment to be maintained, and a multitude of other requirements for available capital.

Furthermore, in many instances, conventional sources of capital are more reluctant to loan on facilities that they feel are more semipermanent in nature with such characteristics as concrete bases and foundations. A tractor is easy to move, cattle and hogs are sold at regular cycles and the dairy farmer is usually paid monthly. Capital is more restrictive for shorter term loans on grain storage facilities. Further, these loans are of genuine public benefit. It is important that we maintain a sufficient inventory of this feed grain to produce the meat and milk necessary to supply our own domestic needs. A fall and winter such as the one we are now in can jeopardize the source of these feed grains.

Let us not be misled by the cost of such a program. I cannot conceive where there would be an actual cost to this grain storage facility loan program. If the Government accounting system is such that the cost of this program is charged to one department or function and the credit on the repayment goes to another, I can see where the one department might consider this as a cost. But, actually, from a taxpayer's viewpoint, and from a realistic viewpoint, it really is not a cost-it is not a subsidy, it is a loan.

At the present time, the Department of Agriculture is requiring 6 percent simple interest on these loans. I would presume that at worst this should be a breakeven operation for the Government. If it is not, then I would believe that the interest rate should be increased slightly so that it would not be a cost. Please remember, that these loans are all repaid and at the present time at 6-percent interest. To categorize this as a cost would be like a bank assuming that all the money they loan is a cost.

These are but a few of the points which I would like to make to encourage you to introduce and pass legislation to expand the on-thefarm grain storage facility loan program. Permit me to summarize. 1. Corn, milo, barley, and other grains are primarily feed grains.

According to the USDA, almost one-half of the corn that is grown is fed on the farm where it is grown.

2. It is to the public interest and welfare to maintain an adequate backlog of these feed grains on the farms where they are produced. 3. There is a definite trend to high-moisture grain in the type of facility that limits outside atmosphere.

4. Storing grain as high moisture means that energy can be conserved, as drying is not necessary. It also means that transportation of energy is likewise not required, which would help in the solution of the current rail car shortage. Transportation of grain can be held to a minimum. I should further point out that if something can be done immediately and before warm weather sets in, a considerable amount of the grain still remaining in the field could be salvaged and used, and it would not be necessary to have abnormal amounts of energy to dry it.

5. High-moisture grain is a marketable product. Each year, increasing amounts are sold by elevators and farmers.

6. High-moisture grain can help stabilize meat prices because it is more efficient as a feed source.

7. Corn, which is normally in surplus, can produce beef which is in short supply, to the mutual advantage of the farmers and the housewife.

I want to again thank the members of the Senate Agriculture Committee for the opportunity to make this presentation to you. This is an unusual program in that it doesn't necessarily require any cost on the part of the Government and the value of this program can be extremely significant in many areas of our economy.

Therefore, I urgently recommend that you initiate legislation at once to expand the on-the-farm grain storage facility loan program and to take the necessary action to help salvage the millions of bushels of grain that are still in the field so that it can be kept in highmoisture condition without a major drag on our energy or transportation sources.

Thank you, Mr. Chairman.

(The attachments to Mr. Fonda's statement are as follows:)

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HIGH MOISTURE GRAIN HELPS IN THE FARM LABOR CRISIS.

MOST GRAIN IS FED--ALL HIGH MOISTURE GRAIN IS FED.

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