in 1947, it was over $17 billion. That is not a great deal of program compared with the increased cost of living and increased wages and increased corporate profits during that period, is it?

Mr. CARPENTER. Mr. Chairman, you are exactly right. In fact, it is not an increase.

I don't know what plans the Senate expects to take on REAP. We would hope it is either that you initiate legislation here that will require the administration to reinstate the REAP program or hopefully, if the bill comes over from the House where it is moving quite well you act on the House bill.

The CHAIRMAN. It has already been approved by the House committee and my information from Chairman Poage is they hope to act on it in the House possibly tomorrow and several of us have an identical bill on the REAP program in this committee.

You think the President would obey the second enactment of Congress if he didn't obey the first one?

Mr. CARPENTER. Mr. Chairman, I have a little question about that. I saw the first ray of hope this morning. I got cast in a rather unkind light by a member of the committee when I said after Secretary Campbell testified that I saw the first glimmer of interest that I thought the administration had shown in Agriculture's welfare and perhaps that they will take some interest in the United States again.

As I get over here a little farther into the emergency loan program, believe it or not Secretary Campbell appeared in favor of Congressman Alexander's emergency loan program.

The CHAIRMAN. They filed a letter with me as chairman of this committee recommending that specific bill. We have a bill before our committee now. It is in Senator McGovern's subcommittee. I am hopeful we can act on that in executive session Wednesday of this week, which is our regular committee meeting today.

I have great hope that we can get some of this loan program that will be agreed to by the President and implemented by the executive branch. I know that there are hundreds and hundreds of counties throughout the Nation that are extremists for disaster loans, including 53 counties in any one State.

Mr. CARPENTER. Mr. Chairman, if this program is not reinstated in the Midwest we are going to have a number of farmers today that cannot be farmers tomorrow because they have got to have money to operate on. It takes a huge amount of money, as you well know, to operate today.

I have talked to farmers who personally have told me that unless they come up with this type of credit they can't stay in the farming business next year.

Then I have talked to bankers, country bankers. This one will surprise you a little bit. Those fellows keep pretty well wised up on what is going on in Government. They say there is no way that they can meet this emergency need. But the other one that sort of took me back was the fact that they note the recent actions on the part of the current administration to take positive action in the best interests of agriculture, and should that be the case the bankers are not going to be able to handle all of the hazards that prevail in agriculture. I don't mean that to be partisan. I was called on the carpet this morning for being partisan. If it is partisan it will be such, because that is exactly

the words the banker told me on the telephone. So I think the only one thing I would like to suggest, I don't know that I go along with the idea, because one fellow got something another one should: Also, I understand in some States it is real sticky where the 5,000 off the top some people have gotten and some people that need it still haven't got it. Our States is still asking to get authorization. So we are not affected with that. The only one thing I think needs to be changed is indeed a disaster loan

The CHAIRMAN. I am not enamoured with that forgiveness feature. Mr. CARPENTER. The President himself sent up a request here for Hurricane Agnes and for the Grand Rapids, S. Dak. area where there would be a $5,000 forgiveness for Small Business loans. We in this committee didn't want to be less generous to rural people than the President himself had requested for urban areas, but when we considered that legislation we wrote it in the alternative with the trigger device being whatever Banking and Currency provides for Small Business Administration loans.

The Banking and Currency Committee gave the President just exactly what he asked. We on this committee followed the same course. I would be perfectly agreeable to repealing that part of it. In fact, I never thought it was wise in the original instance. We only went along because the President himself requested it.

Mr. CARPENTER. I don't think it is wise either, Mr. Chairman, but I agree with you and I want to commend you very highly. There is no reason why a business that is wiped out is a more serious disaster than a farm that is wiped out. It is one and the same thing.

I would like to suggest that you take a good hard look at that up to 6 percent interest that is in Congressman Alexander's bill. It seems to me it still wouldn't hurt anything if we had a little subsidization on interest. We put quite a little subsidization on interest in a goodly number of spots outside of the United States.

The CHAIRMAN. It is also a source of complete amazement to me why we would request programs for foreign citizens and do for foreign cities things we are unwilling to do for Americans. If I propose on the floor of the Senate, programs for Georgia that we have done all over the world in the foreign aid programs I would be laughed off the floor of the Senate.

Mr. CARPENTER. You are so right.

The CHAIRMAN. Any other comments?

Mr. CARPENTER. I think not other than I want to make mention of REA. Here again there are some of them that can pay it, although, Mr. Chairman, I never did understand the rural area development program to be a program as you promoted it, as you wrote it, to encompass the financing of REA

The CHAIRMAN. Never had such intentions-if we had such intentions we would have repealed the REA Act.

Mr. CARPENTER. It was never mentioned. I don't think this is the place for REA financing.

The CHAIRMAN. It was never mentioned in the bill nor the testimony of any witness before the committee nor any speech made on the floor of either body of Congress.

Mr. CARPENTER. And I thought here again, and I don't want to be partisan, but my hair stood on end about as much as when I read where

the President said that 80 percent of the money is going now for country clubs and dilettante. I had to look that one up, I had never heard that before. I know a little bit about what that is. I know Butz says he really didn't mean that. I will tell you one thing, there wasn't any farmer who read that and liked it. That is for sure.

We have REA in our State, particularly in the Ozark area, that are sparsely population areas, and, Mr. Chairman, I am fearful if 5 percent money replaces 2 percent money many of these REA cooperatives are going to encounter some difficulty in continuing to serve their patrons and members.

Now, as you well know, the proprietary big power corporation stand around every corner-and are ready to try to make deals with these people to get a chance to buy them out. It is real odd to me, because I lived back in the day when we were within a mile of a power company line and they had no interest in hooking us up. But today they have an interest in acquiring these under this circumstance. They may be successful unless we have the continuation of a reasonable interest rate for REA to service its customers. Sure they are reaching a lot of people now, Mr. Chairman, but they are putting out a lot of electricity. They have to update their lines, they have to replace their poles, they have to update their transformers, and it is going to take money.

The CHAIRMAN. I am well aware of that. I have no objection to amending that law, putting in restraints on the ability of the individual REA cooperative to pay. That is exactly what we did in the rural telephone bank bill.

Mr. CARPENTER. Right.

The CHAIRMAN. And I think that is what ought to be done. I don't think the President can repeal an act of Congress without Congress having any voice whatever in the procedure.

Mr. CARPENTER. Mr. Chairman, let me wind up and say that we are elated to see both Houses of Congress, although I have not been over here in the Senate too much, I have watched both sides of the aisle over in the House of Representatives, and they both seem to be interested in restoring the prerogative that Congress has, we think, in making some of these determinations of priorities. This is a matter of priority. And how agriculture falls clear to the bottom we haven't been able to understand. We don't think we should continue in that category.

(The prepared statement of Mr. Carpenter is as follows:)

Mr. CARPENTER. Mr. Chairman and members of the committee, my name is L. C. "Clell" Carpenter, vice president of Midcontinent Farmers Association with headquarters in Columbia, Mo. I am appearing here today in behalf of approximately 156,000 members in Missouri, Arkansas, Oklahoma, Kansas, Nebraska, Iowa, Illinois, and other adjacent States.

Mr. Chairman, your news release of Wednesday, January 2, on the subject we are discussing here today was the most thorough and complete of any one article that I have seen. Your opening statement expresses our opinion and position quite well when you state as follows:

I want to express deep concern for a number of recent Administrative actions taken in programs for farmers and the millions of others who live in the American countryside which I believe will reduce the opportunities and income of these citizens substantially.

We in the Midwest are affected by all of the cutbacks that you have mentioned including cotton and tobacco. Other actions by President Nixon on agricultural matters since the date of your news release has made the outlook even more bleak and dismal for farmers in the future.

For the sake of brevity, I will deal specifically on three of the most urgently needed programs which for all practical purposes have been abolished by administrative order. The USDA announcements a few weeks ago that FHA emergency loans would no longer be available to hard-pressed farmers, that REAP would not continue and that REA would not have any 2-percent moneys for rural electric cooperatives was a shock to farmers and their urban neighbors.

I would like to comment briefly on each of these programs. Each has a long record of proved performance.

Mr. Chairman, I would like to make a few rather brief remarks regarding the restoration of the Farmers Home Administration emergency loans. I have recently talked to a number of farmers who are depending upon the restoration of this loan program. If nothing is done, it is doubtful they will be able to continue in the farming business in 1973. Within the last few days, I have also talked with a number of "country bankers". They tell me that there is no way they can meet the demand for emergency loans from farmers in their area. This is caused by two basic factors:

(1) We in the Midwest have encountered the most adverse harvesting conditions during the fall and winter that we have ever had. Many crops are still in the field and may or may not be harvested. These same adverse weather conditions have required livestock producers to use much more feed than in ordinary years thereby incurring much higher operating costs. They have utilized funds that normally would be used for planting this years' crops.

(2) These bankers tell me that it appears the present administration is no longer interested in the welfare of farmers. With all the impoundment of funds that has been announced, plus the virtual elimination of the production management program, farmers loan repayment ability will be greatly reduced. If there is another adverse crop year, chaos will exist.

To be specific, at the time of the cutbacks of emergency funds, 15 counties in southwest Missouri which had just experienced a devastating ice storm in mid-December had requested, or were in the process of requesting, designation as emergency areas. Another disaster area in the state is the seven to ten counties known as southeast Missouri. They were in the process of making application for disaster designation. due to their total inability to harvest much of their cotton and soybean crops.

How many dollars would be needed to meet these needs is open. speculation. Even with a good crop and harvest year in fiscal 1971 and 1972 over $5 million was loaned to farmers in Missouri through the emergency loan program. If this program were available today, this amount would be a mere "drop in the bucket" to meet the needs of the agricultural emergency conditions that prevail.

We are also concerned with the abrupt and arbitrary decision to discontinue REAP. This program, formerly known as ACP, is the oldest continuous program of the Department of Agriculture. It has

been extremely popular with farmers and the Congress. It has contributed and continues to contribute to the improvement and maintenance of the Nation's soil and water resources far more than it costs. Since this worthwhile program was initiated in 1936, farmers have built terraces, dikes, and diversion structures in accord with the program's standards to protect more than 4.4 million acres of farmland from excessive runoff. They have constructed nearly 2.2 million dams for water supply and erosion control. They have, in recent years, established annually from 9 to 15 million acres of vegetative cover for the control of erosion, soil protection, and improvement.

The worth of these practices, implemented under the encouragement and with the assistance of REAP, is immeasurable. The effect has been to greatly reduce loss of topsoil, slow stream and river flow following excessive rainfall-thus reducing the threat of flood and controlling sedimentation in river channels. These practices have improved soil fertility. They provide cover for wildlife. They have resulted in additional forest planting.

In the early days of this program more than 4 million farmers each year carried out one or more conservation practices authorized under ACP. This number has in recent years, however, been sharply reduced. This is due to a combination of facts: fewer farmers, fewer dollars allocated the program, rising cost of earthwork, seed and fertilizer, and land preparation.

However, the program practices continue to be popular with farmers. In the last 5 years, 114,400 farmers in Missouri have participated at least once in the program. And there are only 137,000 farms in the State

now.

The farmer members of MFA have consistently urged full funding of this desirable conservation program. Four (Iowa, Missouri, Illinois, and Kansas) of the top five States in dollars spent for cost-sharing practices are in the midcontinent area where MFA is most active.

REAP is not just some giveaway program to pay farmers for something they ought to be doing themselves. It is a practical and economical way for the Nation to share with the farmers the cost of protecting these irreplaceable natural resources.

Mr. Chairman, as you know, this is a program where costs are shared. Many apparently do not realize that the amount of money paid by the program is only a part of the total cost of the practice considerably less than half, in fact. And, furthermore, cost sharing by the program is authorized only when the practice meets the specific quality standards set up by USDA.

At a time when the people of this country are so concerned about the quality of their environment, it is hard to believe that the administration would attempt to discontinue such a practical, effective, and proven soil and water conservation program. Surely, anyone who studies the facts can see the national benefit of it. And a visit to the farmlands of the Nation yields visible proof of its impact. The record is there clear farm ponds and lakes, terraces, grass cover, new forest plots.

Our farmland today is in the best shape it has ever been. Fertility is higher; soil loss is less, the threat of flooding is diminished. Much of this is to the credit of these conservation practices carried out under the auspices of this program this bill seeks to reinstate.