price of 65 percent of parity on the output of their allotted acres. Under the proposed program noncertificate rice (approximately 65 percent of the crop in excess of the first 1,500 hundredweight produced by each producer) would have virtually no support, and the support level could be reduced to 65 percent of parity on the certificate portion of the crop.

The significance of this broad grant of discretionary authority is illustrated by the following table:

Illustrative range of blend prices for rice (in excess of the 1st 1,500 hundredweight) under the certificate plan

This table simply points out the difficulty of showing that if the domestic portion of the crop was supported at 65 percent of parity, we could have an average blend price of only $3.83, or if the domestic portion was supported at 100 percent of parity, the bin price could be as high as $4.64.

Any additional certificates that might be distributed on the first 1,500 hundredweight produced would, of course, raise the blend prices shown above; however, the point is that the Secretary could set the support price on certificate rice as high as $6.56 per hundredweight, or as low as $4.26 on the basis of the present parity price.

If we go down the certificate road we could wind up with a very low average support level and a stifling maze of bureaucratic controls; whereas, growers logically should be given more freedom to run their own businesses when supports are reduced.

Mr. Freeman has also been quoted as sawing that he has no intention of cutting the national rice allotment. Perhaps not, but he is asking for a change in the allotment formula which would permit a sizable cut now and further cuts in the future as per acre yields in

crease.

The proposal to distribute additional marketing certificates on the first 1,500 hundredweight of each producer's production is an effort to give the program a welfare flavor by increasing average returns to small producers. This is a clumsy and ineffectual approach to the poverty program.

Unlike the producers of some other crops, most rice growers are fairly large operators. Consequently, the largest portion of the extra certificates would go to growers who produce more than 1,500 hundredweight of rice.

Since rice is not necessarily the sole source of a producer's income, the volume of his rice production is not necessarily an accurate measure of his need for a Government handout. Moroever, to the extent that it encouraged growers to continue the production of small acreages of rice, the proposed program would place a premium on inefficiency. We feel that there is no need for new rice legislation.

The rice provisions of the Agricultural Act of 1958 were developed and passed in an effort to move rice in the direction of greater reliance on the market system. Real progress was made under this act in 1959 and 1960; however, the cost of the program was increased when Secretary Freeman used discretionary authority to increase both the national acreage allotment and the support price. If additional acreage was needed to produce rice for foreign aid, an appropriate part of the cost should have been charged to foreign aid rather than the rice program.

In our opinion the rice provisions of the 1958 act are sound. We recommend that these provisions be continued in effect and that the philosophy of the 1958 act be adhered to in the establishment of future acreage allotments and price support levels for rice.

I would like to say to you, Mr. Chairman, that this is a joint statement by Mr. Geiger and Mr. Hardee and myself. I am sure that they would be happy to respond to any questions that you may have, as well as myself.

I should like to offer the tables attached to my prepared statement as a part of the record.

Mr. JONES of Missouri. It will be made a part of the record. (Tables 1, 2, 3, and 4 follow :)

TABLE 1.-National acreage allotment, harvested acreage, support and average market price of rice, 1959–65

1959.

1960.

1961

1962

1963.

1964.

1965.

1 Preliminary.

1956.

1957.

1958.

1959.

1960.

1961

1962.

1963.

1964 2

TABLE 2.-Supply of rice (rough rice equivalent), United States, 1956-64

[In thousands of hundredweight]

1 Includes imports.

2 Estimated.

TABLE 3.—Disappearance of rice (rough rice equivalent), United States, 1956–64

TABLE 4.-Relative importance of exports and domestic consumption to major rice-producing areas

Mr. JONES of Missouri. We want to thank you, Mr. Bowman, for your statement. The only comment that I have is this. And while this is not given in the nature of trying to defend or to oppose the administration's proposal, I think that your statement here in two different places indicates, or you refer to the dumping of rice. I think that is, perhaps, a little harsh statement, due to the fact that if it was not for these export sales and gifts and whatever you have in the distribution of rice, the rice farmers would be in a much worse shape and I think that rather than dumping, I think that it was a program to produce this rice for this foreign market, for political and economic, and social purposes. The only thing that I have tried to do

with each of these people who have appeared here is to call their attention to the statement of Mr. Jaenke yesterday in which he stated that if we went back or if we retained the present law, that we could expect those price supports at the present time would be reduced and. also, that the acreage would be reduced. And I would just like to ask if the American Farm Bureau Federation has taken that alternative into consideration in reaching its conclusions.

Mr. BOWMAN. Well, yes, sir. Of course, we have discussed this widely among the membership, as well as among the group that is testifying here. We feel that maybe this is a sort of a threat-I do not mean to imply that you are doing this, of course you have just stated otherwise-but if I could cover both of your points, sir, I am inclined, of course, to agree with you in your reference to dumping. but we feel that, or rather the American Farm Bureau Federation feels, that there are countries, particularly in the European Common Market, which do look upon this as dumping. And so we used this term particularly relative to that area. Japan, possibly, would not be in that category. But, on the other hand, we feel that this, certainly, as has been expressed here before, that the worst that could happen under the 1958 act would be better than the proposed multiple price program. But I do not mean to imply by this that the American Farm Bureau Federation and its membership-and that is who we speak for-would be happy or pleased at all with an acreage cut and a price reduction, because we feel, as one of our tables indicates, that the carryover of rice is comparatively low, so that there seems to be a need for the rice. And as a rice farmer producing rice at 69 percent of what is said to be a fair price, we feel that we are not really priced at a high level. I know of a few industries that operate on this margin, on this small amount of what is called a "fair price."

But, generally, the philosophy of the 1958 program was to move rice. I think that since we have shown that the Secretary has shown that there has been a need for this rice, the extra production, and that this was justified. If we are forced to go back that is what we will have to do.

Mr. JONES of Missouri. I can agree with you very wholeheartedly that in many of these farm programs the farmer has taken a lot of criticism for the cost of the program which, actually, should have been charged to other programs, particularly foreign aid and things like that. I think that we have gotten that criticism. In so many of these programs, like in foreign aid and school-lunch programs and other programs, such as gifts, so to speak, they have reacted to the detriment of the agrciultural community. And I am hopeful that at some time we will get these costs, as least, charged to the program that is benefiting from it.

Mr. BOWMAN. You share our sentiments, too. You express them. Mr. JONES of Missouri. Mr. Gathings.

Mr. GATHINGS. Mr. Chairman, I want to thank you, Mr. Bowman, for having given us this statement on behalf of the American Farm Bureau Federation.

You brought out two very important matters in your testimony. Particularly, the issue on the broad discretionary powers that the Secretary would have under this legislation.

On page 6 of your statement you illustrate that well in showing that 65 percent of parity that the crop might bring and what 35 percent of that crop would bring at 100 percent of parity, and what the blend price would be in each instance. That would be the extremes of it at one end to the other, the smaller or the larger of that discretionary power which the Secretary has or would have.

And then the other matter that was so well presented, as I see it, is that the hammer falls upon the person who is least able to take the blow, that is, the poor people.

Thank you.

Mr. JONES of Missouri. Mr. Findley.

Mr. FINDLEY. Mr. Bowman, I, too, want to compliment you on your statement. I am sure you understand that the reason for the proposed change was to reduce the cost of the program to the American people. Do you have any comments as to what this certificate program would cost the American people if it is enacted?

Mr. BOWMAN. No, sir; I do not have at hand an exact figure, but if we would figure the average cost at 5 cents per pound, times the domestic consumption, I think that we can see that we simply are transferring the cost from one segment of the population, which would be all of the taxpayers, to a group of poor people, relatively so, who would have to bear this whole burden.

It seems to me in effect that we are transferring some of the costs of foreign aid from the general public to the rice-consuming poor people. They are not all in Puerto Rico, either. We have a lot of Puerto Ricans, I understand, in New York City, besides some poor people in Arkansas.

Mr. FINDLEY. The administration conveyed the impression that this would cut the costs about $40 million to $50 million. I cannot see how this would come about when we consider the cost to consumers as well as to taxpayers.

I wonder if you have any estimate on that?

Mr. BOWMAN. Could I ask Mr. Geiger to answer that?

Mr. FINDLEY. Yes.

Mr. GEIGER. I think that your problem-I think that you are probing for something different.

My name is Harold Geiger and I am a rice farmer from California, as previously noted.

You should understand, also, that you are now setting up a new relationship with the growers, in statistics which will require additional personnel in the ASCS departments in the States to develop the historical averages of production by poundage.

Also, you are going to have to set up in the Department personnel to police this relationship.

You now have the processor in this program who sells the rice, because you have to police the certificate program.

I cannot tell you what it will cost, but I have heard some figures. that the initial group will take another $1 million.

Mr. FINDLEY. It is assumed that the income to the rice producer will remain the same for a given quantity of rice. If that is assumed, then we must, also, assume that the cost of the program will remain at least as high as at present.