Mr. GEIGER. I would say that it would go up.

Mr. FINDLEY. It would go up?

Mr. GEIGER. You are setting up two new relationships that we have not had in the past. You are now going to have to get all of the history; that is, you have got to get it recorded on the poundage basis which has not been done before. And I expect from experience, as a former ASCS chairman in the county in which we live that you would have difficulty doing that. We have kept it on an acreage basis heretofore. No setup has been made as provided for in this law for poundage quotas for the individual groups or growers in the areas. So this will have to be done. And this is time consuming and costly.

Of course, without past accurate history this will not be accurate, either. And when you rely on the farmer's memory as to what he got for a given year it will be a little difficult.

Mr. FINDLEY. On page 5 of your statement, Mr. Bowman, you referred to the problem in policy, particularly, in our efforts to keep the trade doors open, and you stated further

Any program that maintains a wide differential between the prices charged domestic consumers and those charged foreign buyers is a form of dumping which encourages importing nations, such as the Common Market, to set up barriers against "cheap" American imports.

We have that problem today, do we not, under the present program? Mr. GEIGER. That is correct.

May I comment on that?

Mr. FINDLEY. Yes.

Mr. GEIGER. It seems ironical that at the present and the very thing that we are asking, particularly, the members of the European Common Market not to establish, these same price supports, in order to set up trade barriers against us, where we send a high proportion of our various crops into those communities, that we are asking them not to set up this disparity between the domestic and the import world markets, and then we, in turn, are proposing the same thing. so that, certainly, whoever is sitting in at these discussions have had their power cut for negotiation.

I would like to quote one thing. This was brought out all day yes terday, and if I could add to it a couple of remarks at this time, Mr. Chairman, I should like to do so.

First, on this transfer cost. This is not a money-saving program. I would quote from the Secretary's testimony before the committee— this particular committee on April 6, and it is in paragraph 4 of

his statement:

It is to reduce the cost of farm commodity programs in order to free more public resources for the war on poverty, for education, for housing, and for the many other programs designed to help people in rural and urban areas.

You will, also, note in the testimony that has been given from the various areas of the States that the very people who are purporting to help with this relief of funds, a budgetary item transfer, if you please, that they do not intend to give them as much as they intend to take away from the farmers in the area. To ruin a going industry, upset its markets, and then actually transfer to the people in poverty in the area, is not going to solve anything.

The other area that I believe Mr. Findley-you were the one that asked about it, I believe, and some of the others--where the farmers

are in support of this program-where are they? Someone asked the question yesterday, I believe.

As a member of the ASCS committee and, primarily, in a ricegrowing country, I am acquainted with any number of rice growers. And in my present capacity I travel quite widely. I have yet to find one rice grower in the State of California who would come to you and ask for this particular bill.

Mr. FINDLEY. May I ask the other gentlemen if they have had any expression of support for this proposal from any rice growers at all? Mr. HARDEE. None whatsoever. We had a called meeting of rice producers because of the time element and we explained the basic philosophy of the certificate program. We have had no favorable comment received from any of the rice producers, rice-producing people in my area.

I would, also, like to comment on your question of a little while ago on dumping. We do have a program now, to answer your question, where we subsidize exports. And they are very controlled and, certainly, well taken care of insofar as you are table to take care of this type of a problem, but this program, the certificate program, would magnify the difference between the domestic price and the price which we sell abroad. It would set it up there where we could really have a big differential between them. And this is the thing that hurts us in this field-hurts more than our present program does.

Mr. FINDLEY. Thank you.

Mr. JONES of Missouri. Mr. O'Neal.

Mr. O'NEAL. Mr. Bowman, on page 3 of your statement you are referring to a table, your column headed "South." What geographical area do you refer to there?

Mr. BOWMAN. Well, generally, to Mississippi, Alabama, Georgia, the Carolinas, and Louisiana.

Mr. O'NEAL. Distinguished from the United States?

Mr. BOWMAN. Yes, sir. [Laughter.]

Mr. O'NEAL. Do you include Arkansas?

Mr. BOWMAN. No.

Mr. O'NEAL. One other question, Mr. Bowman. When you were calculating your figures on the United States did you include those States, too?

Mr. BOWMAN. Yes, sir.

Mr. O'NEAL. Then it would make a difference in the average if you included them or did not include them, would it not?

Mr. BOWMAN. Yes, sir; it would.

Mr. O'NEAL. Of the figures for the United States; that is, are the figures for the United States figures for the whole of the United States-does it include all?

Mr. BOWMAN. All of the States: yes, sir. The reason we made the two columns is because it happens to be that, perhaps, most of the poverty seems to be in southern areas and we were making a point that here is where most the burden would fall because they are the heavy consuming eaters of rice in this particular country.

Mr. O'NEAL. Thank you.

Mr. JONES of Missouri. Mr. Belcher.

49-012-65- 8

Mr. BELCHER. The chairman asked you if you had taken into consideration Mr. Jaenke's statement that price supports and the allotments might be reduced. Well, the price supports, under this bill, could be reduced under 65 percent, could they not?

Mr. BOWMAN. Yes, sir; they could, certainly. Could I ask Mr. Hardy, too, to respond to this question?

Mr. BELCHER. Yes.

Mr. HARDY. Sir, I think one point maybe that would help answer this question and clarify it. We have been hearing this over and over again that price supports under the present bill can be reduced to 65 percent parity, which is true. Today, the average support price for this year, 1965, is about 69 percent of parity. In 1961 when we had $4.71 price supports for rice, it averaged 78 percent of parity. And the same $4.71 in 1965 represents 72 percent of parity.

As costs go up parity goes up.

In November of this past year, 1964, parity was $6.35 on 100 percent of parity. Parity was $6.35 last December, and $6.50 in January. So we are going to be at 65 percent of parity at the present support price of $4.50 within a couple of more years if the cost trend increases. whether they decrease this support price or not. We will be there. This is the point that I do not think has been made clear, that we are gradually going down.

Mr. BELCHER. The question was you could do the same thing under the certificate plan that you do under the present plan, could you not? Mr. HARDY. You can go much lower under the certificate plan. This is the other part of the question.

Of course, from 65 to 100 percent is on domestic share only. You could look at the figures here on the blend price, and get the minimum that this could go down to under the certificate plan. Very much lower than the present plan, of course.

Mr. GEIGER. May I comment further to that question?

Mr. BELCHER. Yes.

Mr. GEIGER. We are talking about this possible cut. I would like to refer to table No. 2 at the end of our presentation for the figure for 1961. This was the year in which the Secretary chose to increase by 10 percent the acreage allotment and at the same time to increase price supports. It is interesting to note that at that time we had, approximately, 3 million more bags carryover of rice than we now have. Now they are talking about cutting-does this make sense?

In reading the analysis of the bill, and reading the instructions of Mr. Johnson and his desire for these things, it is rather interesting to note that he indicates that we will need more rice. And with the projected increases in yield I do not see how we would be considering a rice cut, so far as acreage is concerned. We will fully support this if this is what the record shows we need. It is rather interesting from the Department's own figures and from what they intend to do with the rice, that they would indicate a decrease.

Mr. BELCHER. That is all.

Mr. JONES of Missouri. Mr. Stalbaum?

Mr. STALBAUM. In your testimony, on page 7, you say "since the rice is not necessarily the sole source of a producer's income," you then go on with an explanation and refer to a "Government handout." I do not like the word "handout," but it is your word. Yester

day when Mr. Blair testified he stated that "first I would point out to the committee that with some exceptions rice is the only major crop grown in the rice-producing area. In general it is a one-crop economy."

I would like to get clear in my own mind is it or is it not a part of a varied production?

Mr. BOWMAN. Mr. Hardy would like to answer for Louisiana. Mr. HARDY. In Louisiana it is a one-crop area. I am sure that Mr. Blair was probably thinking of Louisiana and possibly Texas at that time when he was speaking. I would say that probably Mr. Bowman could tell you more about it in Arkansas and the other areas.

Mr. BOWMAN. If I may give you an example. Probably the wealthiest person in the county in which I live has a 27-acre rice allotment, I believe it is. He acquired this in acquiring some land. He is not really a rice grower, but he would be in this group that we might call the low-income and poverty group if we were looking at him from the standpoint of being a small farmer. He is not a small farmer. He is a cotton producer, primarily, but he happens to have this small rice allotment. I just point this out as an extreme example of what we are talking about. It does not necessarily indicate his need for special help, because many farmers in Arkansas, for example, of whom I have knowledge produce soybeans and cotton as well as rice, and they may have a relatively small acreage of rice, yet they may or may not be largely dependent upon this for their livelihood. In many cases they are not. If it is very small, they could not be dependent upon it. Mr. STALBAUM. Is it the general pattern toward diversification along with rice or not?

Mr. BOWMAN. Generally, it is. I would say generally. This varies by sections. In the old rice belt of Arkansas I would say it is less so, but it, too, is diversified and they grow a lot of soybeans.

In Arkansas, I will say generally, it is diversified, but as these gentlemen have indicated in some California areas as well as in these other States, it is not.

Mr. STALBAUM. Mr. Findley asked about the main point which has been raised that is as to the cost of the rice program of $180 million. I recognize that many of these costs have not been charged where they should be. If you think you have problems there, you ought to talk to my dairy farmers in their programs. It depends upon the way the accounting is done.

The proposal that the Department brought in will reduce the Government cost by $50 million by transferring costs to the consumers. I do not think there is any argument there. Somewhere there will have to be a transfer of costs or funds. If we are going to reduce the tax portion $50 million, would you prefer to have that $50 million transferred to the producer, rather than to the consumer, on the assumption that we would have to reduce the rice program by $50 million? Mr. BOWMAN. This is a hard choice to make.

Mr. STALBAUM. This is the choice that you have. I want to make it clear. Let me say further

Mr. BOWMAN. Excuse me.

Mr. STALBAUM. The point is that there are many of us who feel that $180 million is more than we should be spending on a rice program of tax money. And we have some figures on it. In my own mind I have some. Let me say that it is $130 million. You then have two choices.

There are no others. Either you can transfer this cost to the consumer as is proposed in the Department's proposal or it can be transferred to the producer. In that light, and without other qualifications as to whether it is good or bad, would you prefer to transfer this cost to the producer rather than transfer this cost to the consumer.

Mr. BOWMAN. Yes, sir; under such a program as proposed here we would prefer it.

I would like to expand, if I may, on this, though. I cannot go along with the promises that we have to cut $50 million out of the rice program. We have $1,400 million in the feed grain program; $3,400 million in the aid program. And I think that I am expressing the view of the Farm Bureau here I am trying to represent them-I do not think that the Farm Bureau people feel like all of this cost should be charged to farmers. It ought to be charged to foreign aid costs. I do not like the terminology of calling this the rice program cost. Of course, it is involved in the rice program, but I do not think that it is justified at all.

Secondly, we are for saving money and cutting down the budget. The Farm Bureau has testified along this line hundreds of times. But why it has to be taken on by an industry, such as the rice industry which we feel is doing a good job and working under a workable program where there is not a large carryover and there seems to be a need for the commodity. I just cannot see why. And most of the cost is borne by those least able to bear the cost under the administration's proposal.

Mr. GEIGER. May I comment further to the question?
Mr. STALBAUM. Yes.

Mr. GEIGER. In Mr. Jaenke's presentation yesterday he indicated that the reason was that this was a percentage which is different in cost between this and wheat and other programs. And to amplify what Mr. Bowman said it is unfortunate that rice happens to be the strategic material that is most needed for our foreign aid program. This further justifies the program. If rice were as large an industry as some of the others this would appear as a minor figure in the agricultural budget percentagewise to the others.

Mr. STALBAUM. I cannot agree with that. I have trouble on that point. It has been shown that the rice program-and I am familiar with some of your points on the accounting view-that this is a factor we are now faced with and I do not see anything in the offering this year that will change this method of charging these programs. When you get into a program which on mere accounting is showing a cost so close to $8,000 per farm, I do not think even in the feed grain program that we have a cost as high as that. To my mind this is more of a factor than the spreading of the cost around. Again, we get into the matter of accounting, I grant you. But realize that we have a program here that, ultimately, we have to make acceptable to those who are here as the consumer's representatives. Some one said that in the House we will have difficulty with this.

That is all. Thank you.

Mr. JONES of Missouri. Mr. Walker?

Mr. WALKER. No questions.

Mr. JONES of Missouri. Mr. Bandstra?

Mr. BANDSTRA. No questions.