all the way through or some such reasonable average for the taking out of production of good average crop producing land, we can make the soil bank work.

When you figure you can take 50 million acres of land out of production for $1 billion, and that is the terms of money we talk about now in the soil bank, certainly that 50 million acres reduction in production coupled with conservation under the Soil Conservation Service, certainly that is going to do an awful lot of good toward balancing the question of production or supply and demand that you are talking about.

So certainly along with it has to go control of production. I admit that but I think that all you gentlemen in the Department of Agriculture would have to do would be to figure how many acres a year of good average producing land do we have to keep out of production in this great country of ours. It might be 50 million acres, might go down to 25, might go back up to 40; but certainly under Mr. Benson's theory and Mr. Morse's theory of figuring that they can get good average producing land out of production for $10 an acre average throughout America, why they are entirely wrong. I say that in all sincerity.

CONSERVATION RESERVE

They are making the conservation reserve part of the soil bank, the real soil bank, unworkable by making it virtually impossible for a farmer to join in the soil bank because of the fact that under the 5-year contract they will not offer him more than $10 or $11 an acre and the farmer cannot see his way clear to do so.

and I don't think Mr. Morse and Mr. BenMr. PAARLBERG. I agree son expect they are going to get the kind of good plan you have got in your part of Minnesota.

Mr. ANDERSEN. Well, the idea of the soil bank, and I say that as one of the authors of the soil bank—I am talking about the conservation reserve is to retire temporarily good producing land. I don't know who put in that acreage reserve but it may not be in there much longer.

In the meantime we are going to meet a moral commitment to the farmers of the Nation, but we can make that conservation reserve work providing that they will have enough conscience to come up to us in our area or any good producing area in America and offer a fair price which will take good average producing lands out of production. I don't mean these sands deals out in New Mexico, $6 and $8 an acre. That is not average producing land to me. That does not get the job done. But if you will come into northern Iowa and southern Minnesota or central Minnesota, and offer it to $24 to these farmers who really produce the surplus on a 5-year term, you will see tremendous quantity of land go out of production, all that the economy of our Nation can stand to let us be taken out of production.

So certainly I agree with you that your premise that along with the stated price, getting back to that, the legal price that any commodity should bring in the terminal markets, along with it has got to go in some way control of production.

Mr. WHITTEN. In that connection, I would like to say that farmers have many different views. So do Members of Congress. There are not many places where my colleague and I differ. I don't think acreage controls can ever work. It is my belief that if you rent land from a farmer and pay him money, he will use it to buy more fertilizer and produce more on the remaining acreage than on the total to start with.

I think the records will support that view.

I would like to go further and say I am not talking about prosecuting anybody for buying below the fair price. But here is the thing, Dr. Paarlberg, and I would like to hear your reaction to it.

FARMER'S SHARE OF CONSUMER'S DOLLAR

We have just heard your own witnesses testify that the people between the farmer and the consumer for one reason or another are able to pretty much fix their take. Since 1940, that take has constantly increased under the bargaining power of labor units, under the right of railroads to increase rates, under wage contracts, under the right of the Safeway Stores to set its markup and I understand they have split their stock in three parts, they have made so much money in the last few years.

They are able to do that. However, as it shows now from your own records, that increase has been pushed back down on the farmer. Now that being true, I can't see how you can help the farmer by constantly taking less and less of the consumer dollar. You will agree, I believe, that consumer dollars are limited-and there is just a hundred cents in each consumer dollar. To the extent that these segments through these powers that they have under existing law get more and more cents out of that dollar, there are fewer and fewer cents left for the farmer.

Now, as I see it, you have either got to have price supports, seeing that the farmer gets at least his share and letting the pressure come between his fixed support and the ceiling which is the consumer dollar, or you have got to provide regulation, as you say, for the middleman as to what they pay.

Now, about the word "prosecution"-I think my colleage probably meant "penalties." The bill that I introduced would provide monetary penalties for a failure to pay a proper return.

Now, it is all right to talk about everything going back to the 1930 level. But when we can see that all these costs are going to be kept on a 1958 level, I don't see any way for you folks to be for reducing the support level to agriculture without being a party to saying that you are for these middlemen. In the absence of price supports the very thing that your own witness has testified to will constantly take more and more out of the farmer's hands. I don't see any way around it.

Do you have any comment on it?

Mr. PAARLBERG. I do have.

I think that the matter of increasing cost for marketing farm products and the increases in wage rates that outrun productivity, are a very grave problem. I think that agriculture is seriously threatened by this kind of development. Everything we can do in the way of

research to improve the efficiency of the operation, whatever we can do legislatively to redress the imbalance of bargaining power, is good. Whatever farmers can do cooperatively to strengthen themselves across the bargaining table from labor and industry, is good. What we can do through our marketing agreements and orders to strengthen the bargaining power of farmers, is good. And whatever we can do with price supports to increase the returns to the farmer without pricing him out of the market, is good.

I think that we

Mr. WHITTEN. Dr. Paarlberg, let's put it this way. The American public is going to eat and wear clothes, isn't it?

Mr. PAARLBERG. Yes, sir.

Mr. WHITTEN. That is right. And any price that the Government fixed for either clothes or food, if you supported it the American public would pay it. They have to eat, don't they?

Mr. PAARLBERG. Yes.

Mr. WHITTEN. That is right.

So don't tell me about pricing yourself out of the market. If you fix a price that will continue to be it, because we have all got to eat and wear clothes. So how could a man price himself out of the market if he had your help in the Department of Agriculture.

We have 42 million unemployed-many people say 7 million unemployed-in this country. We have requests for unemployment insurance because of unemployment. We find that everybody's take of the consumer dollar has increased under laws passed by the Congress, supported by the Department of Labor, the Department of Commerce and every other Department, yet we find you and Secretary Benson in here advocating that the farmer reduce his prices so as to absorb the increases that all these folks are getting. And it has caught up with you and I don't believe you can live with it. I am serious about it because I think it is pulling the whole economy down.

I think in 3 years you are going to find this unemployment up to 10 or 15 million, if we can't get some help out of your Department to see that the farmer gets his share of the income. You are his spokesman in Washington and in Cabinet circles, but where the Secretary of Commerce is insisting on more business and more profits, and the Secretary of Labor is supporting a dollar an hour for labor, we find the Secretary of Agriculture, including you, Mr. Morse and the rest, advocating a lower price. And every time you have lowered it, the reduction has been absorbed by this group in between.

Not a dollar has gone to the consumer. I think the farmer is in a deplorable state with you folks representing him at the council table in the Cabinet. I mean that. That is not personal. You are entitled to your view, I am entitled to mine.

Mr. PAARLBERG. The Secretary of Agriculture has been before the Congress requesting a number of things that will be very helpful to farmers. Among these, he asked for increased authority under Public Law 480 to move abroad the products of American agriculture.

Mr. WHITTEN. Dr. Paarlberg, you folks haven't opposed paying money out of the Treasury. The record will show that you and Secretary Benson have spent more money for price support and Public Law 480 and similar programs out of the Treasury than all the Secretaries of Agriculture since 1932.

You folks have been willing to spend it out of the Treasury, just as long as you don't have to support a law which would require the user of the farm product to pay a fair price in the first instance. Yet each time I am quoting your record each time you have reduced price support prices have gone down to the reduced support, and as you reduced prices to the farmer, the middleman has absorbed it. None of your price reductions have been felt by the consumer.

Mr. PAARLBERG. Some of them have. I agree with you a large share of this has been taken up but certainly an appreciable part of it has been reflected in a lowered price at the retail level.

Mr. WHITTEN. Let me describe this to you.

Here is a Secretary of Commerce, promoting business, promoting business profits, promoting foreign aid, where the Government guarantees American businesses in foreign countries on their business operations.

We find the Secretary of Labor urging a dollar an hour and supporting more and more income for American labor. However, at that same council table we find you and the Secretary of Agriculture saying, "Well, these others ought not to do it but we will support them, but that part of the law that protects the American farmer, we will just modify that a little bit and reduce it 12 percent.'

And now that you have had 6 years of that and the record shows that the farmer's loss has been absorbed by the Secretary of Commerce and his crowd and the Secretary of Labor and his crowd, when are we going to expect you folks to stand up for the farmers' fair share of the consumer dollar?

Mr. PARLBERG. I would like to point out that there is quite a difference between the minimum wage for labor and the support price for farm products in this respect. The going average market rate per hour for labor is about twice the minimum statutory level, whereas

Mr. WHITTEN. That is under the law, however, which gave them the right to bargain.

Mr. PAARLBERG. This is true. In agriculture, the market prices are resting on the support levels. If we want to consider minimum wage rates and farm support prices on a comparable basis, then we might talk about support prices for agricultural products that would be at about half the market level. Then we would have comparability of a sort. But they are not directly comparable.

Mr. WHITTEN. So your idea is that, if you and Secretary Benson were to recommend that price supports be cut 50 percent, it would make the farmer comparable with labor; is that true?

Mr. PAARLBERG. In one respect, yes. I am simply indicating that the comparison you gave is not a full and complete one.

Mr. WHITTEN. Now these bargaining rights of labor unions come under laws that the Congress passes.

Mr. PAARLBERG. And indeed so do the agricultural people.

Mr. WHITTEN. Giving them the right to strike, does it not?

Mr. PAARLBERG. That is right.

Mr. WHITTEN. So the rates they have now come by virtue of various laws given by Congres which have been supported by the Department of Labor?

Mr. PAARLBERG. Yes, and may I point out that the agricultural cooperatives also operate under legislation which exempts them and

gives them protection from certain laws which regulate restraint of trade.

Mr. WHITTEN. Now for 6 years you and the Secretary have been following your views. Sometimes you are a little slow getting the law amended as fast as you want it. But after 6 years, Dr. Paarlberg, following your views, when farm incomes have dropped down to the smallest percentage of the national income that we have had in history, when farm income has dropped from about $1412 billion when you came in to about 10 and a fraction billion dollars now, when the farmer's share of the consumers' dollar has dropped from 50 percent when you came in to 40 percent now, does not that raise a little bit of a question in your mind whether your theories are sound? Mr. PAARLBERG. May I point out, Congressman, that per capita income in agriculture during 1957 was at an all time high. It was 2 percent above the previous peak which was in 1951.

SHIFT TO OFF-FARM EMPLOYMENT

Mr. WHITTEN. In the meantime, in 6 years, how many farmers have you put out of business?

Mr. PAARLBERG. We did not put any of them out of business.

Mr. WHITTEN. All right. How many of them have gone out of business?

Mr. PAARLBERG. A considerable number. I cannot give you the figure out of my head, but it is about half a million people a year that transfer out of agriculture into

Mr. WHITTEN. Where are you going to transfer them to, now that we have this 5 million people unemployed?

Mr. PAARLBERG. A number of them do find job opportunities off farms. A number of them find job opportunities while they continue to live on their farms. I would not presume that we should tell them where they should find a job or if they should.

Mr. WHITTEN. No, you should not. But if you have any suggestion, they sure would appreciate it.

Mr. PAARLBERG. Beg your pardon?

Mr. WHITTEN. I say you should not dictate to them where they should get a job but, under the present conditions, with 42 million already unemployed and with the present condition of agriculture, if you have any information on where to get a job I am sure the farmer would appreciate it. They would not take it as dictation. If you have any suggestions, it would be most helpful.

Mr. PAARLBERG. Throughout the rural regions, there is, as you know, a considerable industrial development which is going forward despite the current slack in business. There are increasing job opportunities in rural areas. And people are finding jobs, despite the present slackness in employment.

FARM INVESTMENT

Mr. WHITTEN. Doctor, if you cut the farmers that you now have in half, where 3 years from now you have only half as many farmers, and divide half as many farmers into farm income, of course you come up with a nice picture on a per capita basis.

But are you familiar with how much more money it takes now for a farmer to operate a farm as compared with 6 years ago?