First you said there was not any money and we had to make that study in connection with military expenditures.

Next, Secretary Benson said the trade was opposed to it, and I was able to show that your cotton advisory committee had 7 out of 8 who had an interest in holding United States cotton off world market.

To take care of the matter further, I had a special study by this committee to show that every other country was selling what it had competitively. I say again, when you are selling what you have competitively, you are following the course that other foreign countries use and they have less chance to complain.

The minute you have something identified as an export subsidy, then you are giving them a tool through our State Department to stop the operation of the program.

So with that long background I am very, very skeptical. Skeptical of your changing, skeptical of the folks who are getting you to do it and skeptical of anybody who has had the wonderful record you have had since you first started selling wanting to change the matter at all. I will be glad to discuss the matter before you write the report. I would like to have an opinion from the Solicitor as to the authority of the Commodity Credit Corporation to release commodities as a form of subsidy.

Mr. HORAN. I could not do it without consulting the wheatgrowers. Mr. WHITTEN. At this time I am not objecting to anything that is in existence and working fine. I will point out again you do have an international agreement on wheat that helps to point out the degree of understanding between the big wheat producers. We do not have any such cotton agreement. If we did, it might make the picture greatly different. However, you must have authority in law for your action.

Mr. HORAN. Well, now, to begin with, I do not think we can live with acreage restrictions in America and we have to use all of our American ingenuity to change that matter.

The reason I say that is that it is the old umbrella game. We restrict production at home and it is reflected in increased yields in a lot of cases abroad.

Now, one thing I think this subcommittee is rather proud of and that is the new life we have been able to breathe into the foreign agricultural service.

WORLD PRODUCTION OF FARM COMMODITIES

I have before me one of their most recent publications which is just filled with information, worldwide. It is The Competitive Position of the United States Foreign Products Abroad, 1958.

Let's take wheat if we can and then I do want to ask you some questions concerning that.

World production of wheat, rye, rice, corn, oats and barley has been increased more rapidly than population since the end of World War II. Preliminary estimates indicate that the total ontput in 1957-58 will be about 804 million tons. This represents an increase of 21.6 percent compared with the immediate postwar 1945 to 1949 average.

On the next page is a table called Table 2: Wheat, world production by areas and United States share, average 1950 to 1954, annual 1956 and 1957 production with comparisons.

If you are looking at that, it is a very interesting table.

The important producing areas are the ones that are below their average.

Canada is down to 68 percent. Australia, 82 percent. French Morocco is 69 percent. The United States is 84 percent.

However, all the rest of them that are listed there have increases.
I will take that back.

There are two. Tunisia and Uruguay are at the same level.
I want to get your comment.

Now, if you will turn to page 21.

During the past three seasons-I am reading from page 20.

Foreign production of cotton stabilized at about 25 million bales annually and will probably be about the same in 1957-58. This level is considerably above the 1950-54 average of 21.6 million bales. The prewar average was less than 18 million bales. Traditionally cotton producers are expected to grow about 9.3 million bales equaling their 1934 to 1938 average.

In the 1956-57 season, cotton production dropped below the 1934 to 1938 average in both Egypt and Brazil. These declines were more than offset by gains in India, Pakistan, and Peru.

Iron Curtain countries are producing about 40 percent more cotton annually than in 1934 to 1938 but data are insufficient to indicate the breakdown by countries.

Unlike wheat, strangely enough, cotton apparently is grown commercially in more countries than is wheat. But it is rather interesting. Take that table on page 21 there. The United States produced in 1950 to 1954, 14,093,000 bales.

Last year, we produced 11,010,000 bales.

But take a look at Mexico.

In the average for 1950 to 1954 was 1,333,000 bales. Now in 1957, 3 years later, they are up to 2,010,000 bales.

To me this is a red light. It is a warning signal. As we reduce acreages at home, other countries increase theirs to a large extent, and I think it is incumbent on all of us to get away from this thing by any way that you might be able to.

I certainly think that the only cure can be found in legislation is by getting away from the omnibus farm bills that we have so often and attacking each commodity separately.

Now, you take the domestic parity plan, you would expect to feed up to 250 million bushels and, of course, the corn boys won't let us do that, but we are turning to feed grains now, tremendous production this year.

So I think we will have to get away from that.

I would like to have your own comment on this because this America belongs to all of us, and we share equally in the responsibility of finding solutions.

Mr. MCLAIN. Well, this is a broad topic, Mr. Horan. First of all, of course, the tables pretty well speak for themselves. With most of these commodities, we know now and this also includes-our tobacco expert isn't here, but it also includes tobacco.

We find that other countries are expanding their production in these commodities. Part of it is caused by the umbrella we have held. Part of it is caused because they want to be more self-sufficient, they don't have the dollars, and so forth.

I think we are just going to have to face up to the fact that we are going to have larger production worldwide, but I don't think that needs to discourage us too much. If we can get more people using a better diet and can get them clothed better, with populations increasing tremendously all over the world, if we can get better living standards in many of these countries, we still ought to hold our share of the total world market.

I am sure you agree that the Secretary feels that one of the solutions to the United States farm problem is to get and hold a good share of what this expanded market might be. I think we are demonstrating with the gadgets we have got that we are doing it pretty well. The only part that of course bothers a lot of us is that in using 480 and the giveaways whether we permanently are getting markets. I think we have not much other choice at the moment, but if they will help us get these markets permanently, and then they can of course have the wherewithal to buy with, it is a direction we ought to go, because we know wheatgrowers. The thing they want to do in your area as well as most every other area is to raise wheat. They don't like to be left idle.

Mr. HORAN. Well, in some of the fallow areas-I mean good wheatlands that can't raise anything else. When you get them away from wheat, you might well-you mentioned tobacco.

TOBACCO

World production at 8.3 billion pounds in 1957 was the third highest on record, being slightly below the 1955 and 1956 levels. Foreign production continued its rise, reaching an all-time high of 6.68 billion pounds. During the 20-year period from 1937 to 1957, world production increased about 1.25 percent per year. United States production rose about 35 percent from 1937 to 1947 while foreign production increased 25 percent. However, since the 1947-51 period, United States production has decreased and foreign production has expanded 30 percent.

Mr. MCLAIN. This is the reason some people even in the tobacco industry are getting concerned.

Mr. HORAN. Well, I think they should. I think our hearings should reflect it. The facts are here.

I am very proud of the work of this subcommittee in getting our foreign agriculture service going again because we have the facts in front of us.

Mr. WHITTEN. If the gentleman would yield to me, I would recall that this committee, in its report on the studies of foreign markets, pointed out that there was real question as to whether tobacco producers in this country shouldn't insist on sales in world markets on a competitive basis because, while our share at that time was continuing rather stable, we were getting no part of the increased consumption in the world of foreign production.

Mr. HORAN. Of course, the war years disrupted practically every nation in Europe and a good portion of the breadbasket of Europe. It created a vacuum into which all our foodstuffs could be moved. Then, we went about this business of rehabilitating the world, and we have done a good job of that.

COTTON

Mr. MARSHALL. How competitive is Peruvian cotton with United States cotton?

Mr. MCLAIN. We are competitive with the world price of cotton, Mr. Marshall. This doesn't mean in every instance every quality. They are going to sell their other cotton at some price. They are not going to keep it. Mexico, for instance, is going to sell their cotton. I think the big thing that has come about that hasn't shown yet in these figures is that in meeting the competition we have in the world market, with the volume like we are moving, it is going to deter further expansion, I think, a little.

If they get dams like they are talking about in Egypt this is going to open up vast areas that will go to something and cotton and wheat will be something that is raised.

Mr. MARSHALL. Isn't it true that they sell a different type of staple?

Mr. MCLAIN. In Peru, you mean?

Mr. BERGER. Long staple.

Mr. MARSHALL. Yes.

World market doesn't have too plentiful a supply of that type of market; does it?

Mr. BERGER. Our growers in the long-staple cotton have asked for lower price supports and increased acreage which we have gone along and given them because the demands for that type of cotton in the past didn't meet the world market.

Mr. HORAN. Here is a very interesting thing, Mr. Chairman.

On this chart on page 21, we got the newer producing cotton areas, the Near East, South America, Africa, Central America, and Mexico. And they raised-well they produce now about one-fourth of the total world supply those newer areas.

And we are helping them to prosper, Mexico being the one that has grown the most.

Mr. WHITTEN. Now we turn to acreage allotments and marketing quotas. I would like to have pages 188 to 211 of the justification included in the record at this point.

(The material referred to is as follows:)

ACREAGE ALLOTMENTS AND MARKETING QUOTAS

PURPOSE STATEMENT

This appropriation provides funds to carry out acreage allotment and marketing quota programs authorized by title III of the Agricultural Adjustment Act of 1938, as amended.

These programs are designed to keep the production and marketing of basic commodities in line with demand in order to give each farmer a fair share of the available market and the total production.

The national acreage allotment (in the case of wheat and corn allotment for commercial producing area) is set at a level which, based upon normal or average yield, will result in ample production for domestic consumption, exports, and adequate reserves. The total acreage is divided among States or counties on the basis of production history for a specified number of years preceding the year for which the allotment is determined, with adjustments for production trends, abnormal weather and production conditions, previous allotments, and other factors.

State or county allotments are apportioned through local committees among eligible farms. Acreage allotments, unless implemented by marketing quotas, do not constitute an enforced limitation on production. However, when acreage allotments are in effect for any basic commodity, compliance therewith is a condition of eligibility for price support.

Marketing quotas must be proclaimed for tobacco when the total supply exceeds the reserve supply level, or if quotas were proclaimed for the kind of tobacco in the immediately preceding year unless quotas have been disapproved in 3 successive years subsequent to 1952. In this event a national marketing quota would not be proclaimed for any marketing year within the 3-year period for which quotas were disapproved, unless prior to November 10 of the marketing year, one-fourth or more of the farmers' petition the Secretary to proclaim a national marketing quota for each of the next 3 succeeding marketing years. Marketing quotas must be proclaimed for peanuts each calendar year regardless of the supply situation; for upland cotton when the total supply exceeds the normal supply; for extra long staple cotton when the total supply exceeds the normal supply by more than 8 percent; and for wheat and rice when the total supply exceeds the normal supply by 20 and 10 percent, respectively. Marketing quota provisions of the Agricultural Adjustment Act of 1938, as amended, do not apply to corn.

Quotas do not become effective unless at least two-thirds of eligible farmers voting in a referendum approve quotas. Quotas may be increased or suspended under certain demand and supply conditions, in the interest of consumers, or in national emergencies.

Appropriation:

Appropriated, 1958

Budget estimate, 1959...

$40, 715, 000

39, 715, 000