20 percent of what I figure I have of $22 an acre involved in. Every farmer and rancher will be glad to cut back if he will be granted 100 percent parity.

Senator DOLE. You mentioned also in your statement-so did Mr. Stockebrand, about livestock. Are you suggesting this cover livestock as well as grains and other commodities?

Mr. SHAY. It has to. It has to. A cattle feeder can't have 100 percent parity for corn and sell his cattle for 60 percent parity.

Senator DOLE. I understand that. In other words, you want the Government to get into that area, too?

Mr. SHAY. If they will let us in it, we will stop the imports into this country. We already produce less red meat in this country than is consumed every year, but also we import all of this imported beef, we are hurting our cattle industry, which, in turn, cannot pay 100 percent parity for grain.

Senator DOLE. There is some thought about opening up the import law. Some of us want to tighten it up, and some, of course, want to expand it. I know what your feeling is, but I'm not certain, again, what some of the other Members might feel. Once you open up the meat import law, you have to be prepared to take the gamble that you might end up with something worse than we have today; and I think that was one thing that prevented it from coming up last year. It was talked about in our committee by Members of both sides. And we decided that we probably didn't have the votes to get any changes made in the Senate. I can't speak for the House. There are administrative actions that could be taken, if we think we have to go that route, rather than through legislature.

Mr. SHAY. You lost me, now. Control what, you say, imports?

Senator DOLE. Meat imports; we start changing the quotas on meat imports. There are some who would like to have more come into the country; some of us would like to have less. It gets down to the question of who has the votes in the Congress, who has 51 percent of the votes in the Senate.

VOICE. Get some new voters.

Senator DOLE. I am willing to do that. That's up to you.

Mr. SHAY. We will provide you with those, Senator Dole. I think American agriculture has made known to this country, and will make known further, that we do have power, although we are small in numbers.

Senator DOLE. I can't quarrel with that.

We can use some help. There was a time in Congress you had to wait in line to get on the Agriculture Committee. A few years ago, they had to draft people to serve on the Agriculture Committee for the very point you mentioned, because there wasn't any power on the Agriculture Committee. But I think it's changing; I really do. I think there is more interest in agriculture; and I think there is more interest among Members of Congress. And I hope that your organization, and others like it, will continue to persuade some of our urban Members of the need to eliminate the cheap food policy. We have had it for a long time.

Mr. SHAY. May I suggest that any Senate Members or anybody else that proposes a hand-down policy, perhaps, and a farmer, and he will make it very simple to them. I think their source of income is a little

bit confusing. If bonafide farmers and ranchers were included, I think we could make this very simple to people, and the Senators and Representatives, how to make a fair price for farmers.

Senator DOLE. That's what I assume that you'll be trying to do and-are you going back, or will anybody on the panel be visiting Washington next week?

Mr. WILLMS. We keep talking about imports, and there are people wanting to bring in cheap imports. The only people who can survive cheap imports are those in big enough companies that we blended a few imports in with something else. They finally went to all the foreign markets; electronics. But we just can't, as a nation, afford to use the cheap labor policy in the foreign countries to sell out on our prices here at home. Now, those cowboys back in Austrialia would like to have a fair price for their meat, too. So would the Canadians. And, really, a thousand bushels of wheat, if you are going to buy at the farm, will buy more export stuff coming in than it will here at home. But the trouble is, we are trying to buy from those poor countries so cheap, their raw materials, that they can't pay anything for ours. Now, the solution is, pay those poor countries a fair price for their products, and let them pay us a fair price for our products. Now, I know that the internal merchants would like to buy everything cheap and sell everything high, but one of these days, you are going to find out they don't have the market in the United States for that high priced stuff. Senator DOLE. We tried in 1970, and I think in the closing days of the session, to tighten up on the Meat Import Act. It passed the Senate; and went over to the House side, where they amended it to relax controls; so, we ended up with no change at all. We have got to have the votes, whether in your group or our group, you have to have the votes. And if there are four of you out of the panel going back, there is a fertile field back there to inform others of the way you feel, the need, the changes that need to be made.

Mr. HANSEN. I would like to comment on that, Senator Dole. The point that I made in my presentation is that we have had programs that have worked and gave farmers nearly 100 percent parity, and it cost taxpayers $1 billion in price supports for 20 years. Congressman Cooley entered that in his testimony in May of 1960. I think, probably, consumers got the best buy on food in that period than they ever got, which should make it appealing to consumers; and so, it was a good combination of the Government and the consumer and the farmer, all receiving benefits under the same program. But it looks to me like one of the places that we went wrong, is having people representing the grain trade attempting to represent farmers. For instance, Clarence Palmby, the head of the export marketing service and people like that, making undreamed of profits while farmers are in deep financial trouble. I think there's a lot of different ways to approach the problem. We have the economists up in Nebraska who said there are 40 different ways to get 100 percent parity.

Senator DOLE. But there are 40 different economists, too. You give me an economist, and I will give you another theory.

Mr. HANSEN. Í really do think there are a lot of different ways. I think that we do have the history in the Department of Agriculture. One of the things that I am disturbed about is the Secretary of Agriculture who goes around the country frightening consumers about

high costs and frightening taxpayers and even talking about regimentation; and as far as this past program, it was all a voluntary program as far as feed grains and wheat; the bellwether crops. It shows that when you control the price and the production of the bellwether crops, feed grains, and what, there really was no need of control over livestock. But yet if you follow the parity figures, it will reflect, I know, on cattle, and I'm sure it's true on other livestock products, that they received 100 percent or better at that particular time. So, I think that there are ways that we can go about it that will benefit-that will be appealing to consumers as well as taxpayers and the farmers.

Senator DOLE. I agree with that. I don't think we ought to misunderstand each other. If we are on the Agriculture Committee, we ought to be spokesmen for the farmers. At the same time, we are not opposed to consumers. After all, if you don't buy it, you don't need it anyway. And I think that's the attitude that most people have on the Senate Agriculture Committee; and I'm not here to defend anyone or praise anyone. These are the facts. And we are not perfect, but I think one thing that is going to be important is that there be some unity.

Instead of presenting 100 ideas, we focus on 2 or 3. Otherwise, it's going to be impossible to really bring the right pressure. I'm talking about the right pressure to bear on the Congress, or anyone else, for that matter.

Mr. SHAY. May I make a point clear here, that I think this statement has been made several times, that a support is going to cost the taxpayer; not a subsidy, but a support, a support will not cost the taxpayer. Should the Government support our 100 percent parity through loans, we pay that loan back. And every time I got one from the Government, I paid interest; so, I cannot go along with

Senator DOLE. You don't have to pay the loan back, though.
Mr. SHAY. Pardon?

Senator DOLE. You won't have to pay the loan back.

Mr. SHAY. Someday I will. I have every one I have ever gotten..
Senator DOLE. Give them the commodity.

Mr. SHAY. We don't want subsidies, which is a gift. And that point has been made many times in newspapers and on TV. We want support, however, through loans, or however, we get it.

Mr. HANSEN. I would like to interject in there, too, it depends on the attitude that the U.S. Department of Agriculture has. For instance, we had accumulating stocks of grain in the late 1930's; and rising prices for those grains because it was the policy of the USDA; and the policy of Government to do that. But we took that programand I'm not blaming Republicans or Democrats-whether it was Orville Freeman or Erza Taft Benson or Bergland, it became the same policy. They used the grain supplies, or they called them surpluses, instead of reserves, dumped them on the market, and used it to drive down the price.

Senator DOLE. That's right.

Mr. HANSEN. So, it depends upon the role that the Government wants to play; and the role that the USDA wants to play. It is like running a cooperative, you can't hire an enemy of the cooperative to come in and manage it, because if you do, you are going to be in bad trouble. It's hard enough to make them work, if you have people in there who want them to work.

Senator DOLE. Yes. Marvin?

Mr. OERKE. Senator Dole, I would like to relate how much is it going to cost and the most simple explanation is, or the second explanation that former Congressman Jerry Litton used, a loaf of bread. He explains that there is only 2.6 or 2.17 cents worth of wheat in that loaf of bread. OK, now, if we raise the price of wheat in the market place to parity price, there would be no more than an additional 2.7 cents, or around that figure, to raise the value of that bread. So, we are not talking about a great amount of rise.

Senator DOLE. That's a good point. We make it as often as we can on the floor of the Senate; but I can tell you, and just talking about support, generally, we won one battle on target price by 4 votes in the Senate, 50 to 46. And we were trying to raise the target price of wheat 25 cents. And the same people who proposed it ought to be higher are the ones that voted against it in some cases. So, we have those problems. I have seen the Litton film, and it's very good.

Mr. Deines?

Mr. DEINES. I just wonder whether this, the deficiency of payments couldn't maybe be eliminated by improving the Federal crop insurance. Senator DOLE. That's another thing we are going to be taking up this year. We are going to review the disaster program and the Federal crop insurance program. We don't like the term deficiency payment, in any event. It's a negative term. It's almost a welfare connotation. But we are going to take a look at the disaster program and Federal crop insurance. I have a bill pending, as other Members have. I assume that will be done very early this year.

We have some people who have to catch a plane, so go ahead and

Mr. STOCKEBRAND. Senator Dole, you asked how we could express to the other 96 percent of the population how we can get a fair price. Now, it seems to me that the other 96 percent of the population wants a high-quality product for a cheap price. Now, I don't quarrel with that, if the other 96 percent is willing to produce a high-quality product for a cheap price.

Now, as for the meat imports, they can ship all the meat they want to into this country if they will offer it at a parity price. I am willing to compete with any producer in the world on a parity price standard. Now, I think the rest of us here are, too.

Senator DOLE. Done?

Mr. WILLMS. You were talking about one or two or three ideas. I have been in a lot of different organizations, meetings; and you can see here today a typical farmer's opinion meeting. These people here represent the majority of farmers' thinking. It's not the major organizations that are promoting themselves. And I think there needs to be more emphasis and publicity on the fact that farmers are thinking a lot alike. In Kansas, we had a vote, and it was in different groups. They all agreed that we should all take out from 20 to 40 percent of our production, if that's what it takes for us to get a price. The problem is, if we take out 40 percent of the production and then it becomes a shortage of 5 percent, boom, up, and we are back in spiral forced. And then we have 5 percent too much; it's a boom down. There is no reason why there can't be some stability in that because it costs just as much to raise that wheat when it was cheap as it was when it was high, and vice versa. And if you will remember when I was in Wash

1

ington one time and visited you, I said I was personally in favor of a top price, a certain percentage above parity. And I still think farmers have to expect a range rather than just leave it wide open on the top. We would have been better off if we had never went over 110 percent of parity.

Senator DOLE. Well, I appreciate very much the comments of the panel. If there is anything else you think of you want to add to the record, the record will be open.

We are going to move on to some other witnesses. And thank you very much.

If there are any witnesses who haven't checked into the desk, if you can check in with Bill Taggart, I think you can see Bill over on the right.

STATEMENT OF DALE LYON, REPRESENTING TONY DECHANT, PRESIDENT, NATIONAL FARMERS UNION

Mr. LYON. I am Dale Lyon. I'm a livestock and grain farmer from Athol in Smith County. I am president of the Kansas Farmers Union and member of the board of directors and the executive committee of the National Farmers Union. I am appearing on behalf of the National Farmers Union at the request of Tony T. Dechant, president of the National Farmers Union.*

We are pleased to have the opportunity to appear on behalf of Farmers Union leaders and members. We commend you for your concern about the calamitous farm situation in calling this hearing.

We believe the 1977 Agriculture Act approved by Congress and signed by President Carter late last year represents forward progress toward achieving better farm prices and improved farm income. We hope that it will be used by the administration to improve farm income as Congress intended.

We believe, however, that further attention should be given to legislative measures to increase market prices and overall farm income. Since 1972, we have witnessed a dramatic example of the boom and bust cycle which plagues farm producers. From a relatively low point in 1972, farm prices rose to a point where consumers were exercised and now we are witness to a period when farm prices have been so low that the parity ratio is equivalent to what it was in the Great Depression of the 1930's.

No one can deny the instability of the present market situation and no one can ignore its frightening effect on both consumers and producers.

Farmers are not asking for a return to the boom prices of 1974, and they do not ask for guarantees that would push prices so high that they would lead the inflationary spiral. But they do ask that the higher prices they pay for everything they buy and use in their production be reflected in the prices they receive for their produce.

Historically, the Farmers Union has supported the parity concept of determining what prices are fair to both producers and consumers. We believe that concept is still valid and that it can be used as the basis for farm policy today. Farmers Union delegates to our annual national policymaking conventions have reaffirmed their belief in the *See p. 179 for the prepared statement of the National Farmers Union.