loss over that period of time, and I cannot stand it any longer. I would urge sincere consideration of Senate bill 2626, but I would also urge that in that piece of legislation that any time a so-called producer is presenting cost of production figures that any subcontractor or contract grower therein be fully considered before the acceptance of that final cost of production figure.

Thank you, sir.

Senator HODGES. We will put the balance of your statement in the record.

Mr. DAVIS. Thank you very much.

Senator HODGES. I have had very limited experience with raising broilers. My son last summer, who is 10 years old, decided that since I raised them when I was growing up he wanted to raise them. I had 55 baby chicks given to me. I charged nothing for my high-powered legal help to him in getting started or working with him. We sold them at exactly what broilers were selling for, 39 cents a pound. Only one died, but he broke even on this, and the only thing we charged off against it was the feed-nothing for labor, nothing for overhead, nothing for the electricity, nothing at all except for the food.

That might not translate into large numbers of birds. This was 55, and, of course, 1 died, and I told him if we had had a loss, we would be better off if they all died and we wouldn't have lost as much. He simply and only paid for the feed at 39 cents a pound. It was rather amazing. It is a good lesson for him, incidentally. He is working harder in school now and wants to be a lawyer instead of a farmer.

Mr. DAVIS. I think this points out one thing. You more than likely bought a comercially prepared ration for the birds; is that not correct? Senator HODGES. Yes.

Mr. DAVIS. In our particular case the pressure from the wholesale industry has caused depletion of quality feed. There are no additives, no medications that these birds must have to survive, and again properly from the standpoint of a highly hybridized bird. They are breeding these birds at such a rate and they are trying to build in growth rate for a 7 week bird to weigh 4 pounds, and yet the feed is so basic and so inadequate to help this bird fight off diseases and his hybridized condition can no longer ward off even ordinary diseases which a yard chicken could, so we have at various times hauled out as many as 200 or 300 birds out of a house, each house, because of diseases that could have been controlled a year ago by simple medication that has been removed from the market.

Senator HODGES. To add to the woes of the broiler producers in south Arkansas, many of them this winter had the snow destroy their producing houses and they discovered it is not covered by insurance. So if Job thought he had problems in the old testament, he needs to get in the broiler business in south Arkansas.

Thank you very much for your statement.

Do you have any questions of this witness, Senator?

Senator LUGAR. I have no questions. Thank you.

Senator HODGES. We will call at this time Jim Billington and Mr. Schieber.

Mr. SCHIEBER. Mr. Lyman Knapp is also with us.

STATEMENT OF JIM R. BILLINGTON, PRESIDENT, OKLAHOMA WHEAT GROWERS ASSOCIATION, ALTUS, OKLA.

Mr. BILLINGTON. Mr. Chairman and members of the committee and friends, I want to express my appreciation to this committee in the difficult task you have before you in alleviating many of the problems now facing agriculture in this Nation. I also want to express my appreciation to your committee in passing the Food and Agriculture Act of 1977. I know it wasn't what we wanted, but I think it was probably as best you could do at that time.

My name is Jim R. Billington and I farm about 1,000 acres in southwest Oklahoma, about half of it irrigated. I grow cotton, milo, wheat and I run stocker cattle on my farm. I am president of the Oklahoma Wheat Growers Association and a member of the Oklahoma Wheat Commission. My hometown is Altus, Okla.

My objective today is to seek your assistance for immediate relief, as authorized by legislation in the Food and Agriculture Act of 1977. I know the process of enacting and implementing new legislation is costly, time consuming, and disruptive. We have the tools now in legislation, so let's get on with it.

First, and as background, we have the problem of the coldest winter on record in the southern Great Plains Oklahoma area. Temperatures are 7 degrees below average at Dallas, Oklahoma City, and Amarillo. This was reported last week, as of March 1. Land was prepared and wheat seeded in the fall of 1977 without knowledge of the law and ensuing regulations. Much of the southern Great Plains suitable for wheat production is seeded, has adequate moisture, has experienced little wind damage, and remains dormant much longer than normal. The production of pasturage has been minimal due to slowdown and covered with snow most of the winter. Cattle grain from wheat pastures has been little to none and supplemental feeding has been full feeding to maintain weight and health. Wheat growing should not be providing all of the nutrients for these cattle, but the day I left, Sunday, my cattle were consuming 12 pounds of high-priced roughage per day due to lack of growth on the wheat, and this wheat is producing very little for storage.

The Secretary of Agriculture has authority under the present act to allow hay and grazing set-aside acres. They have agreed to grazing, but seriously restricted its value by requiring, by regulation, that we must remove the cattle and set-aside the same day. The Secretary has stated that the State ASCS committees are to determine this date in Oklahoma, Kansas, and Texas. The date was set by the ASCS-State committee, by Mr. Ray Fitzgerald's staff, and by Mr. Weldon Denning, Deputy Administrator. The regulation is much too restrictive and needs to be changed back to the date set by the ASCS committee. In my case here is what it means. I miss 15 days for grazing, with at least 30 pounds per acre for grain and as it now stands it amounts to about $15 per acre income off my required set-aside, without 1 cent cost to the U.S. Treasury. This is not additional income; this is income to minimize losses on the cost of seeding, land preparation, fertiliza

tion, and spraying in order to protect my soil from wind and water erosion, a cost I bear 100 percent.

Item 2, also permitted in the present act, is the Secretary's authority to implement section 1004, special grazing and hay programing. This would allow additional acreage for hay and grazing. This section is a family farm section that would allow small farmers to take additional acreage out of grain production, be paid no more than present deficiency payments and reduce grain production. This should satisfy the northern and western grain producers, as it would not impact on their grain production at harvest time in 1978 because most of the acreage of grain production would have occurred.

Most of the cut in the acreage of grain production would occur in the southern Plains States, which harvests first. We have the tools in the present act to help alleviate our present farm problems. We need only assistance and prodding by you gentlemen in the Senate who wrote and passed this law, so again I say let's use this law and get on with it.

Senator HODGES. Thank you.

Next would be Mr. Schieber.

Mr. SCHIEBER. Mr. Chairman, Senator Bellmon, I ask that my statement be inserted into the record.

Senator HODGES. It will be done.*

STATEMENT OF DON SCHIEBER, NEWKIRK, OKLA., REPRESENTING THE OKLAHOMA WHEAT GROWERS ASSOCIATION

Mr. SCHIEBER. At this time, as you know, we have a very large surplus of wheat in this country. What are we going to do with it? There is the old saying, let supply and demand take care of it. We have no control over demand. In fact, demand will increase. We do have control over supply to a certain extent. We know if we lower supply, the price will go up.

One of the best tools we can now use is export marketing of wheat. In my remarks I am referring to the Texas coast export area. There are many problems concerning exports of wheat that could both directly and indirectly increase our export sales if proper action would be taken.

There are many inconsistencies in obtaining an official grade designation from the Federal Grain Inspection Services for grain before it is loaded on vessels. For example, grain coming into an elevator receives a grade designation at time of entry. Inconsistencies have occurred where this same grain receives a different grade designation prior to loadout. When this happens, there is a delay trying to find out who or what the problem is.

Unnecessary delays occur on a near regular basis in obtaining vessel clearance to be loaded with grain. These vessels are inspected for cleanliness prior to reaching berth and are failed when they reach dock and are ready to load. When this happens, they must be removed from dock, recleaned and reinspected before they can be loaded. This

See p. 303 for the prepared statement of Mr. Schieber.

delay time costs an average of $200 per hour. At this time there are approximately 70 vessels awaiting load in the Texas coast area. These delay times cost $14,000 per hour when you add these 70 vessels at $200 per hour. These foreign buyers are not going to stand for this kind of treatment very long. Prior to the FGSI arrival on the export scene, using one example, there were two grain inspectors, three or four samplers, and one weight supervisor for railcars. Now the FGIS has 10 supervisors for railcars, trucks, and ships, 4 to 6 grade inspectors and 6 samplers. This is the same elevator operating under the same conditions but under two different inspection agencies.

Under the FGIS system, we have seen the cost factor go up rather drastically, and who pays for it? The American farmer pays for it. The exporter has to add these extra costs to his expenses and the only way he can pay these costs is by reducing the price he pays for the wheat he exports. The inconsistencies under this system are created by more people doing the same job when less are needed. They are trained for a very short period to be a Federal grain inspector, and this cannot be done.

One more regulation for FGIS employees to operate under is that when relative humidity at the elevator reaches 45 percent or below, they are allowed to leave the job, and when they leave the elevator it is closed. The reason 45 percent humidity was chosen is because that is what the humidity was when the explosion occurred at Farmers Export Elevator at Galveston, Tex. This is very disturbing when elevators that have operated safely for many years with no regulations like this and now all of a sudden at 45 percent relative humidity it is so dangerous. We have the same weather we have always had, it hasn't changed that much.

We must be able to load grain that we have sold more rapidly, but with regulations like these it is impossible.

The USDA should be promoting the quality of our wheat instead of saying that it will get better now that the FGIS has taken over the inspection. With statements like these, Secretary Bergland is telling the whole world that before FGIS takeover the U.S. wheat has been substandard grain. The FGIS cannot perform any magic on our grain. It is no better now than it was then.

The USDA should also tell our foreign customers that once they buy U.S. grain that we will load that grain and will not embargo that grain. We have many export market possibilities, but we must continue to work on these markets. The most important export customer we must open up is the People's Republic of China. We need their business now.

Senator HODGES. Excuse me for interrupting, but your statement has been put in in full and if you intend to give time to Mr. Knapp, perhaps you should begin to yield.

Mr. SCHIEBER. I am done. Thank you very much.

Senator HODGES. I apologize for interrupting, but we are under time limitations.

Mr. Knapp.

STATEMENT OF LYMAN KNAPP, BLACKWELL, OKLA.*

Mr. KNAPP. Mr. Chairman, members of the Senate Committee and others, I don't need to say very much to you. I am going to take the position that you pretty well know what has happened out there in agriculture, but I do want to ask you a question.

Now, I am from Oklahoma and about 75 to 80 percent of our wheat goes into export. Since two-thirds of the U.S. wheat is exported and we are the major exporter in the world market, why do I produce and sell at $2.90 a bushel, or 80 percent of the cost of production, when the moment that wheat touches its foreign destination that wheat value is multiplied by at least 2, if not 4 times, and this wealth remains in the foreign destination and that doesn't get back to our economy where it belongs. We have been shortcircuited in the beginning of this move. How foolish are we in our own eyes, much less the eyes of others. It has been amazing to me that the United States as a Government, as a people, as a society does not use the force that we have in the surplus of wheat in our balance-of-trade arrangement.

I would like you to lift the sheet up when you get to looking at this and I have presented back here a copy of the prices of wheat in the foreign countries, taken from the International Wheat Council Report on the 1976-77 crop and you will see that wheat obtained a much different value in the foreign countries and at the same time remember the exporting countries had a different price generally than the importing countries.

There is one other graph here I want to call your attention to in my testimony, and it is the result of a study of the prices of parity received by the farmers over a 67-year period in connection with unemployment and inflation rates, which will have to be read over in the chart on the back of the next page.

Now, this visible chart here gives the prices of farm products in relation to parity, and you can quickly associate the lowest prices for farm products is always associated with the highest unemployment. This reflects 67 years of history in these United States. I consider it very important.

Then if you turn the page over here, here is the table in print. I didn't copy the graph. It shows the inflation factor to be very, very stable during the years in which we have had parity for farm produce, and these are the two objections I have heard running up and down the Halls of this Congress, that if you had parity, even assuming you could get it, we would have runaway inflation and the unemployment would go bad.

There is a new study out by the USDA I would like to interject in that. I don't have it with me, but I can get it out of my briefcase in a minute.

[The following information was subsequently received by the committee:]

*See p. 305 for the prepared statement of Mr. Knapp.