average income, because in it you have everything from watermelons to artichokes, on one end, to the basics of wheat, cotton, meat and so forth, on the other.

The CHAIRMAN. In the TNEC study in 1940, I find the following:

Recent studies of the Bureau of Agricultural Economics show that in 1940 farmers got an income of approximately 6.2 billion dollars for producing goods bought by American consumers.

This left out nonfoods and exports.

The consumer spent 14.8 billion dollars for these foods. The difference, amounting to 8.6 billion dollars, went to railroads, truckers, processors and manufacturers, wholesalers, retailers, bankers and other kinds of middlemen. On the average, the farmer got 42 cents of the consumers' food dollar, and the marketing system got the other 58 cents.

I thought it might be interesting to put that into the record, and if possible, if you care to, you might give us some up-to-date figures and, possibly, break it down in accordance with particular commodities.

Mr. KEATING. Of course, in that connection, it should be borne in mind that in this process are hundreds of thousands, probably millions of people employed who also shared in that.

Mr. MICHENER. Yes.

The farmer gets the money he receives for his product in the market place, and in addition to that he gets the benefits, the checks for doing a better job, such as in soil conservation.

Now, in determining what part of the consumer dollar the farmer gets, do your figures take into consideration the checks the farmer has had from the Government?

Secretary BRANNAN. No, Mr. Congressman, I do not think they are computed, and I do not think they should be computed because, after all, it is the farmer himself who has contributed to that tax money which is invested in the improvement of his soil resources.

Mr. KEATING. The farmer, among others.

Secretary BRANNAN. Among others, certainly; yes.

Mr. MICHENER. Some of it comes out of general tax money.

Secretary BRANNAN. He is a big taxpayer in this country, too. Mr. MICHENER. Of course he is. That is just what I am getting at. If you are getting into figures, just saying now, here, this farmer gets so much out of every bushel of potatoes he sells, and the consumer pays so much for the potatoes, now where does the difference in there come from?

Secretary BRANNAN. From the tax funds.

Mr. MICHENER. That is it exactly, and the farmer only shares in proportion to the amount of taxes he pays.

Secretary BRANNAN. That is right, sir. I am sure the Congressman does not associate me with that particular type of law, pricesupport law, because, as you know, I have been opposing it vigorously for a long time.

Mr. MICHENER. Yes; I think that is true, since you have been in power, but I am viewing the whole situation, especially that which existed at the time the TNEC report came out, to which the chairman referred.

Suppose I had a farm-I am talking about only the last 2 years-I have a farm now: If I agreed to go along and do the things that your

Department tells me to do, then I receive the regular price in the market place, whatever that is, plus the check which I receive from the Government for doing the thing that would help my business. That is correct; is it not?

Secretary BRANNAN. That is correct but, Mr. Congressman, may I point out the total amount appropriated in any year, or the maximum amount appropriated in any year has been $300,000,000, and just draw the relationship between $300,000,000, on the one hand, and the farm income of 32 billions of dollars in 1948, and you can see that the amount he got in conservation-practice payments was an extremely small fraction of his income. It was certainly no part of his income that would have made the difference between living or nonliving, or profit or loss, or anything else.

Mr. MICHENER. No; the question of marketing, the question of demand, the question of exports, the question of what we sent abroad all enter into it.

Secretary BRANNAN. I do not quite understand the implication in the statement, sir.

Mr. MICHENER. What I mean is that the demand in the market cuts a big figure with what the farmer's income is; and if the demand is artificial, or if the demand is unusual, or the demand is an emergency demand, that can hardly be considered as the income of the farmer in ordinary times.

Secretary BRANNAN. No; I think that is right, Mr. Michener.

As a matter of fact, over the last 10 years, 1939 to 1948, the national farm income has ranged from about 912 billions of dollars to the 31.2 billions of dollars that I mentioned a moment ago.

Mr. MICHENER. That is all.

Mr. KEATING. Well, Mr. Secretary, do I understand that the payments by the Government to farmers last year amounted to about $300,000,000?

Secretary BRANNAN. $265,000,000 last year.

Mr. KEATING. And you do not associate yourself with the plan under which those payments were made?

Secretary BRANNAN. Oh, yes, I do, sir. I was making the point that I do not associate myself with the price-support device now being used in the case of potatoes, to which Mr. Michener made reference.

We, in the Department of Agriculture, have written letters in 1947, 1948, and 1949, and testified several times that we thought that was not a good application of the price-support theory.

Mr. KEATING. Is not that price-support program a part of the method by which these payments were made to the farmers?

Secretary BRANNAN. That is correct, sir; but we maintained, and I think almost everybody in the field maintains, that it is subject to some improvement, and that was one of the areas in which we thought there was room for improvement.

Mr. KEATING. You have proposed a specific plan to change that; have you not?

Secretary BRANNAN. I have, sir.

Mr. KEATING. Under your plan, what is it anticipated will be paid to the farmers in checks each year?

Secretary BRANNAN. Of course, as you are well aware, that is one of the controversial subjects, but let us take the question of potatoes.

My previous analysis showed that in the year 1948 we will have for the 1948 potato crop paid about $240,000,000 in price-support operations. That price-support operation involved going into the market place and removing from the supply the quantities of potatoes necessary to maintain a supply and demand level for potatoes at the 90 percent of parity or around $2.25 or $2.50, depending on the area in which you were, and disposing of those potatoes to the best possible uses you could put them, about which I do not want to elaborate too much, but you again are aware that we, first of all, put them into school-lunch programs, institutional feeding, manufactured them and sold them for the manufacture of starch, sold them for the manufacture of animal feed, sold them for the manufacture of alcohol, and, with a few very selected varieties at particular times of the year, were able to export some of them.

We also had some dehydrated and exported, or made into potato flour, and sold to the Army for export.

Now, my proposal, if applied to that, I say would not cost $40,000,000, much less the $240,000,000.

Mr. KEATING. So you would anticipate saving $200,000,000 for the country?

Secretary BRANNAN. In potatoes?
Mr. KEATING. Yes.

Secretary BRANNAN. That is right.

Mr. KEATING. In other words, of the $265,000,000 paid out, $240,000,000 of it was paid to potato farmers?

Secretary BRANNAN. Excuse me—

Mr. KEATING. I understood you to say that the total payments to farmers last year were about $265,000,000. Secretary BRANNAN. No; $240,000,000, sir.

sir.

Mr. KEATING. And all of it paid to potato farmers?

Secretary BRANNAN. I am talking only about the potato crop; yes,

Mr. KEATING. Well, how much was paid to farmers in all for all crops?

Secretary BRANNAN. Well, I will do my best to supply a statement on that for the record. It is almost an impossible question to answer, I say respectfully to you, sir, for the reason

Mr. KEATING. I understood that you had already answered it a moment ago by giving me the figure $265,000,000.

Secretary BRANNAN. I did not intentionally use the figure $265.000.000 at any time. sir. I am sorry if I did.

Mr. KEATING. When I asked you if $300,000,000 was paid out last year for the farmers, you gave me some figure. What was that? Secretary BRANNAN. We were then talking about Mr. Michener's question, as I understood it, with respect to payments to farmers for soil conservation practices.

Mr. KEATING. Oh. That was your understanding of my question. was it?

Secretary BRANNAN. Yes, sir. We were talking about that as distinguished from price supports. I am sorry if I have misunderstood you, sir.

Mr. KEATING. You do not have the figures as to what was paid out to farmers over all, in all forms last year?

Secretary BRANNAN. We have statements which are kept up reasonably to date, but I point out to you that much of this money has been invested in storable goods, cotton and wheat, and many other commodities, many of which we will liquidate out our total investment in them, and some of those commodities we have actually made very large profits in times gone by, so, to give you the figures

Mr. KEATING. And in many you have incurred large losses, have you not?

Secretary BRANNAN. Up until the middle of last year, the pricesupport program had not cost any money, sir. It was only until we got in the tremendous losses on potatoes and a few other programs, that the over-all historic picture of the price-support program showed any loss.

Mr. KEATING. I am interested, however, in the amount which you paid out to farmers last year of Federal funds.

Secretary BRANNAN. We will supply that figure for the record. What we will do, if you wish, is to put into the record the Commodity Credit Corporation operating budget. It is in the record several places around here.

Mr. KEATING. Well, simple figures would be better than to have a budget, I think.

Secretary BRANNAN. On the other hand, they would not be too informative unless you took it crop by crop, and dealt with it in that

fashion.

Mr. KEATING. You do not have it crop by crop?

Secretary BRANNAN. We do have it by crop, yes, indeed, but

Mr. KEATING. I think it would be helpful if you were to supply

that.

Secretary BRANNAN. All right, sir.

(The information referred to follows:)

SUPPLEMENTAL Statement FURNISHED BY THE HONORABLE CHARLES F. BRANNAN, SECRETARY OF AGRICULTURE

During the fiscal year 1949, through May 31, 1949, the CCC had extended price support, through loans, direct purchases, and purchase agreements, in the estimated amount of $3,129,910,615 on 1948 crops. However, during the same period, loans repaid and estimated purchase agreemenets not to be exercised totaled $464,150,289 on 1948 crops. This left a total of $2,665,760,326-largely representing loans outstanding, purchase agreements signed, and the book value of collateral acquired.

As I pointed out earlier, it is not possible at this time to estimate with any degree of accuracy the ultimate net results of the 1948-49 price support program. Some of the loans now outstanding will be repaid. Some of the purchase agreements that we now estimate will be exercised may not be exercised. And, if the CCC is required to acquire substantial quantities of collateral, the manner in which it is able to make final disposition of that collateral will have a major bearing on net program results. The CCC, for example, made a gain of $237,158,970 on its domestic cotton price-support program from its inception in 1933 through May 31, 1949, largely because it was able to sell at a profit during the war years cotton it had acquired under price support before the war.

As the following tabulation of gains and losses shows, the CCC had sustained a net loss of $234,551,306.05 on price-support operations for the fiscal year 1949, through May 31, 1949. But these results, of course, are not final, particularly in the case of such crops as cotton, corn, wheat, tobacco, and wool. Final results

will depend upon the volume of collateral the CCC must take over, and the price at which such collateral is sold.

1 Represents CCC losses for first 11 months of fiscal year 1949. Gross losses for crop year 1948-49 approximate $240,000,000.

Mr. KEATING. On page 14 of your statement, you say:

While prices were going down last year, the entire difference in cost to consumers was coming out of the farmers' price-none of it out of middlemen's margins.

Do you mean to imply that the middleman, if he is buyng a product for a dollar, puts the same margin on it that he would if he were buying that product for two dollars?

Secretary BRANNAN. No; the statement on page 14 is a plain statement of fact. There are no implications meant whatsoever. It is sug gested that one of the areas in which we might examine is in there.

Mr. KEATING. Well, I had supposed that the middleman added, perhaps, a percentage onto the cost of his article in marketing it, rather than a fixed amount, as you implied here, when you say that none of this lowered cost has come out of him; it has come out of the farmers.

Secretary BRANNAN. Well, now, there are two or three things which, I am sure, if a representative of the so-called middleman were sitting here right now, he would cite to you, that in this period of time, transportation rates have increased; perhaps, his labor costs have increased; perhaps, the cost of some of his packaging materials has increased, and so forth, so that, as the price of the commodity came down it was not possible for him to reflect it immediately on this item. The CHAIRMAN. Mr. Secretary, at that point also is it not well to call attention to the fact that we have had latterly more legislation that increases marketing spreads and prices to consumers, like the fair trade practice laws, which tend to guarantee a price on certain articles, particularly food to the retailer, and in those instances, the larger profits are not handed back to the farmer, are they, in any fair degree?