FLEXIBLE PRICE SUPPORTS FOR U.S. FARM PRODUCE

Press, Volume XC, Issue 27427, 13 August 1954, Page 11

FLEXIBLE PRICE SUPPORTS FOR U.S. FARM PRODUCE

(Rec. 8 p.m.) WASHINGTON, August 11. President Eisenhower today expressed satisfaction with the passage by the Senate of a bill covering his Administration’s farm prices support programme, but said he did not regard it as a “political victory.”

The Senate, in a vote yesterday, endorsed the flexible support of prices Mr Eisenhower had fought for instead of the rigid supports which had operated since 1943. The House of Representatives last month adopted the same flexible price support plan.

Slight differences between the two bills will be ironed out at a conference between representatives of each chamber. But the Senate vote has assured the Administration of the enactment of a plan which will permit farm price supports to be moved up or down as stocks vary. Both Houses adopted a variable range of price supports between 82 j per cent, and 90 per cent, of parity, so that the question will not be an issue at the conference of the two Houses. Parity is a Federal standard calculated to yield farmers a fair return on their produce in relation to their costs. Originated by the Roosevelt Administration, it was calculated on a fiveyear pre-war base period. Until now the rigid price “props” for five basic commodities—maize, wtyeat, cotton, rice, and peanuts—has been 90 per cent, of parity, resulting in the building up of large Government-held surpluses. Broadly, the parity programme has operated by the Government buying at the maximum prices (90 per cent, of parity) as soon as open-market prices dropped beloW such a level. Mr Eisenhower’s Secretary of Agri-

culture (Mr Ezra Benson) has fought for 19 months for the flexible pricesupport policy. He had wanted the range to be from 75 to 90 per cent., but the Administration accepted the compromise of 82£ per cent, as the lower end of the support range. This will mean that the Government, if it wishes to reduce surplus stocks of commodities It has bought, can allow open-market prices to sink as low as 82j per cent, of parity before it sends its buyers to “peg” prices against further declines. Control Over Production The basic purpose of Mr Benson’s programme is to control production by inducing farmers voluntarily to reduce acreages in the face of lower price supports. The “New York Times” said the Administration “rode roughshod” over the powerful farm bloc of Republicans and Democrats to obtain for Mr Eisenhower “virtually everything he wanted” in the farm programme. Senate passage of the bill, to be known as the Agricultural Adjustment Act, was by the overwhelming vote of 62 to 28.

The farm bloc made attempt after attempt to preserve rigidity in the price support programme and other phases of agricultural activity. The Administration programme is based on the belief that the real road to farm prosperity is a flexible price system to help in bringing about a balance of production and consumption to end the surpluses piling up in Government storage, and greater freedom for farmers. Farm Bloc Split To split the Senate farm bloc, the Administration welded Western wool interests. Southern Democrats, and some northern “big city" Democrats with the party-line Republicans. This combination was composed of 44 Republicans and 18 Democrats. Twentyfour Democrats, the heart of the farm bloc, were joined by only three Republicans and one Independent. Ona of the Republicans was Senator Joseph McCarthy, of Wisconsin. The only major item of controversy between the Senate and the House concerned the level of price supports for dairy products. The House fixed the range of support at 80 to 90 per cent. The Senate retained the “floor” of 75 per cent, recently established by Mr Benson. This and other discrepancies between the Senate and House versions of the bill are expected to be settled tomorrow. Mr Eisenhower, in references to the bill at his press conference, said he would like to see these discrepancies settled. He plumned particularly for the 75 per cent, "floor” for dairy products. Other discrepancies he mentioned were two price plans for wheat and the lack of a time programme for the supnort of wool prices. He said that the Sena’# 1 vote should be regarded as just another step in a programme designed for the welfare of the United States farmer and for a healthy, stable economy befitting all Americana.