Special Message to the Congress on Agriculture.

To the Congress of the United States:

I urgently call attention, once again, to a most vexing domestic problem--the low net income of many of our farmers and excessive production of certain farm products, largely due to economic distortions induced by years of Federal interference.

We are most fortunate that our problem in agriculture is over-abundance rather than a shortage of food. But it defies common sense to continue to encourage, at the cost of many millions of tax dollars, the building of ever larger excess supplies of products that, as they accumulate, depress farm prices and endanger the future of our farmers.

The wheat situation is particularly acute. Federal funds tied up in wheat approximate $3 1/2 billion. Although this means that well over thirty percent of the total funds invested in inventories and loans of the Commodity Credit Corporation goes for wheat, this crop provides only six percent of the cash receipts from sales of farm products. The government sustains a net cost of more than $1,000 a minute--$1,500,000 every day--the year around, to stabilize wheat prices and income.

Day by day this program further distorts wheat markets and supplies. Its only future is ever higher cost. Inexorably it generates ever larger surpluses which must be expensively stored. Ultimately, if our government does not act quickly and constructively, the danger is very real that this entire program will collapse under the pressure of public indignation, and thousands of our farming people will be hurt.

I think the American people have every right to expect the Congress to move promptly to solve situations of this kind. Sound legislation is imperatively needed. We must quickly and sensibly revise the present program to avoid visiting havoc upon the very people this program is intended to help. Every additional day of delay makes a sound solution more difficult.

I have repeatedly expressed my preference for programs that will ultimately free the farmer rather than subject him to increasing governmental restraints. I am convinced that most farmers hold the same view. But whatever the legislative approach, whether toward greater freedom or more regimentation, it must be sensible and economically sound and not a political poultice. And it must be enacted promptly. I will approve any constructive solution that the Congress wishes to develop, by "constructive" meaning this:

First, that price support levels be realistically related to whatever policy the Congress chooses in respect to production control, it being recognized that the higher the support the more regimented must be the farmer.

Second, that price support levels not be so high so as to stimulate still more excessive production, reduce domestic markets, and increase the subsidies required to hold world outlets.

Third, for reasons long expressed by the Administration, that we avoid direct subsidy payment programs for crops in surplus; likewise, we must avoid programs which would invite harmful counter measures by our friends abroad, or which, while seeking to assist one group of farmers, would badly hurt other farmers.

Within these three guidelines, I am constantly ready to approve any one or a combination of constructive proposals. I will approve legislation which will eliminate production controls, or make them really effective, or allow the farmers themselves to choose between realistic alternatives. I am willing to gear supports to market prices of previous years, or to establish supports in accordance with general rather than specific provisions of law, or to relate price supports to parity.

I recognize that these observations are general in nature. They are intentionally so in order to leave the Congress room for alternative constructive approaches to this problem. If the Congress should so act, I urge an orderly expansion of the Conservation Reserve Program up to 60,000,000 acres, with authority granted the Secretary of Agriculture to direct the major expansion of this Program to areas of greatest need.

In connection with the expansion of the Conservation Reserve, the Department of Agriculture stands ready to assist, if desired, with the development of sound legislative criteria governing the administration of this program in the light of its experience gained through its operations of the past four years.

As part of the Conservation Reserve Program, I would be willing to accept an authorization, with proper safeguards, to the Secretary of Agriculture to make payments in kind in whole or in part for the reduction of acreage devoted to crops in surplus and retirement of this acreage from cultivation, provided measures are included to keep production below total consumption while the payment-in-kind procedure is being used. Lacking such safeguards, a payment-in-kind procedure would overload the free market and thereby depress prices.

My views as regards the price support program for wheat are clear. I prefer the following approach:

Acreage allotments and marketing quotas for wheat should be eliminated beginning with the 1961 crop--thus freeing the wheat farmers-and thereupon price-support levels should be set as a percentage of the average price of wheat during the three preceding calendar years. The Secretary of Agriculture will furnish the Congress the details of this approach.

Here I wish to comment somewhat more specifically on corn, a crop tremendously important to many thousands of our farmers.

Just over a year ago, by a referendum margin of almost 3 to 1, our corn farmers decided upon a new program that liberalizes corn acreage and adjusts corn price supports. This program is still new, and I believe it would be wise to give it a chance to demonstrate what it can do. In order to help the producers adjust to this new program, it is intended to use the expanded Conservation Reserve Program to provide a voluntary means of removing substantial acreage of corn and other feed grains from production.

On the administrative side, I want briefly to mention three programs highly important to agriculture.

The Food for Peace Program, initiated pursuant to my recommendations of last year, has been vigorously advanced. On my recent trip abroad, I saw many constructive results from these efforts and the need and opportunity for even greater use of this humanitarian program. Clearly we should continue to do our utmost to use our abundance constructively in the world-wide battle against hunger. The law we enacted in 1954, known as Public Law 480 of the Eighty-Third Congress, has been especially helpful to us in waging this battle.

Next, an aggressive Utilization Research Program is under way to develop new markets and new uses for farm products. The 1961 Budget now before Congress recommends additional appropriations for utilization research, and additional local currencies being acquired under Public Law 480 transactions will be devoted to this purpose.

A Coordinator for Utilization Research will shortly be named by the Secretary of Agriculture with the sole mission of concentrating on finding and promoting productive new uses for farm products.

The Rural Development Program, to assist rural people in low income areas to achieve a better living, is also being accelerated.

This program, initiated in my 1954 Message, is now well beyond the demonstration stage and is going steadily forward in 30 States and Puerto Rico. Other States are now starting this important work. I have also recommended more funds for this program in the pending Budget.

Finally, I repeat my conviction that the public, and farmers particularly, are entitled to sound legislative action on the problems I have mentioned. The Congress can act within a broad latitude of proposals and still comply with the recommendations I have made.

If the Congress wishes to propose a plan as an alternative to the course here recommended, so long as that plan is constructive, as I have indicated herein, I will approve it. The Department of Agriculture will cooperate fully with Congressional Committees and with individual Members of Congress in helping to prepare such alternative programs as they may wish to have considered.

The important thing for farmers, and for all other Americans, is for us to act sensibly and to act swiftly.

I urge the Congress so to act in order that the farmers and public generally may plan accordingly.

DWIGHT D. EISENHOWER