Evening star. [volume] (Washington, D.C.) 1854-1972, 1956-01-29
SurpIuses Tax
Ingenuity Of
Farm Secretary
By OVID A. MARTIN


One Of the biggest responsibilities
falling on Secretary Of Agriculture
Benson is that Of being custodian
to the Governments 90 billion stock
Of farm surpluses.
He is charged by law with hus-
banding the vast supplies Of wheat.
corn. oats and other grains. cotton.
tobacco. dairy products and other
farm items 80 that they will not 60
to waste, be stolen or be allowed
to deteriorate unnecessarily.
Furthermore, he is directed by
law to see to it-within prescribed
limits-that the SURPRISES are not
allowed to move into markets to
compete with the farmers own
products and undermine prices.
But new fair-aid proposals laid
before Congress by President Eisen-
hover recently would raise new
problems for Mr.. Benson in handling
the SURPRISES. To meet these prob
lens. the President recommended
that his farm chief be granted
greater leeway in handling the over
supplies.
Some farm-belt lawmakers baked
ut these recommendations These
differences could well develop into
q major issue in congressional eff
forts to reach agreement on new
farm measures.
Under the present farm law, the
Secretary may not sell Government
surpluses in domestic markets below
q designated minimum price. AS a
general rule, that minimum price
Ii los per cent Of the prevailing Gov
eminent price support rate for the
affected commodity. plus handling
charges. These charges include
costs Of making price support loans
to farmers on the commodity. ac-
cumulated storage charges and in
terest on the loan.
How Surplus SoIes Work
Assume. for example, that the
price support rate for wheat is
$2.08 bushel. The minimum price
at which Benson could sell Gov
eminent wheat Of the base quality
and grade would be $2.08 plus 5
per cent Of $2.08 plus handling
charges. The 5 per cent addition
would be 1914 cents. Assuming
handling charges totaled 10 cents
bushel. the minimum sales price
would be $2.284.
Congress wrote this minimum
into law for the declared purpose
Of protecting farmers markets
against competition Of Government
supplies UP to the minimum level.
The lawmakers did, however.
provide one general exception to
this minimum. They allow the
Secretary to sell SURPRISES below
this level in the event he finds that
surplus stocks are in danger of
deterioration.
The Eisenhower proposal meeting
opposition is a condition under
which SURPRISES would be allowed
to move into markets under a rec
commended soil bank plan. Under
this plan farmers would be given
certificates for planting less than
their allotments of cotton, wheat,
corn and rice The certificates
would be redeemable in cash or
their cash equivalent in surplus
products.
The purpose Of the soil bank plan
Is to cut down crops of these COM
modtties and make way in the
markets for Government SURPRISES.
The administration proposed that
some OF the surpluses be allowed
to move into markets at the going
market price and that additional
supplies be offered at the support
rate plus handling charges-or S
per cent below the present minimum,
Farm Group Protests
This proposal brought protests
from leaders of such farm or
CARNATIONS as the National Grange.
the Farmers Union and the Ameri-
can Farm Bureau Federation as
well as a number of lawmakers.
The critics commended that such
reductions in the Government sales
price would weaken farmers prices
still further.
On Tuesday Mr.. Benson dropped
the proposal for authority to sell
part OF the surplus at market
prices" He did ask authority.
however, to sell of SURPRISES at the
current support price plus carry
ing charges.
In periods like those of recent
years when year-to-year production
has exceeded market demands, the
Governments minimum sales price
has been of minor Importance be-
cause ample supplies are available
in markets at lower prices.
But in event production should
fall short of market requirements
goal of the soil bank plan-the
Governments ceiling price would
become all important. Market
prices themselves would tend to
rise to the Government level under
the influence of buyer action to
obtain supplies.
Hence, the higher the Govern
ment price. the higher would be the
price the farmer would get for his
crop. Herein lies the farm LEADER
opposition to a reduction in the
surplus price.
There is a further likelihood that
some Congressman may seek to re-
tain the present price limit on sur
plus sales, but to add limit as to
the amount Of a given commodity
that the Secretary may sell in the
domestic market.
There also is the possibility that
Congressr-in its desire to protect
farmers prices--may set up q new
restriction on sales of "deteriorat-
ing" SURPRISES
In this connection, it is being
proposed that the Government be
required to buy on the market the
same quantity of good quality