Veto of the Farm Freeze Bill.

To the Senate:

I return herewith, without my approval, Senate Joint Resolution 162. I have given earnest consideration to the many representations made to me both for and against it. It is my judgment that to approve this resolution would be ill-advised, from the standpoint both of the nation and of our farm families as well. It is regrettable that for the second time in two years the Congress has sent me a farm bill which I cannot in good conscience approve.

Specifically, the Resolution would have such consequences as these:

1. It would pile up more farm products in government warehouses.

2. It would restrict the growth of markets.

3. It would postpone the day when agriculture can be released from the strait-jacket of controls.

4. It would by-pass the problems of the small operator who produces so little for sale that price supports have scant meaning.

5. It would hold up the needed transition to modern parity and would in fact disregard the parity principle.

6. It would be unfair to those winter wheat growers who signed up under the 1958 acreage reserve program with the understanding that the price supports which had then been announced would be the effective rates.

This Resolution would fix farm price supports and farm acreage allotments at not less than existing levels. The true need is to relate both price supports and acreage allotments to growing market opportunities.

With regard to government controls, what the farm economy needs is a thaw rather than a freeze.

Improvements have been made in farm legislation in recent years. The keys to these improvements have been expansion of markets and greater opportunity for our farm people to exercise their own sound judgment.

Fears were expressed by some that farm prices might collapse when high rigid price supports were abandoned. These fears did not materialize. Instead, farm prices rose. This month the index of prices received by farmers is 9 percent above the level that prevailed in June of 1955 when high rigid price supports were last generally in effect. The parity ratio now stands at 87, up 6 points from a year ago.

Most of agriculture is without production controls and without price support. This is generally true of meat animals, poultry and fruits and vegetables.

There is impressive evidence that farmers stand to profit from less rather than more governmental intervention. Unsupported prices of cattle and hogs are unusually strong.

Despite these bright spots, many farm problems remain to be solved. The price-cost squeeze continues to harass our farm people. Production restrictions impose a severe burden. Many of our farmers--those on farms not large enough to be profitable--are earning incomes which are below any generally accepted standard.

Cotton, wheat, corn and other basic crops have major problems. Progress in solving the problems of these crops cannot be made by going backward. We must continue in the direction which the Congress set in 1954 and endorsed in 1956--changes in the direction of greater opportunity for adjustments made necessary by our ever-changing agriculture.

I said, prior to the passage of this Resolution, that what it proposed would be a turn of 180 degrees in the wrong direction. After reviewing the Resolution in its final form, I adhere to this conviction.

For the 1957 crop, prices were supported, product by product, in accordance with a complex set of legislative and administrative considerations. The same was true in the establishment of acreage allotments. To carry these forward unaltered, despite changes in demand, in supply, and in surplus stocks, would be contrary to sound legislative procedures and would completely disregard economic fact.

Now I want to turn to the progress that has been made through programs already in effect. In recent years a many-sided attack on farm problems has been launched. Substantial gains have been achieved:

Through the Rural Development Program to help those at the low end of the income scale.

Through market-making exports which last year reached an all-time high.

Through providing needed credit to family farms.

Through sharing our abundance with the needy at home and abroad.

Through market development in cooperation with producer organizations and the food trade.

Through surplus reduction, which has cut down our stocks by more than a billion dollars.

Through stepped-up research to find new uses for farm products. Through special programs to increase milk consumption. Through expanded long-range conservation measures.

While it is necessary to reject the freeze embodied in this Resolution, the Congress and the Executive Branch can be helpful in other ways.

A five-point program should be undertaken, involving various separate but related actions. Some of these are the responsibility of the Congress and some are administrative. Some call for legislation, while ample authority already exists for others.

1. The old basic law should be revised. On January 16, 1958, I sent to the Congress a Special Message on Agriculture which recommended needed changes. Many of the problems will be alleviated if the Congress will act on these proposals in this session:

Authority to increase acreage allotments up to 50 percent, and to widen the range within which price supports may be provided.

Elimination of acreage allotments for corn, permitting all corn farmers to plant in accordance with their best management decisions, so that price supports would apply to all corn rather than, as the freeze bill would have it, to only about one acre in seven in the commercial corn area.

Abolishment of escalator clauses in the law because these rigid provisions keep farm people continually under the shadow of price-depressing surpluses.

Extension of the Agricultural Trade Development and Assistance Act, with substantial increased authority to move surplus stocks abroad.

Shifting the price supports for cotton to the average of the crop, the same as for all other farm products.

There is opportunity to make these needed changes before fall seeding time if the matter is undertaken promptly.

2. When these necessary legislative changes have been made, 1959 acreage allotments will be established at levels as high or higher than those prevailing in 1958 Certain statutory provisions which place a floor under acreage allotments for cotton and rice are scheduled to expire after the 1958 crop. Producers face sharp acreage reductions unless the law is changed. When the Secretary of Agriculture has been given the necessary authority to adjust price supports and acreage allotments he will set 1959 allotments at levels at least as high as those in use this year. for cotton and rice these allotments will be substantially above the levels which would otherwise prevail.

3. When necessary new authorization is provided in keeping with my legislative recommendations, the special export programs for our surplus crops will be enlarged. Opportunities exist to export, both for dollars and through special programs, large quantities of our staple commodities.

Wheat is becoming better known to consumers abroad. Market development and promotional activities have made more people acquainted with the merits of our many export products. These commodities can alleviate hunger and need, and should be so used.

4. Dairy products acquired under the price support operation will be used outside the regular domestic commercial market. These products will not be offered for sale in such markets during the remainder of 1958 at less than 90 percent of parity. While freezing supports would not be a useful step, we seek to help the dairy industry in other ways.

To strengthen markets, the butter, cheese and dry milk acquired under price support will be donated to the school lunch program, to charitable institutions and to needy persons. Exports will be made when this can appropriately be done.

Such inventory management will serve to bolster the market. Meanwhile, the Administration will continue to support the special school milk and armed services milk programs. We will also support as a further aid to dairy farmers, the accelerated brucellosis control program. Stepped up promotional activity will increase consumption.

Every constructive step available to us will be taken to increase the use of our wholesome dairy products.

5. An export program for cotton, corn and other feed grains, similar to the present export program on wheat, will be put into effect. This can be done without legislation. The effect of this program will be to move these products directly from commercial markets to the export trade without running them through the Commodity Credit Corporation. Under the wheat export program farmers have obtained broader markets and substantial price benefits in the marketplace. Marketing efficiency has been promoted and the amount of wheat which has moved into government channels has been reduced. The new program for cotton and feed grains is expected to have similar effects.

To meet the rapidly changing conditions in agriculture, farmers must be able to make their own management decisions on their own farms. They must not have their production and prices frozen in an outmoded pattern. They must not be made the captives of a restricted history; they must be given freedom to build a brighter future. This can be done if farmers and those who serve them will team up in support of sound legislative and administrative action.

DWIGHT D. EISENHOWER