Sheepmen's Subsidy

While many a dairyman and grain farmer fretted about sagging Government price supports, wool growers had much to be thankful for last week. The Agriculture Department announced a guarantee of 62-c- a Ib. for the 1955 wool clip, 17% above the current support level and a generous 106% of parity. The bigger subsidy, authorized by congressional revision of the Wool Act last summer, was designed to spur wool output to 300 million Ibs. annually from a near-record low of 230 million Ibs. this year.

Although the boost was originally proposed by wool-state Congressmen as a defense measure, it was also their price for going along with the Administration's program of lower support prices for other agricultural products. Actually, the fatter subsidy could result in lower consumer prices for woolen goods, because Congress also decided that the 1955 clip should seek its own price level in a free market. The Government will make up the difference to growers out of the duties on wool imports. Under the present law, the Government guarantees the growers up to 90% of parity by buying up their surplus production.

When the new program goes into effect next April, a $65 million kitty from customs revenues will be available for subsidies. If the program had been in effect this year, it would have cost the Government about $21 million to bridge the gap between the free market and the guaranteed prices. Agriculture also announced that as soon as the higher subsidies raise wool production to the 300 million-lb. goal, there will be a new target of 360 million Ibs. set up.

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