Out of the Frying P.cm

When Congress last year ordered the Agriculture Department to subsidize cotton exports and thus cut the mounting surplus. Agriculture Secretary Ezra T. Benson hoped to send possibly 5,000,000 bales overseas this year, more than twice 1956 exports. Last week Agriculture officials totaled up the figures and announced that the program had succeeded far beyond Secretary Benson's prediction. At a cost of $442 million in subsidies, the U.S. will have exported 7,500,000 bales by Aug. 1, the highest since 1933. But before anyone could cheer, the Agriculture Department also warned that the export program may prove more of a headache than a help.

Under the escalator clause of the price-support law, supports move up or down according to total supply, as well as according to changes in the general price level. Now that the export program has cut the carryover, Secretary Benson will probably have to boost price supports for the current 1957 crop well beyond the 28.15-c- per Ib. price he set last February. The net effect, as Under Secretary of Agriculture True D. Morse wrote the House and Senate Agriculture Committees a fortnight ago, will be to encourage farmers to produce more cotton, which in turn will mean a higher surplus and one that will be even more expensive to dispose of abroad. Each additional penny of price supports will cost $25 million more in cotton export subsidies. Said Morse: "With the formulas in the present law, our success in moving surplus No. 1 will set the stage for surplus No. 2."

The Agriculture Department asked Congress to eliminate the escalator clause in the support law before serious harm is done to the "longrun interests of our farm people." But last week influential farm-bloc Congressmen passed the word that there will be "no action this year." On commodity markets, cotton futures jumped $1 to $3.65 a bale in a single clay as cottonmen got set for higher prices and higher supports.

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