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A lot of the answers are known but a great many more answers are to be found than has been found. Additional facilities are needed.
4. Additional technical assistance is needed. Farming today is a rather complex operation if it is to be profitable and at the same time assure future generations of adequate soil and water.
5. There are certain portions of the total soil and water conservation in which the public shares the cost of the installation or improvement. This appears to be fully justified, especially where the benefits are to the public as well as to the individual. There appears though to be a lack of balance in the public expenditure for large "downstream” structures where $50 to $150 million are spent on a dam or navigation channel and the amount that is spent in cost sharing on the "upstream" treatment and installation of a small watershed which feeds into the reservoir or channel.
Improvements on the upstream reaches of a watershed, such as small dams, grassed waterways, terraces, reforestation, and all the other soil and water conservation measures held hold the rainfall at its source on the farm, thereby making greater beneficial use of water, reduces soil deterioration and sedimentation of channels and reservoirs. The public, as a whole, benefits from such work, however the farmer in many instances does not derive benefits in keeping with the immediate cost. Farmers as a whole desire that the technical phases of the soil and water conservation program, along with the upstream work on small watersheds, continue to be funneled through the locally organized and governed soil conservation districts.
The CHAIRMAN. All right. Mr. Harley Langdale.
Senator YOUNG. I have to leave to catch a plane. I dislike very much leaving your good State of Georgia. It is a pleasure to come down here.
You people here have a good farm organization which has unified the thinking of the people in your State to an extent not prevalent in any other place we have held hearings. I know the bankers here and chamber of commerce people and all others are pretty well agreed on the solution to this farm price problem.
Another unusual thing is that we have had more Members of the IIouse of Representatives here today than any other meeting. I think if we had a situation like this in all of the States of the Union our chance of solving this farm problem would be much easier.
May I say again many thanks for all the nice things you have done for me on this trip and before. Thank you.
The ('HAIRMAN. Proceed, Mr. Langdale.
STATEMENT OF HARLEY LANGDALE, PRESIDENT, AMERICAN TURPENTINE FARMERS ASSOCIATION COOPERATIVE, VALDOSTA, GA.
Mr. LANGDALE. I am Harley Langdale. I am a farmer and I am also president of the American Turpentine Farmers Association Cooperative, an association representing all the gum naval stores industry in the United States.
Mr. Chairman, our position is just different from anybody else's position that has been on this program today. We have no surplus problems, we are not a basic. I was very much interested, someone wanted to forget those nonbasics. We are nonbasic. We have enjoyed a loan with the Commodity Credit Corporation for the past 18 years. For the past 5 years we had a 90 percent of parity loan on our products. We are in the permissible group, not compulsory, and this loan was based on our supply and demand. In other words, these last programs have been based on a supply and demand proposition.
Last year we did take in quite a bit of rosin and turpentine. We were able to sell it all at a profit plus all expenses to the Government of something like $75,000, which was distributed among our members. This year we have had a '90-percent loan and we haven't had a single gallon of turpentine or a pound of rosin to go into loan.
The point I have is this: You know naval stores is the oldest agricultural product in this country. The first ship that left the American shores when this country was first founded carried naval stores, and it played a very important part in the economy of this country ever since.
We in the pine tree section, of course, have this dual-purpose tree that extends from Carolina through Georgia, Florida, Alabama, Mississippi, and Louisiana. You know in 1910 Mississippi and Louisiana produced 35 percent of the gum naval stores in the United States, but they cut the trees out down there, but they are coming back. Louisiana at the present time is not producing any naval stores but they are about ready to tap some of those trees in Louisiana pretty soon going to be producing gum naval stores again.
The CHAIRMAN. Mr. Langdale, if you permit me, let me state that the record shows that in 1955 the naval stores price support program made a profit for the Government of $132,618; in 1954, $9,370; in 1953, $30,253; in 1952, $3,876. The only trouble you got in was between 1933 and 1941 before the war.
Mr. LANGDALE. That is right.
Mr. LANGDALE. We had 1,300,000 drums of rosin on hand when the war started.
The CHAIRMAN. Have you any suggestions? Do you like the program as it is?
Mr. LANGDALE. We are just as happy as we can be. We are trying to increase production this year 25 percent.
The CHAIRMAN. That will not put you in trouble?
Mr. LANGDALE. No, sir; it will help us. In other words, we are 16 percent short this year on production over last year, and last year we had the lowest production we have made since the Government has kept records.
The CHAIRMAN. I am glad to have one industry in good shape.
Mr. LANGDALE. Mr. Chairman, our association handles all the collateral; have been doing so for 18 years. We service it, we sell it, and our expense of operating, I think, will show that we have done it cheaper than any other commodities in which the Commodity Credit Corporation has had anything to do.
The CHAIRMAN. I am sure that is true because it shows a profit here.
Mr. LANGDALE. Yes, sir. And we sold out in 1947 all the crop and the Government at that time took in over $1 million of net profit on the sales end.
Today under market prices there is over a million dollars profit in the collateral and the season is about over for this year's production. All stocks anywhere today are the ones we have and we figure that a large portion of those stocks will move before the next season. Our season starts about May next year when we really have production, and we figure we will be in wonderful position but we are trying to increase
Ours is a hand-labor proposition; our labor cost is a 50-percent proposition and people any more don't like to work with their hands.
Then, too, there has been keen competition for timber, great demand for pulpwood and sawmill timber; it reached an all time high. This tree that makes gum naval stores is like milking shorthorn; you can get turpentine and now with our present method of operation it doesn't diminish value of the tree. The other sections of the country are not so fortunate in having that valuable tree.
You know there is a large amount of land in the South submarginal which should never have been in cultivation or pastures and when cattle got a little high here 3 or 4 years ago a lot of our forests were bulldozed to put pasture grasses. "That wasn't suitable, but we have the natural habitat for the pine tree and indications are, as I say, for a big demand now.
The paper consumption in this country now is around 400 pounds per capita, alltime high. And I think that is an out especially in the South here, to plant these in trees. I have planted myself already over 5 million trees and I have 2 million ordered for this year.
The CHAIRMAN. On your land?
Mr. LANGDALE. Reasonable size. I have 2 million ordered and will plant a million and a half and give away a half million to smaller farmers provided they will match it. In other words, the small farmer, if he will plant 2,500 I will give him 2,500 more to encourage him, which I think is a wonderful thing for our section. I believe that it is the salvation and we can't compete with my friends in wheat. All I have is a 15-acre wheat allotment.
I grow tobacco, corn, hogs, cattle. They gave me 15 acres of wheat. I don't make flour; I use it for livestock and the birds.
Just plant these diverted acres in pine and make it a permanent proposition because the supply of timber in the South is not going to be sufficient in the future in my opinion.
The CHAIRMAN. Thank you.
Mr. LANGDALE. A lot of people want to know what naval stores is used for. I have a list here I want in the record to see the importance. It will surprise you, the number of things in this country that use naval stores, a very important product.
The CHAIRMAN. Thank you. It will be put in the record. (Statement referred to is as follows:) I appear before you today representing the gum turpentine producers as president of the American Turpentine Farmers Association Cooperative which was organized in March 1936 and meets the requirements of Capper-Volstead Act and the Georgia Cooperative Act of 1921, as amended. Our association is made up of approximately 3,500 members whose production comprises more than 75 percent of the gum naval stores produced in this country. Its income is derived from two sources: (1) dues paid by producer members, the amount of which is measured by the quantity of gum produced ; and (2) royalties peid by licensed packers of turpentine in small containers for the use of the asinciation's copyrighted symbols, slogans, and devices. Royalties so paid are masured by the quantity of gum turpentine distributed by such licensees in containers bearing all or any such symbols, slogans, and devices. Any producer is eligible for membership upon payment of a nominal entrance fee of $1
which includes their subscription to the ATFA journal, our monthly publication. Nothing in the bylaws, policy, or regulations of the association prevents any producer from becoming a member. To the contrary, the association is constantly striving to increase its membership to embrace 100 percent of the gum production.
Gum naval stores production in this country dates back to early colonial days when the English Government wanted tar and pitch for use in His Majesty's ships.
It has been said that the first ships to leave our shores carried as a part of its cargo pitch and tar to caulk the boards and tar the ropes of the ships. It is indeed interesting to note that the British Covernment, back in 1610, offered a subsidy to the early settlers to encourage them in the production of sum naval stores and tobacco.
History relates that naval stores and tobacco have been a vital factor in the economic and industrial development of the world for many centuries. It also appears they were the first agricultural crops ever subsidized in the United States. Gum naval stores have been produced from Virginia south to Florida and across the gulf to Texas. However, at the present time production is confined to the States of South Carolina, Georgia, Florida, Alabama, and Mississippi.
The United States production of naval stores includes: (1) gum, made from the living tree by farmers represented by the association; (2) steam distilled. commonly referred to as wood naval stores produced from virgin slash and longleaf pine stumps; and (3) sulfate rosin and turpentine made from the byproducts of the pulp and paper industry. Only gum naval stores are classified as agricultural products.
Naval stores consumption has not greatly fluctuated during the last 50 years. In 1908 all production was from gum naval stores. However, since that time, gum naval stores has gradually decreased and wood naval stores has increased and today steam distilled accounts for approximately 60 percent, gum naval stores 25 percent, and sulfate 15 percent of the production. The wood naval stores pro:luction has reached its peak and leaders of that industry predict from now on a steady decline will occur due to the rapid depletion of their source of supply: the virgin slash and longleaf pine stumps. It is estimated the combined sulfate production from all pulp and paper mills will only yield approximately 25 percent of the present demand for naval stores. It is reasonable to assume the future naval stores supply must in an ever-increasing volume come from gum.
The association has been utilized as a primary nongovernmental agency in the administration of gum naval stores price support programs since 1938. The agreement between the association and CCC governs operations of the loan program and provides that no producer who is otherwise eligible for loan may be excluded for membership in the association. The loan agreement with CCC, among other things, makes the association directly responsible for the loans made to its membership.
The record of the gum naval stores CCC price support program is one all producers take pride in relating. As previously stated, all CCC loans have been made through the ATFA to the producer. In 1947 when all CCC turpentine and rosin stocks were liquidated, the Government had recovered the principal in full with interest and charges and in addition made a profit of $1,079,000 on the combined price-support programs since their beginning through the year 1947. In addition, USDA officials in charge of the CCC gum naval stores loan programs have advised us administrative expenses, including the Washington office, is one of the lowest, if not the lowest, of any CCC program. We feel safe in stating that the profit and loss statement is as good or better than any other.
Qur members do not regard the Federal Government CCC support price program as a subsidy to them, but as a means of tiding them over the heavy production months and during the period when supply exceeds demand. We produce 75 percent of the year's crop in the 5 months' period, May through September. Producers have looked upon this price-support program as an aid from the Government to enable them to help themselves. Two-thirds to three-fourths of the association's revenue has been used throughout the years on an advertising and educational program to encourage and promote a greater demand and use for turpentine and rosin. The association has made many worthwhile contributions to the promotion and sale of turpentine and rosin. In addition, it has aided in the great advancements in production techniques and forest conservation practices which are in use today. Our gum naval stores loan is
a nonrecourse loan in the permissive category. The Secretary of Agriculture determines the support rate on a year-to-year basis.
For the past 5 years, the Secretary of Agriculture has granted the turpentine farmer a price-support loan based upon 90 percent of parity. We have been able to justify the 90 percent of parity based upon supply and demand ratio. This year prices are approximately 8 percent above last year. I am happy to report that even though we have a 1955 CCC loan supported at 90 percent of parity, turpentine farmers have not pledged a single pound of rosin or gallon of turpentine to it.
On the contrary, demand has been sufficient to sell more than 128,000 drums of rosin and 20,000 barrels of turpentine of the stocks held by CCC from former years. In addition, the association sold for and on behalf of its members all turpentine and rosin stocks pledged to the 1954 loan before the 1955 production began. At the present time, CCC has only 543,000 drums of gum rosin and 37,000 barrels of turpentine, which constitute virtually the only stocks in the whole industry. These modest CCC stocks amount to less than 1 month's supply of turpentine and 314 months' supply of rosin compared with the longtime normal reserve of 214 and 5 months, respectively. If all CCC loan stocks could be liquidated at today's market prices more than $142 million in profits would be realized in addition to all interests and charges.
We expect fair prices and good demand for naval stores to continue next year. Our association is striving to encourage farmers to supplement their farm income by placing their trees in production for naval stores.
The reduction in acreage allotments of tobacco, cotton, peanuts could be partly offset by naval stores income in the sections where slash and longleaf pines abound. Many farmers have slash and longleaf pine trees of suitable size to put into production. Of course, most of them only have sufficient forest acreage for small operations, from 1,000 to 5,000 faces, but thousands of farmers could work from 1,000 trees upward and we would welcome them as gum producers.
CCC price support loans are the only financial protection the turpentine farmer has for his investment which is at the present time no small consideration. Turpentine farmers must plan their capital outlay for a minimum of 3 and normally 4 years. The producer realizes the CCC loan is to support current production. ATFA's hopes of obtaining a good CCC price support loan rate depend upon stocks including CCC holdings remaining at a sound carryover level in relationship to supply and disappearance.
We, therefore, realize when our products are pledged to any loan program, they must at some date be redeemed and disposed of, otherwise we could not continue a price-support rate at a satisfactory level or 90 percent of parity. We are thankful that we have been able to maintain our stocks at a reasonably small level compared to the overall yearly production.
Our industry will continue to need the CCC loan programs as long as other agricultural and industrial assistance is granted. We will strive to keep our stocks in a proportional ratio of supply and demand to justify a loan based on sound business principles.
I thank you.
STATEMENT OF PASCHAL MUSE, PERRY, GA. Mr. Muse. Mr. Chairman, my name is Paschal Muse. I am a farmer from Houston County, Ga., and also chairman of the fruit and vegetable committee of the Georgia Farm Bureau.
We are all very much disturbed by the continued downward trend of prices received by the farmer for that which he produces, while his cost of production is soaring. This thing has reached the critical stage, and the farmer cannot continue to produce under these conditions. In our county alone, we have decreased our farm worksheets almost 50 percent in the last 10 years.
It is serious as shown by the number of new farm mortgages for the first 6 months of 1955, an increase of $300 million over the corresponding period of 1954. The Farm Credit Administration said mortgages also averaged $1,100 more per farm this year. The agency