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(c) In compliance with the one requirement of this unit acreage-marketing plan, the unit farm either with one farmer unit or more would divert all other lands owned or managed to tree growing or to vegetation listed for planting on permanently diverted lands, and be eligible for the loans for permanent land diversion.

(d) With production on the unit acreage allotments being unrestricted there would be surpluses in some years, above the marketing allotments. These could be stored on the farm or elsewhere at its own expense, consumed, or sold on the open market, or held over until the next year and sold at approximately parity prices under the next year's unit marketing allotment. IX. Plan for supported prices at approximately 100 percent of parity

(a) On presenting required evidence of sale of crops or products, such as proper receipt, or evidence designated by the Department of Agriculture for proving sale of his production, the unit would receive from the Government the difference between the 100 percent of parity price and the average market price of the particular commodity since January 1 of the same year.

(0) The subsidy fund could be raised by a specific commodity tax, levied against the processors or manufacturers using the commodity, such as the present tax levied on the manufacture of tobacco products. X. Unrestricted plan

(a) There would be a choice between the acreage-marketing plan and an unrestricted plan.

(b) There would be no restrictions of any kind either on acreages or kinds of crops or products or on marketing and no requirements to divert land, but there would be no price supports or subsidies under the unrestricted plan.

(c) Farms choosing the unrestricted plan would be informed of the prevailing unit market allotment and unit acreage allotment as guides to a voluntary effort to balance the supply of commonly overproduced crops with the demand.

PRICE-SUPPORT PROGRAM

TUESDAY, NOVEMBER 15, 1955

UNITED STATES SENATE,
COMMITTEE ON AGRICULTURE AND FORESTRY,

Raleigh, N.C. The committee met, pursuant to notice, at 9 a. m., in the Department of Agriculture Building, Senator Allen J. Ellender (chairman) presiding.

Present: Senators Ellender (chairman) and Scott.
Also present: Representatives Cooley and Fountain.

The CHAIRMAN. Mr. D. W. Colvard, please. Will you give us your name in full and your occupation.

STATEMENT OF D. W. COLVARD, DEAN, SCHOOL OF AGRICULTURE,

NORTH CAROLINA STATE COLLEGE, RALEIGH, N. C.

for us.

Mr. COLVARD. I am D. W. Colvard, dean of the school of agriculture at State college.

The CHAIRMAN. All right, Mr. Colvard. I understand you requested to make a statement as to the general situation in North Carolina.

Mr. COLVARD. Yes, sir.

The CHAIRMAN. I think we know it pretty well, but if you desire to, you may file your entire statement in the record and highlight it

(Mr. Colvard's prepared statement follows:) As a background for the discussions which are to follow I shall make a few general observations concerning agriculture. I will then discuss some current trends and prevailing situations pertaining to farming in North Carolina. Representatives of farm organizations, agricultural agencies, commodity groups, and individual farmers present will no doubt give you a good picture of their specific problems and recommendations.

Several of my colleagues from the School of Agriculture of North Carolina State College are in the room. They may be in position to provide certain useful information as the hearing proceeds.

First of all, I should like to state that from the point of view of service to the Nation agriculture has done a fine job. In this respect agriculture is strong. The entire population is eating better than at any time in history. There is an abundance of high-quality foods a given quantity of which can be purchased with the smallest number of working hours on record. Even with the added costs of more processing and better packaging a greater share of consumer income is available for nonfood purposes than ever before.

The wartime needs for food and fiber for our country and, to some extent at Jeast, for our allies were met. It was not necessary for the Government to operate farms to get the job done. Individual farmers rose to the occasion within a general framework outlined by the Government.

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Sufficient quantities of foodstuffs have been available for export to needy countries wherever such has been deemed in the best interests of world peace. Sufficient reserves are available to offer much reassurance in event of another

war.

Many thousands of farm workers who have been reared and educated on farms have been released to industry to increase the production of nonfarm goods and services. This has contributed to a continual improvement in the standai of living of the average American citizen.

No further elaboration seems necessary to establish the fact that from the point of view of service to the Nation agriculture is strong.

From the point of view of reward to itself agriculture is not doing nearly so well. Agricultural prices and farmer's net income remain a major weak spot in the current generally strong economic picture. Agriculture has made tremendous strides in efficiency as have most segments of our economy. However, a very large share of these gains has been passed on to the consuming public. Increasing percentages of gross farm income are going for materials and services provided by industry. Rising costs for these items, which include increasing wages to industrial labor, accompanied by declining farm prices, are squeezing net farm income lower and lower. This, I am sure most of us agree, represents the major problem in agriculture.

Having made these general comments I would like to turn now to the current situation in North Carolina agriculture.

POPULATION There were 4.3 million people in North Carolina in 1954. The rural farm population totaled 1.25 million or 28.4 percent of the total population. Nearly 60 percent of the people were so classified in 1920 when total population was 2.6 million. Between 1920 and 1950, the rural farm population decreased 8 percent. During this period, the rural nonfarm population increased 154 percent and the urban population increased 153 percent. Net loss out of agriculture was 341,000, most of which occurred in the 1910–50 decade. This shift out of agriculture is much smaller percentagewise than in other Southeastern States.

LAND IN FARMS, AND LABOR RELATIONSHIPS Compared with other States, North Carolina has very little land per farm person. North Carolina ranks 47th in amount of cropland per farm person with a total of 5.1 acres per farm resident. In terms of cropland per male farm resident 14 years old and over, exclusive of those employed in nonfarm work, North Carolina has only 18.9 acres and ranks 48th among the States.

The most profitable use of land and labor—that is, the products which it is most profitable to produce depends on the amount of labor the family has in relation to their land and other capital. Historically North Carolina farmers have attempted to increase their farm incomes by producing crops which use large amounts of labor per unit of land. These crops return a high value per acre of land. On the other hand, they yield a low return per unit of labor employed.

Tobacco and cotton are major sources of income to North Carolina farmers. The amount of labor used and the return per hour of labor and per acre of land in the production of these commodities are compared with other North Carolina farm products in table 1. The return per acre of land used in the production of these commodities is higher than for other major farm commodities. The return per unit of labor, however, is low.

TABLE 1.-Labor requirements and income above direct cash expenses per acre

and per hour of labor used, selected enterprises produced with recommended farm practices in North Carolina

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Source: C. R. Pugh, Cost of Producing Farm Products, revised, Department of Agricultural Economics, North Carolina State College. Based on 1952-54 product prices and 1955 prices paid for items used in production.

In recent years efforts have been made, with considerable success, to diversify agriculture by the use of more livestock and feed crops which provide a higher return per hour, a fuller employment of labor, and a better soil conservation program. This has been possible as yields have increased and row-crop acreages have been reduced.

INCOME

Cash receipts from crops, livestock, and livestock products in North Carolina totaled $928 million in 1954. This is 32 percent above the average of $899 million for the period 1950–53. Cash receipts in 1955 are expected to be equal to or above the 1954 level, perhaps exceeding the record year of 1951 when receipts totaled $954 million. With the exception of hurricane-damaged areas in the coastal plains, bumper harvests are expected over the State.

Despite high total cash receipts from farm marketings in recent years, considerable damage from droughts, hurricanes, late frosts which destroyed most of the fruit crops this year, and hail damage in some local areas has created serious problems. Crop and livestock losses and farm property damage from hurricanes alone in 1955 have been estimated to total $91 million in 28 eastern North Carolina counties. These counties have been declared eligible for emergency credit and other disaster-relief measures. In 1954 farmers in dire circumstances in 87 counties were declared eligible for emergency credit as a result of severe drought. Of these 87 counties 39 were eligible for livestock feed under the emergency feed program. Drought conditions were more general in 1952 and 1953. A limited number of farmers in all counties in the State were then eligible for emergency credit.

TABLE 2.-Cash receipts from farming, North Carolina, 1940-54

(In thousands)

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Source: Cash receipts from marketings, by States and commodities, calendar years 1924-44, January 1946, various farm income situations.

Average cash receipts from farm marketings per farm in North Carolina was $3,464 in 1954. The 1955 Census of Agriculture reports, however, that 64 percent of the farms in the State reported the value of farm products sold in 1934 to be less than $2,500 (table 3).

TABLE 3.-Farms by economic classification, North Carolina, 1950-54, compared

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1 Provided that less than 100 days of off-farm work is performed by the operator and that the income of the operator and members of his family from nonfarm sources is less than the value of all farm products sold.

2 Farms with a value of sales of farm products of $250 to $1,199 on which the operator performed 100 or more days of work off the farm or on which the nonfarm income received by him and members of his family exceeded the value of farm products sold.

3 Farms with a total value of farm products sold of less than $250. Abnormal farms omitted. Source: U. S. Census of Agriculture, 1950 and 1955.

Average net income per farm household in North Carolina in 1950 has been estimated at $1,650. Income per nonfarm hosehold in 1950 was approximately 50 percent greater than the income per farm household.

Personal income per capita in North Carolina, including both the farm and nonfarm sectors, was $1,190 in 1954. Compared with other States, the per capita personal income rank of North Carolina was 43 in 1954, 42 in 1950, and 43 in 1945. Personal farm income in the State was 13 percent of the total personal income in 1954, whereas the rural farm population that year is estimated to have been approximately 25 percent of the total population. Personal farm income differs from farm marketings in that personal income is primarily a measure of net business earnings plus wage and salary payments received by hired farm

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