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ment of Agriculture and additional emphasis now being given to the problem is beginning to get some result. Of course we are still far from our objective but at least the Congress took a constructive step in my opinion when you enacted legislation and transferred the agricultural attachés back to the Department of Agriculture.
The CHAIRMAN. I am sorry to say I voted against it, but it is all right. Mr. CALDWELL. I didn't know how you voted.
The CHAIRMAN. You are never going to get a handful of people to go abroad and sell our products and all that these people are now doing, they spend over 50 percent of their time sending statistics, just as was done under the State Department. It is my hope, however, that we can get industry itself interested to the point where they are going to spend some money to sell goods abroad.
That is the way to do it, but sending a mere 30 or 40 people abroad, over the world, to sell cotton and sell various other of our surplus commodities, I don't think is the correct approach.
Mr. CALDWELL. It is not the entire approach.
The CHAIRMAN. It is the law now and I will do all I can to see that it works.
Mr. CALDWELL. It is not entire approach but it is another one of those devices that may be helpful and it is for that reason we were favorable to its enactment.
We favor adjustments in tariff rates consistent with the general welfare; simplification of customs procedures; and the use of trade agreements. We were pleased to note that the Department of Agriculture has been able to barter some farm products for strategic materials needed in this country.
Personally some of us would like to see the Commodity Credit Corporation use the full authority that has been granted them by Congress to barter our surplus agricultural products for strategic materials. There are problems in this field that the members of this committee could afford to look into, things that may be hampering the full use of the powers you have granted them to help meet that problem.
The CHAIRMAN. I don't know what it is except we have a State Department that takes better care of the farmers abroad than of the farmers in this country and I suggested the other day that the only way by which we might be able to enforce that was by denying salaries or impeachment but I don't want to do that, you understand. It strikes me that in the Agricultural Act of 1938 as amended in, I think, 1949, we have a provision in that which gives the Secretary of Agriculture specific powers through the Commodity Credit to dispose of the surpluses, but he is stymied somewhere by the State Department in that the State Department doesn't like to see them sell our surpluses abroad for fear that it might upset the economy of some of the countries abroad.
They don't raise their voice when countries dump their goods on us. On the contrary, they seem to invite it. It strikes me that we need to exert a lot of effort to get, from the President on down, assistance for our own instead of permitting them to continue helping our friends across the seas to our own detriment.
Mr. CALDWELL. There are some materials of course that are storable that do not ever depreciate in value or usefulness that are strategic
from the standpoint of the national welfare, which we do not produce in this country and there is some evidence I think that maybe people who compete with those things may also be bringing pressure to bear on agencies of Government to keep them from bartering away agricultural commodities to those countries in exchange for those things.
The CHAIRMAN. We had a good plan to dispose of some of our commodities and accept in return the currencies of the country that bought this. But when we go to buy rubber, when we go to buy tin and strategic materials we don't want to have to use dollars. They won't let us use the same currencies in many instances. That is where we are stymied. If we could get convertibility, in other words if we could get to the point where we could get countries to permit us to use their own currencies to buy materials they have we wouldn't have any trouble. That used to be the way it was handled before.
Mr. CALDWELL. We support that principle.
The CHAIRMAN. It won't help to support the principle, we have to have action.
Mr. CALDWELL. We are ready to cooperate of course with the members of this committee and others in Congress in trying to get whatever additional legislation may be needed to bring that about.
Senator, while we would put a lot of emphasis on expanding markets we recognize the limitations. There has been very little increase in the per capita consumption of food. There are shifts from one commodity to another, but the possibilities of solving the farm problem through expanding markets are not too bright. We can make some progress and we have to go as far as we possibly can go in this direction but it is our opinion it will not go for enough or fast enough to meet our problems. We do not believe farmers can rely upon the law of supply and demand alone to assure them of dependable markets and fair prices so price supports are necessary under existing conditions or any program designed to maintain adequate reserves will wreck the agricultural economy of the Nation.
I will not discuss all of the details of this. Certainly we need to strive to develop a program which will enable farmers to get full parity in the market place, but even then there is likely to exist even under the most favorable conditions the need for a price support program.
The CHAIRMAN. I heard that statement many times, get parity at the market place. How will you attain it!
Mr. CALDWELL. I said even under the most favorable conditions we don't believe it is going to be achieved. Our only hope of getting parity in the market place is to balance supply within such a narrow Îimit of demand that the pressures will be there to force the price up and under a program of that kind in my judgment the consumers of the Nation would suffer.
The CHAIRMAN. You would have a shortage?
Mr. CALDWELL. Yes, sir; and it is our conclusion that price supports
The CHAIRMAN. Is that the general feeling of the Grange or your own feeling?
Mr. CaldwELL. General feeling of the Grange.
The CHAIRMAN. They are not for the so-called sliding scale, are they, the Grange?
Mr. CALDWELL. We do not support flexibles as such. There are some instances where flexible price supports may be the best answer to some commodity problems but for the basics where we use other devices in balancing supply and demand we are not for the flexible price support program but rather we favor a rigid program. I would like to pick up one other thing.
There is a growing need for price supports for livestock and dairy products. The farmers of the Nation sold their livestock in 1951 for $11.5 billion when the volume of production was considerably lower than it is today. In fact, the annual meat consumption was 136 pounds that year. In 1954 we had stepped up production until there was enough to provide everyone with 153 pounds and population had grown. Yet the gross receipts dropped to $9 billion. We had more meat but we got $2 billion less money gross from the sale of that meat. The CHAIRMAN. That
may be the reason you sold more because of the lower price.
Mr. CALDWELL. It may have been partially responsible, although there had been a substantial increase in consumer purchasing power during the same period and I don't believe the consumers got the full share of that drop in price that the farmers took, either.
The CHAIRMAN. I can speak from experience. I market just 2 blocks from where I live and I have been watching prices. I go there almost every other day and the beef steaks that I paid $1.18 a pound for last year I will still pay almost that, and the year before that it was also about the same.
Mr. CALDWELL. We don't believe the problem is going to be solved by just letting the law of supply and demand operate. There are some groups that advocate the use of production payments for dairy and livestock products. It is our opinion, however, that this plan may lead to real trouble for farmers. Its use once begun could so change market demands that all farm products would eventually be forced to call for similar action in self-defense.
Farmers would then be dependent upon Government payments for existence and a proportion of the consumers cost for farm products would be shifted from the marketplace to the taxpayer. We should strive to find a way to get a fair return for farm products with as little direct subsidy as possible.
I have very definite feelings on that point. I wrote a footnote to a report now coming out from one of the important organizations in Washington, where many prominent economists are suggesting possible use of production payments, and I pointed out some of the dangers inherent in it. Production payments used to solve the problems for one commodity, may create unfair competitive advantages over others, so that they will be forced to demand similar action and little by little we would move in that direction. We would like to see the Congress hesitate before you begin a program that has the potential dangers that we foresee in it.
The CHAIRMAN. That is what caused me to vote against the wool bill because of the production payments involved. It may be that it is a good thing, but up to now I need to be convinced.
Mr. CALDWELL. We see dangers in it, and I mention it here. What should be our price goals for agriculture? That certainly is an impor
tant question. Some people argue farm prices are too high and lower price will expand consumption, foreign markets, and income. Past experience does not support this theory. Farmers are businessmen and workers. They should receive a wage and investment return comparable with nonfarm segments of the economy. Here is a right interesting statement. If farm workers received the minimum wage now fixed by law by Congress and a return on their investment comparable with manufacturing corporations it would more than double the net income of agriculture.
If we gave farm workers the average wage which includes the fringe benefits it would more than triple the net income of agriculture.
The CHAIRMAN. That would increase the price to the consumer, I guess.
Mr. CALDWELL. Probably. I would say that from our
Mr. CALDWELL. From our examination of this problem we believe that the time has come when we need to reexamine our parity formula. If parity, if 100 percent of parity meant an income for farmers, that would give the workers a wage return comparable with the minimum wage guaranteed by law to nonagricultural workers and the farm owners an investment return comparable with the investment return of nonfarm businesses, if that was 100 percent of parity you could flex your price supports down below 90 percent of parity, and you would have a wider range of flexibility without bankrupting farmers. If we were to get 100 percent of parity under the present formula we would still be $9 billion short of what I just said farmers would receive if they had a wage and investment return comparable with the nonagricultural segment of the economy.
The CHAIRMAN. That is another phase of our problem that I hope all of the organizations can get together on and give us ideas as to hoy to improve that parity formula.
Mr. CALDWELL. Tobacco growers are calling for a reconsideration of the acreage allotment for 1956. I produce some tobacco, I have a 7-acre allotment, we are calling for reexamination of the acreage allotment for 1956, and such adjustments in the allotment as may be necessary in gradually bringing about a better relationship between supply and demand.
The tobacco program has worked well and served farmers well, but we have been increasing the surplus stocks. We are reaching a point where they can become dangerous to the program itself unless we take steps to bring about gradually a better balance between supply and demand. We do not believe it ought to be done in any short period of time. To do so would greatly disrupt agricultural practices and dislocate many agricultural workers, especially among tenant farmers.
The CHAIRMAX. We got a suggestion yesterday that a law should be passed when Congress meets to enable the Department to present the matter to the tobacco growers with a view of curtailing the acres for next year.
Mr. CALDWELL, We support that.
The CHAIRMAN, I doubt we could do that but we can try. I doubt we could give relief along that line, but if it were possible to get tobacco farmers to do it voluntarily I would try it. You have such a small amount, 2 or 3 States involved, and it strikes me that the farmers ought to try to help themselves in that regard.
Mr. CALDWELL. We have tried this voluntary curtailment program, tried it in cotton in 1931 and 1932.
The CHAIRMAN. I wouldn't suggest it in cotton because there are too many States involved, but here you have tobacco only in a handful of States.
Mr. CALDWELL. There is the same philosophy among individuals. "If my neighbors are going to cut theirs voluntarily this is a good year to step it up.” It doesn't change. We hope Congress will carefully consider this problem when it is finally presented to you because it is a matter of grave importance to the tobacco program and if we lose the program certainly the agricultural interest of this State and throughout the Southeastern States where tobacco is produced will be seriously impaired. We hope very much that members of your committee and the Congress will give careful and thoughtful consideration to that suggestion when it is presented to you.
The CHAIRMAX. Is there unanimity among tobacco growers?
Mr. CALDWELL. I think so far as I know there is general agreement among them.
The CHAIRMAN. That won't do. You have to have almost unanimous agreement.
Mr. CALDWELL. I think you will find it is almost unanimous that some action will be necessary. Congress is exploring the possible use of poundage quotas for burley tobacco. The adoption of such a program is fraught with grave dangers. Burley growers in North Carolina have taken a firm stand in opposition to this proposal. We hope that Congress will drop this proposal.
Marketing agreements and orders can be employed to stabilize markets. We hope that Congress will broaden the act to cover additional commodities and provide for the continuous operation of marketing agreements and orders despite any short-run price variations.
You have heard that matter discussed by Mr. Brinkley from your State whom you know, Homer Brinkley, and others, and I know that you are very familiar with the argument.
Then there are some soil bank and land rental proposals now being discussed as another way for balancing production with demand. I understand there are almost as many soil bank proposals right now as there are people talking about it. We are not so much concerned about whose program may be considered as having the right program on the books that will help to bring about the kind of adjustments that are needed.
There is general public support for conservation expenditures. It seems to us that major emphasis must be given to measures which conserve resources and yet do not result in an immediate increase in production. It is our belief that an expansion of the present agricultural conservation program offers the most practical method for doing the job.
We believe that the machinery now set up in the agricultural conservation program can be used and it would be more practical to work within the framework of the existing setups in trying to expand conservation, soil banks, or whatever you call them, then to set up something new.
The CHAIRMAN. That is the purpose of soil conservation; isn't it?
Mr. CALDWELL. Yes. I would like to point out that the land capabilities survey needs to be completed if we are going to use these