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These figures reveal the following facts: 16,465,000 bales were produced in 1953 on 768,850 farms, for an average of 21.4 bales per farm; 645,310 or 82.63 percent of the cotton-producing farms had under 50 acres of cotton, and they produced 5,797,000 bales or 35.21 percent of the total, at an average rate of 8.98 bales per farm; 712,020 or 92.61 percent of the cotton-producing farms had under 100 acres of cotton, and they produced 8,784,000 bales or 53.35 percent of the total, at an average of 12.34 bales per farm; 56,830 farms, 7.39 percent of the total, had 100 acres of cotton or more, and they produced 7,681,000 bales or 46.65 percent of the total; 20.38 percent of the farms having 0.1 to 4.9 acres of cotton produced 1.47 percent of the crop; 34.04 percent of farms having 5 to 14.9 acres produced 9.93 percent of the crop, and these 2 groups, comprising 54.42 percent of the farms growing cotton, produced only 10.4 percent of the crop.
It is clear from these figures that the major beneficiaries of the present cotton program are the large-scale commercial growers who are best able to stand without it.
Based on that picture, I propose the following thoughts on a solution:
1. Change the basis of allotment from acres to bales of domestic consumption. If domestic consumption is 9 million bales, each farmer's allotment would be based on his acreage allotment converted to bales and reduced proportionately to arrive at a 9-million-bale total.
2. The farmer's support of his allotted amount of cotton would be in the form of a direct payment of the difference between the average market price and the support price for the particular grade and staple produced.
3. A farmer would be permitted to carry over cotton produced in excess of his allotment and sell it on his allotment in the following year, if he chose to do so.
4. No farmer, regardless of the size of allotment, would be eligible for support subsidy on more than a predetermined number of bales. The number of bales eligible for support under any one farm allotment would be determined by Congress after a detailed study of cotton-production patterns had been completed.
5. The entire crop would be handled on a free-market basis, price being determined by world supply and demand.
6. In order to permit this plant to be introduced without a disastrous break in the world cotton price, the entire Government holdings would be insulated from the market for the first year, except that Government cotton could be sold in the free market at or above parity price.
7. After the first year, Government holdings would be sold on the free market at such equal annual rate as might be necessary to exhaust the stocks (less any military stockpile deemed necessary) in a period of 5 to 7 years, depending on the size of the holdings. Here, again, sales could be accelerated only if market prices reached or exceeded parity.
8. The subsidy could be financed—this is not essential to the program but it is a suggestion—by an excise tax on poundage of domestically produced cotton goods. An equal amount of tariff would be levied on imports of cotton goods. Rebates would be made on exports of domestic cotton goods. This tax on goods would avoid the pyramiding effect of a tax paid at a lower level.
In conclusion, I would say that by being able to sell its cotton competitively in the world market the United States can regain its status as a major, rather than residual, world supplier. By permitting the domestic market to fluctuate with the world market, we can avoid the problem of injuring the domestic manufacturer in our effort to help the farmer. By tailoring the support program to help those who need help, we can reduce its cost well below what it would be on a cropwide basis.
The cost of disposing of the present surplus stocks will not be as great as it might now appear. Actually, if it were not for the existence of large reserves of cotton it would be advisable for the Government to stockpile a considerable amount of cotton as a military precaution. When this amount has been determined, such cotton should be transferred to the defense stockpile, and the cost of ownership and storage should be chargeable to the defense program rather than the agricultural program.
In the long run, world population growth, improved standards of living, improved cotton characteristics and advances in utilization will undoubtedly greatly increase the world consumption of cotton. In the meanwhile, we must find a program which will not lead to production distortion and underutilization. I hope that these proposals may suggest a program of that nature.
The CHAIRMAN. Thank you. We will certainly consider them.
GINNERS ASSOCIATION, GARYSBURG, N. C. Mr. LONG. I am Willie J. Long, Jr., of Garysburg: Clifford Hardy, the secretary of the Ginners Association, originally planned to be here and he is not here so I am serving in his stead.
I am a cotton farmer and cotton ginner, and serve as president of the Carolina Ginners Association, which includes the two Carolinas and Virginia.
I would like to speak for myself as an individual cotton producer and in behalf of the cotton ginners of these three States who are all cotton producers as well as original processors. This spring I appeared before the subcommittee of this group
headed by Senator Eastland. My efforts at that time were on behalf of the Carolina's Ginners Association. We were actively interested in certain changes in Public Law 480 and our suggestions were very specific. Today, after having had the opportunity of appearing before you gentlemen before, and realizing that your knowledge of the entire cotton problem is based on considerable experience and careful study of an extremely complicated involved problem, I wish only to make three points that I would have you gentlemen consider.
The first two are, in my opinion, essential to a solution of the problem confronting those of us in the cotton industry. The third I believe would prevent a great deal of trouble in future years.
First: It is my belief that some form of subsidy program must be instituted, whereby domestic cotton production can be sold at a parity formula that will allow the farmer a reasonable income for efficient production and at the same time allow our production to be sold in the world market at competitive prices. There are precedents in many
segments of our economy for the preservation of our higher standard of living and yet allowing us to compete in world trade.
The CHAIRMAN. Have you got a plan as to how that can be accomplished?
Mr. Long. In the preliminary statement I stated I was appearing before you before I found your knowledge of the situation was vastly superior to mine. I would like to State generally three things I would like to have you have. I would prefer to have you work out the details.
The CHAIRMAN. You know what was stated to us in one of these meetings? We had a gentleman appearing before us and I think at the time we were five Senators present, and he made a suggestion and I asked him how would it be carried out. Well, he said, "That is your business.” He said, “You here are getting $25,000 each,” and he pointed to the 5 of us, and said, “With $125,000 worth of talent you ought to be able to do the job.” That is what you are suggesting to us?
Mr. Long. I don't know, but what I agree with the gentleman.
The CHAIRMAN. Someone suggested that we are not getting $25,000, but $22,500. He said, “What is $2,500?”. It doesn't help to make the suggestion unless you tell us how to do it because that is why I am spending my time here and that is why we are here, to get suggestions not only as to what ought to be done but how to do it. That is what we are trying to get from you.
Mr. Long. In answer to that I think I can be a bit more specific. I stated in this that some form of subsidy is necessary. There is no form of subsidy other than 90-percent support for cotton produced within the marketing levels and then a system whereby that cotton has to be resold at the price above what it was bought at.
I am saying I don't believe you can continue on that system. We are going to have to change and I suggest that the change be in the form of a subsidy. As for the exact amount, I am not qualified to say.
The CHAIRMAN. Subsidy on domestic as well as that sold abroad?
Mr. Long. I am suggesting domestic production of cotton be subsidized. That might be a dirty word but it is necessary that we do something different from now. I think it is essential that system be established whether we like it or not if we want to stay in the cotton business.
Mr. COOLEY. Is that a two-price system for cotton?
Mr. Long. Yes, in effect it is. It is not a two-price system, it is different from that.
The CHAIRMAN. You are suggesting that cotton that is sold domestically and cotton sold abroad just be sold for what it will bring?
Mr. Long. At world prices. The CHAIRMAN. And let the Government pay the difference above what it brings to what the price ought to be up here as a fixed price, either 90 percent or a hundred percent of parity?
Mr. Long. One thing I would say in connection with that: You are making me be specific. You are correct in what I say. In order to accept that under no conditions would I like to see that situation exist without allotments and rigid controls. You understand what I am saying
The CHAIRMAN. I understand.
Mr. Long. Very clearly, I am saying it is necessary to accept a subsidy form of cotton economy or to continue the system we now have which I think we can't continue. That is the statement I wish to make. I hope that is specific enough.
The CHAIRMAN. Yes.
The CHAIRMAN. The statement you have said there of course is similar to
Mr. Long. To the one made by the previous gentleman ?
The CHAIRMAN. Yes; and similar to what former Secretary Brannan
Mr. Long. No, sir.
The CHAIRMAN. Yes, it is; it is a production payment. In other words, you fix the price of cotton up here at 90 percent of parity and let the cotton be sold at what it will bring and if it brings 40 cents and the support is 45, the Government pays the difference between 40 and 45 cents.
Mr. Long. Yes; in effect.
The CHAIRMAN. That is the so-called Brannan plan. You can't get away from it.
Mr. COOLEY. We are following the plan on wool.
The CHAIRMAN. We may have to go there some time but I just thought I would bring it to your attention that that is what you are proposing.
Mr. Long. Senator, you probably are correct. I can't criticize and say you are not. However, there are many features of the so-called Brannan plan that are most objectionable to me personally and when I hear it that is a dirty word to me, as subsidy is to many other people. I do think it is a necessary evil if we are to continue production of cotton. May I make my second point ?
The CHAIRMAN. All right.
Mr. Long. Two: Intense effort must be made to provide the legislative means for allowing a large portion of our surplus cotton to be sold at world market prices through normal marketing channels regardless of acquisition cost. This move is essential to the solution of the present cotton crisis since the drastic reduction in planted acreage in any given year would completely disrupt the entire cotton economy. If something is not done to reduce the inventory of cotton carried over, then reductions would seem necessary.
In effect, I said that in answer to your question.
Third: Some form of allotments should be continued under any program. If in any year there is no necessity for allotments, they should be continued so as to maintain a historical base for future allotments. This concept is borrowed from the tobacco program, which I believe is our most successfully operated commodity program.
In doing that I am suggesting that a historical base be continued for future allotments and before I finish, this is my text, I have 2 or 3 complaints that I would like to make.
First it is concerned with ASC program and I presume you want me to make it to you. I farm in Northampton County in North Carolina and in Virginia farm a considerable acreage. I am interested in soil conservation and do as much as I feel I am able.
In some years I am able to secure assistance from the Government for a small portion of this and in other years I have not been able to secure a great deal of assistance. This past year my brother and I farmed together as a partnership and we were limited in the amount of funds we could secure for soil conservation for two reasons:
First, because we had a considerable acreage of land and second because we farmed as a partnership we were not entitled to receive as much Government funds for soil conservation payments as if we had been individuals. I personally think that in my particular case it seemed an extreme injustice. I do think there is some error somewhere in your law that should be corrected on that particular point.
Basically, my criticism is in any soil-conservation program. If it is a true soil-conservation program it should not be limited as to the amount of participation one individual may do but should be limited in the amount of land that can be placed in a soil-conservation. That seems only just and fair.
A program that does not allow that seems to be politically inspired. That is my criticism.
The CHAIRMAN. I don't know about “politically inspired."
Mr. COOLEY. I agree with him because if you are going to have a soil-conservation program you want it to be nationwide in scope and not be restricted. The amendments which have been adopted, restricting the amount that could be paid, were prompted by politics. Somebody was trying to make hay by cussing out the big fellow.
Mr. Long. One other complaint: In any program that you are to consider, I will be very specific in this, Representative Cooley brought out this point previously. In 1953 I had a farm in Virginia which had a base acreage of 135 acres of cotton. In this year I received allotments of 30 acres. I was told by the committeeman, when I consulted him, he had done me a special favor in getting me 30 acres, entitled to 135, he got me 30 when he said I had only 5 acres. The situation was in the State of Virginia, the minimum 5-acre provision required that the total acreage be allotted to farmers on 5 acres if they had planted 5 acres during any 1 of 3 years.
In spite of the fact my farm earned for the State of Virginia that allotment, I was not entitled to it. I suggest for your careful consideration, don't be trapped into a program that would allow you to get in that situation again because what will happen, not only will you ruin the large farmer which earned the allotment, but the small farmer in many cases did not plant that cotton because they did not want it and they will not plant it even if you give it to them. Don't misunderstand me. I am not saying that for every farm but for the total result within the entire State that is the situation.
The CHAIRMAN. Mr. Roberts, please. Give your full name and occupation, please.
STATEMENT OF MAX ROBERTS, ASHEVILLE, N. C.
Mr. ROBERTS. I am Max Roberts. I work for the Farmers Federation in Asheville, N. C. They asked me to say a few words concerning burley tobacco.
In 20 counties of western North Carolina we have allotments of about 10,000 acres, which is an average allotment of about fifty-three