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Actually it has made a profit and at the same time has given the farmer a low premium cost insurance.
My main point today is that I have heard rumors that the cropinsurance program may be put back under the ASC program and I am very much opposed to this move. Why am I opposed to this move? Because in 1948 when it was in an experimental stage there were 9 counties participating in the program and there were 8,408 farmers insured. In 1950 there were 17 counties which wrote 30,839 contracts. During these periods it was administered as an independent agency. Then in 1951 it was turned back to the ASC with 31,957 contracts. At the present time there are 34,185 contracts, and it is being operated as an independent agency. These figures show that every time the insurance program was operated by the FCIC itself, there was an increase in farmers insured.
The ASC has enough of the farmers problems to work on now. In fact, I do not believe they want it, because in 1948–50 they refused to enter into an agreement on a piece basis for sales and service. It should remain as a separate agency and a full-time office set up in each county or small area, so our farmers can go in and talk over the crop-insurance needs and be told what is available to them.
Another point I want to make is that the present coverage is only 225 pounds of cotton per acre and this ought to be raised to 300 pounds which would cover actual cost of seed and fertilizer and pay some on equipment and labor investment. The cotton production will average this year in Cleveland County approximately 600 pounds per acre and it seldom ever falls to the point where a farmer can collect now, and the present breaking point does not cover actual cost. I also feel that the cost of the premiums should be held at a low rate even though our Government may have to underwrite a part of the cost. I want to emphasize to you, gentlemen, that farming today is an expensive business, and it is hazardous. Our average farmer cannot stand the risk involved, and, unless some assurance can be given them, many of them are going to be forced out of business even though we consider the times pretty good now.
In conclusion, let me say that I have been interested in the Federal crop-insurance program since its beginning and have expressed my views to our State office many times and one time to the national director in a conference held at Winston-Salem, N. C., in 1950 which was just before it was put under the old PMA. Today, I am asking you to leave the administration of this program as it is at present, except to strengthen it by setting up officers where they are needed, so more farmers can be reached, and to reduce the premiums and increase the coverage, so our farmers can stay in business.
I thank you for this time.
STATEMENT OF GLENN MARTIN, WAYNESBORO, N. C.
Mr. MARTIx. I had hoped to get considerable time, but time has run out.
The CHAIRMAN. Have you anything to offer?
Mr. Martin. I have a different idea from what I have heard today. First, two problems that I see, which is over-production with resulting low prices. The other is intolerable conditions existing in the sharecropping in North Carolina and other Southern States that under civilized conditions should be remedied.
I heartily concur with the gentleman before me that child-labor laws should be applied in agriculture. Secondly, I feel that the wage and hour laws that are in effect in industry should by all means be applied to agriculture. If I hire a man to drive my tractor, give him the minimum at least. That will help the small farmer in that there are thousands of farms in North Carolina, like Mr. Cooley's, who are operated by tenants. He may operate his own sharecrop basis but if he had to
all his hired help $1 an hour which will soon be the law, it will eliminate a tremendous amount of farm produce all over the United States of America.
Now, as for conservation, to highlight that, we are blessed in the Southland in that pine trees grow abundantly and profusely. Any land taken out of crop production could very profitably be planted in pine trees. In the Great Plains, what I have seen of the farms, ponds are the only answer I have seen. I won't take more time.
The CHAIRMAN. All right.
Mr. MARTIN. I feel 16 is young enough. Farming is a very hazardous occupation.
Mr. Cooley. One other question: You say if you paid $1 an hour for farmhands and plowboys and others who worked on the farm, until you could get commodity prices up, how could you pay the labor?
Mr. Martin. I work my farm and wouldn't have to pay it. If you hire yours done you go in the hole and quit production unless prices went up.
Mr. COOLEY. What will happen to those tenants you are talking about?
Mr. Martin. Governor IIodges is preparing small jobs in industry here to take care of a lot of them.
Mr. Cooley. If they could all find jobs in industry, that is right, but we cannot change the pattern of farming in the South overnight.
Mr. Martin. It is a long-drawn-out thing.
Mr. MARTIN. Anything in the world I can do in helping with furthering these suggestions I have made, just ask.
The CHAIRMAN. Thank you.
STATEMENT OF H. A. LEARY, CAMDEN, N. C.
Mr. LEARY. With the honeymoon with the farmer over and prosperity and the small farmer being divorced from the farm by the Department of Agriculture, I would like to make two suggestions: We in the South in the northeastern part of North Carolina had three hurricanes and with the Department of Agriculture attitude toward
the small farmers, it has made our problem more acute than the average. Mr. COOLEY. That is tornado velocity.
Mr. LEARY. Yes, sir. And one thing I would like to see done is Senate investigation of the difference in farm prices-what the farmer gets and the consumer pays—in order to spotlight it in the national way to help the farmer gets his problem before the public as the crime investigation did.
Another thing I can't understand is that the Government spent thousands of dollars and millions, maybe, in soil reclamation when we are producing too much now. I believe in that. In order to keep the balance so that we don't get behind, we should always stay so we can produce enough but it just doesn't make sense to me to spend millions of dollars reclaiming soil and running other farmers out of business.
The CHAIRMAN. We have had suggestions on that and a lot said we should curtail it until we need more land.
Mr. LEARY. That is my opinion.
Senator Scott. One man said yesterday just declare a holiday and not do anything for a year.
Mr. Cooley. On reclamation and irrigation ?
The CHAIRMAN. We have a lot of testimony obtained from the West, believe it or not, that suggested that we ought to lay off of any further reclamation development until we need the land. There may be a lot to that and we may have to look into it.
Of course, most of these projects you understand are what we call multipurpose, for the production of electricity, flood control, navigation, and also irrigation.
Mr. LEARY. We believe in all those things, when you need power and we believe in flood control and when you need power build your dams, but opening up this extra land to be in competition with us is detrimental to us.
The CHAIRMAN. That doesn't seem
Mr. LEARY. Naturally from the East we haven't heard much about potatoes today and we have been kicked about potatoes. We feel that something should be done with that.
The CHAIRMAN. You mean support?
Mr. LEARY. It was tried under Roosevelt. The Supreme Court knocked that out.
The CHAIRMAN. We repealed it.
Mr. LEARY. At one time they would penalize you about $90 an acre if you overplanted and it didn't cost the Government anything to do it.
Mr. COOLEY. We didn't have acreage allotments. Lindsay Warren sponsored the bill and got it through Congress.
Mr. LEARY. How were we paid $70 to $90 an acre for taking it out of production ?
Nr. COOLEY. That was the support program.
Mr. LEARY. There was no overproduction and putting them in the woods at that time.
Mr. Cooley. They paid you not to plant.
The CHAIRMAN. Thank you ever so much, sir.
At this point we will make a part of the record a statement by Mr. B. S. Davis, of Evergreen, N.C.
(Mr. Davis' prepared statement follows:) I decided to write this letter to let you know about some grievance we the people have and to suggest some ideas that it might help you that you, having a keen mind, might take these rough ideas and work out something that will help us to have a better and a clearer program.
Idea No. 1: That where there is tobacco given in a district to adjust the acres that each and every farmer in that district gets with their notice of their allotment who got the tobacco that was given out. Another thing we would suggest that these allotments of one-tenth and two-tenths that some people have that live in towns and villages and have these allotments on no more than lots be cut out. In other words, set a minimum of acres that you could have an allotment on. I have been told by the boys that measure that there would be a right good number of acres in each county that could be cut out.
Another thing: I suggest that the penalty be raised so high that people won't be tempted to overplant, which is what's wrong with our program now.
The CHAIRMAN. Congressman Fountain's statement will also be made a part of the record in its entirety.
The statement of Hon. Lawrence H. Fountain, Representative in Congress from the Second Congressional District of the State of North Carolina is as follows:)
Mr. Chairman and members of the committee, I appreciate the opportunity to make this brief statement.
It is my privilege to represent the people of the Second Congressional District, who live in Bertie, Edgecombe, Green, Halifax, Lenoir, Northampton, Warren and Wilson Counties in the northeastern part of North Carolina.
A very large number of my constituents receive all of their income from farming, particularly from the production of 4 of the 6 basic crops——tobacco, peanuts, cotton, and corn. The ability of the farmers of the Second District, and elsewhere in North Carolina, to maintain a decent standard of living for themselves and their families depends directly upon their ability to obtain fair prices for these crops. In addition, the prosperity of the entire Second District of North Carolina is substantially affected by the price level of these four basic crops. This is likewise true in practically all of the farming areas in North Carolina.
The farm families of our country have done a truly magnificent job of producing the food and fiber needed to give us the world's highest standard of living. But there are some problems which no individual farmer can solve by himself, no matter how resourceful and industrious he is.
The several million farmers in this country are each a separate business, run by individuals. Being individual units, they have no production and marketing system which they can control, except with the help of their Government.
It is easy to say that a farmer ought to grow what he can get the most for and trust to luck to make a profit, just as other people do. However, it doesn't work that way, and very few others are able to function under such a system. Take the car manufacturers for example. There are three big companies doing about 75 percent of the total business, and all told there are only 5 or 6 companies. If there were only 3 big farmers in America raising 75 percent of the cotton, corn, peanuts, tobacco, rice, wheat, etc., and 3 or 4 others raising all the rest, they wouldn't need any Government support prices. They'd just hold the food off the market until they got what they had to have.
Let us take tractor manufacturers as another example. There are 7 or 8 companies making all the tractors and other farm implements for the farmers of this country; and yet, car manufacturers and tractor manufacturers have price supports in the form of tariffs.
The farmlands of America are divided up into small units. Let us hope this situation will continue to prevail, because if there is anything that keeps our democracy functioning, it is a lot of small people who are their own bosses and are economically uncontrolled by anybody else. However, as long as our farmlands are so divided into small units, there must be some method devised to let a farmer know when he starts a crop about what he can get for it when he finishes. It is the most stabilizing factor in farming today.
The farmer is probably the only producer who can control neither the amount of his product that is produced nor the price at which it is sold. As a resut, in past years, compalratively small surpluses have forced the price of farm products far below the cost of production. I am sure we all remember some very vivid examples of that situation in the early 1930's before the establishment of our present farm program.
The Federal farm price-support program was established to help insure the farmer a fair share of the national income and to help protect our farm families against economic disaster caused by factors over which they have absolutely no control. Price supports are not a special favor to the farmer at the expense of those in other ways of life, but a fair, logical and necessary program fully justified by its contribution to the overall economic stability and well-being of our country.
The farm price-support program has, of course, cost some money. The cost of the program is small indeed when measured against the tremendous benefits derived from it. As a matter of fact the cost of the farm price-support program appears modest when considered alone. It appears even more modest when compared with the many billions of dollars spent on other programs. In addition, it has been much smaller than the losses sustained by our Government in its performance of services for other specific segments of our economy.
Unfortunately many leaders in high places have endeavored to make our people believe that our farmers are living on Government bounty when the truth is that subsidies to agriculture add up to only a very small fraction of such payments that have been going to business and industry since the very beginning of our Government. Data by a House Appropriations Subcommittee in 1954 indicated subsidies amounting to approximately $45 billion have been paid to business since World War II, a large part of this in business reconversion payments.
Today the farmer is caught in a serious economic squeeze. Farm prices have steadily declined, while the cost of things the farm family must buy have remained fairly stationary or increased. Without the stabilizing influence of rigid price support at 90 percent of parity on what we refer to as the basic commodities the situation would unquestionably be much worse. For example, this year the tobacco farmers in my section would have gone bankrupt without such a program.
Ninety percent price supports may not be perfect but on the whole they have worked well. Every effort should be made, to make such other improvements in the program as will make 90 percent price supports even more effective, and to eliminate unnecessary surpluses. I firmly believe that 90 percent supports would have worked eren better if certain of our officials in high places had spent more time trying to make them work and less time propagandizing for lower flexible supports. How anyone can contend that 70 percent or 75 percent or even 821,6 percent of parity is better for the farmers than 90 percent is beyond me. As I understand it, parity is supposed to mean a fair price. Apparently there are some who believe that 70 percent or 75 percent or even 821/2 percent of a fair price is better than 90 percent of a fair price.
One hundred percent of fairness never did seem like too much fairness to nie, but it appears to be from 25 percent to 30 percent more than some people in high places believe in. In other words, many believe in equal justice to all, except farmers, and they believe further that 70 percent to 75 percent is enough for them. I just can't understand it.
Many people know from experience that the difference between 75 percent and 90 percent of parity means the elimination of absolutely all profit. Surely, no serious-minded person in America believes our farmers should supply food and fiber for the rest of the Nation at less than cost, and without being able to supply the same thing for themselves.
As I understand the law now in effect, in addition to dropping price supports to 75 percent of parity, the modernized parity formula will also go into elect and this will mean an additional loss to our farmers.
One further thing and I am through. The problem of price supports and effective production controls is one problem. The problem of disposing of surplus now on hand is another, and should be so treated. While we can afford the comparatively modest cost of 90 percent price supports at least on the basic commodities, we cannot afford to add momentum to an already dangerous decline in farm income by reducing the support level. Nor can we afford to forget that depressions on the farm have a historical habit of moving into town.
I therefore urge the members of this committee to take all possible and speedy action to see that price supports on basic crops are maintained at not less than