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STATEMENT FILED BY NORMAN A. RANDALL, CHAIRMAN, BURLEY COMMITTEE,
NORTH CAROLINA STATE GRANGE, LEICESTER, N. C. I am Norman Randall, chairman of the North Carolina State Grange burley committee, from Leicester, N. C.
As Mr. Caldwell has told you, we meet at least once a month, and right at present one of the principal questions is, What are they going to do about burley and are they going to force poundage controls on us? It is a good question; if that is done it will cost our small farmers from one to three hundred dollars per acre, based on the average production in the burley belt as a whole. We are proud of the fact that we have been able to build our average production to over 2,000 pounds per acre from 1,200 pounds since the program started. Evidently this has not lowered the quality of our tobacco, as has been reported, since we again led the whole belt in price per pound last year.
To limit the pounds that can be sold from an acre will also penalize the small farmer who needs to make every acre of his small farm produce to the limit in order to have sufficient income to have a decent living. According to reports from Washington, the representative of the burley tobacco Warehouse Association and the Kentucky Burley Growers Association stated last week we would not need a further acreage cut next year as it looked like the present strict enforcement got the surplus under control. Why try something new when the present program is working so well? Most North Carolina growers would pre fer a further acreage cut to poundage control.
We also feel that poundage control will be a problem to enforce. Policing the warehouses to prevent the surplus tobacco from being sold will require a small army of men. Poundage control works a hardship on farmers since a surplus can only be declared after the tobacco reaches the scales, thus entailing labor and expense and the use of cropland that could produce other crops.
We insist that the minimum acreage provision should be used to control burley tobacco production in order to guarantee some income to the small farmer. In summing up, we believe the existing law will adequately take care of the situation if given a fair chance.
The rth Carolina farmers have never tried to force other farmers to a low production level but have tried to raise the grade of our product as well as to equal and sometimes to exceed the standards, in both grade and poundage, of other States. It would be unfair to penalize good farming methods.
STATEMENT FILED BY John B. VANCE, PRESIDENT, VIRGINIA FARMERS UNION,
RICHMOND, VA. For the record, my name is John B. Vance. I am State president of the Virginia Farmers Union, the Old Dominion's second largest general farm organization representing approximately 20,000 farm people. I am indeed grateful for the privilege of presenting this statement to the committee today to express our views and recommendations with respect to some of the many serious economic problems confronting farm people. May I also say that we in Farmers Union feel that the Senate Agriculture Committee is to be commended for holding this series of hearings over the United States so as to make it possible for the farmers themselves to discuss their own problems directly with you. Since the legislative branch of our Government has traditionally been the branch most responsive to the needs of our people, it is therefore natural that the farm people are today looking to the Senate Agriculture Committee and the Senate of the United States to take appropriate legislative action to correct some of the economic inequities which are squeezing the very lifeblood from the veins of the American farmer.
What should be the desired end of the legislation you author next year? If I interpret correctly the feelings and thinking of the farm families I represent, and I sincerely believe that I do, they are concerned over whether they can survive as family units on the land or whether they are doomed somewhere down the road to the status of a day laborer. It is people in the United States that are important-not the assortment of economic doctrine of one brand or another you have had paraded before you. The farm families I represent will not worry about the kind of legislation the committee authors next year as long as they know you hold foremost in your deliberations the human considerations. You have had testimony on many different phases of the agricultural situation. With
few exceptions, however, the opinions expressed have been related to how to preserve our family-type pattern of agriculture.
Parity and how to obtain it is of great concern to farm families in Virginia. The interest in the level of farm prices grows out of the concern of farm families over the question of survival. The farm families I know best are interested in parity farm prices as a means of attaining the good life. They are not interested in getting rich.
Farmers are in trouble. Make no mistake about that. Caught between high, rigid, inflexible production cost on one hand and falling farm prices on the other, there is a very definite question as to how much longer the average family farmer can withstand the pressure without being forced out of business. Since 1952 net farm income is down by 23 percent; prices received by farmers have dropped an average of 19 percent since 1952. The farmer's share of the consumer dollar was only 40 cents in July of this year, which is the same as the 1935-39 average and is down 3 cents from a year before.
A release dated October 31, 1955, issued by the Agricultural Marketing Service of the United States Department of Agriculture entitled, “The Farm Income Situation," had this to say regarding the current farm situation :
RECENT TRENDS IN FARM INCOME
“Farmers' realized net income in the third quarter of 1955 was at an annual rate of approximately $10.3 billion. This was about 5 percent less than the second quarter rate and 10 percent below the rate in the third quarter of 1954. The number of farms in the United States has declined approximately 242 percent a year since 1950.
“The decline in realized net income and a similar decline in net income of farm operators which includes the value of inventory change—was due primarily to lower prices of farm products accompanied by only a small reduction in expenses. Prices received by farmers averaged 4 percent lower in the third quarter of 1955 than in the second quarter, and 5 percent lower than in the third quarter of 1954. Marketings were about the same except for seasonal changes."
In brief, this release tells me that (1) farm income is continually falling at the rate of about 5 percent each 6 months; (2) the drop in farm income is due to lower farm prices and rigid production cost; and (3) over 300,000 farm people are being forced off of the farm each year. I submit, Mr. Chairman, that this is a situation which is not good for agriculture; it is not good for business; and it is not good for our country.
In sharp contrast to the deepening farm depression are the glowing reports we farm people hear about the enormous profits being piled up by big business. Stockholders' dividends up 19 percent since 1952; corporate profits up 32 percent after taxes since 1952; manufacturing workers' weekly earnings up 13 percent since 1952; the average person's income up 14 percent since 1952. Let me make it clear that farmers do not resent the fact that business, industry, and labor are prospering. We do not begrudge labor a minimum wage of $1 per hour. We do not begrudge the approximate $5 billion cut in corporate taxes allowed big business hy act of Congress last year with approval of the President. No, the farmers only ask for an opportunity to earn a fair share of the great productive capacity of this country, and we do not believe that 90 percent of a fair price is too much to expect for the things we grow on our farms.
A major part of the responsibility for the dilemma in which American agriculture finds itself today must rest squarely on the shoulders of the Eisenhower administration and more directly on the shoulders of Secretary of Agriculture Ezra Taft Benson. About all the farmers have gotten from this administration is an occasional pat on the back and hollow assurances that “You are not as bad off as you think you are.” The greatest injustice ever promulgated on the farmers of this country is the so-called flexible price-support program. In fact, it is a no-support program rather than a low-support program. Any person who has farmed for the past 25 years knows that its basic theory is completely unsound and unrealistic. The theory, of course, is that by manipulating the level of price supports you can control production. Its basic philosophy is that farmers can be forced to stop producing by lowering the level of prices. This cock-eyed theory has already been disproved. In this connection I would like to cite the following production figures as reported by the Crop
Reporting Service of the Department of Agriculture for several major commodities on which the Secretary has reduced the price-support level :
Now, gentlemen, what is already a serious injury to agriculture is about to be compounded further in 1956 if the full force and effect of both the flexible price-support system coupled with the modernized parity formula is allowed to take effect. Just let me cite what the additional loss will be to Virginia farmers alone in 1956. The figures I will use are for commodities which will be most severely affected in 1956—peanuts, wheat, cotton, and corn.
It is estimated that Virginia will produce approximately 100,000 acres of peanuts in 1956. If the 1956 yield should be 1,750 pounds per acre, which is a conservative yield figure, our total 1956 crop will be about 175 million pounds. Using present parity of 13.5 cents with price supports at 90 percent of parity, this crop would have a gross value of about $21,175,000.
In 1956 modernized parity will become effective on peanuts. This will probably lower parity itself from 13.5 to 12.8 cents. This is a reduction of 5 percent which is the maximum allowed in any one year under the transitional formula. Now, according to the most recent estimates I have seen, it appears that the total supply next year will exceed 130 percent of normal consumption. This means that the Secretary will have the authority to reduce the price-support level to 75 percent of parity; and if we can judge the future by the past, this is exactly what he will do. Under a lower parity, plus supports at 75 percent of parity, the support level in 1956 could very well be only 9.6 cents. A 175 million pound crop at 9.6 cents per pound would gross $16,800,000.
The loss which Virginia peanut farmers will take in 1956 as a result of flexible price supports and modernized parity is $4,375,000.
Using the same process of reasoning and applying the provision of the modernized parity formula plus flexible supports, Virginia farmers will stand to lose at least $13 million as a result of lower price supports on wheat, corn, and cotton in 1956 alone.
This will then mean that Virginia farmers alone will be at least $17 million worse off under the flexible modernized parity price-support program than they would have been under 90 percent of present parity.
The already weakened farm economy of my State simply cannot stand to have an additional $17 million siphoned off without serious repercussions. I submit that it is not only in the interest of the farmers, but it is in the best interest of every businessman, every banker, every worker, and every other person in our State to prevent this bone-crushing loss to Virginia agriculture.
On behalf of the membership of the Virginia Farmers Union, I wish to submit the following recommendations which we believe if adopted will largely correct this gross hardship on the farmers of our State and Nation :
1. Enact legislation which will restore price supports on all basic commodities at no less than 90 percent of parity effective for the 1956 (rop.
2. Enact legislation which will provide for use of dual parity instead of modernized parity. In this connection I would like to point out that the modernized parity formula as provided in the present law helps no one and works a grave injury on the producers of peanuts, corn, wheat, and cotton. It helps no one, since the few commodities on which it provides a higher parity price are those commodities which the Secretary has refused to authorize effective price supports. The dual parity formula would simply give the farmers the advantage of the higher of the two.
3. Enact legislation which will provide the producers of dairy products, beef cattle, and poultry, as well as all other agricultural groups, the legal authority to use marketing quotas as a means of maintaining the proper balance between supply and demand as is done in the case of the basics. The law should further provide, as in the case of basics, that quotas shall
not be effective unless approved by the producers themselves in a referendum. If the producers of any agricultural commodity approve the use of quotas, then we urge that the price of that commodity be supported at no less than 90 percent of parity through the use of production payments, commodity loans, or any other method which will insure that the effective price to the producer will be at least 90 percent of parity.
4. Generally speaking, we are opposed to the method of price supports now being used by Secretary Benson in attempting to strengthen the hog market. When $80 million of the taxpayers' money is used to support hog prices, it should be so used as to insure that the producers of those hogs will receive the direct benefits and not the packers. If the purchaseprogram method of supports is to be continued, then any packer from whom the Government purchases hogs should be required under penalty of law to pay the producers not less than 90 percent of parity.
5. In addition, we favor legislation which will provide for a conservation acreage reserve. Under this program, the Secretary of Agriculture would determine the number of acres of farmland not needed in the year ahead for the production of farm home-used and commercial sales of crops, including hay. The Government would then stand ready to contract with farm operators over the country to put as much of their land into the conservation reserve as each individually cared to, receiving in return a conservation award per acre equal to usual cash rent or customary landlord's share for putting the land into its optimum conservation condition. If special facilities, land treatments, or construction were required, the farmer would be eligible, in addition, for an agricultural conservation payment, under the ACP program to defray a part of the cost. In case more acres were made available for the reserve than the national total, the Secretary would assign each State and county its proportionate share of the national total. An individual farmer could offer to place all, a part, or none of his farmland into the reserves.
6. To bring about a vast increase in consumption of food commodities, Virginia Farmers Union urges :
A. Adoption of a nation-wide food allotment stamp plan.
B. Expansion to all schools of the national school lunch program now serving less than one-third of the schools.
C. Improvement and expansion of the fluid milk for school children proyram to provide free at least 2 half-pints of milk per child per day and pay local school district administrative costs.
D. Adoption of improved Federal standards and inspection of perishable farm commodities in terminal, as well as shipping, markets with adequate Federal financing.
E. Adequate nutrition standards for the Armed Forces and veterans hospitals, penal institutions, hospitals, and other public and private nonprofit agencies by means of commodity donation or food subsidies.
F. Adoption of a credit program to encourage modernization and im
provement of perishable farm commodity terminal markets. Many United States-produced farm commodities, up to 10 percent of total production, must in normal years find a market outside our national boundaries. This market can and sould be expanded. Additional agricultural attachés and improved advertising and merchandising will help some. But just as in the case of domestic market, the really big increase in market demand for United Statesproduced farm commodities can come only from increased purchasing power in foreign countries, or from United States Government purchases designed for foreign shipment. To raise our export shipments we favor
A. Negotiation and establisbment of additional international commodity agreements for all raw materials that enter importantly into international trade, similar to the International Wheat Agreement, which will bring into agreement all of the important nations as well as all of the exporting nations for each commodity.
B. Negotiation and establishment of an international food and raw materials reserve or clearinghouse, to stabilize supplies, reliere famines, and stabilize prices of all food and other raw material commodities that enter importantly into international trade.
C. Continuation and intelligent expansion of the point + program of United States aid to economic development of other free nations in a way that will increase coordinated economic growth of the nations of the free world.
D. Continuation of the reciprocal trade agreements providing for world. wide tariff reductions and customs simplification. I assure the members of the committee that we are grateful to them for devoting so much of their time to the study of the plight of the Nation's farm families. Again, let me state that our interest is in agricultural programs that protect the families on the land. We sincerely believe that it is in the interest of all the citizens of the United States to adopt programs such as I have discussed which will preserve our long-cherished system of ownership and operation of individual farms by individual farm families.
STATEMENT FILED BY EDGAR L. WILLIAMS, SALISBURY, MD. I am a fruit, vegetable, and grain grower in the heart of the fruit and vege table section of Wicomico County, Md.
Being a grower of these commodities, I would like to tell the committee that the land taken out of production of commodities under controls should not go into the production of fruit and vegetables.
STATEMENT FILED BY Miss ISABELLA C. WILSON, CHAIRMAN, MASON COUNTY
FARM BUREAU DAIRY COMMITTEE, ARBUCKLE, W. VA. There the eight ways that I believe the dairy farmer can be benefited in his present calamitous condition. Some of these conditions may be helped by the Congress of the United States and some by our own State legislatures.
I. I believe that the Pure Food Division of the Pure Food, Drug, and Cosmetic Agency should be administered in the United States Department of Agriculture and that adequate funds should be provided to stop the adulteration and misbranding of milk, cheese, ice cream, butter, and any other dairy products.
The Congress of the United States passed a bill making it possible to color margarines yellow and the honorable gentlemen should be as willing to protect the dairy farmer as they are to protect the manufacturer of margarines. Margarine sold at 56 cents per pound uncolored ; now it is selling cheaper than lard, even colored, wrapped in waxed paper, cut in quarters, and packaged in boxes printed in three colors.
Somebody told the cotton farmer that the dairyman was against him. Somebody persuaded him to rob the cottonseed meal of its fat to make margarine. This fat is needed in the cow's feed to make a milk rich in cream; and the dairyman is paid for his milk according to its cream content. The price of milk will vary as much as 80 cents per hundred by cream content alone.
The feed manufacturers are now using animal fat in the dairy feed which is indigestible by cows that can digest fat only in the form of oils.
Now I leave it to your imagination where they get that animal fat since plain lard is as expensive as margarine, and tallow (lanolin) is used in beauty preparations.
II. Dairy farmers are not getting 75 percent of parity for their fresh fluid milk.
There is a lot of rubbish being talked about the need of dairymen being more efficient. Any businessman will tell you that sooner or later he will go broke with a business operating at 25 percent or more below what it costs him to produce. There is a fine dairyman in our community who has been operating for nearly 50 years who is spending his life's savings to operate his dairy farm. He plants to sell his herd in the spring.
If you expect a dairyman to produce an essential food like milk he must be protected.
There are some individuals and groups that society must protect for its own preservation. Society protects the wife and mother-we must do it for its own protection.
If we want good clean milk from healthy cows we must give the dairyman the cost of production. One form of that protection is against the importing of foreign dried, skim, and whole milk.
Here in our area, the industrial area of the Kanawha and Ohio Valleys, the section hand on the railroad, the truckdriver, the worker in the chemical, metal plants, and electrical plants, receive many times what the dairy farmer with