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STATEMENT OF ARCHIE WRIGHT, PRESIDENT, FARMERS UNION
OF THE NEW YORK MILKSHED, OGDENSBURG, N. Y. Mr. WRIGHT. Mr. Chairman and gentlemen of the committee, I am president of the Farmers Union of the New York Milkshed. I reside at Ogdensburg, N. Y.
As your committee knows, we have in this general region Federal regulation, order No. 27, covering milk produced for the New York metropolitan market. In this, some 50,000 milk producers are immediately concerned and the amount of milk involved is currently around 8 billion pounds yearly, roughly some 7 percent of the national production. The excess of milk produced, over utilizations for which municipal sanitary inspections are maintained, amounts to 40 to 50 percent of the total. This excess is sometimes referred to as the surplus. It is, however, the cushion for all the fluid markets of the Northeast, and it is not waste. It is used in the manufacture of products, cream, and so forth. The pricing of this so-called surplus milk is a highly important matter to farm people as their return, a base uniform price, is a weighted average of utilizations and prices.
In 1953, October 19 to November 24, in Utica and Albany, we had a hearing on the pricing of this milk. 'An astonishing feature of this hearing was the vehement insistence by the representatives of many farmer cooperative associations that the farm price for milk for manufacturing purposes had to be reduced by a substantial amount. These were representatives of farm people. They had a plant interest. It was obvious that that plant interest was being hurt, and hurt bad. The smaller proprietary processors were also panicky in their demands for relief. These demands were backed up by the representative of the larger outfits in more dignified and detached manner.
As the evidence developed, a peculiar situation began to unfold. The cooperatives, together with the smaller proprietary handlerprocessors had been unable in the flush season, and beyond, to move their finished foods. They were stuck with their inventories, they couldn't get a handling charge, or even transportation on milk moved to processing facilities. Nobody wanted the stuff, and their producer payroll was hard on their heels. The Commodity Credit Corporation of the United States Department of Agriculture wasn't taking their goods. It had some brand new rules on volume, containers and 30-day manufacturing periods with which they could not comply and besides inspection had become of a closeness out of previous experience in this world. The CCC just wasn't taking on inventory, except on a selective basis, highly selective. The larger manufacturers could comply and their stuff was going into the CCC outlet. These larger operators were, and are, the assemblers and distributors of milk products upon whom the smaller fellows depend normally for outlet of their product.
Note, at this point, that no class price of milk under the order of Federal regulation was, or is, based in the support price but rather on the commodity exchange quotations. Nor are processors of order milk, availing themselves of the CCC outlet at the support price, required to pay producers, or to account for their milk, at the support price level. Thus we had a situation in which a handful of pretty large operators could move their product to the CCC at the support price, say 14 cents for roller dried skim, and buy their milk supplies
at a price based on open market quotations of between 9 and 10 cents, and not only the milk but the goods to supply their trade. Of these, they are taking only enough for their immediate needs, the little fellow was choking on the balance. The bulk of products is made up in the spring and summer for year around use and the inventory is usually carried by the distributors and in late years to a large extent by the CCC. The operation beat down the quotations and forced an increase in margin none of which was reflected to any amazing extent in ultimate consumer prices.
This was a purely artificial windfall, the immediate killing was substantial, and the situation was used to bring down the price return to producers of milk for the New York market by a substantial amount. And, from the cries of pain from the Midwest dating from about that time, the cheap milk situation brought about so artificially in the New York milkshed must have been used to beat down the farm price out there. And from the way other farm commodities acted in this general period, it looks from the outside as if they, too, had had a milk operation performed on them. The farmers as a whole, the most essential producers in society, were thus deliberately and callously victimized, and the victimization was brought about through something approaching connivance on the part of the United States Department of Agriculture.
If our farm people are to be left helpless as opposite the business element handling and processing their products, nailed down for skinning as it were, and if this simply cannot be remedied by setting any reasonable restraint on the business element, then society as a whole would, in our opinion, be wise to provide a supplementary remuneration to farmers, for amends and for pantry shelf insurance, in such amount as will bring farm income up to the nonfarm level. No less will be acceptable to farm people.
Such a program is envisaged in the Brannan farm plan which would provide for production payments on a basis of goods brought into the market place. But, even that is not sufficient. Other features of that plan are even more important for the long run. I refer to soil conservation and limitation of benefits to family-type farming operations. Our surpluses are more apparent than real. There are still ill-fed people in this country. Our protein situation isn't anything to boast about. And what surplus we have comes out of some 16 good growing years. Three or four bad growing years and those surpluses would look as good to us as that 7-year surplus looked to the people in Egypt in the days of Joseph and his brethren. We can have a lot of hungry people in this country in a few short years. It would be far better to go to work on that prospect now than have to rig a crash program of doubtful success in the event. In any case the hand of society cannot be closed tight on the farmer for much longer. That phase of our history grinds to an end.
The CHAIRMAN. Are there any questions?
Senator HOLLAND. Mr. Wright, I notice that you appear to endorse the Brannan farm plan; is that correct?
Mr. WRIGHT. Yes, sir.
Senator HOLLAND. Are you endorsing likewise the plan advanced by the National Farmers Union, which is elementally based on the Brannan farm plan?
Mr. WRIGHT. Our endorsement is confined to the Brannan plan.
Senator HOLLAND. You mean the National Farm Union endorsement is confined to the Brannan plan?
Mr. WRIGHT. No. Ours is. Senator HOLLAND. Your own organization for which you speak? Mr. WRIGHT. Yes, sir. Senator HOLLAND. I notice here that you refer to the limitation of benefits to family-type farming operations. What is your definition of a family-type farming operation?
Mr. Wright. Well, regardless of acreage, that kind of an operation which is ordinarily conducted by a farmer, unpaid family labor and occasionally hired help.
Senator HOLLAND. How much volume--how much production in dollars would such a family-type farm, under your definition, produce?
Mr. WRIGHT. I could not say as to dollars, but we do have operations in the New York milkshed of 60 cows and above which are entirely conducted by the farm family.
Senator HOLLAND. How much annual volume of production would that be?
Mr. Wright. Well, that would probably run a million and a half pounds a year or more, in some instances. I understand there have been very considerable technological advances in farming which permit of a much larger family production than was the case at the time that the Brannan plan was first advanced.
Senator HOLLAND. Under your suggestion then, the payment of production payments should be limited to the production of the family type farm?
Mr. WRIGHT. We believe so. We think it is very essential.
Senator HOLLAND. Anyone who is more efficient or has grown larger or produced more than that would not be entitled, as to the surplusage, to have any production payments?
Mr. Wright. Undoubtedly, it would work a hardship in some few instances, but I think that on the whole it would be eminently fair.
Senator HOLLAND. Would you answer the question? I say, that would mean that as to production beyond the production of a family unit form there would be no production payments?
Mr. WRIGHT. Yes, sir; that is correct.
Senator HOLLAND. Your idea, therefore, is to give support of the Federal Government to what you call the family type farm and withhold it beyond that?
Mr. WRIGHT. Yes, sir.
Senator HOLLAND. In the case of one of the national officers of one organization, when he was testifying before this committee I noticed that in his literature he said that their program was designed to force greater distribution of the land, fairer division of the profits of the land, and I asked him if that was correct-if that was the objective of the program. I am going to ask you the same question.
Mr. W'RIGHT. First, I would like to say we are not affiliated with the National Farmers Union.
I think our organization does, that it is highly important for the democratic people of our country, to preserve the family type of farming, and to put rather severe restrictions on large-scale corporateoperations.
Senator HOLLAND. What about larger-scale individual operations, due to the efficiency of operation or the skill of operation of an individual operator-do you discourage them also!
Mr. WRIGHT. Undoubtedly, the more advanced individual operators would be under some limitation in this, but the great mass of farmers would benefit from it enormously.
Senator HOLLAND. Is this plan designed to force what you regard as a fairer distribution of the land and more equitable distribution of the profits of the soil ?
Mr. Wright. Yes, sir; I would say that was the case.
Senator AIKEN. Mr. Wright, are you endorsing all provisions of the Brannan plan or simply the compensatory-payments provision?
Mr. Wright. I think I was pretty specific on that. The conservation features and the family type of farming features.
Senator AIKEN. Then you endorse that provision of the Brannan plan which would have provided 100 percent of parity supports for about 75 percent of the agricultural production of the country. That was part of the Brannan plan. You would endorse that? Mr. WRIGHT. I do not know that it would work out that way.
I think an operation that changes and adjustments would be made.
Senator AIKEN. You are also aware of the fact that the Brannan plan did not restrict its benefits to the family farm, but restricted it to a dollar-volume output which was approximately $24,000 a year.
Mr. WRIGHT. Yes, sir.
Senator AIKEN. That any one farm could produce for price support. And you support that limitation?
Mr. WRIGHT. No, sir; I would say there have been changes since the Brannan plan was first advocated which would make necessary a quite considerable increase in the top limit.
Senator Aiken. You would change that to kep pace with the change?
Mr. WRIGHT. Now and in the future.
Senator AIKEN. Also, do you endorse that provision of the Brannan plan which required any producer, in order to be eligible for supports, to operate his farm in accordance with directions from the Department of Agriculture?
Mr. WRIGHT. I doubt very much that such a provision would be workable. I think one of the appeals that the Brannan plan has to me is that it would bring a prosperity to agriculture within the framework of the free-enterprise system.
Senator AIKEN. Do you think that if we guaranteed 100-percent support of farm commodities it would be necessary to impose ceiling prices also in order to protect the consumer?
Mr. WRIGHT. I am afraid that at times something like that might be necessary.
Senator AIKEN. That is all.
The CHAIRMAN. Mr. Wright, when you speak of the Brannan plan, do you have in mind this situation: That a fixed price would be agreed, whether it is 90 percent or 75 percent, whatever it might be, and let the farmer sell his product on the market for whatever the market would bring, and the difference in market price and the fixed
price up here, whether it be 75 or 90 percent, will be paid for by the Government?
Mr. Wright. Yes, sir; that is my understanding.
Senator HOLLAND. Well, now, the Brannan plan involved 100-percent price supports; did it not?
Mr. WRIGHT. No; not my understanding of it. The selling price of the product was in a free market, and the compensatory payments to the farmers would be at some level above that, presumably determined by the Congress. Probably, the original advocates of the Brannan plan had in mind 100 percent of parity. Personally, I think that eventually this country is going to have to go beyond 100 percent of parity to bring about anything like equitable individual farm in
Senator HOLLAND. Then you think that this program should be aimed at more than 100 percent of parity?
Mr. WRIGHT. I can see no prosperity for the farmers in price returns to them around 100 percent of parity.
Senator HOLLAND. You remember that the Brannan plan also covered perishables; do you not?
Mr. WRIGHT. Yes, sir.
Mr. WRIGHT. Yes, sir; I think that it should be an across-the-board program.
Senator HOLLAND. Despite the fact that the fruit people do not want it, by and large the vegetable people do not want it, the livestock people do not want it, and many other elements of agricultural production population, including much more than one-half of the dollar value of agricultural production in the Nation do not want it?
Mr. WRIGHT, Senator, I have been in the farm organization field a long time. I have heard many statements made as to what farmers want and what farmers do not want. And I do not think that anybody knows very much about it.
Senator HOLLAND. Of course, it is the business of the men in the Congress to try to find out what their own farmers want, is it not?
Mr. WRIGHT. It is. It is, also, their business, in my opinion, to bring about an equitable situation in agriculture, based on knowledge of the subject that goes far beyond that, that any individual working farmer can possibly have.
Senator HOLLAND. Well, if I tell you that in my State, where the 3 principal commodities are tree fruits, winter vegetables and livestock, that all of their organizations in those 3 fields have repeatedly, constantly, consistently insisted that they be left free from Government regimentation, and that they do not want price supports, and that they think it is wrong in principle, do you think that I am not correctly informed as to their wishes?
Mr. WRIGHT. I would not say that entirely, but it is conceivable that the situation could be misunderstood. I would want to talk to those individual farmers. I have found in talking to farmers that