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STATEMENT OF GEORGE HUMPHREYS, PRESIDENT, ONEIDA COUNTY
FARM BUREAU, NEW HARTFORD, N. Y. Mr. HUMPHREYS. George Humphreys, dairy, potato farmer, and I am also president of the Oneida County Farm Bureau.
We, of the Oneida County Farm Bureau, are honored that you have selected Utica as the last stop on your 10,000-mile tour of the United States, during which you have made a continuing effort to find out what farmers really feel about the present farm situation. Throughout your trip as well as all of today you have heard many suggestions both practical and impractical about what should be done for farmers. No doubt many of these ideals have merit but we submit that perhaps the farmer's plight is the direct result of things that have been done for him, and that he would benefit greatly if less were done for him in the future rather than more, as seems to be the trend.
An outstanding example of what we mean is found in the theory and practice of price supports. We are the first to admit that high fixed price supports are a pleasant and even a necessary prop in a declining farm market. However, a support program is not a true market, but rather a Government storage operation. The produce thus purchased is not consumed and as the inventory builds up, what appeared to the farmer as help in time of need becomes a millstone around his neck once his production about equals the demand. Ordinarily his unit price would go up but the surplus hanging over the market depresses it below the level dictated by a normal supply and demand. Obviously, continued high support prices only aggravate this situation.
Therefore, we recommend the present flexible price support program be continued, but that our goal be the eventual discard of all support programs and that we look forward to the time when once again supply and demand will govern our agricultural economy.
We believe that farmers should do all they can to help themselves. With this in mind we recommend the continuation of the Federal marketing orders affecting the sale of milk and hope that they will be amended to provide the opportunity for producers to vote the acceptance of promotional deductions for advertising and further that these may be made mandatory on all involved.
Finally, we feel that research is an all-important field in which the Federal Government should help agriculture. Research, for example, in the area of milk marketing and new uses for milk. Research, too in the untouched field of agricultural public relations. This to our mind is all-important as the farmer becomes an ever-decreasing minority in our population. We need real help in better public understanding of agricultural problems by everyone.
Please accept our thanks for your patinece in hearing us out at the end of what must be a very tiring day. We are very grateful for your interest in our problems and commend your zeal and diligence in going to the grassroots for your information.
The CHAIRMAN. Thank you, Mr. Humphreys.
Ladies and gentlemen, this concludes the witnesses who asked to be heard, according to the list before me. If there are any of you present that desire to file a statement who may have some new ideas to give us in trying to reach a solution to this problem, we would appreciate it.
Personally, I was very glad to have been able to be on the road since October 23, and to be present to conduct every meeting for the past 4 weeks. It has been a little strenuous, but I can take it. I am used to it, but I am glad to say that this meeting will conclude our field hearings.
We hope that from what we heard here today, and from what we have obtained from other States, that come February we will be able to have a law on the statute books that will at least be of assistance to the farmer. I do not expect it to be a cure-all but we are very hopeful that we will be able to place something on the statute books that will assist the most important segment in our society, that is, the farmer.
Are there any further remarks? If not, the committee will stand adjourned until we meet in January.
(Whereupon, at 4 o'clock, the committee adjourned.)
STATEMENT FILED BY EVERETT C. CANDAGE, TEMPORARY CHAIRMAN, COMMODITIES COMMITTEE, SCHENECTADY COUNTY FARM BUREAU, ROTTERDAM JUNCTION, N. Y.
It is pleasing to know that the authorities responsible for our Federal Government are realizing that the forgotten man--the farmer-should have more consideration, that he might get his fair share of the national income.
You do not have to be reminded that we have been working the most hours per week and getting the smallest returns for our labor, of any group in our Nation. Our county of Schenectady is no exception to this rule, although we have large industrial operations in our area and a high income for their workers. We as farmers must compete in this labor market if we desire any employees on our farms.
Farmers in this area produced their share during the war years, or our national emergency, whatever name you care to call it, and, we believe, did a good job willingly, with their share of sacrifice.
We believe our Federal Government program of high supports has been given a fair trial, and has not worked and will not work. We believe if we must have price supports at all they should be flexible, and should be so regulated that the program would serve as a floor for prices, or rather as assurance that a farmer would be guaranteed average production costs.
The nature of farming and the fact that the major part of the working force on farms is provided by the family, are major reasons why agricultural production does not make the same readjustments that characterize industry. Family farms will continue to be the primary type of farm. These family farms are generally geared for economical operation and if we have high supports with rigid controls that would cut back production, it would make many of these farms unprofitable and force some of the personnel to seek other employment. We believe we do not want to make farming so unpleasant and unprofitable that we will force our farm-raised young people off the farms, because, if the stork continues his present rate of delivery, by 1975 we may need our total production to feed our people.
Many of our farmers, especially poultry raisers, believe the penalty for raising more than 15 acres of wheat, to be fed on their own farms, is wrong, and they should be allowed to grow as much as they wish.
We believe that the Government should provide more research in an effort to find other uses for farm products.
We believe that if some of the so-called redtape were removed from the school lunch program, many schools would use more milk.
STATEMENT FILED BY AMHERST W. Davis, PRESIDENT, SUFFOLK COUNTY FARM
BUREAU, MT. SINAI, N. Y. Potato growers in Suffolk County are seriously considering the adoption of a potato-marketing agreement. At a recent meeting of the Suffolk County Potato Committee, 18 out of the 26 growers present voted in favor of trying to work out a marketing agreement which will fit Long Island conditions.
The decision to try to work out a satisfactory marketing agreement is the result of economic necessity. Due to the surplus United States potato crops in the 3 years since 1952, Long Island farmers have quite generally lost money from growing potatoes, the same as growers in other competing areas.
A majority of our growers believe that a marketing agreement will be a big help (but not the complete answer) in balancing supply with demand provided we can get the type of marketing agreement that we need approved in Washington. The big drawback to the adoption of a marketing agreement previously on Long Island has been the United States Department of Agriculture's policy that all potato-marketing agreements must require compulsory shipping-point inspection for all shipments in order to provide a means for enforcing the agreement.
I would like to make it clear that the marketing-agreement law in my opinion does not require mandatory inspections before shipment. Rather it is just a USDA policy that a marketing agreement cannot be enforced unless all shipments are Government inspected as to grade before shipment. I can see how such a requirement is practical for Maine or Idaho, which are far from market, but such a policy makes a marketing agreement impossible to live with on Long Island. I will try to explain why.
Many potato farmers in western Suffolk and Nassau Counties of Long Island truck their own potatoes to New York City markets. They usually make up mixed loads of both potatoes and green vegetables. The grading and packing of these loads is not usually completed until it is about time for the truck to roll to market. It is impossible and impractical to delay the truck until a Feieral-State shipping-point inspector can be secured to examine the load. On the other hand, the inspectors cannot inspect the shipment until it is graded and packed.
Commonsense tells us that there just cannot be enough shipping-point inspectors in western Long Island, so that our market trucks will not be delayed. If there were enough inspectors, so that trucks were not delayed, it would require one for nearly every farm and the inspection cost to the grower would therefore be excessive.
If the United States Department of Agriculture will go along with us, we believe we can work out a marketing agreement for Long Island which will be enforceable and which will not require the inspection of every farmer's load. We propose a system of spot checking whereby roving Government inspectors will call unannounced at each farm shipping potatoes to market.
These roving inspectors will check any lots of potatoes which the grower has packed for market. If any sacks of graded potatoes are found ready for shipment which do not comply with the marketing agreement, then the offending grower will be subject to an appropriate penalty. If the inspectors find that a grower repeatedly packs potatoes for shipment which violates the marketing order, such grower will be assessed increasingly heavy penalties. We believe that such a system will make a potato marketing agreement practical and workable on Long Island without the necessity of inspecting every load that a farmer drives to market.
I maintain that spot checking of potato shipments as to grade is completely practical. In a sense, it is already being done successfully. New York State has a compulsory potato branding law with teeth in it. State department of agriculture and market inspectors are continually checking on potato farms and warehouses to make sure that sacked potatoes comply with the branding law. By adding 2 or 3 more inspectors to the job on Long Island, these same inspectors could enforce the potato-marketing agreement regulations as to grades shipped on a spot-check basis. This of course would require the active cooperation of the State bureau of markets, but I am sure that Commissioner Carey would see to it that we secure such cooperation.
We would like to respectfully request that your committee examine the marketing-agreement law and determine if there are any legal obstacles to the spot-inspection plan I have outlined above. If the law does not permit such spet inspections, it is recommended that appropriate amendments be made in the law to permit spot inspections.
A Long Island potato-marketing agreement along with similar marketing agreements in Maine, Idaho, California, and other potato-producing areas will not be adequate every year to assure potato growers a reasonable profit for their efforts. Any one area or even several of them together cannot withhold enough low-grade potatoes from market by marketing agreements in a surplus crop year, like 1955, to bring growers a profitable return on their investment.
In a surplus potato season like 1955, it is necessary for all potato areas in the United States to withhold their low grades from market in order to eliminate the surplus. It does little good for one State, or even several States to hold back its low grades, unless all growers in all States do likewise.
A possible remedy for such a situation is a nationwide potato marketing agreement. We request that Congress investigate the possibility of drafting a law which will allow potato growers to adopt a nationwide potato marketing agreement. I suggest that it be written into the law that no nationwide marketing agreement would become effective unless it was voted in by at least twothirds of the potato growers voting in a special nationwide referendum.
A national potato-marketing agreement must have considerable flexibility to meet local conditions.
Even a national potato-marketing agreement cannot be successful in a big surplus crop year unless section 32 funds are used in conjunction with it. That is, section 32 funds should be used to encourage growers to divert the low grades to starch and other byproduct uses in order to reduce the surplus. However, when it becomes necessary to use section 32 funds, the expenditure of such funds should be made in such a way that all potato areas can benefit equally.
For example, this year, the USDA requirement is that section 32 funds will only be used for diverting potatoes to starch factories, or for livestock feed, or other nonfood uses. The requirement on livestock feed is that the potatoes are to be cut or sliced before shipment. Such requirements completely prevent Long Island from benefiting directly from section 32 funds. First, we have no starch factories, although we have tried desperately to establish same.
Secondly, we have no livestock industry large enough to consume an appreciable quantity of potatoes. The requirement that the potatoes must be cut or sliced completely prevented our Long Island growers from supplying potatoes to upstate New York dairymen for feeding purposes. Because of the golden nematode regulations, we have to ship potatoes in paper sacks. As anyone familiar with potato shipping can tell you, cut or sliced potatoes will not carry or keep in paper sacks. The cut potatoes become slimy and decay and the paper sacks disintegrate.
It was absolutely unnecessary to require that offgrade potatoes for livestock feeding be cut or sliced. If this cutting and slicing requirement had not been tied to the use of section 32 funds, Long Island could have diverted thousands of bushels of low-grade potatoes to livestock feeding this fall.
Turning to another phase of potato marketing, I believe there is no actual overproduction of potatoes, but rather underconsumption. In Europe, the consumption of potatoes per capita is 2 to 3 times what it is in the United States. That is partly because the European countries have developed so many industrial and byproduct uses for potatoes.
I realize that United States conditions are a lot different from what they are in Europe. But I believe that many more industrial and byproduct uses for potatoes could be developed in this country. I recommend that increased funds be made available to the United States Department of Agriculture for finding new uses for potatoes and other vegetables. Just a few new byproduct uses might completely solve the potato problem.
Relatively little is known about consumer preferences for potatoes and other fresh vegetables. We may not be growing the varieties that housewives prefer or packing them to best advantage. Additional funds for research on consumer preferences for fruits, vegetables, and potatoes. would be a very worthwhile investment.
The golden nematode continues to be a perplexing problem for potato growers. As yet there is no satisfactory control for this tiny pest. A satisfactory solution for curbing this pest is many years away. Therefore, additional funds should be made available for research on the control of the golden nematode. In the long run it will be cheaper to find a way of controlling the pest rather than spending large sums annually in checking the spread of the nematode.
Potato growers might be able to get along without any government potato program or assistance such as I have outlined above if there were a change in the income-tax laws. At least, potato farmers were able to survive on their own in the past before income taxes became so burdensome.
In the past before the days of the heavy income taxes, if a potato farmer was lucky enough to make a good profit due to good prices in a short-crop year, he could sare his earnings to tide him over in the big-crop years when prices are unprofitable.
Now, when a farmer makes a good profit, income taxes are so heavy that a farmer is unable to build up a reserve fund for the years that he operates at a loss. Consequently after 2 or 3 unprofitable years, the farmer is broke or so crippled financially that his credit is exhausted. It is this sort of situation which leads to the farmer accepting Government programs to control production and to support prices.
Most farmers would prefer to operate their farms without the necessity of acreage allotments and marketing quotas and similar forms of governmental assistance. In these times of heavy Government spending for defense purposes, we realize that heavy income taxes are inevitable. The farmer does not wish to shirk his responsibility in sharing the tax burden.
But there is a real need for revising the income-tax laws so that the farmer does not bear more than his share of the tax burden. That sbould be done by allowing the farmer to pay his income taxes on the basis of his average net income for the past 5 years.
Under the present income-tax laws, a farmer can carry his losses backwards 2 years and forward 5 years in equalizing his taxes. This is good in theory, but in practice it is not used by most farmers. To secure a refund of taxes, it is necessary to file amended tax returns. Busy farmers do not have the time or the knowledge of income-tax technicalities to file amended returns.
If a change is made in the income-tax law so a farmer can average his net income over a period of 5 years in determining his tax, I suggest that an op tional period of 5 years be allowed during which the farmer is allowed a choice of using 1 year's net income or 5 years' net income in figuring his tax. This should be done so that the farmer is not penalized by having to pay a tax the second time on a year's profit for which he has already paid the tax.
I appreciate this opportunity of submitting a statement and trust that your committee will give my recommendations due consideration in drafting new farm legislation.
STATEMENT FILED BY CARLTON J. HINMAN, ANDREW J. KUBIS, ADELBERT H.
BLENCOE, MICHAEL KUBIS, CLAUD E. BLISS, JR., (LIFFORD S. DRAKE, AND EDWIN P. PHILLIPS, COOPERSTOWN, N. Y., AND ROBERT M. HALBERT AND STANLEY R. WILBER, GILBERTSVILLE, N. Y.
In a simple society the law of supply and demand works to regulate prices and control supplies. When controls or restrictions of any kind are placed upon the flow of trade or services, it begins to upset the balance and calls for other like measures on other things to correct this upset. Thus controls and upsets extend in an ever-widening circle.
Labor, industry, and agriculture are probably the three most important facets of our economy and in that order. Each has achieved its present degree of importance for various reasons. Some of the reasons are Government protection or regulation, unity or disunity, use or sometimes abuse of power, research, etc.
Our economy today is in a state of imbalance. Labor is enjoying the highest wages and highest percentage of employment ever recorded in peacetime. Wages are still rising. Industry as a whole is reported in financial reports to be enjoying its greatest prosperity and expansion. Agriculture, according to all sources of information, is suffering a gradual decline in prosperity. This decline has been taking place for several years, brought about by falling prices of farm products and rising costs of manufactured articles.
We understand that this hearing today is to obtain the views of individuals or groups of individuals about what steps can be taken to correct this imbalance. We would set forth the following opinions and respectfully urge their consideration by the United States Congress in its attempt to aid American agriculture. We ncede to la!
right not to work for an employer—the right for everyone to quit together, to strike over wages or working conditions, but we question their right to picket an employer's property, thus preventing the owner or anyone else from entering or leaving at will. We also question labor's right to force a worker to join a union in order to work for an employer. It should be a privilege rather than a qualification for employment. We would hardly in. sist that a union member who chose to buy a farm should be obliged to join the Grange, the Farm Bureau, or the church we attend in order to enjoy that farm with his family or to operate it.