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This certainly would not come in our time, probably, although it may-we are living in times that move very fast—we may yet see the time in the United States, Mr. Chairman, when a great committee like this has a program, not to support crops as such, but to support farm families.
I do not think that is an impossible thing, that such a thing like that may come about. But meanwhile, before that happens, I do think that this offers a time to try various programs for various crops.
I do not think there is any one thing that will solve this. That is just the conclusion that I have as a very inexpert witness. I would not take any further time unless you have questions.
The CHAIRMAN. Are there any questions?
Well, thank you ever so much and your entire statement will be printed in the record.
(The prepared statement of Senator Neuberger is as follows:)
M Chairman, thank you for this opportunity to speak to you briefly about the need for some new departures in our national farm policies. I shall be brief, because I do not pose as an expert on agriculture, and your committee will consider statements from the farmers themselves and from many experts on various phases of this complex subject. I do, however, want to offer some general observations about the approach with which we in the Congress should tackle the farm crisis which has developed during the last few years.
Only 2 weeks ago, I returned from 4 months in my home State of Oregon. During the autumn months, I traveled constantly throughout the State the ninth largest in territory of the 48 States. I visited 31 of the 36 Oregon counties, extending from the Pacific coast where Tillamook County dairymen produce the famous Tillamook cheese, and Coos County, where cranberries are grown, to the Snake River, 500 miles to the east where, in the valley, intensive cultivation of row crops produce garden seed, sugar beets, and sweet corn, and where on the vast expanse of range thousands of white-face cattle fatten.
In county after county, I met with farmers whose crops range across the entire spectrum of agricultural products: Wheat and feed grains, apples, nuts and soft fruit, vegetables, dairy products, poultry, and beef cattle. I talked to farmers who, by force of economy circumstances, are already engaged in soil bank acreage reduction-prune growers of Walla Walla Valley near MiltonFreewater who are pulling out their orchards; fescue seed growers in the Grand Ronde Valley who are plowing under hundreds of acres of luxurious fescue, and hops growers of the Willamette Valley who must clear poles, string, and wire from fields before they can be planted to other crops.
Two facts in particular impressed themselves on my mind: (1) That after 3 years of falling farm income, many, many farm families face a real economic plight; and (2) that many of these farm families, at least in a diversified agricultural economy such as Oregon's, are completely outside any Federal program of economic aid. In other words, the great Government price support and surplus-disposal programs for the so-called basic crops about which we hear so much, and the magnitude of which places them at the center of any debate over farm policy, do not reach thousands of farm families in States like Oregon, who grow berries, or carrots, or raise chickens or turkeys. Many of these farmers spoke to me, not of price supports or Government purchases, but of the cost of bank credit, or of transportation, or of weather losses.
Oregon agriculture is highly diversified, although the individual farmer may in many cases be a specialist like the spud grower near Powell Butte, the producer of alsike clover seed near Madras, and the Lake Labish onion grower, This is possible because nearly every kind of soil and every variety of climatic condition can be duplicated in one part of Oregon or another. Such diversity should ordinarily spell wide agricultural prosperity. What I have found, Mr. Chairman, is acute economic pressure bearing down on the farmer in every section of the State. The shrinking farm income and the rising costs of farm operation are producing a rising chorus in which the voices of farmers generally are lifted.
In immediate economic jeopardy, especially, are many of the younger farmers, those who are 40 and younger; veterans, hundreds of them, who have begun their operation and expanded in a period of high land values and high com
modity prices. Payments on their mortgages cannot be met out of today's declining income. No rapid amortization provides them with a friendly tax relief. In all the proposals that have been outlined, and that includes the Eisenhower program now before the committee, I find nothing that will solve the agricultural problems of hundreds of these farmers who produce fruit, raise poultry, or intensively cultivate row crops on farms of relatively few acres.
Mr. Chairman, can the cherry grower in Marion County sensibly retire every fifth acre in his orchard? How will the Lane County farmer, whose beans keep cannery production lines running 24 hours a day in season, share in the President's program? Again, I would like to ask the committee, Should the farmer whose enterprise, location, and skill in producing specialty crops adds much to our vaunted standard of living be denied consideration as new farm legislation is fashioned ? I believe a farm program to meet the needs of modern agriculture will try to answer these questions with consideration and fairness to all farmers irrespective of whether they raise basic commodities or not.
Mr. Chairman, by now everyone is finally willing to face the fact that a critical situation in agriculture exists. I have spoken of it on several occasions last year, in the Senate and also before this committee, and I think it is unnecessary to take the time today to recount facts which at last everyone seems to be recognizing.
I believe that this recognition of a very broad crisis in agriculture, which cuts across many crops, many areas of our Nation, many types of agricultural production, points the way to the kind of approach which we in the Congress should take toward new Federal farm policies. I believe this is an opportune moment for experiment, for initiating new programs which are not known in advance to be foolproof but which deserve a trial.
The so-called soil-bank proposal may be one such program. As I understand it, the proposed acreage reserve is intended primarily to reduce the acreage planted to wheat and cotton in an effort to permit the Government to work off the surplus stocks it now holds of these crops. I have heard estimates of the cost of this program running to $1 billion a year, but perhaps even a very expensive program may be justified to solve the immediate problem of overproduction. Another program which deserves consideration for wheat, and, I am told, perhaps cotton and rice-not as an emergency measure, but as a means of preventing the accumulation of future Government-held stocks of these crops—is a domestic parity program, which would guarantee farmers a fixed ratio of parity on their predetermined share in the anticipated domestic consumption of the crop.
The idea of a conservation reserve also presents an attractive concept of land management. I know this committee will inquire with care whether it is more than an attractive concept and actually an economically meaningful and feasible program. In the course of this inquiry, I hope the committee will give consideration to the proposal recently advanced by Mr. Dewey Anderson, director of the Public Affairs Institute, and others for placing emphasis on a long-range program of growing trees on acreage removed from the production of annual crops. With your consent, Mr. Chairman, I ask that a recent letter by Mr. Anderson, explaining this proposal, which appeared in the Washington Post and Times Herald on December 11, 1955, be printed in the record of these hearings after my remarks.
It is obvious that we have not one farm problem, but many farm problems. The economic condition of farmers differs not only with the supply and demand of the different commodities which they raise it differs from area to area with differences in climate, soil, and water, distance from markets, adequacy and cost of transportation, and of electric power, availability and cost of credit, and so on. Equally obviously, no single method of Government assistance, which may solve specific problems of one group of farmers, will be a panacea for all farmers. In medicine, we have long since given up bleeding every patient as the standard cure for whatever ails him; we should not permit the same single-minded approach in our treatment of our sick-farm economy. Perhaps one patient needs surgery, another penicillin; one may be ready for an oxygen tent, another may require only some extra vitamins.
My point is that we must be prepared to act resourcefully, to discard any preconceptions which would inhibit experimental and imaginative programs. If acreage quotas have been made ineffective by modern inteusive, high-yield farming methods, perhaps limits on Government support should be expressed in quantities rather than in acreage. Perhaps quality differences should be reflected in support prices. Perhaps the technique of direct production pay
ments, as in wool, should replace the technique of shoring up market prices through Government support purchases for more commodities.
Too often in the past years, any bold and imaginative proposal to bolster and stabilize the role of agriculture in our national economy has been made a target of partisan attack. But those who, as we all remember, subjected the Brannan plan, for example, to bitter political denunciation are now eating their words. Sometimes their reluctance to eat them in public is almost humorous. For years, Republican farm policy consisted in impassioned attacks on alleged Democratic plans to plow under crops—so the President's message on agricultural policy gingerly proposes that "it should be practical to include (in the acreagereserve program) wheat already seeded if it is incorporated with the soil, as green manure, or by other accepted practices."
I do not suggest that it may not be necessary to plow under some presently growing wheat, as the President suggests, in order to make the soil-bank program effective. I do suggest, however, that it should teach us to approach farm legislation with open minds rather than with doctrinaire economic theories and political slogans.
We have in the past seen partisan efforts to defeat necessary farm programs by inciting city dwellers against farmers with cries of "favoritism” and “subsidy." The fact is that th farmer is lov man on the totem pole in the American market place. When his product is ready for sale, he must deliver it. He takes what is offered. Yet, when the farmer buys equipment or things for his own use, he pays what is asked. I think it is obvious that the farmer needs some Government help. You can call this help a subsidy or a service, according to your own viewpoint. I find that people who disapprove of a Federal program refer to it as a subsidy. If they like it, the program becomes a service or an aid.
The Conference on Economic Progress has pointed out that, between 1944 and 1954, subsidies to airlines costus nearly $700 million. Shin operators, between 1947 and 1954, received subsidies totaling $300 million. Treasury losses on accelerated tax amortization certificates for business corporations amount to about $2 billion. The Conference on Economic Progress also has claimed that “the termination of World War II defense contracts, on terms favorable to industry, cost the Government $6,800 million.” We have subsidized the edu. cation, the housing, and the health of millions of veterans, and I for one support the continuation of these Government services.
I am not criticizing these subsidies. Many of them are part of American life. The original land grants to railroads were a virtual gift; one company received about $131 million in Government timber lands to build a $70 million railway. But we needed the railroads to open up the frontier. Airlines and steamship routes have pioneered other frontiers, some beyond our shores. Accelerated tas writeoffs may sometimes be questionable, but these are not at issue here. The point I make is that most of the criticism of subsidies has been directed at subsidies for farmers. Yet Government grants to farmers are equally as defensible if not more so—than the grants which have gone in vast sums to large corporations, and are rarely questioned at all. I am not critical of the mail subsidy to newspapers in the form of less-than-cost mailing privileges, except when some of these same newspapers become holier-than-thou about subsidies to farmers. This is hypocrisy.
The letters I receive from farmers and the statements made by farmers with whom I talked convinced me that something besides political answers must be provided in farm legislation of 1956, First, the sheer problem of financial survival facing countless thousands of farmers must be recognized. There is disaster ahead for all too many of our farm families if the income decline is not immediately arrested. Second, there must be a willingness to try previously recommended suggestions that have long been denied a fair trial, such as the domestic parity plan. Third, surplus capacity must cease to be considered a national liability. Our surplus agricultural capacity must come to be viewed as a mighty asset and be treated as such. The day we find that we can produce no surplus food in this country, that day, all too late, we will know we have tragically become one of the have-not countries of the world. Fourth, we must preserve the farm as the home for those who have chosen the family farm as their way of life. It has not been demonstrated that, as claimed in some quarters, the tarmers now being forced from their lands are those by training and inclination properly destined to migrate to town. It has not been demonstrated that huge corporate farms can provide food for the masses most economically. Howerer,
there can be no argument that our American culture and our American way of life would be radically altered with the decline of the family-type farm.
Í am confident that from the farmers themselves, Mr. Chairman, have come constructive proposals and program suggestions from which your committee can construct farm legislation which will meet the immediate needs of the farm crisis, provide a long-range plan for a prosperous agriculture while insuring the Nation's consumers of unlimited supplies of food and fiber at prices well within the purchasing power of the public. Only such a program will remove the farm problem from the arena of partisan political debate and at the same time maintain the farmers' position of dignity and self-respect, which his vital contribution to our national life merits.
[The Washington Post, December 11, 1955]
TIMBER BANK VERSUS LAND BANK
Current talk about a "land bank" should be taken with a lot of salt.
The purpose is to cut down on land which now produces crop surpluses, while keeping it in good standby condition for any emergency. When needed, it could be plowed up rapidly. Instead of paying for surpluses we would pay for alternate land use.
To be effective, millions of acres of cropland would have to be removed from present crop cultivation, turning it into grassland. Cost estimates range up to $600 million a year-say $6 billion in 10 years. When they get down to cases, it may require payments of $20 an acre a year for 30 million acres.
Apparently we have given up on efforts to get more food to hungry people at home or abroad, no matter how badly they need it. Now we are going to take land out of cultivation in a big way.
We can do better than this, because this isnt really a good idea at all. It simply has not been thought through. The bright boys haven't done their homework this time. Somebody is jumping the gun.
It isn't a good suggestion because it does not eliminate surpluses. It simply shifts them from crops to beef and dairy products. The “land bank” idea adds more pastureland and lets the farmers use it for cattle raising or milk production.
Our milk production is already growing so rapidly that another few billion pounds raised on some of these new land bank acres would most certainly all be surplus. If some of the new acres are put into more cattle and hogs, already at disastrously low price levels, these two sectors of the farm economy would be forced to ask Government protection and subsidies. I have a cattle ranch in California and I know. Another point-the new pastureland would reduce some demand for corn, and surpluses of that crop would increase.
If we are going to take land out of crop cultivation,if that is the route we decide to go, then we had better make up our minds to take it out for a really long time and stop talking about emergencies. For unless we find big new markets, we are probably in a permanent surplus situation.
Taking land out isnt much good as long as we can get cheap fertilizer and better machinery to get more crops out of the remaining land. That is what we do in cotton, wheat, corn, tobacco, and potatoes. We would probably have to put all of Iowa into parks in 20 years to catch up with our fertilizer factories.
But if we are going to take land out of production—if that is the best we can think up-how about a timber bank instead of a land bank? Timber is the one crop grown on the land that isnt surplus and doesn't need any price supports or Government props. Wood is so scarce and costly that hardwood floors are now almost tissue thin layers put on top of subfloors. Try to buy a piece of firpelace wood-ouch! They tear down 100-year old barns to get big beams, for few trees are allowed to grow that big before being cut these days.
Millions of acres might go into a land bank without really solving any sizable part of our agricultural problem. But the same acres planted to trees would be to everyone's advantage. They would represent a shift from a surplus to a scarcity not a shift from one surplus to another.
Through a timber-bank plan, we could make a start on reforesting the Nation, stop soil erosion and help prevent disastrous floods and droughts. The game and wildlife of the Nation would multiply. Streams now drying would flow more steadily and fish could live throughout the year. Recreational fa
cilities would increase by leaps and bounds to meet the growing demands of our city populations. Farmers could reap a tidy extra income from sportsmen.
If we have enough foresight, a local woodworking economy can be built, along with the timber bank, which could revitalize many small rural communities. People could farm in the summer and some of them could work in the fall and winter in woodworking plants, producing a wide range of consumers' goods. Probably combining on and off farm work is the only reasonable solutiton for a lot of small farmers, and more and more of them have been taking that route.
But trees won't grow as fast as compound interest at 6 percent—so that farmers cannot be expected to put any land into timber growth if they have to meet present commercial requirements for the capital. Why not a Governmentsponsored credit program?
For lending purposes set up a National Resources Corporation, as we did the RFC, Small Business Administration, or the Housing Administration. Provide for the participation of local banking facilities. Tailor timber loans to meet the practical necessities of the situation. Get a guaranty of good forest practives. Make the loans after careful determination of feasibility by the Forest Service, placing the interest low and making the term of payment long enough so that the farmer can get a pay-out and take a real capital gain.
The chances are that it will cost the taxpayers a lot less in the long run to provide the setup to finance a timber bank on 30 million acres of cropland and in other areas as well, than it would cost them to finance directly a land bank and on top of that pick up the tab for surplus milk, beef, sheep, and pork.
A timber bank and a timber workshop for tree farmers make a lot more sense than the land bank to me, Anthony Wayne Smith, who conceived a good part of the idea, and to dozens of others with whom I have shared this thinking. I'll bet this idea takes hold.
Executive Director, Public Affairs Institute. WASHINGTON.
Senator HOLLAND. I want to make it clear, if I can, for the record, you do favor an extension of the present price-support program to include the producers of perishables; is that it in general?
Senator NEUBERGER. My feeling in general is this, the present pricesupport program does involve the collection of commodities by the Government, and potential laying up of surpluses.
I think better than the present form of price supports, some form of limited direct payments, let us say, to avoid the loss between what a farmer raising prunes or cabbage gets in the market place and his cost of production on a certain portion, would be more appropriate for many crops than the present loans, by which the crop is then taken by the Government and stored in a certain place, be it perishable or not.
But I do think that all justice and equity calls for the extension of whatever form of Government aid we have to more crops than now receive it. I do believe that, Senator Holland.
Senator HOLLAND. You do favor the Brannan plan?
Senator NEUBERGER. I would say some form of the Brannan plan for the people who are now totally outside such Government programs as do exist in the realm of agriculture.
Senator HOLLAND. Do you not know that most of the organizations which represent those commodities which are outside, do not want to be included ?
Senator NEUBERGER. Well, let me just say this, I went and talked to individual farmers. I am not giving you any suggestion from any farm organization. When I talk to people who told me that for the first time since 1937 they had to borrow money to pay their school taxes this past November and they are raising crops which are totally