Mr. PATTON. Well, lowering the price won't do it. Until they go busted-until so many of them go busted so that they can't produce. That is happening now among dairy farms. But I think, Mr. Chairman, that working together we can find ways. I believe sincerely if you had a balanced price across the board, so that a fellow was not running the piano keys, trying to find something where there was a good price, that he would make more diversified selection. But when he has to crowd everything he can into wheat because wheat has a good support price, or everything into another commodity because it has a better price position, then you are going to get these bulging surpluses. There are farmers in Senator Young's State who have gone to milking cows because of the situation on feed grains and their lowered income, who normally do not go into dairy. The CHAIRMAN. When you say 100 percent across the board, I presume that you want to apply that to vegetables. Mr. PATTON. Yes. The CHAIRMAN. To watermelons. Mr. PATTON. Yes. The CHAIRMAN. Fruit production, apples. The CHAIRMAN. How would you curtail the production of those commodities? Mr. PATTON. Out in Colorado we have marketing quotas on peaches. For several years that has worked very successfully. We do that there in that particular instance by allotting to each grower so much of the market for a certain class of commodity, and the rest is just taken off the market. I am sure they do that in California. I think in cases like that you probably would use marketing agreements, applied on the State basis rather than on a Federal basis. The CHAIRMAN. You mean use the same type of marketing agreements that are permitted in the milksheds? Mr. PATTON. In Colorado, in the peach industry we have special State legislation that sets up a peach board under general State supervision and they decide what percentage of the fruit, down to what level starting with the No. 1's, then the No. 2's. The CHAIRMAN. That are to be shipped and sold? The CHAIRMAN. How? Mr. PATTON. Well, part of it goes into charity, if there is any around, and the rest of it is destroyed. The CHAIRMAN. Who pays the farmer for this? Mr. PATTON. The farmer? He gets-you mean for what is given to charity? Mr. CHAIRMAN. What is destroyed? Mr. PATTON. He gets the total price, his price for the number of units he markets and that is his income. The CHAIRMAN. Is there any difficulty in ascertaining how much of the crop will be sold by each farmer per year? Mr. PATTON. It has been in operation now, I would guess, about 10 or 12 years. Although there are always difficulties when you get into human relations it seems to have worked quite well. The CHAIRMAN. We are going to look into that. I wish you would get a copy of the Colorado law, Mr. Stanton, the State law and let us find out how that is working. Mr. PATTON. I think it is applied to a number of different perishable commodities. The CHAIRMAN. I would like to get as much information on that subject as we can. We are very anxious, I know the committee is, to make available to the farmer all that the traffic can bear. I realize that unless you put the farmer on his feet, soon it might forebode a depression. None of us want that to happen. Mr. PATTON. I know that. The CHAIRMAN. That is why the last 6 months this committee has been very active in trying to get the information, making the tour over the country; and we are now engaged in trying to get a bill before the Congress as soon as possible so as to alleviate the situation which you have been complaining about. Mr. PATTON. May I say, sir, that I think you have done a greater service to agriculture by holding the hearings out in the grassroots. We were very glad to have our grassroots members to appear rather than having those of us who spend all of our time at this appear. The CHAIRMAN. We were very happy to do it. Proceed. Mr. PATTON. Our provision for an adequate program must cover 100 percent of parity income protection and price support for all the commodities farm families produce. ONE HUNDRED PERCENT OF PARITY If we write a correct parity price formula as a way of determining a fair price to farmers, let us not try to convince ourselves, or anyone else, that farmers, alone among the population, should be asked to accept some partial percentage of the fair price all of us have asserted in the formula to be just and right. PRODUCTION PAYMENTS As I pointed out to your committee in June 1955, the price-supporting methods authorized in existing law have gross disadvantages and weaknesses when they must be used as the exclusive means of protection of farm family income. I shall not take the time of the committee to repeat my testimony on these. However, I do urge you now to include in the proposed legislation an authorization for the Secretary of Agriculture to use production payments and that you direct him to use them in workable combination with the price-support methods already authorized. MAKE PARITY PRODUCTION PAYMENTS ON 1955 HARVESTS Farm families suffered severely in 1955. Almost everyone else in the country was enjoying the highest personal and corporate incomes in the history of the world. I urge that you direct the Secretary of Agriculture to make parity level production payments on 1955 crops, and on milk, butterfat, poultry, eggs, and livestock products sold in 1955. This will help to cut farmers in on a part of that prosperity enjoyed by others in 1955. Senator SCHOEPPEL. Do you suggest retroactive payments? Mr. PATTON. Yes, sir. Senator ANDERSON. How would they be calculated? Mr. PATTON. Roughly, they would be calculated on the difference between the average market price and what parity would be. Senator ANDERSON. You mean 100 percent of parity? Mr. PATTON. Yes, sir. It would cost a substantial figure. Senator ANDERSON. Livestock products account for a large share of our income, 60 percent, you said. That would be another two-fifths of the income that the farmer got added to him now. run into the billions of dollars? Would not that Mr. PATTON. It would, somewhere between 4 and 5 billion dollars on. Mr. PATTON. I think on the total. I just figured that. Mr. PATTON. Somewhere between 4 and 5 billion dollars. A lot of that would come back in income. Mr. BAKER. In 1952 prices were averaging 100 percent of parity. Net income was $14.9 billion for the farm families. In 1955 it is going to be close to 10.5 or 10.6 billion. If 100 percent of parity was a fair price and we were able to maintain it in 1952, everyone else's income has gone up. All Mr. Patton has recommended is that farm income be held at the same level it was 3 years ago. Whereas the income of others have gone up from 13 to 37 percent. Senator ANDERSON. I was just thinking of the legislative struggle it would be to pass a special bill to give $5 billion to the farmers at this time. Mr. PATTON. We had carryforward and carryback provisions for corporations taxes to refund money. I think we might be able to pay out some money if we get a substantial amount back in income taxes that were not paid because of the low income. Senator ANDERSON. Some of use might not be hostile to the reception of it. I am thinking of the people voting. Mr. PATTON. Yes, sir. May I proceed? The CHAIRMAN. Surely, proceed. FAMILY FARM ELIGIBILITY Mr. PATTON. The maximum eligibility of any one family unit for Federal farm income protection and price supports should be limited to the maximum production of a fully adequate family farm, with the upper limit defined as a farm unit of not greater than a size where an average operator family performs the bulk of the labor and management required for production. The limitation should not be set so low that any bona fide family farm is excluded from full eligibility for 100 percent of parity income protection and price supports. Nor should it be set so high that unfair competition against family farms by industrial agricultural production units is encouraged. Any farm unit operated by a family or a group of two or more families, including industrialized units, should be eligible for 100 percent of parity income protection and price support on all the commodities they produce up to the specified limit for each family or farm unit. The CHAIRMAN. Would you tell us what that limit is, what you have in mind? Mr. PATTON. We have felt, roughly- and it would have to be calculated, I suppose, on each type of farm production-somewhere not lower probably than $25,000 gross, and probably not higher than $35,000 gross. I will admit that is just a very rough figure. When we proposed this same type of thing in 1949, I think we used the unit basis, Senator, of 5,000 units of wheat or its equivalent in other commodities. The CHAIRMAN. Would your objective be to increase or encourage more farmers to come back on the farm? Would that not be your primary idea? Mr. PATTON. Our first objective would be to make it more possible for the family farmer who is now on the land, especially the younger men to stay on the land, and to the extent that there was need, if there need be, at sometime and I think there will be, with the average age of farmers where it is, that it would be encouraging to the farm family or those who wished to engage in family agriculture to come back to the farm. The CHAIRMAN. As to farming units, such as we have now in many States, it would be your plan to deny them any kind of price supports whatever? Mr. PATTON. No. The CHAIRMAN. What would you do about that? Mr. PATTON. Up to the $25,000 or $30,000, whatever Congress said, any unit, regardless of what size it was or what type of operation, would be eligible. I would not support a proposal to deny supports to one farmer, even though he might be an industrial or absentee, farmer. I think they all ought to be treated up to that limit on the same basis. The CHAIRMAN. Yes; but about that? Mr. PATTON. And I would cut it off. The CHAIRMAN. Cut it off altogether? Mr. PATTON. Yes. There are those who propose a graduation. I personally feel that would be a step in the right direction as long as the graduation was sharp enough on the large end, that is, on the larger producers. In other words, what I am saying, I personally would not oppose or object to a graduation. I feel probably the direct cutoff is the cleanest way to do it. There are those who have some very good ideas. The CHAIRMAN. What would be the consequence, sir, if you did that? Would it not be destructive of a lot of these large farm units? Mr. PATTON. I do not think percentagewise there is a large number of them. I think about 2 percent of the farms, the large units have about 25 percent of the production. The CHAIRMAN. I was reading some figures somewhere, where 40 percent of the farmers produce 80 percent of the food. Did you ever hear those figures? Mr. PATTON. As I recall in money terms, about 25 percent of the agricultural income is produced on 2 percent of the big farms. They produce about that. The CHAIRMAN. What would you do with those farms? Would it be your idea to make it so that they could not make a go of it? Mr. PATTON. No; but they are always talking about how efficient they are. I would give them a chance to try this efficiency that they seem to be so in love with. Senator ANDERSON. We were discussing the other day the large producer of cotton. Obviously, he would not be eligible for price support. Mr. PATTERSON. Above a certain amount. Senator ANDERSON. You cannot penalize him if he sells his cotton below the price level. Anderson, Clayton, Delta, Mississippi, etc., would you allow them to market their cotton at any price they wanted to? Mr. PATTON. Unless Senator ANDERSON. You would have to, would you not? Mr. PATTON. Unless you had soil conservation and other devices. Senator ANDERSON. Would it tend then to require the rest of the cotton to move under the loan? Mr. PATTON. I think probably-Well, sir, it would, but I would think that eventually-and I didn't intend to get into this-we are going to need to put cotton partially on production payments if we are going to meet the world situation. Senator ANDERSON. But at home, here is a man who has complied with the regulations, he has a family-sized farm, he wants to market his cotton, and he goes to sell it on the market and they say, "No, no, Delta did not get any price support. It is selling it for half a cent less than you take for your cotton." So he puts his cotton into the loan, does he not? Mr. PATTON. I believe, Senator, that if you had an adequate conservation acreage reserve and the other elements of the program that we are talking about and other people are talking about, you would come fairly well into balance in marketing, particularly if we move on and get some international agreements on cotton. In other words, I don't think if we balance this production up as has been proposed and as we are proposing that a few big producers are going to have enough to market, that you are going to get into any very severe difficulty. Senator ANDERSON. I wanted to clear up a point. This is not the first time this family farm eligibility has been brought up Mr. PATTON. That is right. Senator ANDERSON. I have never been able to get an answer definitely before and I would appreciate it this morning. If a man had too much production to qualify, you would let him sell that production in the open market any time he wanted? Mr. PATTON. Yes, sir. Senator ANDERSON. Thereby establishing an increase of corporation farming. Mr. PATTON. No; I do not think it would. Senator ANDERSON. All he has to do is to cut half a cent under the market and he sells all of his stuff and the rest of it all goes into the loan. 64440-56-pt. 8 -10 |