1. COMMENTS REGARDING COMMITTEE PRINT (a) We favor the principle that in order to qualify for price supports, producers be required to put an acreage of soil-depleting cropland in the soil bank, provided that this shall not apply to 1956 crops or to crops for which marketing quotas are in effect as a result of referenda held prior to enactment of legislation proposed herein. If corn allotments were suspended in 1956, and producers given an opportunity to vote concerning reinstatement of allotments in 1957, we would not be opposed to making the program effective in 1956, provided the crops affected should not have been planted. We would not be opposed to this requirement being extended also to eligibility for agricultural conservation payments. The Farm Bureau consistently has supported the principle that producers receiving price supports should not be given Government benefits and at the same time be permitted to shift the acreage taken out of price-supported crops into the production of other crops or commodities. lack of control of production on acres diverted from supported crops constitutes unfair subsidization of competition with the producers of all other agricultural commodities. The (b) The prohibition against the use of any retired land for the production of agricultural commodities or products, including livestock products, is a vital requirement of any program to withhold acreage from production. (c) We do not believe it is desirable at this time to make major changes in the determination of the level of price support, the determination of parity, or eligibility for price support as set forth in the Agricultural Act of 1938, as amended, by numerous acts, including the acts of 1948, 1949, and 1954. (d) It is undesirable to limit or graduate the amount of price support which an individual producer may earn by reason of the size of a farm or ranch. Proposals of this type would, if adopted, penalize efficiency, place a ceiling on opportunity, encourage the artificial division of farms and ranches, and finally, result in increasing the cost of food and fiber to consumers by forcing the division of farms and ranches into uneconomic producing units. By arbitrarily forcing some producers to sell at a lower price than others, the result could be to undermine the price that the Government is trying to support to all producers. It could force larger amounts of price-supported commodities into the inventories of the Commodity Credit Corporation and further impede the marketing of such commodities through the normal channels of trade. Graduated land taxes are unconstitutional in many States, yet this proposal would have a similar effect as such a tax. (e) Any soil-bank plan should have the objectives of helping to balance agricultural production with effective market demand, emphasizing conservation, contributing to a solution of the diverted acre problem, facilitating a substantial reduction in the Government's inventories of surplus commodities, emphasizing the voluntary approach, protecting the rights of tenants on an equitable basis, including enough incentive to achieve a high percentage of participation, but using payments only to further the achievement of these objectives and not as an end in themselves. Since accumulated surpluses are acting as a ceiling on farm prices and depressing farm income, we believe that a soil-bank plan at this time should use the surplus stocks of Commodity Credit Corp. to reward the producers for placing acerage in the soil-bank. We favor the "payment in kind" approach, since we do not believe that the soil-bank plan should be kept in operation indefinitely and as the Commodity Credit Corp. stocks are liquidated, the program likewise could be terminated. We believe it would be possible to have a highly satisfactory soil-bank plan, if only a very nominal amount of newly appropriated funds were made available for that purpose, since the quantity of surplus stocks held by CCC are quite ample to make payments at this time. Of course, the release of commodities from the CCC stocks should be handled in such a manner as to limit the quantities released to a reasonable estimate of what would have been produced for market on the acreage withheld from production. By calculating such payments at harvesttime, after the yields per acre are readily available, it would not be too difficult to make payments out of surplus commodities in such a manner and in such quantities as to minimize any adverse effects upon the market prices of the released commodities. Apportionment among States, counties, and farms of acreages to be put into the bank, is an unnecessary administrative burden which should be avoided. Any soil-bank payment should also be varied in such a manner as to fairly compensate producers for their real contribution to a reduction in production. This would necessitate being careful about making payments for merely withholding acreage from production for only 1 year. Arid areas, by holding acreage out of production merely 1 year, could build up a water supply on such land so that production the second year would be much greater than it would have been otherwise. Comparable situations would occur in humid areas for acreage only held out of production 1 year. (f) We oppose the provisions of title III, section 301. The setaside provisions of the Agricultural Act of 1954, should not be amended to make stocks withheld from the market under that act into a revolving inventory which will continue to hang over the market and depress prices. (g) It would be advisable to place the programs concerning school milk, brucellosis and milk for veterans and members of the armed services on a regular budget basis, rather than to continue to finance these activities out of CCC funds. (h) The Farm Bureau believes that the certificate plan to effectuate a multiple price program for wheat, if put into effect, would constitute unfair competition for the producers of other commodities. With respect to rice, a multiple-price plan has some serious problems which should be given careful consideration. It should not be permitted to unfairly destroy the market for approximately 50 million bushels of corn, which is now going into brewers grits. We actually have a two-price plan for both rice and wheat, since the CCC is offering stocks for export at less than domestic prices, and these commodities are being sold for local currencies under Public Law 480. (i) Amendments to the marketing quota and acreage allotment provisions of the Agricultural Adjustment Act of 1938, as amended, should not be made in such a manner as to relieve individual producers from making a just contribution to the balancing of supplies with demand. The indefinite crediting of producers as having planted their allotments by the release and reapportionment of acres could have such effect. We are for the release and reapportionment of acreage allotments as they are presently established in the law. However, any acreage underplanted to qualify for payment under the surplus reduction and soil-bank act should not be available for release and reapportionment to any other producer. 2. COMMENTS REGARDING S. 2949 (a) The Farm Bureau generally agrees with a number of the major points contained in S. 2949. However, it falls short of the policies advocated by the membership of the Farm Bureau on a number of points. We agree with the principle of providing for the voluntary reduction of production of farm commodities now in surplus through the underplanting of allotments. We have recommended this. We have also recommended that payments to farmers, who voluntarily underplant their allotment, be in the form of certificates drawn against surplus stocks held by the CCC. (b) Farm Bureau supports the establishment of a plan to take other land out of production for a period of not less than 3 years. (c) We favor the prohibition of harvesting and grazing on soil-bank land, since such provision is vital in protecting the interests of livestock and dairy producers. (d) We are pleased that the bill provides for protecting the rights of tenants on all phases of the soil-bank program. 3. THE FOLLOWING MAJOR POINTS OF THE ADMINISTRATION'S BILL REQUIRE REVISION (a) Unfortunately, the bill does not refer to one part of the Farm Bureau's plan, which we consider to be an essential section of a bill to reduce surpluses and establish a soil bank; that is the section which provides for requiring that farmers place a percentage of their land devoted to price-supported crops in the soil bank as a condition of eligibility for price-support loans. This would further help with the problem of diverted acres. (b) Section 106 should be revised to provide a greater safeguard against the improper release of surplus stocks into the domestic market. It is suggested that the provisions of section 5 of the bill we proposed, providing that release of stocks into domestic markets in any one year, shall be limited to such quantities as the Secretary determines to be a reasonable estimate of what would have been produced for marketing during such marketing year, on the acreage withheld from production under all the provisions of the act, would have been a considerable improvement. It should be recognized that these payments would not be made until after harvest, which would enable the Secretary to reasonably calculate the quantities that would have been produced on the underplanted and otherwise withheld acres. (c) We believe that any soil bank plan should provide judicial relief to the producer if he feels aggrieved particularly in those instances where he has made a substantial compliance with the agreement entered into with the Government. (d) We oppose disposing annually of 100 million bushels of wheat for feed without any safeguards. We would not oppose the use of wheat for paying producers for underplanting their allotment or holding acreage out of production for a period of not less than 3 years. However, we would keep such disposals tied to the provision that the release of stocks into domestic markets, in any one year, shall be limited to such quantities as the Secretary determines to be a reasonable estimate of what would have been produced for marketing during such marketing year on the acreage withheld from production under the law. (e) We oppose the revision of Public Law 480 in such a manner as to make unfriendly countries eligible to exchange their currencies for surplus American food and fiber or to be given such commodities for relief. Title III of Public Law 480, permitting barter should be very carefully considered before any action is taken to open up these provisions to unfriendly countries. 4. GASOLINE TAX REFUND We are pleased with the proposal of the administration to in effect, repeal the Federal gasoline tax for gasoline used in agricultural production. This is something we have been advocating vigorously for over 2 years. It is recommended that the Secretary of the Treasury be authorized to enter into agreements with States making refunds on gasoline taxes so as to permit the States to make the Federal refund and thereby save on administrative expenses. 5. GENERAL We have merely commented generally on Senate committee print of January 17 and S. 2949. Accordingly, the foregoing comments should not be considered to be a complete statement of our views with respect to all of the matters raised in either one of those two documents. The CHAIRMAN. All right, Mr. Newsom. We have kept you for dessert. Mr. NEWSOM. I am sure, Mr. Chairman, I know the implication of that one. The CHAIRMAN. Will you give your name? STATEMENT OF HERSCHEL D. NEWSOM, MASTER, NATIONAL GRANGE Mr. NEWSOM. I am Herschel Newsom, master of the National Grange, a farmer in Indiana. I have taken the liberty, Mr. Chairman, of asking Mr. Parker and also Mr. Zimmerman of our staff, to be available in case we need help. The CHAIRMAN. As I said to Mr. Shuman, all bureaucrats come here with their help; so we will not deny you that privilege. Mr. NEWSOM. Mr. Chairman, I think if I do not owe the committee an apology, I at least owe an explanation. We started yesterday to draft some testimony on the subject matter that we thought was before this committee, predicated primarily on the President's message, and then late yesterday evening we were furnished a draft from the Department of a bill which we understood would be introduced this morning. So we concluded, I hope accurately, sir, that you would prefer that we base our testimony on that particular bill. We, therefore, revised the testimony this morning. I have with me only 2 partial copies and 1 rough copy. I had expected that the full 50 copies would be here before Mr. Shuman finished. So far as I know, they have not arrived, but I expect them to arrive any minute. The CHAIRMAN. Mr. Newsom, if you recall, when all of you folks were before us, there was a suggestion made that you take, I think there were 5 or 6, of the major problems that we were going to legislate on and give us your views as to how you would do it. Mr. NEWSOM. All right, sir. The CHAIRMAN. Now, that is what we expected of the Grange. Mr. NEWSOM. I am prepared to do that, Mr. Chairman. The CHAIRMAN. Well, you can do that and then criticize the bill, too, if you want to. Mr. NEWSOM. All right, sir. The CHAIRMAN. All right, let's go. Mr. NEWSOM. Farmers and rural families are deeply appreciative of the evidences of consciousness of the increasingly serious economic plight that faces them and of this committee's determination to do something about their problems. Our National Grange session, held only 2 months ago, met and worked in an atmosphere of extreme concern over this Nation's failure to recognize thus far that farmers, rural families, and the business of agricultural production, are currently operating within a complex American economic and social structure, in which it is no more possible than it is equitable and just, to treat farm problems in the abstract; trying continuously to solve the problems of inadequate farm income within the business of agriculture. We must recognize, as the Grange has insisted, that our "cost-price squeeze" on American farmers is definitely a result of having the matter of farm income treated in an entirely different manner than this Nation has ever handled the matter of income, prices, or wages for all other Americans. This is why the National Grange has steadfastly insisted that to continue this fruitless argument over relatively minor adjustments in the level of a fixed-price program and an average-control program, clearly designed to work entirely within the business of agriculture itselfand in total ignorance many times of the fact that in many of our problems we cannot possibly isolate American agriculture either from the rest of the United States economy, nor can we isolate it from the effects of competitive conditions internationally-is to continue to condemn American farmers to a declining level of both gross and net income. We believe that it is no more constructive to talk about restoring the 90 percent rigid price-support level (even on a graded commodity basis) under the program of the past many years than it is to assume that simply by removing our present so-called surpluses and relieving the Commodity Credit Corporation of its present stocks that we could then presumably make the 1954 act succeed. I mean to say that if we are thinking in terms of raising farm income, it is not going to succeed just by removing these stocks. Neither alternative is going to improve farm income. Later in this testimony we will have more to say about specific modifications that we think must be made-amendments which must be en acted to our basic agricultural legislation and should by all means be enacted in this session of the Congress. It is, of course, abundantly clear that any sort of program, no matter how sound it may be, would operate under great difficulty-if at all— in the face of the present Government holdings in these export commodities, and in the case of a few other commodities. The longer, however, we postpone adoption of a realistic, constructive program the worse is likely to be our situation from the standpoint of surpluses on hand. With respect to those surpluses now on hand, three correlated actions should be taken: 1. Publicly and officially it should be recognized that the surpluses are fundamentally a product of the Nation's participation in World War II and the Korean war. It should be recognized that prospective dollar losses in connection with the disposal of large amounts of these surpluses are legitimate and unavoidable war costs. It should be recognized, too, that these losses are relatively small in relation to overall war costs and that they are, in fact, a modest price to pay for the assurance this Nation had, all through recent years of hot and cold wars, that our people would not want for food. Whether or not there were Government timing errors in the past in connection with farm program adjustments is of far less importance than concerted, constructive action from now on. Senator THYE. Mr. Newsom, do you mind if I interrupt? Senator THYE. You are dead right, and many a machine did I see sold in the postwar era, after World War II, for only a fraction on the dollar of what its actual value was when it was a part of our industrial defense plants. And if they could do it with industrial plant equipment, then I think that we have a perfect right to think in the terms of trying to save the agricultural economy from the chaotic situation of putting some of it on the so-called bargain block. You are entirely right. Mr. NEWSOM. Senator and Mr. Chairman, and Senator Young, at the risk of being burdensome and repetitious, I would like to try to underline the truth of what we are trying to point out here. I think it will tend to get our basic problem in a little clearer focus than some of our contemporaries have tended to do. I do not know whether all three of you Senators were present when Senator Capehart testified a few days ago or not. Senator YOUNG.. Yes. The CHAIRMAN. Yes. Mr. NEWSOM. But I am much impressed by the recitation of some of the facts that he cited there. If you do not mind, Mr. Chairman, I would like to reenforce what I have tried to say there by simply referring to a few of those facts that Senator Capehart called to our attention: If we continue looking through this book— Mr. Chairman, this is from Senator Capehart's testimony we find an oil refinery at Catlettsburg, Ky., sold for $2.3 million, which had cost the Government $16.4 million; steel properties in Utah costing the Government $191 million being sold for $47 million; another steel plant in Utah costing the Government $12 million being sold for $1 million. |