think you were trying to achieve and I think there is a far better way to achieve that purpose. The CHAIRMAN. Have you thought one out? Mr. NEWSOM. Yes, sir. The CHAIRMAN. Will you give it to us? Mr. NEWSOM. It is going to take a good little while. We will attempt to give it to you now, if you want it. The CHAIRMAN. All right. Senator YOUNG. Can he file his statement on that? The CHAIRMAN. I would rather you file a statement, if you will. The CHAIRMAN. All right, let us proceed. Yes. Allotments should not apply to grain crops used wholly for livestock fed by the grower unless he also places grain under loan or on the market. *** In acreage allotment programs, reductions should be graduated insofar as feasible to minimize hardship upon small acreage farmers. *** Allotments should be adjusted to lessen restrictions on market types of commodities which are not in surplus supply. And I would remind you again, Senator, that every one of these objectives which we are subscribing to here in some emergency sort of manner will be achieved if our wheat program becomes reality. All of these recommendations fall clearly into the emergency category and they recognize the evil consequences generated by the present program. That word is deliberately chosen, sir. I cannot urge too strongly, however, that we must effect such basic revision of our basic legislation as is necessary and wise and has the support of the vast majority of farm producers to the end that we eliminate these difficulties instead of trying incessantly to pile on a continuing maze of legislative mechanism which only provides a temporary relief but leaves the basic problems unsolved. S. 1750 should surely command the earnest and full consideration of this committee. Now is the time to do it. We approve of the provisions of section 204. That is the school milk appropriation up to $75 million, I believe. Mr. Chairman. The CHAIRMAN. The authorization, yes. Mr. NEWSOM. Yes. The CHAIRMAN. We have covered that. Mr. NEWSOM. Section 205 is another illustration of how present legislation is driving us from one difficulty to another. I confess that the Grange is not currently in position to make a vigorous, constructive pronouncement as to present legislation affecting a cotton program for the United States. We hope to be able to do so but the problems of producers of this very important commodity are too vast and our cotton economy in America is altogether too important to assume that the purpose of section 205 does any more than temporary treatment at best, and we have grave misgivings as to whether there is any value at all in section 205. We are opposed to the provisions of section 206; as we are also opposed to the provisions in section 208. The provision of section 206, as I remember it, is the one that eliminates the congressional restriction that commodities out of Government stock shall not be sold at less than 105 percent of support level plus costs. Section 208 is the one, I believe, that seeks to eliminate the restriction in Public Law 480 on sales abroad unless a firm commitment is made that it does not move to enemy countries. The CHAIRMAN. Would you object to the sale of these commodities if they were sold at whatever the Government has invested in them? Mr. NEWSOM. Certainly not. The CHAIRMAN. All right, proceed. Mr. NEWSOM. Both of these sections seem sure to contribute to the philosophy that only the United States Government itself, through the Commodity Credit Corporation, should be permitted to engage in foreign commerce (and in the case of sec. 206, it appears that the Commodity Credit Corporation is even to monopolize all commerce domestically) in agricultural commodies which come into control of CCC. We share no such philosophy. We believe that the provisions of 206 would inevitably mean that inventories in private hands would decline further and that it would be necessary for the Commodity Credit Corporation to immediately be authorized to build, purchase, or at least lease increasing storage capacity. The Grange believes that it is time to get the emphasis on price supporting functions of the Commodity Credit Corporation rather than to move increasingly in the direction of considering it the ultimate marketing place and selling or trading agency for those commodities. Section 207 seemingly embodies a sound objective and we therefore approve of its basic purpose. May we repectfully submit to this committee, however, that a careful examination of S. 2852, introduced by the senior Senator from Indiana on January 5, seems to provide a great deal more realistic and aggressive approach to this problem and therefore might well and logically be substituted for the present section 207. Mr. Chairman, I would like also to say that for section 209, too. They have a slight difference, but I believe that Senator Capehart's bill would do far more in both of those categories. The National Grange is disappointed that no recognition is given in this proposed legislation to the increasingly serious problems facing American rice producers. We earnestly recommend to this committee that a program for rice producers very comparable in character and design to our own wheat program should be a definite part of any agricultural legislation of 1956. We had hoped, Mr. Chairman, that our own committee might be prepared to present such a program, but we are led to believe that many of our good friends in the rice business are working on the same problem The CHAIRMAN. Very vigorously. Mr. NEWSOM (continuing). And in complete compliance with the Grange philosophy of working with these various commodity groups, we are anxious to find out exactly what their program is, and The CHAIRMAN. If you come here Monday morning, you will find out, because they will be here to testify. Mr. NEWSOM. I am very certain from what I have already heard from some of our mutual friends that the Grange will be able to put vigorous support behind that program. We hereby vigorously reconfirm our faith in private marketing and selling initiative. We therefore renew and confirm our fundamental belief that we must lower support levels (at least in the case of our major export commodities) to such a point as will permit the producers of those commodities to compete for markets, both internationally and against domestic competition-in wheat, rice, and cotton. We reaffirm our position, however, that it is imperative that in connection with a program of lowering support price levels we must recognize the compulsion-the economic as well as the moral necessity of providing mechanism that will support income of American farm producers at an American level, so that they may truly share equitably in the exanding level of prosperity and well-being that our fellow Americans enjoy This equity in income position can never be realized by thoroughly and completely withdrawing from both the markets and the needs of the rest of the world. The CHAIRMAN. Any questions? (No response.) The CHAIRMAN. Thank you ever so much, Mr. Newsom. I desire to have placed in the record at this point a statement by Mr. Marion S. Monk, Jr., Batchelder, La., of the National Association of Soil Conservation Districts. (The statement above referred to is as follows:) My name is Marion S. Monk, Jr., of Batchelder, La., a director of the National Association of Soil Conservation Districts. I am presenting the views of our organization on proposed soil bank legislation before this committee, at the request of our president, Nolen J. Fuqua, who is unable to be in Washington this week. As our association, representing the nearly 2,700 soil conservation districts of America, comprising about 90 percent of the privately owned agricultural lands of our country, concerns itself exclusively with problems of soil and water conservation, our statement will be confined to them. As you gentlemen so well know, the soil and water conservation movement as currently organized is making as fast strides as appropriations permit. Our 2,700 soil conservation districts, local units of government, organized by the local people themselves and managed by their own local officials, each has a locally developed program for the conservation and development of its local soil and water resources. Any soil bank bill must provide for fitting its conservation features into these going, local programs. To establish a new competing program would be wasteful and harmful. Our association feels it is most important that provisions spelling out clearly such continued unity of action should be a part of this legislation. Therefore, the National Association of Soil Conservation Districts recommends the inclusion of the following language in any soil-bank bill. "SEC. The Secretary in administering the provisions of this title shall utilize the State, county, and local committees established under section 8 (b) of the Soil Conservation and Domestic Allotment Act: Provided, however, That with respect to conservation aspects of any program under this act, the Secre‐ tary shall call upon soil conservation districts and other appropriate agencies of State governments to participate in the formulation of program provisions at the State and county levels; "And provided, further, That the technical resources of the Soil Conservation Service and of the soil conservation districts shall be utilized to assure coordination of conservation activities and a solid technical foundation for the program. "The Secretary shall utilize to the fullest practicable extent land use capability data in the administration of this act and shall carry forward to completion as rapidly as possible the basic land inventory of the Nation. "Cropland that has been retired to grass and trees by farmers and ranchers through formal agreement with soil conservation districts since August 15, 1945, shall be eligible for benefits under this act and shall be included in the base cropland acreage." We strongly recommend this language for these reasons: For a number of years, the State and county ASC committees have worked hand in hand with soil conservation districts. The Soil Conservation Service, in addition to its technical assistance to soil-conservation districts and their co operators, has had the responsibility of supervising the technical phases of certain practices under the agricultural conservation program which is administered by the State and county ASC committees. This formula has worked to the benefit of both the farmers and ranchers and our country's taxpayers. It should be preserved in the soil bank. In this connection, I would like to point out that when appropriations to implement a soil bank bill come before the Congress, consideration should be given to additional appropriations to the Soil Conservation Service so that they may absorb this additional workload without sacrificing their present basic efforts. Some such provision as that of the so-called 5-percent provision in recent appropriations for the AC program could well be utilized in a soil bank bill. The USDA has already completed a land use capability survey, or inventory, or nearly 25 percent of our land. The data thus available will be most valuable to help farmers select that part of their croplands best suited to the conservation reserve. This provision would give added encouragement to the rapid completion of the land capability inventory, a measure that will be more and more valuable as our population rapidly increases. Ever since the creation of the first soil conservation district in 1937, they, with the assistance of both the United States Soil Conservation Service and the agricultural conservation program have been encouraging and helping farmers and ranchers to retire to grass and trees, land unsuited to cropping. Much, if not most, of the land that will be put into the conservation reserve is in this same category. Our association believes that it is only fair to treat the early pioneers of proper land use on an equal status with those who, up to now, have been reluctant to make such conversions. The August 15, 1945, date is suggested to recognize cropland adjustments that have been made since the end of World War II. If you would prefer to give these same benefits to all who have followed these practices since the first soil conservation district was organized in 1937, we would be heartily in favor of the move. In conclusion, I would like to make one further point on which the members of our association feel very strongly. Income supplement payments to farmers should not be made under the label of "soil conservation." The acreage reserve feature of the soil-bank plan, as presently understood, is exclusively a crop reduction move. Income supplement payments for this should be clearly distinguished from those in the conservation reserve. Otherwise, with the "soil conservation" label on all payments under a soil bank bill, the public might be misled into believing that all appropriations for implementing the act would be used for the protection and improvement of our soil re sources. Our association strongly urges this committee to adopt our suggestions. In so doing you will make one more of the committee's many forward strides toward strengthening the national policy of conservation, development, and self-government for agriculture. The CHAIRMAN. I also wish to offer for the record a statement by Senator Morse of Oregon that will be filed for the record at this point. (Statement filed by the Honorable Wayne Morse, a United States Senator from the State of Oregon, is as follows:) After having spent most of the period between sessions in my home State of Oregon and after having talked with scores of farmers in all parts of the State, I can assure you that the President's message was correct when it stated that there is "* ** a severe price-cost squeeze from which our farm people, with the help of the Government, must be relieved." FARM INCOME SLIDES DOWN The 1954 census indicates that there were 22.6 million people on farmsapproximately 14 percent of the total population. In 1952, farm net income was $13.5 billion. By 1954, it had dropped to $11.8 billion or roughly 4 percent of our $299 billion national total. In the third quarter of 1955, farm net income was at the rate of $10.6 billion. This amounts to a loss of $2.9 billion of farm income since 1952. FARM AND CORPORATE INCOME Figures for 1955 show shocking contrasts between farm income and corporate income. Using the 1945-49 average as a base, we find: Farm net income is down 28 percent. Corporate dividends are up 73 percent. Corporate profits after taxes are up 41 percent. Prices received by farmers, on the national average, are back at 1946 levels. Industrial prices on the average, are 53 percent above 1946 levels. The administration has lowered support levels on every farm commodity it had authority to adjust, except wool. Such statistics fortify the conclusion that farmers must be helped. The President's farm proposals would continue and even deepen the farm price slide. Among these were a $350 million soil bank program and a relatively small gasoline-tax exemption. They not only failed to provide the required Government help, but can make the situation even more difficult. They court expanded production of some commodities, propose expanded sales of Government-held surpluses into domestic markets, and even lower levels of price support for some of our key crops. The farm message says nothing about the plight of dairy farmers and offers nothing hopeful to livestock producers. My conferences with scores of farmers and businessmen over the past few months convince me that help for hard-pressed farmers must come primarily through action on the part of Congress. Thus, the work of the Senate Agriculture Committee under the leadership of its very able chairman will be of immense importance. Immediate remedial action is requisite; we cannot enjoy the luxury of long meditation and philosophical discourse. To meet the present farm emergency head on, we ought to repeal the sliding scale, or what I prefer to call the collapsible supports program, and put our farm economy on firm ground by way of a program which will assure farmers fair prices for their produce and a fair share of our national income. In other words, we should go back to 90 percent supports on basic crops, as provided in the House bill (H. R. 12) now under consideration by the committee, and should consider seriously the possibility of bringing many other farm products within the framework of a support program. If we must have prolonged debates about production payments, diversion of acreage, and other suggested plans for improving the lot of the farmer, let us first put a floor under farm prices and then proceed to conduct our debates in an atmosphere of economic safety for our farm economy. There are certain specific points, however, which I would like to discuss briefly because I believe that they will be of help to this committee in deliberating upon the problems immediately ahead. THE DOMESTIC PARITY PLAN FOR WHEAT Last year, I appeared before this committee to urge the adoption of a twoprice or domestic-parity program for wheat. This proposes to give the farmers parity for that portion of wheat used for domestic food purposes and would permit the remainder to be sold for export at world prices and for feed at feed prices. I was pleased to read recent press notices to the effect that the chairman of this committee would favor a trial of the two-price system on rice. If we cannot reinstate the support plan envisaged by H. R. 12, I believe that the two-price plan should also be applied to wheat. The plan has the support of highly respected and responsible farm organizations, including the Oregon Wheat League and the Grange. It promises a sensible solution to our current problems of grain surpluses and crowded storage facilities. It offers hope for reduction of costs now borne by the Federal Government by way of storage space, rentals, and losses through spoilage and deterioration. By way of contrast, the farm message of January 9 offers a soil bank plan to reduce production, extension of the noncommercial wheat area, relaxation of acreage allotments-which will tend to increase wheat production-and the easing of regulations on Government marketing-which will tend to depress markets further. The President's wheat proposals certainly are not designed to raise supports, increase the market price, or rescue farm income from its present disastrously low levels. |