Governor FREEMAN. No. I would not say that specifically, Senator. I think there are some instances of that.

The CHAIRMAN. I thought there was some cooperation between them.

Governor FREEMAN. No. There is a coordination between them. Senator THYE. Mr. Chairman, if I might say this, Mr. Roy Bodin is our Federal and State statistician in Minnesota. Paul Kirk was prior to his retirement. I was in that department for better than 3 years, and I never found any conflict between the figures of the statistician's office, Roy Bodin, in our State Department of Agriculture in Minnesota, and that of the Federal figures.

Governor FREEMAN. No. I did not say that.

Senator THYE. I think that what you are referring to here, Governor, is that you will pick up a publication, and they refer to statistics, incomes, et cetera, and these figures do not square with the national statistical reports. You would like to see a sort of review and consolidation of those statistical reports that come out of the various agencies.

Governor FREEMAN. That is what I am really referring to, the various agencies.

Senator THYE. But in Roy Bodin's department-he was there 14 or 15 years ago under Paul Kirk-I would say that the man is as accurate as the universe itself.

The CHAIRMAN. Who is responsible for this change in statistical reporting that you are complaining about?

Governor FREEMAN. I am not trying to put the finger on anybody as being intentionally or carelessly inaccurate, Senator. But I think Senator Thye phrased it rather well, and I refer to the Council of Economic Advisers, that there should be one source where you could feel that this had been sifted and carefully defined, and you could rely on what comes out of it. There is such a conflict in this area that people everywhere are confused.

Senator HUMPHREY. Governor, you had an example that you showed me of these figures where there was a discrepancy of many, many millions of dollars in just one report.

Governor FREEMAN. This is the kind of thing, and I have not actually run this down or talked, Senator Thye, with Mr. Bodin about it. It was sent to my office. But I found a difference of $8 million on 2 sides of the same sheet of paper in the State-Federal Crop Reporting Service, and until I have talked with the people that have produced it, I would hesitate to use this as an illustration of carelessness but, for example, I have here a September 1955, State-Federal Crop and Livestock Reporting Service report, which on the front side refers to a figure received in 1953 of $1,288,933,000 of the total income of Minnesota farmers, cash receipts, from farming and Government payments; on the other side where the figures are alleged totaled, it comes out at $1,280,862,000, which is $18 million less than on the other side of the same sheet of paper.

Now, I am not exactly sure, Senator, just why this was done. There may be a very good explanation for it. But as I was reading this on the airplane coming down, it brought to my mind the feeling of frustration that I felt in reading the newspapers and in trying to check a variety of data sources and to get what you felt were finally reliable figures in this area.

Senator AIKEN. I think, Governor, that that discrepancy is partly due to the fact that in the month-to-month records of income, subsidies such as we have on wool and sugar are not added in month to month but are put in at the end of the year. Also if they can get at it, the cooperatives have patronage dividends and refunds which do not appear until the end of the year. Government payments I do not think appear at all, and they vary from year to year. That is, ACP payments do not go in the farm income, and they vary from year to year. That is why I say it is not the changes in the farm reporting; it is the lack of changes in the farm reporting to keep up with the times that we get so much misleading data.

Governor FREEMAN. I am sorry for taking so much of the committee's time with this. But this in other areas has gotten to be a kind of fetish with me, because I find that the public, in highway, in education and welfare and a host of other areas-that we tend sometimes to be so careless with figures, and the public at large gets so confused that before very long they throw up their hands in disgust, and a valued discussion that ought to have been made in the public forum is not made because the figures are not accurate.

Senator AIKEN. You are talking about a subject that I have complained about for a long time. Now, I do not know that we can get it straightened out and completely keep up with the times. But we probably could do better than we are doing now.

Senator HUMPHREY. The Employment Act of 1946 does not provide a directive to the Council of Economic Advisers on agricultural statistics. It is primarily on industrial, manufacturing, retailing, and distribution, as well as employment figures. And I think there is a real weakness under the Employment Act of 1946 for the Council of Economic Advisers. They take figures which have been compiled elsewhere and try to correlate them and tabulate them without doing independent research in the field.

Senator AIKEN. Unfortunately, the statistics of the Department of Agriculture itself have not been kept up to date.

Senator HUMPHREY. That is right.

Senator AIKEN. Maybe they cannot be. I do not know.

Senator YOUNG. Governor, isn't the best way to find out how the farmers are faring is to go to the Farmers Home Administration, your banks and other loaning institutions to find out how many applications there are for loans and how many are delinquent?

Governor FREEMAN. Yes. I refer to that a little later on here. May I proceed, Senator Ellender?

The CHAIRMAN. Yes. Proceed.

Governor FREEMAN (continuing): II. There are certain important aspects of the current agricultural situation which must be kept constantly in mind in seeking to arrive at a sound solution. Most outstanding of these is the now accepted fact that today everything is booming except agriculture. The fact that all other prices are stable or rising slightly, while prices received by the farmer are going down at a serious rate, and the fact that per capita farm income for 1954 was only one-half of the national average, reflects a serious imbalance in our economic life.

FARM PROSPERITY IS IMPORTANT

It is a serious mistake to proceed on the assumption that because the numbers of people engaged in agriculture are constantly declining, farm prosperity is no longer a goal of paramount importance. The 13 percent of our population who earn their living on farms are an important element in our society, whose well-being cannot be neglected. They are engaged in an occupation of basic importance to our Nation's strength and security.

But it is not only the economic well-being of 22 million people that is at stake. Agriculture is a $13 billion customer of industry and labor. Ten million people are employed in the marketing and processing of farm products; 6 million more are employed in plants producing specific farm needs. The well-being of these millions and their families is intimately related to that of agriculture.

One need hardly recall that the late, great depression of the early thirties was preceded by a serious farm depression in the 1920's, which existed in spite of the boom in other aspects of our economy. In the greatly augmented interdependence of our world today, we know that our economy as a whole cannot long continue sound and prosperous if we permit one important part of that economy to be deprived of its proportional share.

AGRICULTURAL EFFICIENCY HAS NOT BEEN REWARDED

American agriculture on the whole is the most productive and efficient agricultural enterprise in the world. This is in part due to the natural advantages of soil, water, and climate with which our Nation is blessed. But it is also due largely to the ability, initiative, and hard work of our farmers; to the kind of farm economy under which they operate; to the progress made by our scientists and investors; and to our leadership in mechanization.

Moreover, our agricultural efficiency has increased 40 percent between 1947 and 1954. In the past few years it has been increasing at the rate of nearly 5 percent a year. This phenomenal increase in productivity has resulted in our ability to supply food and fiber for increasing number of people in our own and other countries; and to pile up what has been, under present policies, embarrassing surpluses, with fewer people engaged in farming,

Such a substantial increase in productivity per man-hour would normally be expected to result in greater rewards to those engaged in such production. Yet farmers have not benefited from their increase in productivity. In this critical modern age, when all the world reaches out for the higher standards which can be attained only by increased productivity, it is an appalling contradiction to have a situation which results in decreasing rewards for increased efficiency in production.

IMPORTANCE OF FAMILY FARM ECONOMY

The family-size farm is the bulwark of American agriculture. Its owner is typically the investor, the manager, and the worker-and most of the farmwork is done by the owner and his family. During the past 20 years, these farmers have substantially increased their

standard of living, their purchasing power, and their participation in cooperative, public, civic, and community activities. Maintenance of this type of farm economy is important to businesses in towns, to standards of family and community life, to a healthy agricultural economy, and to our free democratic society.

These family farms face certain competitive handicaps when compared with huge corporation farms, of which there are about 100,000 in the United States. (Yet these 100,000 account for almost onefourth of our total agricultural production.) These corporation farms make profits for their stockholders. They hire mass labor, often Mexican, Jamaican, or Puerto Rican migrants-or migrants from some parts of the United States. They pay low wages-in some cases in 1955 less than 40 cents an hour-and hire many workers only during the peak season, assuming no responsibility for them during the rest of the year. They are not customers for the local merchants since they buy fertilizer, feed, and seed in wholesale lots, and often have a distributorship or buy machinery direct from the manufacturer. They have sufficient capital to make changes and shifts in production when it is economically advantageous to do so.

The family farms find it more difficult to meet the cost of rapid shifts in production which may be required by market fluctuations, by new products, and techniques. Yet, because of its importance to our social, as well as our economic, life-and because in general the family farm is a most efficient producing unit-this type of farm economy should be encouraged positively by our agricultural economy. Senator SCHOEPPEL. Mr. Chairman

Senator THYE. Mr. Chairman.

I beg your pardon, Senator Schoeppel.

Senator SCHOEPPEL. Mr. Chairman, would the Governor yield for a question there?

Governor FREEMAN. Yes, Senator.

Senator SCHOEPPEL. What limit do you suggest should be put on these payments? Or do you have a suggestion on that?

Governor FREEMAN. I have a general suggestion, Senator, in the neighborhood of $25,000, on a cash basis. I want to preface that by saying

Senator SCHOEPPEL. Is that gross or net?

Governor FREEMAN. I would say gross.

Senator THYE. Mr. Chairman, I had a similar question at that point.

The CHAIRMAN. Senator Thye.

Senator THYE. I have introduced a bill, Governor, that would propose for the applicant of a minimum commodity loan that he would get 100 percent of parity, because he is not contributing any, to speak of, to the surplus problem of this Nation. But he would be, of course, the smaller farmer, and therefore most apt to qualify as a family farmer.

In my bill, the minimum would be on the basis of an application for a commodity loan of $1,000. He would have 100 percent of parity. Then you would graduate down percentagewise to a point where, if his application for commodity loans amounted to $15,000, then he would only receive, say, 70 percent or whatever the wisdom of this committee would determine. It might be found that you would want to go lower than that.

In that manner, you would be certain to take care of your family farmer, and not hold a Treasury umbrella, so to speak, over the investor you have just described in this statement of yours.

What do you think of such an approach? We have had some testimony to the effect that that might be a solution.

Governor FREEMAN. I read something just recently in the newspaper about that, Senator Thye, and I have not really had the occasion to sit down and to look at the mechanics of it. Some such program, putting on a limitation, I think should be put into effect.

I was just last week up in the Red River Valley, where we have some very large farms, and where these large payments have been made and where a continual reaching out for more and more land has been made that many, many young people in the community would like to have and farm, and would operate as a family farm and would produce efficiently.

One particular operation is up to 50,000 acres. I think that those people can pretty well take care of themselves.

Senator THYE. Governor, their ability to pay cash rent is such that they can always overbid the average small operator.

Governor FREEMAN. That is right.

Senator THYE. And, of course, if you were the owner of that land, it would be to your interest to accept the highest bidder.

Governor FREEMAN. Yes.

Senator THYE. And so the ultimate result is, the highest bidder is the big corporate operator; he gets the land. The building is left there to become a home for some part-time worker. But depletion and finally the complete eradication of that farm unit take place.

The question is to determine what are we going to do with this small family-type farm.

Senator HUMPHREY. I think the point that the Governor makes in reference to these large operators buying direct from the manufacturers is a very important point. And we have that.

One of the top farmers out there, in potato growing, Senator Thye— I am sure you know him-buys in such huge quantities that it is literally impossible for a family farmer to compete when he has got to go into the local feedstore or local fertilizer store and pay the retail price.

Governor FREEMAN. This is one particular instance where it does not stay in the community, either. Some of these people make substantial amounts of money, and then they go with no illusions to Florida or Arizona. But we like to have people who make money in Minnesota invest it in Minnesota.

When they have a big operation they do pretty well perhaps on these supports and they go down and build motels in Florida, Phoenix, and other places. We do not like that in Minnesota. We like to keep the money out there.

The CHAIRMAN. Governor, may I refer to a statement made by you a moment ago, in which you find a discrepancy between figures on one side of the page and the other?

Governor FREEMAN. Yes.

The CHAIRMAN. It is very evident that what happened was that on one side of the sheet, only the crops actually sold were accounted for, and if you turn on the other side you will see where they added separately the Government payments.