Such research has made possible the fabulous expansion of soybean acreage; it saved the citrus industry from economic disaster by perfecting first the canned-juice and just now the frozen-juice techniques. Immense quantities of corn are utilized in plants manufacturing oil, starch, gluten, corn sirup, and so forth. Even the lowly corncob is now utilized by industry to the tune of 100 million tons annually.. Literally thousands of products, many of them new, are enriching our whole economy and, of great interest to farmers, are expanding vastly the market for our crops. I feel that the further expansion and intensification of the national, State, and industrial-research programs should be encouraged and well financed. At our own Ohio Agricultural Experiment Station at Worcester, it is estimated that each tax dollar spent on research returns at least $200 to the farmers of the State. Basic research, I think, is even more important than technological, as it turns up the fundamental facts, and the technological applications can then be worked out for industry and agriculture. At the Cincinnati meeting of the American Society of Agronomy, which I attended last year, it was stated that fundamental research findings were being used up faster than new ones were being brought forth. It is becoming more difficult for these scientists to dig out new facts, but it was their feeling that such work was vital to further developments in the production and utilization of farm crops. It was also brought out that there is a timelag of about 20 years between the discovery of new facts and the perfection of techniques and adoption of new methods by a majority of farmers. So it behooves us to get increased research programs under way promptly. Here is something about economic research which I think is very important indeed. Economic research of various sorts is also of greatest importance. to agriculture. In my opinion, we need to know vastly more about marketing techniques, grading, packaging, processing, consumer acceptance of new commodities, seasonal changes in demand, long-term trends in preferences for various foods, and so forth. I think also that the impact on the farmer of new processes, new crops, and new techniques should be thoroughly explored to the end that we can best adapt ourselves to changing conditions. By the encouragement and expansion of research, scientific, technological, and economic as here hastily outlined, I feel we can in the years ahead best serve our farmers and our country. Mr. DAGUE. Thank you, Mr. Smith. Mr. Christ Kainrad had a very fine statement and was not able to stay. He asked to have his statement included in the record, which will be done. (The document referred to above is as follows:) DIAMOND, OHIO, October 20, 1953. To: The House Agricultural Committee on Program Development. GENTLEMEN: I herewith present my vie. and recommendations for the continuation and improvement of our presen, agricultural program. My recommendations are based on my experience of the last 37 years as an owner and operator of a dairy farm located in Paris Township, Portage County, Ohio. In the first 17 years of my life on the farm I and my family have endured much hardship and privation because in those years there existed no medium through which it was possible for farmers to plan and act collectively. As a result, farmers experienced ruinous low prices during a period when people in other pursuits were enjoying measures of false prosperity which brought on a general business depression with large farm surpluses on one hand and long soup lines on the other. During the last 20 years of my life on the farm we have had a program which provided us farmers with some measure of planning and acting together. While the present and past programs have not been foolproof, it has brought about a measure of prosperity on the farm and off the farm never experienced by any peoples anywhere in the world. The peoples of our country today possess the greatest food and fiber production potentialities in the world, with the best mechanical equipment and human know-how to produce food and fiber anywhere in the world. Furthermore, our people today possess the greatest reserve stock of food and fiber ever possessed by any other nation. This has come about during a period of time when our country was engaged in waging hot and cold wars-ever since the days of Pearl Harbor. No other nation has ever accumulated reserve stocks of food and fiber while in the process of waging war. All this is the best proof that our present and past programs have been good investments for all our people, on and off the farm. I, for one, would like to urge this committee to give serious consideration to the continuation and broadening of the present program on a long-time basis in order that we attain even higher economic levels for all classes of people in the future. Specifically, I recommend 1. The continuation of the 90-percent parity provision of the price-support program on a long-time basis; and (a) The inclusion of milk and all products derived therefrom; (b) Beef and all other storable meat products in the basic commodity group. 2. The continuation of the soil conservation practice program on a long-time basis with a minimum commitment by the next Congress of the sum of $300 million annually to assist farmers in defraying the cost of practices that are needed on a local level. 3. The next Congress should seriously consider the elimination of the discretionary powers granted the Secretary of Agriculture under the present law. It is of no comfort to a farmer to realize that his economic well-being is entrusted to one man who happens to be the Secretary of Agriculture, who may or may not be sympathetic to the problems at hand. 4. That all future programs be administered by farmers' committees on all levels-township, county, State, and National. Selected through the democratic process of elections and not by men appointed by the Secretary whose lifelong vocation has been the farming of farmers rather than farms. I understand the Secretary has recently requested all State and county committees to place the affairs of their office in the hands of so-called office managers, at salaries far in excess of that of the respective committeemen. I have been personally acquainted with all the farmers in my county who have served as committeemen during the life of the program. They have been men of high moral character and integrity. They have given the farmers of my county honest and efficient service. I and many other farmers would like to see this type of administration continued. It seems to a number of us that the present Secretary is more interested in creating and handing out fat jobs to some of his political affiliates than he is in the welfare of the farmer and of course some of us don't like it. To illustrate what I am trying to convey, our county committeeman who has been in charge of the office has received a daily pay of $10 or $2,600 per year if he worked not less than 8 hours, 5 days a week. He has now been replaced by an office manager at a minimum salary of $3,240, with annual and sick leave to boot. This is supposed to have been done for the sake of economy while it looks more like good politics than economy to us farmers. I for one hope that the next Congress will be composed of men with enough vision and foresight to enact a law that will forever take the program out of partisan politics. Agriculture is fundamental to our national welfare and should not be used. by any political party as a football. Mr. DAGUE. The next witness is Mr. Snoddy. STATEMENT OF MR. SNODDY Mr. SNODDY. Mr. Chairman and members of the committee, I am a dairy farmer farming 360 acres. Our milk prices got very low last spring so a group of 25 or 30 dairymen and dairy leaders asked our county agent to help set up a self-help committee to see what we could do. Our first meeting was on May 8. We have held seven meetings during the summer, calling in specialists for information on the different problems. The results of these studies are in these forms I have given you. Briefly, we are suggesting that: 1. The present advertising compaign is good but the history on advertising is that it will take some time to bring results. 2. We feel that our Federal order pricing formulas can be improved. We are pricing milk too much on the price of butterfat. We feel that other factors such as cost of production, consumer purchasing power, and the value of nonfat milk solids should also be considered. 3. We favor changing the Agricultural Marketing Act so that producers can vote on proposed amendments to the Federal orders without voting on the order as amended. 4. We favor elimination of the supply-demand amendment to the Federal orders which increases the price fluctuations during the year, also we favor more uniform class 1 price. 5. We believe that the Federal Government should not do anything possibly that the State could do better, being nearer the problem. Therefore, we favor the development of State control to be supplemented by Federal regulation in interstate markets. 6. We favor retaining the 90-percent support on butterfat after April 1, 1954, for these 3 reason: 1. Feed grains, one of the chief factors in producing milk, are supported at 90 percent of parity. 2. Our milk prices at present under Ohio Federal order formulas are based largely on the price of butterfat. 3. It will require considerably more time for our advertising campaign to become fully effective. 7. Lastly, we feel that a little investigation of dealers who threaten punitive measures against producers because of their activities in trying to improve their marketing conditions. These recommendations were unanimously approved at our last meeting October 16. In behalf of our committee I would like to say that we have had close cooperation and a lot of help from our Congressman, Mr. Frank T. Bow, our State Republican, Mr. Ralph Fisher, our county commissioners, and our county agent, Mr. George Dustman. Also thank the committee for this privilege of appearing before them, and commend the committee for going into the so-called grassroots to get the dirt farmers' suggestions. Thank you. Mr. DAGUE. Thank you, Mr. Snoddy. 38490-54-pt. 10—8 (The document referred to is as follows:) RECOMMENDATIONS ON OHIO MILK MARKETING PROBLEMS, WOOSTER, OHIO (This is a summary of recommendations from a grassroots self-help study group of Wayne County dairy farmers who have held seven meetings on the problem this year.) PRICE SUPPORTS We favor continuing price supports on butterfat at 90 percent of parity after April 1, 1954. Grains, chief ingredients of feed, are supported at 90 percent of parity. Feed is the biggest item in milk production costs. Under Federal order, pricing formulas in Ohio fluid milk prices are determined largely by the price of butterfat. We believe this is unwise. Neither cost of production nor consumer buying power are given enough consideration in pricing milk in Ohio at present. Marketing experts estimate that for every 1-cent drop in butterfat prices under Ohio and other western Federal order pricing formulas, fluid milk prices will drop 5 cents per hundredweight. Thus if butterfat supports were lowered from 90 to 75 percent of parity next April 1, milk prices to Ohio producers could drop about 50 cents per hundredweight under prices prevailing last spring. AGRICULTURAL ADJUSTMENT ACT CHANGES Under present provisions of this act, milk producers cannot vote separately on a proposed amendment to a Federal milk marketing order but must vote on the "order as amended." The Dairy Branch itself can initiate an amendment (this is not true of State control). If producers do not want a proposed amendment, they cannot vote it down without voting out the Federal order itself, under present provisions of the act. Producers may desire to retain an order with its protecting floor, but may not want a proposed amendment to the order. The Dairy Branch has recently initiated amendments in Ohio, such as the socalled supply-demand amendment, which producers did not ask for, nor did not want. At a hearing in Cleveland on June 17 both producers and dealers unanimously opposed the supply-demand amendment, but the Dairy Branch attempted to adopt it regardless of this opposition. Even when later modified, producers either had to approve the revised amendment in the referendum or vote out the order itself. This revised amendment now in effect will permit producers prices to drop 25 cents per hundredweight lower next spring than last spring. We favor changing the act so that producers can vote on proposed amendments, rather than on the "order as amended." We further question whether the Dairy Branch should have the right to initiate amendments. PRICING FORMULAS Federal order market prices in Ohio are determined each month by adding a "differential amount" to a basic formula price. The basic price is determined by the average prices of 18 Midwest condenseries or butterfat and milk powder prices, whichever are highest. With support prices on butter and powder, the butter-powder formula has generally been higher than the Midwest condensery prices during the past several years. Thus, the starting point in pricing fluid milk in Ohio in each of the classes is with the milk used in class III for manufacturing purposes. The differential amount each month is determined by the USDA Dairy Branch. This amount is added to the basic price to arrive at the class I price. The purpose of the differential is to arrive at a price to producers that will provide an adequate supply of class I milk in the market. The differential should also be high enough to pay producers for the necessary added cost of production of Grade A milk and high enough to induce producers to sell to this market. Many producers in our area believe that the economic factors should be given more consideration in pricing Ohio milk as in Eastern States. Ohio is primarily a fluid milk State and also a deficit milk State. In this respect we are more like the East than the West. Our producers believe that such important factors as cost of production and consumer purchasing power should be given more consideration in Federal pricing in Ohio. They believe we are depending too much on the price of butterfat which is supported. We are not as well insulated as Eastern States against a price drop in case butter supports are lowered in the future. Producers question whether Ohio pricing should start with the prices of milk used in class III for manufacturing purposes. SHORTAGE, THEN SURPLUS Producers contend that Federal floor prices in the Cleveland market were too low during the 24 month's period rfom about August 1950 to August 1952. As a result, these prices did not provide an adequate supply. They also resulted in dealers paying substantial premiums to producers all during this period. These premiums varied with each dealer and prices were very uneven. The shortage created resulted in dealers bringing in milk to the Cleveland market from approximately 1,000 outside shippers from Michigan and Indiana in 1952. This outside milk created a large surplus in the market late in 1952 and during 1953. The surplus in this market was twice as great as in other Federal markets. As a result, producer prices were further depressed. Thus producers did not get added costs as provided for in the Federal regulations. This surplus made the proposed supply-demand amendment intolerable to producers. UNIFORM PRICES Our producers do not feel that the great fluctuations in the differentials for the various months are necessary or desirable. They favor a more uniform class I price the year around. The excess milk going into class III would bring whatever it is worth at the various seasons. The blend price would thus go up or down as the supply increased or decreased. This, producers believe, would be sufficient penalty on excess production. They cannot see any sense in penalizing class I fluid prices which they believe should be based largely on costs and consumer buying power. Other States do not have these wide fluctuations in class I prices. The continual changes up and down each month in Ohio keep the markets and producer areas in constant turmoil and result in much unrest among producers and decreased consumption among consumers. Lower consumer prices do not necessarily produce increased consumption. The Akron market is an example. SUPPLY-DEMAND AMENDMENT Producers would like to see the present supply-demand amendment either suspended indefinitely or eliminated entirely. This amendment either directly or indirectly was initiated by the Dairy Branch and not by producers or distributors. In fact, both producers and distributors opposed the amendment and asked for its elimination at the June 17 hearing in Cleveland. The Dairy Branch disregarded this testimony and evidence, in its preliminary decision recommended to go into effect on August 1 with little or no changes. It was only after strong producer and dealer opposition developed in July that it was finally revised or modified for the August 1, 1953, to February 1, 1954, period. Producers do not feel that this is a permanent solution. However, we wish to commend the Secretary for the revision and it is reported that producers approved it in the referendum in late July by a vote of 7,960 yes to 40 no. Nevertheless, under the law producers could not disapprove the amendment without voting out the Federal order itself. We believe producers should be able to vote on each proposed amendment separately from the order itself. STATE REGULATION A general movement is already under way to decentralize our farm program. We believe this is a trend in the right direction. State control is closer to the people and closer to the problems. Federal control, which only sets producer floors, cannot prevent dealer price wars, price cutting, and unfair trade practices. Northeastern Ohio particularly has been plagued with these very serious problems for the past 15 years. State regulations in more than a dozen of our large dairy States is already successfully preventing these practices so detrimental to producers. In one State, Oregon, milk is priced largely on the basis of its nutritional value by State law. We believe that the further development of State regulation should be encouraged as a supplement to the Federal control to prevent the ruinous dealer price wars, price cutting, and unfair trade practices. Also, while Federal regulation is needed to control interstate markets, it is just as important that State regulation be developed to control intrastate markets. In some States, we wish to point out the two-Federal and State-work close together even using the same office, same administrator, and sharing the expense. |