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Agricultural Adjustment Act of 1933 was put into effect up to 1955. The shift of crop acreage in this commodity had approximately doubled in acreage and production. Since 1950 to 1955 a large share of the wheat produced has gone into storage as surplus wheat.
Under the provisions of the Agricultural Act of 1955 passed by Congress 12 States were designated as being outside the "commercial wheat-producing area.” Nevada was included as one of these States, in which there is no restriction on the acreage of wheat you might plant for harvest in 1955.
However, since no wheat allotments or no reductions of wheat acreage is required of producers in noncommercial areas, the 1955 wheatprice-support rate for noncommercial areas has been set at 75 percent of the support rate in commercial areas. Commercial areas supports were set at 82.5 percent of parity, or $2.06 per bushel. For noncommercial areas, the basic support of—75 percent times 2.06—$1.54 per bushel or approximately $50 per ton.
It is interesting to note that the price farmers received for wheat in 1954 on the open market was around $65 a ton. The 1954 price support for wheat was around $70 a ton—a difference of approximately $5 a ton in favor of price supports, of which a large portion of the wheat went into storage.
In 1955 the price farmers received for wheat on the open market is around $55 a ton. The 1955 price support for wheat is around $50 a ton—a difference of approximately $5 a ton in favor of the open market, of which a large portion of the wheat has gone into regular trade channels. The acreage in 1955 was greatly reduced by a drought in parts of the State; and the other areas, the acreage planted was slightly down.
By reducing the support price the Government has made wheat fall in line with the other crops produced in these communities or perhaps it has helped the farmer regain some way of telling whether it is better to raise other crops, or perhaps how a particular piece of land can be put to its most economical use.
Price-support and production-adjustment programs have a place in the overall agriculture program. A program should be designed to place a floor under commodities to protect a farmer in his costs, and to encourage efficiency, freedom of enterprise, and self-adjustment; not a ceiling on commodities to encourage a farmer to produce to artificial prices and unmanageable surpluses.
The CHAIRMAN. How would you do that you are contending now that we ought to have a law to protect the farmer in his production; is that your statement?
Mr. ŠEBBAS. I think through a floor similar to our parity, which would be similar to our flexible farm-support program, which would be the Government.
The CHAIRMAN. How could that be established; in other words, if we were dealing with Nevada only, it might be possible to find a happy medium, whereby we could say that the cost of production in Nevada is X number of dollars per bushel. Navada grows irirgated wheat. How would you do that in North Dakota or Kansas or maybe here in California, where you grow dry land wheat-I presume they do here I do not know-but I imagine it is not all under irrigation-how would you set a price that would be applicable to all of the States that produce the commodity, let us say, wheat?
Mr. SEBBAS. That could be adjusted by your parity prices based on the past years, or your historical base in certain areas. " It would vary throughout the Nation in certain areas.
The CHAIRMAN. Do you not think it would cause a lot of confusion to have the Kansas growers get X dollars, and North Dakota just a little less, and Nevada just a little more can you not see the difficulties that may arise in the administration of such a law whereby you would return the cost of production?
Mr. SEBBAS. I do not quite get you on that. There would be a difference between your States. Your whole setup is based on your rules and regulations set up under the program. Well, then, your parity is based on your historical fact that comes out of certain areas.
I think, going back to the start of the agricultural act, where you have your difference, well, 52 to 70 percent of parity, whereas your production comes in higher, well then your parity rate should be down lower. In other words, when you have an overproduction, your support price would be lower, which would discourage a high support price; whereas if your production is down, the incentive would be to raise.
The CHAIRMAN. You would not need them, if you could produce what you could sell. .
Mr. SEBBAS. That is right.
The CHAIRMAN. That is what the Secretary meant when he said to make production and consumption equal.
Could the farmers do that themselves, or would they need some kind of a law as a guidance ?
Mr. SEBBAS. Well, I think they would need some kind of a law or guidance, maybe, to protect them from ruinous prices. They should be let down gradually, and not to have them pulled out from underneath them.
The CHAIRMAN. Thank you, sir.
you state your name for the record in full ?
STATEMENT OF S. ATWOOD MCKEEHAN, MERIDIAN, CALIF. Mr. McKEEHAN. Mr. Chairman and gentlemen, my name is S. Atwood McKeehan and my residence is Meridian, Sutter County, Calif. I am a farmer; my father and grandfather were farmers before me. I have never followed any other occupation. I own 800 acres of land and rent 800 acres more, making a total farm operation of 1,600 acres. I produce wheat, rice, dry edible beans, barley, alfalfa, and have had some beef cattle. At present I have no cattle.
I became actively engaged in farming in 1909. What wordly goods I may have, have been accumulated by farming. First as a tenant farmer and later by becoming a landowner. I continue to rent what land I can.
I came here today to discuss the subject of wheat. Wheat is an important crop for California farmers. California does not raise or produce enough wheat to meet our consumptive needs and yet, through the operations of the wheat-allotment program, our wheat acreage has steadily declined.
Farmers are rugged individualists. They do not like restrictive laws and regulations. Their one idea is produce—to produce to full capacity and then produce more. That is what farmers did until we ran headlong into the depression of the 1930's. Government regulation and assistance during the 1930's, after 1932, did help the farm economic position.
It is my personal belief that the wheat farmer has been under regulation and support for such a long period that the sudden removal of such support would be complete disaster. Conversely, I do not believe that high supports with rigid allotments that reduce the acreage year after year is the answer, either.
When a support price is much higher than the price of competing commodities the tendency is to price the supported commodity out of the market. That has happened to our wheat market and has built up the large surpluses on hand.
It is my belief that wheat farmers must become realistic and produce wheat for the market at a price that the market is willing to pay and not produce for Commodity Credit Corporation stockpile.
It is my belief that support prices should be at figures that would be a floor under the market at which efficient farmers—includes land, the farmers' ability to manage, and equipment—would be able to keep in operation; not necessarily profitable for all farmers.
There are some changes in the law I would suggest for better administration to meet California conditions.
The period of crop history in order to determine a grower's allotment should be 5 years instead of 3 years. At least 4 years' history should be the minimum. A 3-year history period does not give the diversified farmer of California's Central Valley a true picture of operations. The operations of California farmers are so diverse and crop-rotation periods are longer than 3 years. In many cases a 3-year history completely eliminates the farmer who has a longer croprotation period. The 3-year period has completely eliminated many long-established wheat farmers.
I believe that the release and reapportionment provisions of the 1955 farm-wheat-acreage release and reapportionments should be reenacted as a part of any crop-acreage-allotment program.
I refer specifically to section 334 of the Agricultural Adjustment Act of 1938, as amended, and which was further amended by Public Law 690, 83d Congress, approved August 28, 1954, which added a new subsection (f) to the original act. Subsection (f) should be established as a permanent part of the wheat acreage allotment law.
The opinions expressed in this letter are strictly my own and I submit them in hope that more workable farm legislation may be enacted.
Thanks to the committee.
The CHAIRMAN. How would you accomplish that? I would like to see it done. Mr. McKEEHAN. I would like to see it done, too. The CHAIRMAX. Will you write us a prescription?
Mr. McKEEHAN. I do not think that I can write a complete one, but I do believe that the use of the flexible-price support, as it has been called, during the period of years was heading us in that direction. I think it did have some merits. I still think it has some merits.
The CHAIRMAN. Could you, in a nutshell, tell us what that subsection (f) would do to California, if enacted ?
Mr. McKEEHAN. Yes, that would allow a grower to return to the county committee a portion or all of his allotment, if he did not want to plant it in a particular year, and then he could pick it up.
The CHAIRMAN. I think that is in the law now.
Mr. McKEEHAN. No; it went out. It is not in the 1956 law. It is only in the 1955 law. And then with the operation that you have now it becomes obsolete or did not operate beyond 1955. You do have it in the rice law. As I said, I grow rice, and the things that Mr. Lodi and Mr. Alioto spoke of are my sentiments, as well.
The CHAIRMAN. Thank you.
Mr. McKEEHAN. I want to thank the committee for this opportunity.
The CHAIRMAN. Now we get to the fruit and nut crops.
STATEMENT OF HAROLD H. ANGIER, SECRETARY-TREASURER, PACIFIC COAST FRUIT EXPORT COUNCIL, SAN FRANCISCO, CALIF.
Mr. ANGIER. Mr. Chairman, and gentlemen, I am the general manager of the California Grape and Tree Fruit League.
My appearance before you here today is in behalf of the Pacific Coast Fruit Export Council, of which I am the secretary-treasurer. The chairman of the board is Mr. F. R. Wilcox, who is assistant general manager of Sunkist Growers. Mr. Ernest Falk, manager of the Northwest Horticultural Council, is vice chairman.
The members of the Pacific Coast Fruit Export Council are the California-Arizona citrus industry-made up of American National Foods, Inc., Mutual Orange Distributors, and Sunkist Growers-the California Grape and Tree Fruit League, the Dried Fruit Association of California, and the Northwest Horticultural Council.
These organizations are all vitally interested in the exporting of perennial horticultural crops and products and in reestablishing and expanding export markets. They have associated themselves exclusively for this purpose.
It is not our purpose at this hearing to attempt to go into any of the background history or complexities of the current program of exporting fruit and fruit products. Much of this information is in the record of hearings before your Subcommittee on Administration of the Agricultural Trade Development and Assistance Act of 1954 and other acts relating to the disposal of surplus agricultural commodities. The testimony found in part II of the 1955 hearing record printed for the use of your committee and presented by witnesses Ernest Falk, manager of the Northwest Horticultural Council, Yakima, Wash.; Martin E. Hearn, export coordinator, the Florida Citrus Mutual, Lakeland, Fla.; Karl D. Loos, traffic counsel for Sunkist Growers and also representing Mutual Orange Distributors; Truman Nold, executive secretary of the National Apple Institute; and the statement filed by Alfred Tisch, chairman of the export committee of the California Grape and Tree Fruit League, will suffice as reference for the record.
We are pleased to inform your committee that a United States National Fruit Export Council, with a membership consisting of all the major fruit organizations in the United States, is presently in the final process of organization. When this council is completed, it plans to prepare a statement of policy and objectives to be presented to Congress and to Government agencies.
I would like at this point to state that our ultimate objective is the return to normal trading; in other words, the opportunity to trade in fruit and fruit products with foreign importers on a private trading basis without the necessity of financial assistance from Government.
Since the end of World War II we have, through our various industry organizations, expended every effort to bring to Government agencies a true realization of the importance of exports to the economic well-being of the fruit industry of this country. The major obstructions to foreign trade in fruit and fruit products are the result of actions by foreign governments. We must therefore rely on our Government to remove these trade barriers.
Where our Government can assist us most effectively is in helping to open the doors to trade. By this I mean the elimination of all types of restrictions imposed by foreign governments obstructing trade in the usual or normal sense.
Until this objective is attained, we must rely on aid from Government in negotiating sales under the currency conversion provisions of Public Law 480 and section 402 of the Mutual Security Act.
We believe Foreign Agricultural Service should continue to encourage sales of fruit and fruit products under Public Law 480 in those few countries where there are real dollar shortages or balance-of-payments difficulties.
While ostensibly fruits may be included in negotiations under this law, to date we have no record of any sales of fruit and fruit products being made. We have, of course, enjoyed considerable business under section 402 of the Mutual Security Act. We would prefer liberalization of trade instead of government-to-government programs which at best are only substitutes and very cumbersome, especially insofar as the highly perishable fresh product is concerned.
The CHAIRMAN. Could you be more specific as to what you mean by "liberalization of trade"?
Mr. ANGIER. I mean the opportunity to trade with foreign countries without being confronted with embargoes, with premium exchange rates, all of the various gimmicks that the foreign nations have put into effect that preclude us from the equality of opportunity to do business in those countries.
The CHAIRMAN. I understand. How would you attain that—how would you attain that-how could you force that on the foreign nation?
Mr. ANGIER. Well, the only way it can be done is for our State Department in their negotiations—for the committee presently going to Geneva to negotiate under GATT, to get some concessions from those countries, to liberalize their trade with us, in exchange for concessions that we have been continuously giving to them.
The CHAIRMAN. In other words, I presume you also have reference to reciprocal trade agreements ?
Mr. ANGIER. That is right.