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Have you any ideas as to low much compensation, let us say, should be paid to a Nevada farmer on diverted acres ?
Mr. ScHWARTZ. I would say, Senator, at this particular time that the cost of that should not be any more than what the cost is to the operator for the maintenance of that acreage.
The CHAIRMAN. What do you mean by maintenance; Taxes?
The CHAIRMAN. How about depreciation on his machinery? As I understand it, a farmer may buy machinery because he has a thousand acres of land to cultivate.
Now, suppose the diverted acres amount to a third of his land, and he bought machinery for a thousand acres, and he can only produce on 700. Would you also take that into consideration ?
Mr. SCHWARTZ. Well, that is one of the largest costs that has come to the farmer in the last few years, the depreciation on his machinery, and certainly it is one that should be considered.
The CHAIRMAN. It should be considered.
The CHAIRMAN. What I had in mind was are there any other items? Do you know of any other thing that ought to be considered in fixing the amount that the farmer should receive on those diverted acres other than, let us say, taxes, depreciation for machinery?
Mr. SCHWARTZ. Certainly those two are the largest that we have. Taxes, I believe, have gone up some 59 percent in the last few years; depreciation has gotten to be in the neighborhood of 80, 90 percent, and those are the 2 main factors.
The CHAIRMAN. Thank you, Mr. Schwartz.
Senator BIBLE. I am just wondering how much the foreign importations affect the livestock industry.
Mr. SCHWARTZ. I do not believe that it has had too great an effect, Senator. We, in the livestock business, realize that in order to trade with foreign nations we have to trade with them; in other words, we have to take some of the brunt of moving some of our cattle or importing some of the cattle into this country as long as it does not upset the economy of the cattlemen.
Senator BIBLE. Mr. Schwartz, one further question, and this is simply for information. I am wondering how the beef consumption in the United States compares this year with last. Is there a gradual increase of beef consumption?
Mr. SCHWARTZ. I believe there is a gradual increase, somewhere in the neighborhood of 160 pounds per person; that is, meat.
Senator BIBLE. Is that part of the program of eating more beef?
Mr. SCHWARTZ. That is right. I believe that the program that the cattle people have put on throughout the United States is certainly one of the most honorable methods in which they have been trying to solve their own problem without asking the Government for some kind of handout.
Senator BIBLE. Thank you, Mr. Schwartz.
STATEMENT OF HARVEY A. MCDOUGAL, PRESIDENT, CALIFORNIA
CATTLEMEN'S ASSOCIATION, COLLINSVILLE, CALIF. Mr. McDougal. I am sorry, Senator, but I am getting some more copies made and we will have those. I will read this one to you.
The CHAIRMAN. All right. Mr. McDougAL. Chairman Ellender and members of the committee, my name is Harvey A. McDougal. I am president of the California Cattlemen's Association, whose headquarters are 659 Monadnock Building, San Francisco 5. I am also a cattle producer and feeder in Solano County. I am speaking for the California Cattlemen's Association, the California Cattle Feeders Association, the California Wool Growers Association, and with the approval of the California Farm Bureau Federation.
We appreciate the opportunity to appear before you to express the thinking of the organized livestock people in California on a livestock program.
The livestock industry has experienced sharp price breaks and most producers are continually faced with the problem of trying to live in an economy of declining livestock prices and rising costs of many products and services necessary to a livestock operation. The record shows that the price of agricultural products has declined 50 percent during the same period, hog prices are the lowest since 1944; while factory wages have increased 25 percent and the prices of nonfarm products and services stayed on the strong to higher side during the past 4-year period.
PRICE SUPPORTS NOT THE ANSWER
The cattle producers and feeders believe that price supports on cattle would saddle the consuming public with a huge tax burden and that such supports would cause cattle numbers to climb even higher rather than bring them down in line with normal consumer demand. They believe that price supports would mean that the industry would be subject to any other control that the Government found necessary for the administration of the program.
They believe that price supports on cattle would remove the last major barrier of a free economy.
Government-supported livestock grains and feeds has been one of the depressing factors on the price of feeder cattle They have been instrumental in widening the price spread between feeder and fat cattle.
Although the producers take the position of being against price supports or any other form of Government control for cattle, they take a realistic position on supported livestock feeds and grains. They take the position price supports on livestock feeds should be flexible enough to meet changing conditions. And further, that flexible supports on feeds and grains if properly applied to prevent economic disaster, would be acceptable as long as the industry is in a period of postwar adjustment.
DIVERSION OF SURPLUS CROPLANDS There has been a growing discussion on the possibility of taking surplus croplands out of production and diverting them to the production of grasses. And, further, that those diverting such acreage to production of grass would receive a substantial increase in conservation payment or other subsidies.
The livestock people feel the diverting of these surplus croplands to forage for livestock and paying the farmer for the diversions would hurt those producers who are dependent primarily on the income derived from the production of livestock. Producers feel that lands which are diverted to soil-building crops are valuable to the national welfare, but they also take the position that payments for diverted acres should not act as an incentive to farmers to put livestock on these lands they have put into forage crops—these crops should instead be used as a soil-fertility bank.
The livestock industry recognizes that the supply of red-meat products are at almost record proportions except lamb and that the situation is currently aggravated by large numbers of hogs and poultry.
Those engaged in the production of livestock believe that immediate steps must be taken to put the industry on a more stable basis and still furnish to the consuming public an abundance of beef and other red-meat products at a reasonable price.
We believe that a major step toward the solution of this problem would be self-help programs by the different segments of the livestock industry. The cattle industry in California and in many of the other producing States has been engaged in a cooperative beef promotion and merchandising program with the processing and distributing segments of the industry.
We feel that this program has been at least partially responsible for the all-time record per capita beef consumption. We believe that the self-help beef-promotion campaign must be accelerated and that the hog and lamb producers must also accelerate their programs as a step to stabilize the industry
The CHAIRMAN. Mr. McDougal, may I ask, if you do not mind, is this self-help program to be financed and administered by the industry itself? Mr. McDougAL. At the present time it is so.
The CHAIRMAN. I see; is it your idea, in other words, to continue without Government aid?
Mr. McDougal. We are also asking for some things; I will get to that in a moment.
The CHAIRMAN. But in any event the self-help program is to be by the producers themselves without Government interference?
Mr. McDOUGAL. That is correct.
GOVERNMENT'S ROLE IN PROGRAM We believe that these self-help programs can alleviate the currently critical situation in the livestock industry through a cooperative program with the Government. The livestock producers believe that there are great possibilities for further development of export markets for meat and meat products. They are of the opinion that greater appropriations must be made for the promotion of meat and meat products at national and international fairs as is being done for industrial commodities.
The CHAIRMAN. You know, in recent years; that is, in the past 2 years, we have provided a fund of about $3 million, I remember, to start these exhibitions you speak of abroad. That is what you mean?
Mr. McDOUGAL. We were of the opinion that meat and meat products had not had the same proportion
The CHAIRMAN. Well, of course, if we can establish the policy and obtain the buildings, don't you think that the trade itself would furnish the products?
Mr. McDOUGAL. We feel that it possibly would.
Mr. McDOUGAL. The livestock people are of the strong opinion that Government should sharply expand its beef and other meat purchases for the school lunch and foreign aid program. They believe that a meat purchase program would be only an emergency measure and the Government would not control the industry at any time during the program.
That is the same program as was carried on in 1953.
THE ROLE OF RESEARCH IN THE PROGRAM Research has a definite role in any livestock program. Much of the research carried on in past years in the field of livestock and meats has been for the most part to increase the production of livestock. We believe that the time has come for more research in the field of marketing, merchandising, nutrition, packaging, grade standards, cooking, and new uses of the byproducts of livestock.
The stockman feels the consumption of red meats would increase if more research was carried on to find ways to make meat more attractive to the consumer, as well as more research on cookery and palatability. The industry in cooperation with Federal and State Government as well as education and research institutions should increase program of public education as to the nutritional value of meats to the people of the Nation.
GOVERNMENT'S ROLE IN RESEARCH We believe that the Federal and State governments should continue and expand their program in disease, parasitic and predatory animal control as well as their programs in animal nutrition. The stockman would for the Government to provide funds to assist the industry research programs for finding new uses for leather, wool, tallow, and fats and other byproducts of livestock. We believe the Federal and State governments should expand their research programs in the field of marketing, merchandising, and distribution. It is believed by many producers that more knowledge in these fields will be of great value in finding and developing new foreign and domestic markets for meat and meat byproducts.
EFFICIENCY IN PRODUCTION
The livestock producer is continually faced with the problem of reducing his cost of production and continuing research must be carried on to help him achieve the job. The producer is discovering that the more he sells the less money he receives and that the consumer is paying the same or more for the product because of the rigid and rising costs in handling and processing the products en route to the consumer.
We believe that the Federal and State Governments should enter more fully into research designed to help the producer to reduce his cost of production and marketing in order that the net income be more in line with other segments of our economy.
We appreciate very much the opportunity to present our views on a livestock program.
The CHAIRMAN. Thank you, Mr. McDougal.
STATEMENT OF OLAF GEORGE, KANOSH, UTAH
I have been interested in this price-support program and have attended several meetings at which time it has been discussed thoroughly.
Speaking as a representative of the farmers in my area I will say that those farmers who raise wheat feel that it is a good deal because the Government gives them a guaranteed price which is a premium in my particular area in comparison to other crops that are raised there.
I would like to comment for the simple reason that these people are given the opportunity of planting other crops on the diverted acreage that they have, which works a hardship on the balance of our economy in that particular area.
However, it is the general feeling of farm people other than the wheat farmer that if the Government is going to support one crop it should support them all.
Now, we realize that they cannot support them all, but they feel, in fairness to everybody, that if one segment of our industry is going to be supported, then we should have some guaranty, at least, that diverted acres would be put into the crops—let me change that, would not be put into the crops and wreck our particular industry.
We have one very good example in the community I am from where the high cost of wheat has put the chicken men practically out of business.
It is the general feeling, in fact, the farmers voted unanimously in one meeting which I attended that if the Government wasn't going to support all the crops that land called diverted acres should be retired, or some portion thereof.
If the Government is going to be fair to all the people and give us all a guaranteed price we know that this will stimulate the production to the point where eventually we will have to retire some of our acres anyway. It is no more than fair that we ask those lands registered under the price-support program to retire or take out of production some of their diverted acreage.