The poultry industry has long been afflicted with the disparity in the egg-feed ratio arising from an economic relationship where unsupported poultry, dairy, and other grain-dependent products must be produced by use of supported grains, the price of which is relatively inflated by the past and present parity arrangements. The resulting imbalance between unsupported and nonsupported commodities can be traced to its origin with no difficulty. The validity of the price-supports principle has long been accepted by virtually everyone. It has been distorted, however, so that the middleman rather than the farmer has been the beneficiary. Our proposal for production payments to achieve parity by making up the difference between market prices and the parity level would bring the program back to its original intent which was to stabilize the income of farm families. It would make possible the protection of family poultry operators from absorption or annihilation by massproduction poultry interests which have been increasingly invading the California market. 2. CHEAP CREDIT AND FARM DEBT MORATORIUM The small- and medium-sized farmer needs low-cost nondistress governmental credit to relieve him from gouging at the hands of private creditors and lending agencies. Farmers' Home Administration lending funds are totally inadequate and are provided only if credit is unavailable from other sources. The giant operations are again at an advantage in that they can command cheaper credit even from private sources than can the smaller operators. Where stabilization can be brought about by refinancing, such opportunities should be afforded on a long-term basis. Farm debt moratorium legislation is required as a standby measure to prevent any dispossession in the event of continued deterioration in the farm picture. The United States Senate of the 84th Congress is commended for having passed a moratorium bill (S. 689) and we are urging the House of Representatives to follow through in the forthcoming session. 3. CROP INSURANCE Poultry, along with other commodities, is susceptible to many disease epidemics and natural catastrophes over which the farmer often has no control. The enormous losses suffered by poultrymen in southern California in September 1955 as a result of the unusual heat wave is one of the most recent examples of the helplessness of even the most efficient producers against such acts of God. It was for the purpose of coping with these catastrophes that the Federal Crop Insurance Corporation was originally established. We urge that your committee recommend that a pilot study be inaugurated at the earliest possible time to determine how such a program can be set up to cover poultry producers. 4. FOOD ALLOTMENT PLAN FOR UNDERNOURISHED The California poultry industry has demonstrated that it is able to take advantage of scientific and technical achievements to produce a volume of eggs and poultry meat to provide California's increased population and the constantly rising standard of living for which this Nation is internationally recognized, with an abundance of eggs and poultry meat. Nonetheless, the Senate has repeatedly noted in proposed legislation that consumers' buying power is not able to avail itself of this productive capacity and has therefore proposed certain measures through which low-income families may avail themselves of nutritious foods, amongst which eggs and poultry meats are basic. One of these bipartisan proposals is S. 45 (Aiken-Young-Humphrey). This plan would fully utilize normal commercial wholesale and retail facilities and would make unnecessary the establishment of a Government-financed stamp-distribution system since all cooperating agencies have their own apparatus for handling client allotments. We urge early enactment of this legislation. 5. INCLUDES EGGS AND POULTRY IN SCHOOL-LUNCH PROGRAM The CHAIRMAN. Will you just submit that for the record? We are familiar with the problem. We have had a lot of testimony on that. Will you give us points that you have not heard here today? Mr. GURA. Those are the 5 points that I want included in the record and which we recommend. The CHAIRMAN. Thank you; they will be included in the record. (The prepared statement of Mr. Gura follows:) As a segment of California's economy which provides a livelihood for some 35,000 farm families, over one quarter of our farms, according to the 1950 agricultural census, grossing some $300 million in 1953 and $247 million in 1954, proposals for stabilizing the economic fluctuations in the poultry industry are definitely in order. We poultrymen therefore propose certain measures for the consideration of the 84th Congress, which we feel will provide "shock absorbers" to a further economic collapse in the poultry industry, nationally, and in California. In the first instance, poultry producers must be given equal consideration with producers of other commodities in every Federal program dealing with agriculture. To achieve these ends, we ask: 1. PRODUCTION PAYMENTS DIRECT TO PRODUCERS This proposal would allow commodities to find their own price level on the open market. If the price fell below what it takes a poultryman to break even (which is the meaning of parity), the Government would reimburse the producer an amount equal to the difference between the open market price and parity. It is not our intent to bring about unreasonable farm subsidies. We propose production payments only on the first $25,000 sales by an individual producer and in no case should one producer receive payments in excess of $2,500 in any 1 year. The poultry industry has long been afflicted with the disparity in the egg-feed ratio arising from an economic relationship where unsupported poultry, dairy, and other grain-dependent products must be produced by use of supported grains, the price of which is relatively inflated by the past and present parity arrangements. The resulting imbalance between supported and nonsupported commodities can be traced to its origin with no difficulty. The validity of the price supports principle has long been accepted by virtually everyone. It has been distorted, however, so that the middleman rather than the farmer has been the beneficiary. Our proposal for production payments to achieve parity by making up the difference between market prices and the parity level would bring the program back to its original intent which was to stabilize the income of farm families. It would make possible the protection of family poultry operators from absorption or annihilation by mass production poultry interests which have been increasingly invading the California market. 2. CHEAP CREDIT AND FARM DEBT MORATORIUM The small- and medium-sized farmer needs low-cost nondistress governmental credit to relieve him from gouging at the hands of private creditors and lending agencies. Farm Home Administration lending funds are totally inadequate and are provided only if credit is unavailable from other sources. The giant operations are again at an advantage in that they can command cheaper credit even from private sources than can the smaller operators. Where stabilization can be brought about by refinancing, such opportunities should be afforded on a long-term basis. Farm debt moratorium legislation is required as a standby measure to prevent any dispossession in the event of continued deterioration in the farm picture. The United States Senate of the 84th Congress is commended for having passed a moratorium bill (S. 689) and we are urging the House of Representatives to follow through in the forthcoming session. 3. CROP INSURANCE Poultry, along with other commodities, is susceptible to many disease epidemics and natural catastrophes over which the farmer often has no control. The enormous losses suffered by poultrymen in southern California in September 1955 as a result of the unusual heat wave is one of the most recent examples of the helplessness of even the most efficient producers against such acts of God. It was for the purpose of coping with these catastrophes that the Federal Crop Insurance Corporation was originally established. We urge that your committee recommend that a pilot study be inaugurated at the earliest possible time to determine how such a program can be set up to cover poultry producers. 4. FOOD ALLOTMENT PLAN FOR UNDERNOURISHED The California poultry industry has demonstrated that it is able to take advantage of scientific and technical achievements to produce a volume of eggs and poultry meat to provide California's increased population and the constantly rising standard of living for which this Nation is internationally recognized, with an abundance of eggs and poultry meat. Nonetheless, the Senate has repeatedly noted in proposed legislation that consumers' buying power is not able to avail itself of this productive capacity and has therefore proposed certain measures through which low-income families may avail themselves of nutritious foods, amongst which eggs and poultry meat are basic. One of these bipartisan proposals is S. 45 (Aiken-Young-Humphrey). This plan would fully utilize normal commercial wholesale and retail facilities and would make unnecessary the establishment of a Government-financed stampdistribution system since all cooperating agencies have their own apparatus for handling client allotments. We urge early enactment of this legislation. 5. INCLUDE EGGS AND POULTRY IN SCHOOL LUNCH PROGRAM The Los Angeles City Health Department conducted a breakfast nutrition study in 1952 amongst 4,693 public-school children. It found that 26 percent had poor breakfasts while 8 percent had no breakfast whatsoever. Only 15 percent consumed what was considered a good breakfast. Although no comprehensive statewide study has ever been made, the few other studies that do exist indicate that the Los Angeles statistics are by no means the most flagrant and may, in fact, be above the average. This is indicated in November 1954 and May 1955 studies by the California State Department of Public Health's Nutrition Service of four Santa Clara County schools. In one school (Alviso Elementary), 20 percent had no breakfast and 1 percent had no lunch, while 6 percent went without an evening meal. The other three schools experienced 16 percent, 10 percent, and 7 percent without breakfast. Presumably the record of poor breakfasts approximates that experience in the Los Angeles schools, although such a breakdown was not given in the Santa Clara study. When poultry and egg producers requested inclusion of their products in the school-lunch program during the 1954 poultry crisis, the Secretary refused to take this action. Eggs and poultry meat must be included in this program in the interest of proper nutrition and stabilization of the industry. Congress must also correct its failure to expand the funds available to this program to correspond with the annual expansion of school enrollment. In addition, the scope of the present program should be enlarged to include a breakfast program in those schools where it is needed. This would also compensate in some measure for the present low consumption of eggs by school children. (The Santa Clara County study indicated, in the three lower income schools involved, that on that day 57 percent, 75 percent, and 83 percent of the children consumed no eggs.) DESCRIPTION OF INDUSTRY Income of poultry producers, perhaps even more than that for other sections of agriculture, rises and falls acutely due to a number of unforeseeable and uncontrollable factors such as outbreaks of disease for which preventive measures are not yet fully effective, seasonal gluts, weather conditions, consumer buying power and the impact of population growth forcing established concerns to move and rebuild at inflated prices. Moreover, certain sections of the industry have become captive of corporate packing and feed companies to whom they are virtually mortgaged, their entire financial structure resembling the nothing down installment picture. Even though the actual interest rate may be competitive the purchase price reflects this risk cost entailing a mortgage structure and amortization payments which cannot withstand acute economic reverses. This is especially true with regard to turkey, broiler and fryer producers. By and large, the poultry producer finds himself in a generally chaotic and insecure situation. Year to year reports of county agricultural commissioners in leading poultry areas bear out this fact. Sonoma County egg production was up 4 percent in 1954 over 1953, but gross return dropped 22 percent. Income from broilers dropped 30 percent; from fryers, 30 percent, although the number of pounds produced increased more than 50 percent; from hens, equal income, but number of pounds sold for meat increased more than 50 percent. Los Angeles County egg production increased by 10 percent in 1954 over 1953, but producers realized 23 percent less return. Producers raised 35 percent more pounds of fryers but realized only 6 percent more in gross income. They raised 14 percent more pounds of turkeys but their gross dropped 7 percent. They raised 8 percent more pounds of broilers, with 10 percent less gross. San Diego County producers increased eggs by 15 percent, but their gross income dropped 18 percent in 1954 compared with 1953. They sold 63 percent more hens for meat with only an 11 percent increase in gross income. They sold the same number of pounds of fryers but took in 19 percent less income. While they curtailed production of turkeys by 12 percent less pounds, their gross from sale of turkeys dropped 25 percent. A study by the American Farm Bureau Federation shows that feed dealers financed 90 percent of all broiler production in the country in 1954. "Risks are great" they state. "Disease, small profits per unit, violent price fluctuations, and the highly competitive nature of the business make broiler financing hazardous. **** Among unfavorable results of such financing the following are especially noted: Mass production has been encouraged, resulting in overexpansion; flexibility in production has been lessened; cost of production has been increased by excessive markups for chicks, feed, medicines, and other necessities. Poultrymen who depend on such outfits for their outlets are often left high and dry with thousands of birds on their hands when processors and dealers go broke. In one such case this spring a broiler producer had less than a week to find another outlet. Others, less fortunate, not knowing the firm was in trouble, lost their entire equity-in one case $11,000. The intense heat wave which hit California the first week in September 1955 is another instance of an unavoidable catastrophe. Here are some reports from the Vista Press, San Diego County, dated Septem. ber 5, 1955: Charles Carpenter, San Marco: Lost most of his flock of 7,000 chickens. Charles Christy, Vista: 50 percent of flock of 10,000 layers dead and still dying. A & M Farms, Vista: 10,000 out of 20,000 chickens dead. Robert K. Bross, Vista: Half of flock of 20,000 lost. John Prohoroff, San Marcos: 18,000 to 20,000 out of 100,000 gone. The Vista area was conceded to be one of the worst sufferers, but in all southern California counties there was damage to some growers and serious damage to many others. The Farmers' Home Administration, as of October 21, was still considering whether disaster loans should be authorized. "Our problem has not been the appraisal of the damage, but in determining what, if any, breakdown of normal agricultural credit had occurred in the areas," Glenn W. Studarus, acting FHA State director, wrote the Farm Research and Legislative Committee on that date. CONCLUSION Investment of a family's entire financial physical and mental resources in the Nation's most indispensable industry-agriculture-should not place upon farmers additional risks which they are not in position to assume. We believe that the proposals submitted by us to your committee will provide the ballast which we poultrymen require to continue in production and thus supply our State and Nation with a most nutritious, body-building food. The CHAIRMAN. Mr. Hanley. STATEMENT OF JAMES HANLEY, JR., DOS PALOS, CALIF. Mr. HANLEY. Gentlemen, my name is James Hanley, but before I go into my prepared statement, Senator Ellender, one time some time. ago, you gave Fred Othman a throwaway line in an article about "who put the hoey in chop suey." In reference to the California. rice situation. So I want you to do something for me. When you get back to the Crescent City, I want you to-I made this notation-tell my good friend Bill Reed down at Crescent City that you have learned that in California women are deploring the fact of the destruction of the wild pollinations. I think that would be very interesting to the Crescent City people. Now, my partners Bill and Ed Koda ordinarily plant 2,500 to 2,800 acres in rice. As an adjunct to our rice growing we operate our own drier and mill, our own product. We are the only growers independent in the State in such a position. My partners' father pioneered the rice planting on the west side of this great San Joaquin Valley in the year 1927 when it was practically a desert. I have stumped this State from end to end relative to the trouble I could see this industry heading for in the past 5 years. I have written articles, have formed associations of independent farmers and because I have advocated the shipment of paddy rice to Japan I am now known as Paddy Jim. I am not unproud of that name. At least it has an Irish connotation. The California rice industry is essentially different from the United States industry in terms of all major producers and utilization char acteristics. Output has expanded dramatically. Domestic food consumption has never been California's outlet. Čereal and brewers uses of California rice are relatively minor. Territorial food sales are stable and in essence the market for California rice is an export market. The small differential between shrunken the California industry. not avoid further shrinkage. support and export prices has Rigid or flexible supports will |