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be opposed diametrically to the laws and programs which the President had promised to implement and strengthen. Since the day he was appointed, Secretary Benson has set about with full disclosure and great deliberation to destroy the support program enacted by Congress in the Democratic administrations, He has said repeatedly that it is his intention to develop a long-range program more in keeping with his own philosophy of free enterprise; for example, he has taken the position that prices should be supported, if it all, only at such levels as will prevent actual disaster. He said he seeks to build an "uncorrupted citizenry, uncorrupted by action of the state.” His philosophy rejects all of the progress that has been made in social security, the aid to the blind, the aged, and every other activity of government which seeks to improve the lot of its citizens, and the Nation as a whole. Obviously, such a philosophy simply ignores the facts of life and the complications and demands of this very new world in which we have found ourselves since the tragedy of World War II. The views of the Secretary of Agriculture, I submit, have been the expressions of the will of food packer processors, textile manufacturers, investment bankers, and of the middleman. They are certainly not the views of the American farmer. This has been nowhere more obvious than in the results of the voting when the farmers have had to choose between continued acreage controls and the loss of the security of the Democratic programs. In each case, even in the strongest Republican areas, the farmers have voted overwhelmingly to continue the programs of rigid price support with acreage controls.
The matter of our tobogganing toward a general agricultural depression is not a fiction, but fact. While the Republican press and politicians chortle that "everything is booming but the guns," the farmer has been permitted to suffer the greatest price declines since depression days. Net farm income is down 32 percent since 1952. In the past 12 months alone, grain prices have slumped 20 to 40 cents per bushel ; and cattle, hogs and dairy products are off one-third. That, gentlemen, is a most serious situation, and there does not seem to be much brightness in the future if the present trends in governmental attitudes continue.
Last week an economist for a New York investment banking firm calmed the troubled waters for those who took the farm crisis seriously as a threat to the entire economy: He points out callously that direct farm income is now only 4 percent of the gross national income, and that therefore the present situation should not disturb the rest of the economy too much.
One of the most insidious of all political actions that have been taken with respect to the farm program is the concerted campaign to set the city folk against the farmer, to make the worker think the farmer is a parasite bankrupting the Nation while living off Government subsidies and making food prices higher for the consumer. And at the same time turning the farmer against organized labor for increasing the costs of food processing. Actually, while wages have been consistent, farm prices have dropped 20 percent 'on the average since 1951, and meantime the cost of food products to the consumer has dropped less than 5 percent.
The truth of the matter is that while the farmer seeks parity prices, Government statistics reveal the farm income per person today averages only about 40 percent of the national average income per person, and the farmer's share of the consumer's dollar is down to 41 percent, a cent off the 1935–39 low.
It is argued by the Secretary of Agriculture and others in the executive branch of the Government, and even, in fact, by some Senators and Congressmen, that the farm programs are too costly for the American citizen to maintain while we build up surplus of farm products. Actually, in the 17 years prior to the inauguration of President Eisenhower, the cost of the entire farm program to the taxpayer totaled $10 per capita-less than $1 per year per capita—and totaled less than $11 billion. In the last year of the Truman administration price support cost only 40 cents per capita, or about the price of one hot fudge sundae. Moreover, it must be kept in mind that Federal subsidies to American farmers have consistently fallen further and further behind the cost of similar aid to American businessmen. Since 1949 Federal subsidies to business have totaled $5,880 million. Shipping firms, for example, received $150 million yearly; newspapers, magazines and advertisers, using second- and third-class mail, are annually subsidized to the tune of $500 million; and railroads, which enjoy huge sums in subsidy, have also been given 183 million acres of land, worth certainly more than $11 billion.
How many taxpayers are aware that the United States Government has pumped in excess of $5 billion into metal stockpiles, to bolster the sagging markets of only a handful of influential mining companies? The total invest
ment by the Government today in all agricultural products by way of our pricesupport programs is just about equal to that investment in stockpiling the metals of the mining companies.
How many taxpayers realize that in the last 3 years the banking interests dealing in Federal securities have received a subsidy of $1 billion a year through voluntary interest rate increases granted by the present administration?
Gentlemen, in all candor, I say this: Farmers are no longer the uninformed poor slobs of the 1920's. We will not sit still long and endure the economic experimentation of the Secretary Against Agriculture.
The remarks of the Secretary of Agriculture with respect to his intentions concerning the agricultural programs, and the propaganda directed to the cost of price supports do nothing, indeed, to stabilize our wobbling agricultural economy. In fact, it is my sincere belief that primary responsibility for the collapse in farm prices these past 3 years can be laid at his doorstep. He should not be perplexed that he has required for price propping in 3 years nearly twice the entire expenditure of previous Democratic administrations during 20 years.
Every time Secretary Benson or one of his assistants has made a speech on farm price policy, prices have dropped. Their actions have signaled a changing trend of major significance to all buyers and users of farm commodities to packers, processors, traders, manufacturers, and the middlemen.
The point I am making is that both buyers and sellers have lost confidence in the desire of the Government to stabilize farm prices. When that happens laws on the statute books will not prevent a devastating erosion of prices. Under the previous administration it was crystal clear that the rigid price-support program was being enthusiastically and vigorously administered.
The change was dramatic. During these past 3 years buyers have adopted a practice of day-to-day procurement, never knowing how far down is down under a parity system of sliding scales. Thus, for example, Commodity Futures Market Service Letters, and other grain and trade papers have reported time and again the bearish attitudes on the part of the buyers which seem to follow the inept remarks of the Secretary. Such a letter on cotton, dated September 17, 1953, reported :
"Speculative demand is very small and some concern is evident that Secretary of Agriculture Benson, in his speech Saturday, might upset the applecart insofar as confidence in the present price-support program is concerned."
A grain letter reported also in 1953 :
“Early in the session (of the Chicago Board of Trade) there was scattered buying of wheat futures prompted by the rumor that Secretary Benson would soon resign * * * a selling flurry late in the session followed Secretary Benson's denial that he contemplated resigning."
A Wall Street Journal article on cotton last month reported that Secretary Benson was "searching for ways to lower cotton support prices.” Almost immediately the 1956 futures dropped 3 cents a pound.
My point on the part political attitudes play in instilling confidence or backbone in buyers was pretty well summed up by a commodity newsletter of a large brokerage firm commenting on price rise following President Eisenhower's heart attack. I quote:
"Several weeks ago we mentioned the importance of spotting the dominant factor. Does the dominant factor have to be a specific supply-demand condition? No. It can be an attitude: if commodities have been draggy and attitudes dreary—then all of a sudden attitudes start shifting and people generally become friendly toward owning commodities. This shift-ethereal as it is can be a dominant price making force."
I do not resitate to predict that Secretary of Agriculture Benson's resignation or removal would bring overnight a rise in farm prices and a restoration of confidence in American agriculture throughout the world.
The Secretary of Agriculture has a morbid fear of abundance. Indeed, in America today that is the greatest fear we must overcome. Unconquered this fear could become a creeping paralysis. It could prevent the future development of our resources of soil, forest, and water, and therefore prevent the expansion of industry and labor opportunities. Our so-called surplus today consists largely of about 1 year's reserve of wheat, corn, and cotton. The entire dairy products surplus could be disposed of, and the dairy industry stabilized, if we but gave our 38 million schoolchildren 2 pints of milk a day, for 30 weeks of the school year. Today, however, less than one-third of our schoolchildren enjoy the schoollunch program and the food they need in their development.
Lord Boyd-Orr, the first Director of the United Nations Food and Agricultural Organization said recently that it would take 10 to 12 billion dollars worth of food to relieve the hunger that is actually prevalent in two-thirds of the world. He said something even more significant:
“That is the lowest sum that can relieve world hunger, and if food is not provided, then hungry people ultimately will pull down all the rest.”.
I believe that the Secretary of Agriculture has failed dismally in use of existing legislation and in recommending new proposals to find customers in Africa, the Middle East, and in Asia. American food in those areas could do much to halt the spread of communism. The administration has lacked the vision to adequately utilize the technical assistance program (point 4) to build future trade and cash customers for the products of American factories and farms.
In this period of crisis for American agriculture there are many doctors around with various remedies. One group of these diagnosticians point to the growing cotton industry in Mexico and say that we must abandon or chop price supports and enter into cutthroat world competition.
The solution to our problems is not to force our American farmer into a dogeat-dog price war with 10-cents-per-day-labor in Mexico, India, and elsewhere, for that would be tearing down the very things we seek to strengthen in our land and in the world.
We must recognize that of course Mexico is going to expand her cotton production and that soon South American nations will be manufacturing automobiles. That does not mean that farmers in Buttonwillow, Calif., or autoworkers in Detroit, Mich., should shudder and shake with apprehension.
Our solution, rather, lies in taking a bold new look at the geopolitics of a world on the threshold of the atomic era. We must tie our farm policy together with our foreign policy, to the end that we can raise the standards of living and the consumption of the rest of the world.
The demand of the 13 billion persons now living on this earth on about $75 a year can become literally insatiable. Just think; merely providing a single decent outfit of clothing, or a cotton mattress for each such person would provide a demand for an additional 25 million bales of cotton per year. Yet there are fears and trembling in some quarters because our annual crop of cotton is 14 million bales.
No testimony should be so vehement as mine unless, in the end, there be offered constructive criticism and some definite recommendations. Therefore I submit the following:
We must adopt a sound farm program which will consider the long-range ability of our farmers to feed our growing population, effectively to strengthen the economic position of the farmer and the rural community. We must remember that our population increases by leaps and bounds, and that it is anticipated that it will have reached 210 million by 1975. Our farm program must recognize and account for all segments of the farm population: The family-sized farms, the larger commercial farms, their owners, operators, and workers, regardless of whether they be producers of staples or of perishables. It must provide for equality of the economic and the social position of the rural segment of our economy, with the urban industrial and business sections, realizing that the well-being of each is necessary in maintaining the economic and social health of the Nation as a whole.
Our farm program must provide for the orderly and fair marketing of all of the artificial surplus as well as doing something to forestall the possibility of actual shortages of farm products in times of emergency.
We must continue always to increase the productive capacity of our farmers and of our one basic resource, the soil. The program must seek to lower the costs of the production of agricultural products, and to aim always at maintaining the farmer's self-respect, building his social responsibility and broadening his outlook in general.
Specifically, I would recommend :
1. That marginal land brought into cultivation to provide for our war emergency be returned to grassland and to forest. Any money spent on such conversion is money spent on the future wealth of this Nation,
2. That the Congress should encourage the administration to utilize our food and fiber surpluses as weapons to be used abroad in fighting of communism.
3. That the Congress extend the 90 percent of parity support program for basic crops through 1958, and promptly enact legislation to aid farmers of perishable crops by the extension of compensatory payments to them.
4. That the Secretary of Agriculture use all available section 32 funds to alleviate the distress in perishable crops, and not return the same to the Treasury, as he has done in the past. One hundred million dollars of such funds were available, and he declined to use them to assist the distressed farmer in the past 12 months.
5. That the farmer on the family-sized farm have additional low-cost eredit, other than disaster credit.
6. That the Congress reestablish the Federal food stamp program, to dispose of the surplus foods while at the same time raising the dietary level of the undernourished children, the aged and the handicapped, and the underprivileged.
7. That Congress reassure the people by proper legislation that the Rural Electrification Administration's functions will be carried forward, and not sabotaged by the administration.
8. That the Congress take such action as may be necessary to reactivate and broaden the Federal crop insurance program, in order that the farmer finally may be protected from the disaster of the loss of crops.
9. That Congress appropriate additional funds for the expansion of the schoollunch program.
10. That Congress appropriate necessary funds for the undertaking and completion of the San Luis division of the Trinity project, urgently needed to supplement the water supply of central California farms; and that the Congress adopt and follow such policy and enact such legislation as may be necessary to develop such projects elsewhere in our land as they may be needed.
11. That the Congress revitalize and appropriate adequate funds for the expansion of the technical assistance program for aid to underdeveloped nations, partieularly in respect to the employment of our own farm surplus in those areas.
12. That the Congress undertake a thorough investigation into the incredible and increasing spread between what the housewife pays for her food in the retail market, and what the farmer receives for the same product harvested from the farms.
13. That the Congress support the United Nations world reserve of food with adequate funds and such contributions as may be necessary to maintain it.
The CHAIRMAN. Is Mr. Williams present? Mr. Corbitt?
I have called everybody that was on this list. I wish to take this occasion to thank the people of Fresno and California as a whole for their attention and for the testimony that was produced here today.
I want to take this opportunity of also thanking my good friend, Alan Bible, who is the Senator from Nevada, for remaining here the whole day with me.
(Statement filed by Alan Bible, a United States Senator from the State of Nevada :)
Mr. Chairman, I want to thank you for the opportunity to appear before your committee this morning. I am particularly gratified that you have come across the country to meet with those of us who live in the Far West. Naturally, I am sorry time does not permit your coming into Nevada, but it goes without saying that Nevada has everything just as good as you find in California, with none of the bad things such as smog and fog. We may not have so much of some things, but we can modestly assure you that what we do have is the best to be found anywhere. If we can't produce the best, we don't try to grow it.
I can tell you with proud confidence that we are growing the finest cotton in the world, just over the mountains over there to the east and south. All we want is enough more acreage to give our Nevada growers just one cotton gin. Let me emphasize, my friends, we are not asking for one more gin--we just want one gin.
Seriously, I am well aware that your committee, Senator Ellender, faces one of the grimmest problems of all times as you seek to balance commodity production against consumption. You also must try to arbitrate the constant battle of geography, such as that of the cotton industry of the South against that of the West. I am happy that I can assure our western friends here that they will never find a fairer referee than they have in you as chairman of the Agriculture Committee of the United States Senate.
I should tell you, before you feel you must remind me of it, that the United States may produce this year 600,000 more bales of cotton than the October 1 estimate. Our beautiful autumn weather may bring its headaches in this way if production continues so bountifully. I understand the 1955 crop may exceed demand more than 2 million bales. I realize Washington plans to cut 1956 plantings to approximately 17 million acres, or nearly one-third below 1953.
With full awareness of these facts, I still request your attention to the importance of increasing the allotment for Nevada enough, at the minimum, to permit our growers to support a cotton gin. It isn't a happy situation, gentlemen, to know you can produce cotton of such high quality that buyers clamor for it, and yet be told you cannot grow it. We are not asking for Government support for our cotton, as the records of the Department of Agriculture will verify not one bale of Nevada cotton has spent a night in a warehouse waiting for a taker. However, because we have no gin, we must get a good price for it to survive.
As I told you earlier, we produce the best, the very best. If you don't believe me, ask anyone who knows the fertile valley lying over those high mountains to the east. Ask if cotton from Pahrump is not of the highest quality, clean, white, long fibered. Ask if those growers have any justification for seeking your support for giving them just enough increased allocation to put them on an equal basis with growers elsewhere who probably could not conceive of a situation where a gin was not almost automatically available. I know your growers have their problems, too, Mr. Chairman; but I wonder how they would enjoy having to bale their cotton with an old hay baler, as if it were alfalfa, and then ship it by truck 300 miles over those mountains to reach the nearest cotton gin, which is at Arvin, Calif.
As a matter of fact, I think I should let you know what we feel we should have, especially if we aim to be consistent in the way we run our Government departments. Nevada is an undeveloped State. We need every encouragement to every possible agricultural activity capable of existing in our delightful but admittedly rigorous climate and rocky soil. We have few areas capable of producing crops without irrigation, and in most places water is very scarce. We can produce unlimited acres of cotton in southern Nevada. The dean of our College of Agriculture represents the thinking of all our farm experts when he stresses that we should have a minimum of 80,000 acres under development in southern Nevada. We are not presently asking for this amount, naturally; but don't forget we are ready, able, and more than willing to accept all we can get for the purpose of permitting expansion of what we know will be a highly successful industry for Nevada.
A recent announcement from Denver (see New York Times, Tuesday, October 25, 1955, p. 1) outlines a so-called point 4 program for the United States, under which, and I quote Dr. Arthur Burns, Chairman of the Council of Economic Advisers, “That program will make sure that communities get needed technical assistance to develop programs for their own economic development. Federal money,” according to Dr. Burns, "would be given to stimulate growth and development in depressed areas, but the program would put a very definite accent on private enterprise.” We are advised this legislation will be sent to Congress next January for action, if possible, before June.
The significance of this is interesting, Mr. Chairman, when you realize that I come before you today asking your committee not to assist, but to permit areas in my State of Nevada to develop a program which they have already tested and found ideally suited to solve their economic problems. Let us not feed a man with one hand and with the other choke so hard he cannot swallow food abundantly around him. Perhaps there aren't too many farmers in the position of my Nevada friends—they don't need a point 4 program to show them how to help themselves. They need a point 1 program which will let them help themselves.
We are beyond the experimental stage. We have successfully grown cotton since 1950, on the small allotment of 110 acres. We have come up the hard way, and last year we had a quota of 2,324 acres. We are governed by what you know as section 344 (k). We can't be put on a 5-year average, obviously, or we would fade off the cottongrowing map for sure.
There is no reason for my saying more today. We have a simple problem and, to one from the South where you measure by thousands of acres in seeking allotments, it may not seem that a few hundred additional acres could mean that we survive. Without them, we succumb—and you'll have to come along a few years from now and show us how to develop some activity. You may even, then, provide us with several cotton gins, from Federal, State, and local funds;