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Our position on such a soil-fertility bank program should be clear following our annual State convention at the end of this month.

As we examine past farm legislation in this country, as well as agricultural programs of other countries of the world, in the light of conditions as they exist today, we are anxious to copy a program of success—not one of proven failure. We firmly believe that we have the leadership in agriculture and in Congress to plan a farm program that will be in the long-time interest of the farmer and rancher. Such a program will receive our wholehearted support.

STATEMENT OF LYLE E. SMITH, BLANCA, COLO.

Mr. SMITH. Senator, may I file my statement and relinquish my time to Ted Still? He is just a little further down.

The CHAIRMAN. Yes; your statement will be filed in the record as though you had read it.

(The prepared statement of Mr. Smith follows:)

I am a farmer from Blanca, Colo., operating 300 acres of irrigated land. I would like to testify on potatoes, as they are my major crop.

In 1951 I had all my real estate, water stock, and farm equipment paid for plus a sizable cash saving. Since that date I have purchased very little machinery, no more real estate, in other words have followed a normal farming practice and each year finding the increased cost of operation and lower prices for potatoes have had to draw on my savings. At the present time my savings have been used and I have had to operate a large part of 1955 on credit. I haven't had to resort to mortgages yet, but unless something can be done in the very near future on potatoes there will be just one more farmer going to town.

The solution may be marketing allotments or quotas, with national marketing agreements as an instrument to control the years that there still may be an overproduction of potatoes. Due to weather conditions and the available water in potato-producing areas the yield of potatoes may vary from year to year to as much as 166 bushels per acre.

Another hazard in the potato industry today is the fact that there are too many diverted acres in already supported areas of basic crops that are turning to potatoes.

I think they should definitely put rigid controls on diverted acres nationwide so as to keep the right crops where right crops should be grown,

We, in the San Luis Valley haven't many choices of crops to be grown. The season is too short for most crops today that are under Government supports, so we have to depend nearly 100 percent on potatoes and their prices.

The CHAIRMAN. Mr. Still?
Is Mr. Don Collins in the room?
Mr. Robert C. Taylor, is he here?
I am informed that Mr. Taylor is not here.

The CHAIRMAN. Let me make this statement to all of the witnesses present: If any of you desire to file a statement because you have heard witnesses testify to what you are about to say, simply hand those statements over to the clerk sitting at the table to the left, just after the recess, and I want to give assurance that those statements will be filed in the permanent record and printed when the record is made up.

All right, sir.
Mr. Still, you may proceed.

STATEMENT OF TED STILL, PRESIDENT, SAN LUIS VALLEY POTATO

IMPROVEMENT ASSOCIATION, MONTE VISTA, COLO.

Mr. STILL. I am Ted Still, a farmer in San Luis County.
I own a half section of land. I bought it in 1934.

I am president of the Co-Op Improvement Association relating to potatoes.

I am a member of the working study committee of the National Potato Council, charged with formulating a national potato program to be submitted at their annual meeting the 28th and 29th of this month.

I attended a Western States meeting at Pendleton Sunday, an area meeting of the market agreement committees and it was my pleasure to sit in at your committee hearing at Pendleton on Monday.

I am coauthor of a statement presented by Mr. McGee, and with your permission, I would prefer to make a few oral comments on points that I feel need enlargement.

The CHAIRMAN. Yes. I would like that very much if you would do that.

Mr. STILL. In relation to corporate farmers and the corporate farming, I would like to call your attention to what is happening in our area.

A few years ago, Bankers Life & Casualty Insurance Co., of Des Moines, Iowa, came there, bought raw land, putting down deep wells, and are going into production of potatoes and vegetables.

Due to climatic conditions, potatoes and vegetables are our only cash raw crops. We have killing frosts the 10th of June and sometimes later, and again around the 10th of September.

Our elevation is 7,600 feet, and our farms are largely owner operated, and will average in the potato district about half a section.

Since the company that I have mentioned has entered the farining business in our area, there are now, I think it is, four more outside companies who have come in with diversified income from sources other than agriculture that are entering our farming picture.

Our farmers are bitter because they are in the high-income tax bracket and they can farm for a number of years at a loss, if necessary.

Our thought has been in regard to taking care of that, a program that would be a revision of the laws that would prohibit that type of operation.

It is my understanding that Nebraska has a State law on their State statute books that an insurance company cannot own land more than 5 years in that State, even taken under foreclosure.

The corporate farming, if continued and allowed to proceed unregulated, is going to force farmers in my class down to the FHA borrowing loan.

The CHAIRMAN. When you say unregulated, that seems to me that you are going to regulate him in some way now. If that would be your method of approach, how would you do it? Mr. STILL. By taxes. The CHAIRMAN. How is that? Mr. STILL. Tax law revisions, so you cannot enter that simply for the matter of writeoffs. I do not know whether that is feasible or not, but there is some

The CHAIRMAN. The corporate tax today is about 52 percent; that is quite a high tax, is it not? Mr. STILL. Well, it is a high tax but evidently they are

The CHAIRMAN. Let me ask you this: Suppose the Congress should have incentive payments as has been suggested by some of the witnesses, not only here but in other places; don't you think we might approach the problem by giving them less of a support price and lower incentive payments than the man who makes his living on that? Mr. Still. I do. I think you have an out there.

The CHAIRMAN. So a graduated scale of payment might be one of the approaches.

Can you think of any other way under which we could still maintain our way of life, you understand? We do not want to regiment anybody. We certainly do not want to deprive people of doing what they can ordinarily do under existing laws. I am sure you would not want to do that.

Mr. STILL. No; I am sure that this committee and Congress as a whole does not want to drive off your family-type farming.

The CHAIRMAN. Oh, no; I agree with you. That is what we are here to get from you; some ways in which we can maintain that.

Jr. STILL. Not only incentive to a limited payment but you might chop it off at a given level entirely.

The CHAIRMAN. A what? Mr. STILL. You might stop the payment after reaching a certain ceiling.

The CHAIRMAN. I understand.

Mr. Still. I mentioned FHA and I would like to put this in the record at this point. We have 1 man and a girl in the office servicing 2 counties and their loans are approximately $800,000 now. I think any bank or PCA would have a fieldman with that amount of loans to service.

Also we have some men in FHA now that have reached their 7-year limitation who whether they have made any progress or not are not given consideration, but after 7 years, still owe them, then they cannot borrow any more under the present law.

I would like to call that to your attention, Senator.
The CHAIRMAN. Yes.

Mr. STILL. Reference earlier in the testimony today has been made to the old potato program, and we are still trying to live down that bad publicity that we got during that time. But I think we can learn something from that program.

The acreage allotment and the quota system that we are asking for now was on a voluntary basis under that program.

Furthermore, the payments were on a purchase and loan basis, which are comparable to your perishable commodities, and we do not feel they apply to perishable commodities and the publicity given to the huge pile that you mentioned with the Maine farmer who had a Cadillac reflects back to the great problem that all agriculture faces in public relations.

Simply because a farmer has a Cadillac, I do not think he needs to feel like he is getting—he is eating higher on the hog for the national picture.

The CHAIRMAN. You cannot make other people believe that though. Mr. STILL. That is why we have a public relations problem facing agriculture that must be done to put this in its true scope.

I would like to mention—you asked Mr. McGee the question in regard to how is the program proposed to give the potato grower incentive, and he mentioned shipping holidays.

It is our thought that if you stopped that at 90 percent, in other words, a minimum of a parity, then the holiday would be effective.

We feel that that would protect the farmer from losses.

cents out was only a feunderstand whitect the

It would stabilize your markup; it would stabilize your market, because the produce trade takes such a large markup because of the risk involved of market fluctuations.

The CHAIRMAN. Well, suppose you limit it to 90 percent as you sayMr. STILL. As a floor.

The CHAIRMAN (continuing). And there would be no takers, would you expect the Government to take it over? Mr. STILL. Sir?

The CHAIRMAN. I say, suppose you limit, as you say, limit it to 90 percent of parity and there would be no takers, that is, the farmer could not sell it in the trade, would you expect the Government to take over the potatoes ? Mr. STILL. No.

The CHAIRMAN. How would you handle it? What good would it be to say to a farmer, “You can have 90 percent,” if he cannot get it, if there is no method to enforce it?

Mr. STILL. In my statement, Senator, in the cost study made by our committee, it shows that we can do to—under OPS, we were getting $3 for potatoes.

The CHAIRMAN. I understand that.
Mr. STILL. And it still did not affect the price to the consumer.

The CHAIRMAN. I understand that we have been trying to show this. It was only a few years ago when the farmers were getting 53 cents out of the dollar. Today he is getting about what, 4Ā cents? Mr. STILL. Forty-three.

The CHAIRMAN. Forty-three. We have been trying to stop that. So far we have not been able to find any gadgets to do that. We are now in search of suggested procedures.

Mr. STILL. That is why we want this stopped at a given point, because the farmers of America are helpless to resist that passing back, and those markups were developed under OPS which were largely more than the trade normally got, and, naturally, they are resisting any cutback, and they have had increases; I realize that.

The CHAIRMAN. I understand exactly what you have in mind, too, but the point is if the farmers cannot sell their crop, so as to obtain 90 percent of parity, the trade will not take it, then who will you seil it to? You say you would not want the Government to do it. Mr. STILL, I feel confident

The CHAIRMAN. How would it help the farmer just to tell him, “We want you to have 90 percent," but there is no way to enforce it? Do you get the point I am driving at?

Mr. STILL. Yes; but we know the production of potatoes is within the normal consumption of the country, and we will get a normal price.

The CHAIRMAN. Of course, that is the whole problem. In other words, if we could get the farmers of this Nation to produce each year 300 million bushels, we would have no problem. But how would you do that?

Mr. STILL. Marketing quotas with a flexible quota transferred into acreage.

The CHAIRMAN. That is easier said than done. I wish you would put it more in language that we could—

Mr. STILL. We are working on it in the national council committee,

sir.

The CHAIRMAN. Will you let the committee have it when you work it out for us?

Mr. Srill. Well, as we have pointed out, potatoes are extremely sensitive to oversupply and favorable weather conditions.

The CHAIRMAN. And they are very sensitive to many Congressmen and Senators when it comes to price supports, I will tell you that. Mr. Still. We are not asking for price supports.

The CHAIRMAN. I understand. But I have found this: To get farmers to do it on a voluntary basis is very difficult; there has got to be some measure of incentive and if you folks can work out something whereby it can be accomplished, in other words, to make it inviting for them to do something, to produce at this level, our troubles would probably be solved. It is that little spark we are looking for to do that exact thing, to produce the cotton we need for export and domestic consumption, just the amount of potatoes, and pigs and chickens, and so forth; that is what we are looking for.

If we can ever solve that we will not have any trouble whatever, and it is to attain that goal that we are looking for advice. I mean, we are looking for a method to attain that goal. That is what we are looking for.

Mr. STILL. Senator, don't you feel that consumption would be higher in agriculture if agriculture was 100 percent of parity?

The CHAIRMAN. I cannot quite agree with that.
Mr. STILL. I base that on this fact-

The CHAIRMAX. We have had before this committee and we may have some come here today, for all I know, who complain that the 90 percent rigid price supports have been responsible for our being unable to sell our commodities on foreign markets. If we cannot sell it on a 90-percent basis, how will you sell it at 100 percent? Do you get the idea ? Mr. STILL. Yes. The CHAIRMAN. All of us want 100 percent. Mr. STILL. That is right.

The CHAIRMAN. But when you tell this committee as I have heard many of them parade before us and say, "Well, 90 percent has meant a lot of production, it has cut off our markets abroad," and all of that, and others say, “Give us 100 percent." If you cannot dispose of cotton or wheat when the payments are 90 percent, how in the name of commonsense will you do it if you give them 100 percent?

It just goes without saying that you are aggravating the situation. Don't you agree? Mr. STILL. No, I will not agree with part of it. The CHAIRMAN. All right. Tell me why?

Mr. STILL. Last spring, in Bakersfield, Calif., I heard the head produce buyer at a growers' meeting make this statement, that if you had quality and eye appeal, and quality to back it up, price would make no difference to the housewife, and all you need to do is to walk within a block there and see that potatoes were selling in bulk at 9 cents a pound when the Idaho growers were having a struggle to get the cost of production.

The CHAIRMAN. Well, you know, California stands out—those boys can grow potatoes.

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