Whether he got 10 cents a bushel or 50 cents, he did not seem to mind but he wanted to be occupied, maybe it was so he could charge off something against his large income from his usual business.

Whether that is true or not, I do not know, but something has to be done, whether the program remains flexible or rigid, to stop that kind of stuff, that kind of manipulation, if you may call it that, and let us take care of the farmers who really make a livelihood out of farming.

I think if we can attack that problem, we might be able to get somewhere in curtailing some of these surpluses.

Mr. ROBERTS. I think you are right, sir. I think this is a twoway street. I do not think we can ask the Government to solve all of these problems. We have got to, let us say, help ourselves on this, and I believe in these self-help programs.

The CHAIRMAN. That is what I reminded the sheep growers.

Mr. ROBERTS. I think we can get them in gear but we do need the protection.

The CHAIRMAN. If you protect the other interests, you have got to protect the farmer, let us not get around that.

Mr. ROBERTS. That is right.

The CHAIRMAN. You know that.

Mr. ROBERTS. We have got a 10-percent wage increase facing us now with farm machinery going up 10 percent in the last 60 days.

Well, those things are not going to make a flexible or 90-percent program work.

We believe in the flexible support principle and in the present farm program, but I think the biggest thing we have got to do is to implement this program and get it to function.

I believe that summarizes pretty much, Senator, what my written statement is comprised of.

The CHAIRMAN. Thank you very much.

Mr. ROBERTS. Thank you, sir.

(The prepared statement of Mr. Roberts follows:)

My name is Delmar Roberts, and I am a farmer owning and operating a 300acre farm in the Mesilla Valley in southern New Mexico. While I am president of the New Mexico Farm and Livestock Bureau, I am speaking today primarily as a farm operator. I appreciate the opportunity of making a statement before this committee.

I am sure there is considerable agreement on the fact that farmers and ranchers are being subjected to a cost-price squeeze and that this is resulting in a lowering net agricultural income. My own net income is steadily declining. I see no need here to enumerate all the statistics and percentages pointing up to this situation. Farmers and ranchers are not interested in statistics but in net income per farm or ranch. Suffice to say that agriculture finds itself in this depressed net income situation at a time when other major segments of our economy are enjoying a high degree of prosperity. This contrast cannot long endure without endangering our whole national economy. Agriculture is too large and too important a part of the whole Nation.

Cost of production is a major factor in the present agricultural situation. With acreage controls on production and increasing fixed costs of operation there are just not enough acres of a cash crop to meet these high fixed costs. Farming has become a complicated business operation, and any overall farm program must give consideration to such items as taxes, social-security payments, reclamation charges, interest rates, and many other fixed costs. Present income tax rules and rates make it exceedingly difficult for young farmers to acquire and pay for their farms. Farming is subject to all the elements and insects of nature, and crops reflect this situation in respect to volume of production. Consideration should be given to a formula of taxes that will enable the farmers to 64440-56-pt. 4—14

average the exceedingly good years of production with those of bad years. All of these conditions seem to me to be a very integral part of any program to benefit farmers and ranchers.

It seems to me that entirely too much discussion centers around only one phase of the farm program-the level of price supports. As a farmer, I am of course desirous of enjoying a parity price for my production comparable to other segments of our economy. I believe firmly in the flexible price-support principle. I also know that for either 90 percent supports or flexible supports to work successfully there must be implementing actions by all departments and agencies of our Government.

As a farmer, I feel sure that if the flexible price system is properly implemented it would only be a matter of a short time until I would be receiving 90 percent or 100 percent of parity for my farm production.

The crux of the situation is the surplus stockpile of various basic agricultural commodities. As a cotton farmer, I am intensely interested in any program that will reduce the stockpile of cotton. Without such action, I cannot hope for a fair market price.

Yet flexible price supports (or 90 percent for that matter) cannot be effective when at the same time the minimum wage is increased to $1 per hour. This has already resulted in a 7 percent rise in tractor and farm machinery prices and will be followed by like increases in trucks, fertilizers, insecticides, and other manufactured items that comprise farm production costs.

We have within the past few weeks had our agricultural Mexican national labor wages raised 10 percent, for which there is no justified reason. This is the result of an arbitrary directive of the Department of Labor to satisfy certain union labor leaders.

The policy of our State Department on agricultural exports and imports is nothing more than a blockade on our efforts to move surpluses into foreign markets. The United States has supplied most of the cash, technicians, and equipment that have enabled foreign countries to vastly increase their agricultural production. Farmers in this country can reasonably ask if we are to be sacrificed that other nations can gobble up the world markets.

I produce extra long staple cotton. During the war years, we were asked to increase production-we did. Egypt exports to the United States 90,000 bales of similar cotton per year. Following the war years, a surplus of this cotton developed. Rigid acreage controls were invoked. Were imports from Egypt cut in proportion? They were not-and have not been to this date. Not having to meet our high wage and other high production costs, Egypt can undersell United States producers. We asked for and got a reduction in the price support level to 75 percent of parity in the belief that we would be competitive with Egypt. In a further effort toward self-help, we voluntarily assessed ourselves $3 per bale for a promotion program to increase domestic consumption. Has all of this action on our part been to any avail? It has not. Egypt merely keeps the price substantially under ours consistently.

I repeat, what difference does the level of price support-90 percent or flexible— mean without implementing programs? The higher the level of supports the better for foreign producers. Any lower support than we now have and our domestic producers are out of business.

Finally, in closing, I want to return to the all-important matter of these farm surpluses. I believe we all realize that the disposition of these commodities is going to cost money. Certainly they cannot be disposed of at the price they represent to the Commodity Credit Corporation at this time. We are by no means in favor of dumping. Yet at the same time, they must move on a competitive world market gradually and consistently. We must have an aggressive trade policy participated in by all departments of Government. One reason industry made a rapid recovery following all-out war production was that many industrial war plants and surplus war material were sold off for a few cents on the dollar.

It would seem to me that one question that arises is whether we are going to subsidize the Commodity Credit Corporation or further subsidize the farmer. Payments to the farmers for following the practice or for not doing something else is not in the long-time interest of American agriculture-certainly it is not the American way. Such types of legislation for temporary expediency have a way of becoming permanent.

The soil-fertility bank proposal is being given considerable thought in New Mexico at this time. Undoubtedly the program has some merit as well as many objections, but it might form the basis for a long-range effective farm program.

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 farming 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. Mr. 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.