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We see little prospect for improvement of farm conditions next year if Congress does not act. Under the flexible support plan we expect farm prices to go lower, while production will increase as farmers redouble their efforts to meet their obligations. As matters now stand, the farmers of America are headed straight toward bankruptcy.

We respectfully urge the Congress to repeal the present flexible farm law and, at the earliest possible time, enact legislation to protect agriculture against a disaster that is growing nearer and nearer. Our farmers cannot much longer survive the economic squeeze they are now suffering. Unless relief is provided by the Congress very soon, the family type of agriculture we have always known in America will soon become extinct.

This is the type of farming that has done the best and most efficient job anywhere in the world of providing an abundance of wholesome food at reasonable cost; and it should be preserved as a safeguard to our American way of life.

It has been most considerate of you to permit me to represent the members of the Missouri Farmers Association at this hearing today, and on their behalf I thank you most heartily.

The CHAIRMAN. Any questions?

Thank you ever so much.

We have now reached the hour of 12: 15, just lunch time. I wish to say that we have made considerable progress. We have only three more witnesses to be heard on the morning session. As I understand this program, the issues involved have been pretty well pointed up and my hope is that the witnesses who will appear this afternoon will take their statements and revise them in line with what they have heard and if there is anything they have in their statements that are repetitious of what has been stated this morning, the committee would appreciate it if in their testimony they would bring only new matters and new thoughts that have not been brought out this morning.

I wish to say I talked to the man representing the electric co-op last night, and since we are not dealing in that field at this time, İ said we would listen if we had time. I hope he will make his presentation short because we are interested in a solution of the farm program. I realize the co-ops are going to lose if the farmers don't get sufficient revenue. That is self-evident. That applies not only to electric co-ops but every business in town here.

We will stand in recess now until 1: 15.

(Whereupon, at 12: 15 p. m. the committee recessed, to reconvene at 1: 15 p. m. the same day.)

AFTERNOON SESSION

The CHAIRMAN. The committee will please come to order.

I am glad to state Senator Young from North Dakota has reached this city and he sits to my left here. Some of us thought he was lost. As I stated this morning, we made very good progress and we do not expect to cross-examine all of the witnesses this afternoon, but many questions were asked this morning of witnesses who appeared for the express purpose of pointing up the problems that confront us and we hope that the witnesses we shall call this afternoon will

look at the statements before they come to the stand and if, perchance, they can cut it short, we will appreciate it.

We don't want too much repetition. So those witnesses who have not as yet been called, I wish you would continue to listen to the witnesses who appear before you do and if you can shorten your statements, limiting them to new matter, which you think will be of assistance to us. We will appreciate that.

The first witness is Perry L. Miller. Mr. Miller, give your name in full, and your occupation.

STATEMENT OF PERRY L. MILLER, PRESIDENT, KANSAS ELECTRIC COOPERATIVES, INC., MULLINVILLE, KANS.

Mr. MILLER. I am Perry L. Miller, president of a Kansas Electric Cooperatives, Inc., and also a farmer.

Honorable Senator Ellender and committee members and Senator Carlson, it is a privilege to appear before your group. As president of the Kansas Electric Cooperatives, Inc., a statewide association representing 100,000 farm consumers who are served over 54,000 miles of line financed through the REA with an investment of over $90 million, I am filing, with your permission, a written statement. However, I wish to take a few minutes to discuss farm problems as I see them, from my contacts with farmers throughout the State.

On my own farm near Mullinville, Kans., the principal crops are wheat, cattle and forage crops. As we all know, the drop in farm income and the rise in farm costs have us in a squeeze.

Instead of acreage reduction, it is a program of acreage shifting. In place of corn, they plant wheat. In the cotton country they plant corn and wheat. Here in western Kansas we have only one other crop, and that is milo.

The farm situation of low income and high prices has accelerated the movement off the farm to the city. There are 11,000 fewer farms in Kansas today than in 1950.

Agriculture income must be maintained at a level comparable to other industries or the movement off the farm will be increased and jeopardize our whole farm economy.

I have to put in a plug for rural electrification. Our rural electrification program, for example, is already feeling the effects. In Kansas at the end of 1954 we had over 6,000 idle services in our State. We must pay interest, taxes, and principal payments to the Government with fewer farms to take the service.

Our recommendations include:

1. Community development of food processing plants supplied with low cost power could be established in rural areas to package and process foods near the farms. That might take care of the small farm. I understand in Ohio probably 30 percent of the farmers work outside the farm.

The CHAIRMAN. Are there any farmers not taking electricity now because of inability to pay the bills?

Mr. MILLER. We have some.

The CHAIRMAN. That shows the acuteness of it and it is a beginning of what may happen to other industries.

Mr. MILLER. I feel too, factories and defense plants could be decentralized and avoid the congestion of the cities.

2. Sell surplus grain to be fed to livestock.

3. We are missing sales to foreign countries as we will not let them use their own ships to carry the grain they buy. This restriction should

be lifted.

4. The soil fertility bank plan should be studied. It looks as though it may have many good possibilities as well as protect the soil for future generations and at the same time keep land out of production to relieve surpluses. I feel this plan would be acceptable to most segments of the United States economy.

5. World trade must be studied further and additional methods developed to distribute food to the underfed nations of the world. As a farmer, I feel it is a crime to have surpluses in our country when over one-half of the people of the world go to bed hungry.

I appreciate this opportunity to talk with you and want to thank the United States Senate Committee on Agriculture for coming to Kansas to learn at first hand of our farm problems here in Kansas. The CHAIRMAN. Thank you, Mr. Miller.

Mr. Blythe, give us your name in full, and your occupation.

STATEMENT OF L. J. BLYTHE, WHITE CITY, KANS.

Mr. BLYTHE. My name is L. J. Blythe. I live on a farm and that is the only business I have ever engaged in except serving in the legislature.

The CHAIRMAN. It is not a crime; is it?

Mr. BLYTHE. It takes with it a certain amount of punishment, as you well know. I served as chairman of the agricultural committee. The CHAIRMAN. You ought to be able to give us the answer to these problems, then.

Mr. BLYTHE. I can answer about like this, Senator: That we thought we had the answer to the egg problem in Kansas last winter and so we passed an egg law that immediately lowered the price of eggs to the fellow producing them and we didn't have any witnesses that appeared on the other side. I think this law will finally work out. When we give them what they want it may not be what they want at all. I wanted to make some statements in regard to rural electric service, but you have told me you didn't want me to make them.

The CHAIRMAN. It is not a question of not wanting to hear from you, but the point is that we are now interested in getting answers to the farm problems-that is, as to price supports, if necessary, and what have you, in order to get the farmer in a better way to pay his bills with REA which is what you are interested in.

Mr. BLYTHE. Yes. We have almost 400 idle services.

The CHAIRMAN. That would be your complaint: That you are afraid unless the farmers' plight is remedied REA may be in danger? Mr. BLYTHE. We are very much concerned about having our interest rates advanced on REA loans.

The CHAIRMAN. Of course, if your income is cut because of lack of farmers something will have to be done for the remainder of the cooperative members to pay what they owe the Government. The

best thing to do is keep the farmer prospering so he can buy and pay his bills.

Mr. BLYTHE. It wouldn't be by raising our interest rates, Senator. The CHAIRMAN. It depends on your income.

Mr. BLYTHE. I can explain our income, sir. I have here a copy of our audit of our co-op which shows that we started in the business in 1940 and I have been president of that cooperative, I am talking about the Flint Hills Co-op and I am vice chairman of K. E. C. and what happened in our co-ops happened in the rest. We started in 1940 and it was 1953 before we were able to make debt service.

Last year we charged off some indebtedness and that is the first time we have gotten out of the red. We don't owe the Government anything but we have paid them.

The CHAIRMAN. You mean current?

Mr. BLYTHE. All of our payments as they came due were paid. We have paid a little ahead but our peak payment comes next year. We hope, we intend, to pay that debt. I had a statement prepared on what I thought about this farm program. It is a little different slant than anything you have had.

The CHAIRMAN. Is it a cure? Do you have anything specific to add? Mr. BLYTHE. This is all new I have. Practically nothing before you have had on this. It tells a different story. Personally, we are not in as bad a plight as some people would lead you to believe we are. Seventy percent of the farms have no mortgages on them. I would be glad to read this.

The CHAIRMAN. If you have something new, proceed.

Mr. BLYTHE. Farm parity prices have declined 28 points since February 1951, 19 points before January 1953, 9 points since, and are the lowest since 1941. Production costs are up 30 percent. We have had only 1 percent increase to meet the higher costs.

Last year after paying taxes and other expenses, farmers in 11 different regions received less than 50 cents an hour. Farm income in 1947 was $16.8 billion net. In 1955 it will be down to $11 billion. Farm debts have gone up from 4.9 billion in 1947 to 8.2 billion this year.

On the other side there are 18 percent less farm people who have 15 percent more than in 1947. Those are average. But averages can be like the man who has one foot in an ice-cold bucket of water and the other in a bucket of scalding water. The average temperature may be all right but he is darned uncomfortable.

Farmers own 36 percent more land, livestock, machinery and the like than in 1947. Farmers can match 18 billion in debts with 19 billion cash, bank deposits, and bonds they own. Seventy percent of the farmers have no mortgage debt. Farm land is up 25 percent since 1947. We farmers in most cases have all of our assets tied up in land, cattle, and farm equipment, and caught in a price squeeze, especially in drought areas where we must borrow to buy the things we need. We did have a drought in our part of the State this year.

This squeeze is hardest on small and young farmers, who have in many instances nothing to sell. Any farm program should be written to help the small farmer and should not restrict the 240-acre or less farm to the same restrictions as the larger farms.

64440-56-pt. 5- -5

Farmers have increased production 1 percent since 1950; 34 percent since 1940. Consumption is up 7 percent since 1940. It seems to me that if it were not for the huge storage supplies, prices would be higher. I believe that we should not have imported into our country any grain, livestock, or anything else in which we have a surplus.

We farmers today do not farm with horses and mules and the crops they ate are helping to make more food available. The loss in exports plus the amount that used to be fed to horses and mules amounts to about 30 million acres.

Another reason we farmers are not doing better is that the middleman is taking a larger percent of the food dollar. Farmers got 17.7 billion in 1950 and 18.7 billion in 1954. Most of this increase went for higher wages. The population has increased 30 percent and we are eating more per person. In the 1930's 129 pounds of red meat were consumed per person. This year it will be close to 160 pounds. It is my opinion that the best way to get rid of our surplus grain is to feed it to livestock. An acre of corn, 35 bushels, is equal to 3.12 million calories enough to feed an average person 3 years at 2,800 calories per day. If this acre of corn is fed to cattle it would last but 7 weeks.

Farm people had an average income of a little less than one-half the nonfarm average income. People consumed 3 percent more food last year than in the 5 years previous. They bought 15 percent more cars, moved into 19 percent more new houses, bought 143 percent more TV sets.

Powerful unions, with the help of a sympathetic government, have forced costs still higher. Hiking of the minimum wage to $1 set off another round of wage increases. Hourly wages have gone up 30 percent since 1950, transportation 25 percent. Farmers can't keep

up.

Business passes along the increases, which must either be added to the consumer or taken off the farmer.

Another unfair burden is the 2-cent Federal tax per gallon on the gasoline used in our farm tractors.

The CHAIRMAN. You stated the problem but not the solution of it. Senator SCHOEPPEL. I am sure you recognize, as you say there, that this surplus is the great disturbing factor in the farm economy. Mr. BLYTHE. That is right.

Senator SCHOEPPEL. What would you do with these surpluses we now have?

Mr. BLYTHE. Sir, first I would not ship into this country feed grains from any other country. I would get it fed up to livestock.

Senator SCHOEPPEL. Would you change, or have us change the law that would permit the Secretary of Agriculture to sell these surpluses that are in good storable shape yet, at less than 105 percent of parity? Mr. BLYTHE. You mean on our present market?

Senator SCHOEPPEL. Yes.

Mr. BLYTHE. No, sir; because if you do you will depress everything

else we have.

Senator SCHOEPPEL. That question is going to be before us. That is why I asked you.

The CHAIRMAN. Thank you.

Mr. Vernon Adee.

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