The CHAIRMAN. When he does come in, will he come to the stage, please?

As I indicated a moment ago, we are very happy to be here in Oklahoma to hear the farmers of Oklahoma and adjoining States.

Now, as I stated on many occasions during these hearings, the hearings ought to be nonpartisan and nonpolitical. You know the farming problem today in many areas is very acute and the Republicans are hurt just as much as the Democrats and we are trying to make this nonpolitical.

Now, another thing I would like to say is this: That this committee will not permit any farm organization to use it as a springboard to further membership or anything like that.

You know all of those organizations are pretty well represented in Washington and we are able to hear them there. Of course, if there are any members of any of the organizations here who are farmers and who are on this list, we will gladly and cheerfully hear them. This is a grassroots hearing and our main purpose in making this tour is to hear from the farmers.

This is nothing new to me. Back in 1937 I was one of seven Senators from the Agriculture Committee who held hearings throughout the United States and from those grassroots hearings came the Agricultural Adjustment Act of 1938. Of course it has been amended since that time and there is now pending before the committee of which I am chairman a House bill to amend the act again.

In 1947 when Senator Thomas, who represented Oklahoma, was on this committee, we made another tour of the country in order to find out how that act was operating, and we got from the farmers almost a unanimous voice that unless something better could be found to let well enough alone.

Now we are here again to get information in the hope that we can take that same act and try to make it a better one.

I have said on many occasions that flexible price supports or even rigid price supports in themselves won't do the job. We are in search of something else to add to it and we will lean on the farmers of Oklahoma to submit to us such evidence as they may have in order to improve this act.

Are there others who have something to say?

Senator KERR. Senator Monroney wants to put a statement into the record.

The CHAIRMAN. Last night I had the good fortune to meet your Governor, Raymond Gary, and he presented a statement for the record. I understand Senator Monroney desires to present it.

Senator MONRONEY. I have a prepared statement I would like to submit for the record at this time in order to save the committee's time. I know you want to hear as many farmers as you can and to take as much testimony by statement as possible to get a wide spread of views of Oklahoma farmers. So I want to set a pattern at least in submitting my statement for the record.

Mr. Chairman, I also have a statement of Alvin Berg which I will submit for the record.

The CHAIRMAN. Those two statements you have indicated, Senator Monroney, as well as the statement of Governor Raymond Gary, will be placed in the record at this point.

(The statements referred to above are as follows:)

STATEMENT FILED BY HON. A. S. MIKE MONRONEY, UNITED STATES SENATOR FROM THE STATE OF OKLAHOMA

In order to save the time of this distinguished committee, I wish to submit a statement relative to the failure of the administration's farm program-the need for immediate correction-and to suggest ways in which I believe this might be done.

I also want to thank you for coming to Oklahoma for firsthand study of the farm problem as it affects our State.

1. The program of Secretary Benson has completely failed. Its ill-considered provisions continue to bring farm price declines while living costs hover around the alltime high record. It takes a considerable amount of mismanagement and faulty legislation to be able to hit the consumers on the one hand and the farmers on the other.

The continued tobogganing of farm prices is the direct result of faulty legislation of a sliding parity support that slides only downward, together with frequent speeches and official announcements by those high in agricultural circles of this administration which further undermine confidence in farm price levels and adversely affect the market at every turn.

While the farmer has been blamed in dozens of speeches for high consumer prices by officials of the Department of Agriculture, the processors and the middleman reap new profits and the farmer's share of the food dollar declines to new lows. The Secretary of Agriculture is supposed to represent the farmerbut Mr. Benson has conducted what amounts to psychological warfare against a decent level for farm prices.

For example:

Wholesale prices of all commodities have declined nine-tenths of 1 percent from 1952 to 1955.

Wholesale prices of farm production have declined 16 percent in the same period.

Processed foods have declined only 5.3 percent in the same period. All commodities other than food products have increased 2.9 percent. The farmer's share of the consumer's food dollar was 47 cents in 1952. In June 1955 it was only 41 cents-a reduction of 12.8 percent in this period. For the last quarter the official forecast is for 40 cents. The consumer's food index for all items including food increased during this same period by 1.1 percent to 114.7 on the commodity index, near the highest point in all history. The farmer's share of the national income decreased by 31 percent, being reduced from 4.9 percent in 1952 to 3.4 percent in 1955. Farm income has declined $3,300 million, or a reduction of 23 percent.

Meanwhile his equity has declined during the same period by $10,500 million— assets shrinking by $7 billion while his liabilities have increased by $3,500 million. Mortgage debt has reached $8,200 million in 1955, from $6,600 million in 1952, the highest since 1933.

It has cost Uncle Sam more and more money to support farm prices at less and less. From 1952 when all agriculture expenditures, including price supports, cost a total of only $1,045 million, we find Uncle Sam today spending $3.130 million for 1955. Farm price support appropriations cost only $46 million for 1952, and totaled $2,267 million for 1955.

Interest rates paid by the farmer on support price loans have been increased. Relief loans and farm purchase loan interest rates also have been increased. Secretary Benson and other official spokesmen for the Department of Argiculture continually are citing figures of $4 to $6 billions as the cost of the farm pricesupport program. They either do not understand the program they are charged by law with administering, or they deliberately misrepresent the facts.

It is true that the United States has large inventories of food and fiber in storage. These total $4,893,641,750 as of May 31, 1955. The myth that has been built up by the Department of Agriculture itself as to the cost of this program was effectively dispelled by the chairman of this great Committee on Agriculture, Senator Ellender, in his speech before the Senate June 20, 1955. Senator Ellender, analyzing the Commodity Stabilization Service report as of April 30, said:

"It will be noted from a study of this report, that the amount of CCC losses from October 17, 1933, to April 30, 1955, a period of nearly 22 years, on basic commodities, was $353,675,738, or an average of some $16,450,034 a year.

"It will be further noted as to cotton that the price-support program for that commodity actually shows a gain-a profit-of $267,290,377, and that the losses

sustained on price-support operations for the basic commodities as a whole accrued principally on corn and wheat."

The report shows further that the principal losses were incurred on nonbasics such as honey, milk, butter, cheese, wool, potatoes.

Broken down into individual costs, the entire program has amounted to only $2.49 per capita over the entire 22-year period, or 111⁄2 cents per capita year. This support of basic crops has encouraged an adequate production which in itself has prevented abnormally high price swings and low price swings. The income taxes paid by a heretofore prosperous farm economy has repaid the Treasury a return hundreds of times greater than its cost.

Even on the total program, the good and the bad, the basics and the nonbasics, the cost has amounted in the 1933 to 1953 period to only 28 cents per person a year, or $5.53 per capita for the entire period.

But under the Benson program since 1953 the cost is rapidly rising, due largely to the psychological warfare against a decent level of farm prices. In the last 14 years, the cost has risen on the total (support for fewer at less and less) to $6.70 per capita or $3.83 per capita.

Permit me to quote a few headlines from Sunday's newspaper (November 6, 1955):

"Industrial Stocks Rebound to New High is Predicted." "Quality Bonds Pace Advance."

From this week's Oklahoma City Times, November 1:

"Average American corporation is making one-third more this year than last. Six out of every seven corporations so far reporting their net profits after taxes in the first 9 months of this year show increases over the like period of 1954. Some have more than doubled their earnings. Many have set alltime highs for the period."

The same paper of Sunday carried the box on "Past Week in the Commodity Marts: Compared With a Year Ago."

Thus it may be readily seen that while Secretary Benson has by legislative mandate lowered the price of basics he has by his speeches and policy in addition caused such lack of confidence in farm market prices as to disrupt the entire price structure of the farm community. Speculators, processors, and others who know they can profit more from lower and lower farm prices have raided the market as a direct result of countless speeches by the Secretary and his spokesmen attacking farm price supports.

Until a new Secretary of Agriculture is appointed and the policy changed, I can see no hope for full recovery of the farm price structure, regardless of what legislation is passed by the Congress.

I am glad to see the health of the big business community. The level of the stock market and of industrial production and employment is a fine thing provided it is a part of a "balanced economy." Our economy can be neither balanced nor safe when one vital segment is setting new lows of income in recent years, when the farm parity ratio at 84 is the lowest since 1940 and when farm income is dropping every month.

Last Sunday's newspapers again carried a part of this mythical concept with which Mr. Benson's aids seem to content themselves. The story in part read: "Per capita farm income gain far above average.

"New light has been thrown on the current (or continuing) farm problem by the research department of the Northern Trust Co. of Chicago. *

"Per capita farm income (which takes into account the sharp decline in farm population as well as income was 315 percent higher in 1954 than the 1935-39

average, and far exceeded the 209 percent rise in per capita income of the nonfarm population over the same period, Northern Trust figures show."

This is the same line taken by many of the Department's spokesmen. In other words, so many farmers have been forced off the farm that those remaining are more prosperous than before. It is a theory of "profit by plowing the farmers under."

Note the base taken by the Northern Trust as 1935-39, for the farmers. He was the last to recover-it took a long, long time to lift him from the 1933 catastrophic levels of 5%1⁄2-cent cotton, 102-cent oats, 5-cent hogs, and 30-cent wheat. This same 1935-39 period was before the Rigid Support Price Act was passed by the Congress lifting supports from 40 percent of parity to 80 and 90 percent of parity.

The cold hard facts about the farmer's position in recent years is that the net income per farm has declined by 21 percent from 1952 to the second quarter of 1955. The net income per farm from 1952 to 1955 is as follows:

1952: $2,579 (5,535,000 farms)

1953: 2,235 (5,482,000 farms)
1954: 2,212 (5,425,000 farms)
1955: 2,050 (5,365,000 farms)

Income loss per farm: $529 (170,000 farms)
Percent change: 21 percent (3 percent)

The program needed is to return to the 90 percent rigid support program for basics already passed by the House of Representatives and now pending in the Senate. Continuation of the sliding-scale supports neither curtails surpluses nor saves the Government money. It builds up greater storage quantities by forcing larger portions of the years production into the loan. The volume of such surpluses costs the Government more money to operate the program. While the first year of the flexible supports reduced basics by 72 percent, the second one-two punch will further reduce the supports by another 71⁄2 percent or a total of 15 percent. This effectively legislates price disaster for America's farmers.

An effective program of in-and-out supports at 90 percent of parity, for nonbasics when a glut in 1 year or during the marketing season depresses the price of that product and associated products is needed. It must be intelligently run by buying the surpluses on a basis to reflect 90 percent of parity to the producer. Any program that allows the processor to reap windfall profits such as enjoyed by the big packers and processors in the cattle buying program (and will be enjoyed by these same operators in the $80 million hog and pork buying program) is not in the interest of the farmers. If the Government does not buy these surpluses from the farmer, then the contract with the processors should and must specify that the processor has paid on a basis to reflect 90 percent of parity to the producer. The timing and amounts of these programs must be intelligently run by a Secretary of Agriculture determined to aid the producer-not the processor. Further, the Government should consider the program to retire from cultivation several millions of acres on a soil fertility bank plan and rent these acres at about $10 per acre. We can add to our future productivity and to the net capital assets of our farmland a decade from now many times the amount needed to handle such a program. The acres retired to be built up in soil-building practices would cost far less for the period than continued costs of storage of production not now needed for ourselves or nations allied with us in our fight against communism.

Lastly, our disposal program should be stepped up. Perishables should never be allowed to rot or spoil. There is enough need in this Nation, and with other nations facing famine, to use up these surpluses. It is a moral crime to permit spoilage of foodstuffs in a hungry world. Our storage of usable, edible, wearable food and fiber, if kept within manageable limits, is a blessing instead of a curse. One bad crop failure on a multi-State basis could easily turn our problem from plenty to shortage.

In our efforts to win the hearts and minds of other peoples of the world, food supplies can be far more valuable than guns and tanks; and far less expensive. Insurance of an adequte reserve of food and fiber supplies is a strong protection of the consumer.

We have seen twice in recent years the cost in the billions to the consumers of a threat of a shortage in coffee in Brazil. If the consumers had to pay so many billions on a threat of a coffee shortage, imagine what it would run to if such a shortage existed in beef, pork, or in wheat for bread. The increase in

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cost of 1 week's food bill under such a shortage would be far more than the cost of operating the price-support program on all commodities for the entire 22 years from 1933 to 1953.

Hundreds of millions have been spent to aid industry in many ways. High protective tariffs have cost the public billions. Subsidies to railroads, airlines, postage of books and magazines, steamship lines far exceed the net cost to the Government of the entire farm price-support program throughout its history. Yet the importance of farm income to the national economy is many times greater than for any of these other industries or enterprises. Historically the national income has followed up or down the basic farm income on a ratio of 7 to 1. It has been true throughout our history that a prosperous farm economy means a prosperous America. A bankrupt farm economy forecasts severe depression on a nationwide scale. We can insure the foundation of our American prosperity by making certain that farm income reaches a par with other branches of our economy.

STATEMENT FILED BY THE HONORABLE RAYMOND GARY, GOVERNOR OF THE STATE OF OKLAHOMA

First, I want to welcome you to the great State of Oklahoma and express to you my personal appreciation, and that of all of the farm families of this State, for scheduling one of your series of hearings in our State. That the farm families in Oklahoma have been hard hit by the drastic decline in farm prices is no secret to you gentlemen. I believe it may even have dawned on the Secretary of Agriculture by this time. In my recent travels over large sections of this country, I have found the same unfortunate situation existing in all areas. In agriculture, there can be no halfway measures.

Either the farm families of Oklahoma and of this Nation are entitled to, and will get, a fair share of the national income, or they will be relegated to the status of second-class citizens.

For 3 years now we have watched the incomes of Oklahoma farm families being forced sharply downward. We have watched the present administration use every power at its command to ram through Congress a farm bill which has proved disastrous.

In the face of dropping prices and lower farm incomes, the administration has failed to do anything effective for the farmer's relief. We have not had even partial solutions. We beg for a workable farm program, but get only platitudes and evasions.

It is long past time for the administration and Congress to come out firmly with a definite, comprehensive program for the farm families of this Nation. It must be a program capturing the imagination of America's farmers, yet based

on commonsense.

Farm income is down 23 percent since 1952. That's an overall average.. It is down even more on hogs, oats, soybeans, and some other commodities. Regardless of the alibis offered by this Republican administration, agriculture is in a serious depression and all farmers know it. Meantime, the corporate interests of the Nation are enjoying prosperity.

Now to specifics. Farmers in Oklahoma feel, and rightly, that they are entitled to parity of income. In plain English, this simply means a fair share of the national income. Organized labor has its hard-won collective-bargaining rights, and its right to strike. Industry has tariffs, its price-fixing ability, and its fair-trade laws. Agriculture, composed of 5 million independent producers, also deserves Government help to maintain a fair bargaining position in the national economy. Farm prices are made in Washington. They are determined by the administration and Congress. Over the last quarter of a century, farmers have come to recognize this fact. They have learned the meaning of the word "parity." means nothing more nor less than a fair price.

It

That's why Congress must do whatever is necessary to force the Secretary of Agriculture to immediately institute programs halting the decline in farm income and regaining parity income for farm families.

Price supports are essential. We should use the best available means of supporting farm prices-whether it be production payments, direct purchases, or loans. Each commodity must be supported by the most practical means available. We must improve farm credit. We must adopt more-not less-soil-conservation practices. We must once again make the Department of Agriculture speak for the farm family, and not for the processors and middlemen.