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actual facts were the principal part of the decline had occurred under the program they were trying to reinstate. The real loss to farmers has been in net income and not gross income, this is a result of rapidly increasing production costs. I know of nothing more hazardous to the farmer than the high fixed overhead under which he is forced to operate today.

In 1947 the gross income of agriculture was $34 billion resulting in a net income of $16.8 billion, the highest in history. In 1954 the gross income was again approximately $34 billion resulting in a net income of only $12.5 billion or a loss of $4.3 billion in net income. The recent increase in minimum wage is beginning to reflect in higher costs of supplies and equipment thus increasing the cost of production. They tell us that about 85 percent of the increased costs are due to increase in labor costs. The Federal gas tax on nonhighway fuel is costing farmers $40 to $60 million per year. We feel Federal gas tax should be abolished, but if there must be a Federal gas tax certainly fuel used on the farm should not pay this tax since it is now being used to build roads.

Farm Bureau for a number of years has advocated the use of a soils fertility bank idea to store soils fertility, rather than the production of surplus commodities for which we have no visible outlet. If this were done we would have the fertility to increase production as the demand could be increased. There is a great deal of interest and study being devoted to this subject, and we may have some additional recommendations before January 1, 1956.

Most of the farm people I talk to are quite concerned and very much alarmed by the statements and apparent attitude of some of our elected officials, that organized labor is better qualified to speak for agriculture than farmers or certain farm organizations. Furthermore, they are not in agreement with those who advocate the need for farmers to join hands with labor in a trade to get certain legislative strength. I believe if this was done farm people will soon find they have traded too much for too little. Perhaps the real purpose behind such a move is to pave the way for a farm-labor political party.

We certainly would not deny labor the right to organize and represent their people. However, farmers should have and retain the same privilege and not permit their organizations to be swallowed up by other groups.

We would call your attention to the dairy industry, one of the bright spots in agriculture today, and the progress they are making with a self-help program. Stocks of dairy products held by CCC have been greatly reduced this past year. The entire dairy products industry is to be highly commended as being one group who recognizes there is real need of finding and developing markets for their product. Don't destroy this effort by dragging the industry back into a high price-support program.

The farm program seems to be considered by some a very potent political football, which in true fashion may be carried or kicked, depending on the political quarterback's decision as to which will put their team in the best position to win. So long as this attitude exists it will be quite difficult to develop a sound program for agriculture or to keep one after it is developed.

We must constantly remind ourselves and our people that markets provide the only real outlet for production. May we all use every means within reason to find and develop those markets.

May I say in closing, Farm Bureau has constantly tried very hard to develop and propose to the Congress a sound program, one that would be fair and just to all the people in this great Nation of ours. I sincerely hope our membership will never depart from this practice. We appreciate this opportunity and thank you kindly for your attention. The CHAIRMAN. Mr. Fuqua.

STATEMENT OF FLOYD FUQUA, MASTER, OKLAHOMA STATE

GRANGE, NARDIN, OKLA. Mr. FUQUA. My name is Floyd Fuqua, and I am representing the Oklahoma State Grange, and if it is your desire I will also file my statement. I would like to make some comment, however.

The CHAIRMAN. Let us have your ideas and forget about the paper you have. Let's hear your individual ideas, if you desire to express them as a farmer.

Mr. FUQUA. I am a wheat farmer, I live in wheat country. I have only 60 acres. I used to farm about a hundred acres of wheat but the allotment cut me down to about 60. I don't think high rigid supports we have or flexible supports are the answer to the problems. I would like the domestic plan or some people call it the two-price system Of course you all recognize that is a problem.

The CHAIRMAN. Is that the two-price system advocated by the Grange?

Mr. Fuqua. Yes. The CHAIRMAN. We have testimony on that already. Mr. FUQUA. I thought you did have. The CHAIRMAN. Aything else you would like to add ? Mr. FUQUA. I would like to mention that the speaker on grain sorghums went into quite detail. With this two-price system on wheat I think the figures show since we have had acreage allotment that the amount of feed grains, oats, barley, and grain sorghums has increased a lot from the diverted acres, more so than if the same acres had been put into wheat and used for feed purposes alone.

It seems like the result is to increase total feed tonnage rather than decrease it. If the two-price system was put into effect that would probably have a great change on this feed which would include grain sorghums.

The CHAIRMAN. If we have a two-price system, do you advocata no controls on acreage at all?

Mr. FUQUA. That would be the way the plan is to work but with the huge surpluses we have in storage at the present time it might be necessary to have controls of some sort.

The CHAIRMAN. As a committee I think most members have already indicated that problem No. 1 is to find some way to get rid of the present surpluses so that any program we submit will work. In other words, it would be impossible for a program to work unless you were able to set that surplus aside and take it out of circulation so it wouldn't be dangling over the market and thereby depressing it. You agree that is the first thing to do? Mr. FUQUA. Yes. The CHAIRMAN. Do you have any idea how to dispose of it? Mr. FUQUA. I don't believe so. The CHAIRMAN. Any questions?

Senator THYE. Mr. Fuqua, you believe, as possibly many of us do, that we have too many acres under cultivation in the United States? Mr. Fuqua. Well, that may be a kind of hard

Senator THYE. It is a certainty. We have produced more food and fiber than we are able to domestically consume, and we haven't found a foreign market that would take the excess. Therefore, we do have a surplus.

So if we get our surplus down we will have to do it by controlling the number of acres planted, will we not?

Mr. FUQUA. Yes.

Senator THYE. Then would you believe that a program of paying a rental for the idle or diverted acres would be a reasonable program?

Mr. FUQUA, I think it has merit, yes.

Senator THYE. How much do you believe we would need to pay in this particular area as a compensation for idle acres?

Mr. FUQUA. I haven't given that much thought. That would be a good question.

Senator THYE. We are trying to get the answers. What does land rent for in this particular area, not necessarily your community, but in your general area?

Mr. FUQUA. Frankly, in my neighborhood I know of no land that is cash rented.

Senator THYE. It is on a crop-shared basis?
Mr. FUQUA. Yes, pastureland is rented.
Senator THYE. What do they pay for pastureland ?
Mr. FUQUA. That varies from community to community. From
about three to as high as fifteen hundred dollars an acre.

Senator THYE. How much?
Mr. FUQUA. A half section.
Senator THYE. $1,500 a year for a half section?
Mr. FUQUA. Yes.
Senator THYE. That would not be native grass?
Mr. FUQUA. Yes, native grass.
Senator THYE. $1,500 a half section?
Mr. FUQUA. Yes.
Senator THYE. That is all.

Senator SCHOEPPEL. Do I understand that if you go to the twoprice system you would want to see some payment in addition to that for the idle acreage, or would you want to stand on the two-price system as such ?

Mr. FUQUA. Well, the two-price system, like I say, we would like to see it work without acreage controls, and it should if it wasn't for the surpluses,

Senator SCHOEPPEL. I will agree with you that your surplus situation is what would give you difficulty in the two-price system until those surpluses were worked off. Mr. FUQUA. Yes.

Senator SCHOEPPEL. Now if you got 90 percent of parity or up on all of your percentage of the wheat, for instance, that was produced and consumed in the United States, then you could go to the world market, as I understand you are advocating under the two-price system, and sell it on the world market for whatever price it brings? Mr. FUQUA. Yes.

Senator SCHOEPPEL. Would you then want, in addition to that, some payment for the diverted acres that you would have to comply with during the time you were reducing these surpluses? Mr. FUQUA. I wouldn't advocate it. Senator SCHOEPPEL. I wanted to be sure about that. Thank you, sir. (Mr. Fuqua's prepared statement follows:) Mr. Chairman and members of the committee, my name is Floyd Fuqua. I live in Kay County and operate a farm of 280 acres, almost half of which is in pastureland. I try to diversify my crops to balance with a livestock operation. I am master of the Oklahoma State Grange and am appearing here as a representative of that organization, which is composed of 42 subordinate granges. We are grateful for the opportunity of appearing before your committee and discuss some of the current farm issues. Our State grange convention was held the last week of October. We did not have many major changes in our policies this year but did reaffirm many previous resolutions.

First I would like to say one of the objectives that the Grange has always sought for agriculture is freedom of farmers to operate their farms with a minimum of restriction or control by Government.

Agriculture has made great progress in the field of production, but distribution and marketing have not kept pace with this production. While production research must continue, added research in distribution and marketing is badly needed.

We realize that there are almost as many problems facing agriculture as there are farm commodities. What will work successfully for one product may not work for another. As a great number of our grange members are wheat farmers that is one of the issues that we are vitally interested in. Although farmers continue to vote favorable for the marketing quotas, I have yet to hear anyone say that they thought the present program was the answer to our problem of surpluses. I will admit that there is not much choice when it comes to voting for quotas, but yet a favorable vote seems to give some people, especially nonfarmers, the idea that farmers are satisfied with the present program.

Most figures show that we would only need about 19 million acres of wheat to meet our needs with our present surpluses in storage. Since the minimum acreage set by Congress is 55 million acres, it appears that our surpluses will continue to rise under the present setup. The present program of price support is called flexible. I am afraid that it will not be too flexible. For the most part it looks just as rigid as the high rigid 90 percent program, it will be rigid at 75 percent of parity. About all the difference that has been made in changing from high rigid to flexible supports is to lower the farmers' income. Some people say we must wait, that flexible supports will solve our problems in time. It appears to me we have already waited too long to take a realistic view of the situation.

Our state grane in its recent convention passed a resolution favoring the Gomestic parity plan, or as some call it, the two-price plan for wheat. I am sure that you are all acquainted with this domestic parity plan so I will not go into discussion of how it would work but will say that we believe that it would be a great improvement over our present program and we would like very much for it to be given a trial. I know that this domestic plan has had lots of opposition from the corn farmers bceause they felt that too much wheat would go into feed. Actually the present program has hurt the corn farmer more than the domestic plan would. In 1954 we produced approximately 37 percent more feed on acres diverted from wheat than would have been produced if the same acres had been used for feed wheat production. Feed grain tonnage in the form of oats, barley, and grain sorghums in 1955 on the land taken out of wheat will be over 50 percent greater than if the acreage had remained in wheat. Thus as acreage is taken out of wheat, which is required under the present program, it actually results in increasing the total supply of feed grains. Whereas, increases in wheat acreage decreases total feed grain supplies even if all the wheat produced on the increased acreage is used for livestock feed.

If we are to continue under the flexible or rigid support program, we would favor the allotment by bushels rather than by acres. Under the present program farmers have been forced to cut their acreage, but I don't know of any that tried to cut the number of bushels produced. By using fertilizer and soil building practices, many are producing almost as many bushels as they did formerly on all their acreage. We also feel that the small diversified farmer should be given more consideration. According to the statistics that I read 80 percent of the farmers only produce 20 percent of our wheat, or 20 percent of our farmers produce 80 percent. Many of these farmers that make up the 80 percent that are producing only 20 percent of our wheat are efficient farmers that have followed strict soil building and soil conservation practices. A good number of these have been hurt due to the fact that they have to take a big percentage cut in their acreage after having already voluntarily cut down.

The CHAIRMAN. Mr. Duffy.

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STATEMENT OF HOMER DUFFY, PRESIDENT, OKLAHOMA FARMERS

UNION, OKLAHOMA CITY, OKLA. Mr, DUFFY. I am Homer Duffy, president of Oklahoma Farmers Union, and, Mr. Chairman and the committee, I have had the privilege of appearing before this committee many times in Washington and the views of my organizaton are well known to the committee. Since the farmers of Oklahoma who came from 250 miles desire to be heard, and I desire to join with Senator Monroney and the other farm organizations, and just file my statement with the committee.

The CHAIRMAN. Thank you, Mr. Duffy. It will be filed just as though you stated it, sir.

(Mr. Duffy's prepared statement follows:) Mr. Chairman, I appreciate very much the opportunity to appear before your committee and give my views and the views of my neighbors on the question of agricultural price supports. Although I am president of the Oklahoma Farmers Union, I am not addressing your committee in that capacity, as the views and stands of our organization are well known to your committee and to all farmers of Oklahoma. Therefore, my remarks will be made as an individual farmer and will represent the views of my immediate neighbors who are also dirt farmers.

We feel that in agriculture there can be no half-way measures. Either, we as farmers are entitled to and will have a fair share of the national income, or we will be relegated to the status of second-class citizens. For the past 3 years now we have experienced a continual decline in farm income. We have watched the present administration use every power it has to ram through Congress a farm bill which has proved disastrous to me and my neighbors. Agriculture in Oklahoma is already in a serious depression, and whether the Secretary of Agriculture knows it or not, the farmers in Oklahoma do know it. And they know also that corporation incomes are at almost an all time high.

Under Mr. Benson's "sliding scale" flexible price supports, income to farm families in Oklahoma has declined almost one-third since 1952. This decline in our income caused principally by the "sliding scale" price support program has been aggravated by severe droughts which have been all but disregarded by Secretary Benson in providing anything like adequate relief. I would like to state, however, that Oklahoma farmers do appreciate the relief that your committee and the United States Senate literally forced Secretary Benson to give us. But we must respectfully state, Senator, that the relief so given was far from adequate to save many farmers and cattlemen from bankruptcy.

As your committee knows, the price supports on almost all of the basic commodities have been reduced as far as Benson could reduce them under the law. On the nonbasic commodities, he has dropped the price supports almost to the limits. For example, the "sliding scale" slid barley from $1.22 to 94 cents, oats from 78 cents to 61 cents, grain sorghum from $2.38 to $1.78, cottonseed from $67 per ton to $46 per ton, wheat was dropped from 90 percent of parity to 82 percent of parity this past year and to about 75 percent of parity for 1956. I want to respectfully submit, Mr. Chairman, that Oklahoma farmers cannot exist as farmers much longer under this sliding scale imposed upon them by the present administration with considerable assistance from other powerful forces including some of the leaders of some of the major farm organizations.

My neighbors and I must urgently recommend that your committee act favorably upon the restoration of price supports for basic commodities of at least 90 percent of parity; we urge that careful consideration be given to mandatory price supports on many of the so-called nonbasics, and thereby prevent the Secretary of Agriculture from arbitrarily reducing the incomes of producers of such crops. I would like to urge that all commodities be supported by whatever means are available, including production payments, direct purchases, and loans. We recommend also that controls or acreage allotments should be continued on basic crops such as wheat, cotton, corn, etc.

In addition to the program phases mentioned above, we urge the inclusion of a conservation acreage reserve which would work like this: The Secretary of Agriculture would determine each year how many acres of crop and pasture land were needed to produce food and fiber for domestic and export needs.

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