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Crop land left over would be declared the Nation's “acreage reserve.” Farmers could contract with the Federal Government to lease their unneeded acreage to the Government, recognizing that the farmers would adopt maximum conservation practices on the land so idled. The Government would match the going cash rent on the farmer's acreage reserve.
As a part of the overall price-support program, adequate credit at lower interest rates must also be made available to farm people. The tight credit at ruinous rates now imposed by Secretary Benson makes credit through the usual Government sources almost as inaccessible as regular commercial credit.
To summarize, we urge that your committee report favorably on the repeal of Benson's "sliding scale" and the reenactment of price supports on basics at not less than 90 percent of parity. Two, we recommend that mandatory price supports be written into legislation requiring the Secretary to support prices at 90 percent of parity on many nonbasics, including feed grains, poultry, and dairy products, beef and pork. Three, the establishment of a sound and workable conservation acreage reserve program; and fourth, making available again the kind of credit that should be available and useful to farm families. This report is respectfully submitted by me and my neighbors.
The CHAIRMAN. Mr. Davis? Give your name and your occupation, please.
STATEMENT OF HAROLD DAVIS, PRESIDENT, PONTOTOC COUNTY
FARM BUREAU, ROFF, OKLA. Mr. Davis. Harold Davis, a farmer and rancher in Pontotoc County, Okla.
The CHAIRMAN. Proceed.
Mr. Davis. I have a written statement here that will only take about 7 or 8 minutes, Senator. I think it will bring out what we think will be the solution.
The CHAIRMAN. I would like to ask the witnesses to listen to this man who says he has a solution, and when you testify please don't try to duplicate what he states, but just affirm it or if you find any bugs in it, you can so state. Mr. Davis. I have a little preliminary.
The CHAIRMAN. Yes. I presume you will state the problem to us. We know that problem pretty well, but we will listen to you.
Mr. Davis. I am presently president of the Pontotoc County Farm Bureau, Member of the board of supervisors of the Pontotoc County Soil Conservation District, member of the advisory committee, State farm home administration, producer delegate of the National Cotton Council. I am a former member of the Oklahoma Farm Bureau, State board of directors. For several years vice president and for a few months president of that organization.
This is the month of November. The month in which our forefathers chose to give thanks to their Creator for a bountiful harvest and I think we could likewise follow in their footsteps today. We should be exceptionally thankful that we have the opportunity to come here to this meeting to discuss how to live prosperously in abundance of everything produced from the soil. We should be further thankful that we are living under the system of government where the lawmakers come out to all sections of the country and hold hearings in order to obtain as much information as possible relative to what is best for the most important industry in America today. Learn to live with our know-how.
I am confident there are no farmers here nor anywhere else in America that want something for nothing, but they do want something for something and that is, to be reimbursed for a job well done by producing of the good things of life in the way of agricultural commodities, that this Nation can consume and we are able to export under world-economic conditions.
We, in America, have adopted an economic system which stabilizes or controls most of the prices of goods and services and we are debating here today whether or not this method, enjoyed by other segments of our society, shall also be made available to the producers of agricultural products. Up to the present time, farmers of this Nation have taken their products to town and inquired of the merchant, "what are you going to give me today," and this is the quotation which we must get away from if we are to have agricultural prosperity in peacetime. But unfortunately there are still quite a number of us that want to retain this method, saying that this is an established pattern and that we should not deviate from it but when we look around and see the progress that we have made in all lines of endeavor throughout the United States, we recognize that all advancement had to deviate from an established pattern.
I had the privilege of growing approximately 16,000 bushels of grain in 1932 and yet was unable to have enough net income to pay the taxes on my real estate. Then price supports came into the picture and proved to me conclusively that they are much more desirable than the old established pattern aforementioned.
We have further found that when adequate supplies are available, that the level of price supports also establish the markets. Therefore, it is quite important that supports should remain close to parity and this is the feeling of the majority of voting delegates of the Oklahoma Farm Bureau specifically spelled out the last 3 years. I will leave with the committee resolutions for 1953, 1954, and 1955 which covers the recommendations of the Oklahoma Farm Bureau.
We have two vivid examples today that lower prices to farmers will not reduce supplies. In the case of grain sorghums where the support price of 70 percent of parity, which was announced by the Secretary of Agriculture well ahead of planting time, did not reduce the acreage but we had an all-time high this year. And in the case of hogs, that story is told every day when the markets are reported and a survey shows a further increase in sows this fall.
Most farmers operate on borrowed capital and when they feel that prices are going to be lower, the only way they can meet their commitments is to grow more because, in most instances, they have the equipment to produce and harvest the crops they have been growing. Then, also, profitable alternatives are lacking because everything in the way of agricultural commodities is above the current demand.
I am confident that none of us have given quite a true story to the consumers of agricultural commodities. Just the other day I saw headlines, "One million per day for storage of reserve that we have on hand.” This is not quite true because of the fact that when the commodities are sold by Commodity Credit Corporation, the storage charges are collected.
But let's grant that it is true. What does $1 million a day mean to the average person? Let's get it down so we may have it in shape so that the average person may have a direct comparison; $1 million per day is equivalent to about six-tenths of 1 penny per person, or equal
to one-half of one cigarette. Is this an excessive price to be assured that you will not go hungry?
What is the solution ? To exert all efforts to sell all the agricultural products we can, both at home and abroad at near parity. After this is done we must maintain adequate reserve of storable commodities. Where this reserve needs to be, of course, is debatable but here is one point I want to leave with this committee: That we would be most foolish in America with 165 million people and a threat from an ideology across the pond, foreign to our American way of life, to hold our supplies of storable commodities to the current market demand.
Then we must recognize that any reserve that is held, either in the hands of the Government or in the hands of private speculators, will definitely have a depressing effect on the markets. Therefore, if 87 percent of the people of America other than farmers are being assured of a reserve of food and fiber, then maybe they should be concerned as well about the welfare of the agricultural segment which provides it. After we have determined the reserve necessary, the current demands and probably exports, then of course we must retire and rest a portion of the greatest natural resource of this Nation, the soil. Maybe this is the solution :
Voluntarily take out of production completely the necessary number of acres to bring supply in line with current demand, adequate reserves, and probable exports. Would suggest currently retiring 40 million acres; that is, approximately 10 percent of the total acres in cultivation.
The following are the necessary steps to implement such a plan:
(a) As an incentive to farmers to retire acres, rentals would be paid at a rate of approximately 6 percent per annum of the actual value of the acres retired.
(6) Land would be retired for periods of multiples of 5 years unless such acres are necessary for production in a period of national emergency as directed by the President.
(c) Land retired would be allocated by areas or districts throughout the United States in accordance to the needed reduction of the various crops.
(d) Land retired would be adequately protected by proper soil and water conservation practices.
(e) Acreages to be retired must be determined on a basis of complete fields or entire units as computed by aerial photographs.
(f) Until supply of agricultural commodities is brought into line with demand, a support program of 90 percent of parity will be maintained at the option of the producers of individual crops voting in referendum.
(9) All allotments and marketing quotas on individual crops will be eliminated.
(h) Historical records of land use prior to its retirement will be maintained for computation of allotments in the event such a program is reinstated.
Financing of the plan would be as follows:
(a) A levy of one-half of 1 percent would be made on gross agricultural incomes. This would raise $200 million based on a gross agricultural income of $40 billion which is approximately parity at current prices.
(6) Match this with Federal funds of $200 million.
(c) These funds would be sufficient to pay rentals of $10 per acre on 40 million acres.
Advantages of the plan:
1. This plan will permit the remaining acres to be operated to capacity which would increase efficiency.
2. It would permit farms to shift to other crops in accordance with climatic conditions, supply situations and regular rotation of crops.
3. Producers of all agriculture commodities will benefit, not only basics.
4. Persons most likely to take advantage of the plan to retire acres would be the following:
(a) Farmers eligible to retire under social security.
(c) Farmers still engaged in agriculture who wish to hedge on their operations.
5. The plan would be substantially cheaper to administer than the present plan.
6. The retired acres would constitute a tremendously important reserve of resources for posterity and for national emergency.
Gentlemen, I am grateful for the opportunity to have appeared here today and I am leaving with a feeling of confidence that your committee will have assembled material from all over the United States whereby legislation will be enacted which will permit agriculture to share equally with all segments of general business and where 13 percent of the population engaged in the most important business of America will obtain approximately 13 percent of the national income, rather than 6 percent and be rewarded for a job well done.
The CHAIRMAN. Thank you, Mr. Davis.
Now, as I understood you in the beginning of your statement, you indicated that low prices mean more production.
Mr. Davis. Yes, sir.
The CHAIRMAN. That is because the farmer plants more to meet his debts.
Mr. Davis. That is right.
The CHAIRMAN. You cited some instances there and I wish to place in the record at this point the dairy-product picture.
If you recall, in 1953 Mr. Benson continued 90 percent support prices and for that year the production of milk was 121 billion pounds of milk plus. Ninety percent supports were taken off in 1954 and 1955; and in 1954 the production of milk increased by over 2 billion pounds and 1955 will be the record year in milk production. I just put that in the record as far as it will go to indicate that your premise is correct.
Now, you stated that efforts should be made to dispose of our commodities locally and abroad.
How would you expect more goods to be sold locally? Would it be through private channels or would you expect the Government to undertake that?
Mr. Davis. Perhaps a combination of both, Senator. I think we have some clear demonstrations of self-help programs: National Cotton Council is doing a wonderful job, American Dairy Association is doing a wonderful job.
The CHAIRMAN. In that connection do you not think that the most of that job should be done by those who dispose of these commodities rather than let the Government get into it? Mr. Davis. Yes, sir; I concur in that.
The CHAIRMAN. In respect to sales abroad, you recall that I as chairman of this committee appointed a subcommittee in order to find out whether or not there was any interference by the State Department in selling our surpluses abroad.
Mr. Davis. I believe you found there were.
The CHAIRMAN. I think Senator Young was on that committee and he can speak for the subcommittee; I think the record does reflect the fact that there has been some interference and, as a matter of fact, We have a State Department that seems to take better care of the foreign producers than our own producers here. That was the consensus, I think, of some of the members of that subcommittee. It is really an executive problem. We in Congress couldn't take any steps except maybe on the appropriations committee to deny their salaries or something like that, but we wouldn't want to go that far.
It is really something left in the hands of the executive department, with which we have nothing to do.
Now, you mentioned that on these acres that you set aside, say, the 10 percent, you would have the Government pay to the farmers the equal of 6 percent on the value of their land? Mr. Davis. Yes, sir.
The CHAIRMAN. That would mean in the irrigated areas where you have land set aside and the land cost, let's say, $500, you would also give 6 percent.
Mr. Davis. $30. The CHAIRMAN. $30. Here in Oklahoma where it costs $25, you would give them 6 percent, too. Mr. Davis. On eroded land, yes, that is only worth $25 an acre. The CHAIRMAN. Would you place any limitation on the acreage? Mr. Davis. No, sir; I would not. I would like to make clear the reasoning we have behind that statement.
The CHAIRMAN. I would rather have just a follow-through with what I have in mind.
Mr. Davis. All right.
The CHAIRMAN. In other words, let us suppose a man has 40,000 acres. We have a lot of them-gentlemen farmers who maybe own a bank here in Oklahoma City or in some other places. Would you want to give that man the same compensation on his acreage as the man who works his farm, stays on the farm and gets his livelihood from the farm?
Mr. Davis. Of course the personal feeling is no, but the business angle would say yes.
The CHAIRMAN. When you say business angle, you mean as an investment to him?
Mr. Davis. That is right.
The one thing I want to leave here is that to me I think this is going to assist in helping to retain attractive agricultural units. It will give a young man that is in debt an opportunity to operate to capaciy. The man that is ready to retire, let him retire his entire unit if he so desires, and let the young man or the man in debt, to me I think to protect these smaller attractive units is quite desirable.