majority of the people in this section would prefer to be in position to continue to grow cotton. Senator YOUNG. If you weren't growing wheat were you growing soybeans or some other commodity that is in surplus on your diverted acres, such as corn? Mr. GILFOIL. We have been growing soybeans for many years. Senator YOUNG. What are you planting on your diverted acres? Mr. GILFOIL. My operation is based principally on cotton, soybeans, and small grains and corn and oats, some pasture. Senator YOUNG. When you grow small grains, is that in competition to wheat in the north? Mr. GILFOIL. Yes; I suppose it is. Senator YOUNG. I want to say how fortunate you are down here to have so many crops supported at 90 percent or near 90 percent of parity. In my own State on wheat we get 76 percent for wheat and we have had to cut our acreage one-third. Our next highest supported crop is dairy commodities, supported at 75 percent. The others are way down below that. We have a real problem there. Let me ask you this: The Iowa Farm Bureau Federation president proposed a soil bank whereby farmers would be paid something to put part of their diverted acres into a soil-conserving or soil-building procedure. Would you favor that? Mr. GILFOIL. I would say that the plan is probably worthy of study and should be studied. Senator YOUNG. Do you think it would be fair for you people down here to take part of your diverted acres and put it under soil-building and soil-conserving programs? Mr. GILFOIL. In most cases we are doing that now. Senator YOUNG. You wouldn't oppose a program like that if you were given an incentive payment to do so? Mr. GILFOIL. That would depend on a great many things. I wouldn't want to give you that answer now. Senator YOUNG. I hope you will seriously think this over because our overall production in the United States is at an all-time high this year and we can't keep on as we are. I thought this proposal to take part of the land out of production and put it into a soil-conserving program has more merit than anything that had been proposed so far. I hope you give it serious consideration. Mr. GILFOIL. I would like to say something here, that it appears to me all this conversation we have had the last minutes has been going against what I had always understood was an economic law, but it apparently isn't anywhere, got overruled somewhere along the line. I had always thought that production was wealth and that ability to produce and the goods therefrom were the only real wealth. It seems to me that the problem is not so much the problem of overproduction. The problem is finding a market for that which we do produce. I think that is your total overall problem. That is a problem for you gentlemen, for the Congress, the executive department in this Nation to solve. I don't think any of us can say that we have a problem overproduction in the world as a whole. Certainly the people of the world are not too well fed or too well clothed. The problem is therefore to get use of what we produce. Senator EASTLAND. Let me ask you this question: As a farmer now, we are talking about diverted acreage, I want you to answer it from your own experience and that of your neighbors in Louisiana. If you didn't get income from diverted acreage, could you continue to farm with just revenue from your cotton land? Mr. GILFOIL. No, sir. I will be glad to explain why. Senator EASTLAND. All right. Mr. GILFOIL. I believe Senator Young awhile ago was talking about the total plant and whether the plant was too large. Of course I am sure we all understand it takes quite a great deal of time to build up a plant. For instance, I have a great deal of equipment, all farmers do, that they bought a good many years ago anticipating they would use this equipment to produce crops. They can't liquidate that like that. You can't change from a small plant to a big plant and back again at a moment's notice. Senator YOUNG. To continue with present production rates, raising surpluses we can't get rid of will break a farmer, too, will it not? Mr. GILFOIL. Yes, sir; but as I said just now, the essential problem is to find markets for this production. Senator EASTLAND. Doesn't it get down to this: That there is the opportunity to expand the market for cotton and to increase cotton acreage and if you got justice from the Government in exporting cotton and if we would compete with synthetic fibers wouldn't that go a long way to cure the wheat situation and soybean situation? Mr. GILFOIL. Yes, sir. Senator EASTLAND. In other words, let a cotton farmer grow cotton. Mr. GILFOIL. That is what he wants to do. Senator YOUNG. I agree with you, we want to keep these cotton producers in the business of producing cotton. I am all for you. The CHAIRMAN. Of course there is the other angle. We have heard from many sources that our programs have cost a lot, many columnists and people not in the farming business have made the farmer a whipping boy. If we are to follow the suggestion you have made, Mr. Gilfoil, or the council has made, as I pointed out, under the scheme suggested it would cost the Federal Treasury a little over $200 million per year. The question that confronts us here is whether or not you could get Congress to appropriate such a sum each year when under the present program the only basic crop that has shown a profit is cotton. I have the figures here before me which show that as of June 30, 1955, the Treasury has been enriched by $267 million on past programs in cotton, the lint itself. Mr. GILFOIL. I think your cost figures probably do not reflect the true picture. You understand that if such a program were in effect and, say, total cost of exportation was that, you would have to make that less storage charges that you would otherwise incur. The CHAIRMAN. I understand all that, but still the storage charge is a cost too. Mr. GILFOIL. Yes; that should be deducted to some extent. The CHAIRMAN. It wouldn't be too far from $200 million if we were to carry the program as Mr. Cortright indicated and to which you agreed. Mr. GILFOIL. Yes, sir. Senator EASTLAND. We have got a surplus of 13 million bales of cotton and will have at the end of this cotton year, won't we? Mr. GILFOIL. Yes, or more. Senator EASTLAND. It is generally recognized the Secretary will fix a support price of about 82 to 84 percent of parity. Mr. GILFOIL. I don't know, sir. I would think ordinarily so, but I read some reports in the papers that said not. I don't know. Senator EASTLAND. In other words, your recommendation there at a 32 percent discount in price domestically, isn't that going to reduce the value of this 13 million bales of cotton about $17.50 a bale? Mr. GILFOIL. Yes, sir. Senator EASTLAND. In other words, there is an initial loss in the government on the 13-million bale carryover we have got at whatever, if the Secretary sets it at 5 cents under present support prices, then the Government has lost $25 a bale on 13 million bales; has it not? Mr. GILFOIL. Yes. The CHAIRMAN. Will you proceed? We would like to hear other witnesses. This is very interesting. Mr. GILFOIL. I have been away from this so long, but on page 11: The Soil Conservation Service calculates that in our Louisiana Delta Council area the total land available for agricultural use comprises 3,466,178 acres. Of this amount, 62-4 percent is presently in woodlands. Acreage which could be profitably cleared in the next 5 to 10 years is estimated at 108,000 acres. Continued adverse economic conditions will obviously retard the development of such land into efficient agricultural producing units. 5. We recommend that a 1 percent national acreage reserve for aiding small-farm hardship cases be set up in addition to the national cotton acreage allotment. 6. We urge the Secretary of Agriculture Benson announce the 1956 cotton price-support level sufficiently in advance of the marketing quota referendum on December 13 to permit farming to more accurately evaluate their situation. 7. We urge that the Department of Agriculture start research at once to determine the competitive position of United States cotton and foreign cotton; the competitive position of United States cotton and synthetics, both domestic and foreign; and the price relationship in principal end uses. 8. We recommend an expanded program of research emphasizing new crops, new uses for farm crops, lower costs of production, marketing methods and expansion of markets. 9. We urge expansion of our rural development program for lowincome families. 10. We also recommend that our technical assistance program should not encourage the foreign production of any crops in world surplus supply and on which acreage restrictions apply in the United States. We respectfully urge the earnest consideration of our above recommendations by the Senate Committee on Agriculture and Forestry. I should like to express my appreciation for the privilege of appearing before this committee. Please accept the thanks of the Louisiana Delta Council for this opportunity to present our views to the Congress. The CHAIRMAN. Thank you, Mr. Gilfoil. (Mr. Gilfoil's prepared statement follows:) My name is James H. Gilfoil. I am a farmer from Lake Providence, East Carroll Parish, La., primarily interested in the growing of cotton. I am appearing before you representing the Louisiana Delta Council. As a member of the American Cotton Producer Associates, our organization endorses the recommendations and views previously presented to you by Mr. G. C. Cortright, Jr., for the group. Louisiana Delta Council is an economic federation of the people of the northeast Louisiana delta region. We represent the common interests of agriculture, industry, education, forestry, and research. The territory served consists of 11 parishes (counties) comprising an area bounded on the north by the State of Arkansas, situated between the Ouachita and Mississippi Rivers and extending southward to the parishes of Concordia and Catahoula. The income of our area containing 279,000 people is primarily derived from agricultural sources, principally cotton. There are approximately 13,000 cotton farms in our section. They received about 44 percent (283,243 acres) of the total 1955 State cotton acreage allotment. The following figures illustrate the drastic acreage reduction under allotment programs for Louisiana farms during the last 4 years in which cotton plantings were restricted: 1950-876,350 acres 1954 750,400 acres In 1951 the gross value of the Louisiana cotton lint and cottonseed was $214,946,000. In 1954 it amounted to $175,436,000, a decrease of $39,510,000. In 1954 cotton dropped to 28 percent of the State's gross farm income.1 We maintain vigorously that there exists today a grave public misconception that the present surplus is practically solely due as a result of the operation of our price-support programs. This erroneous view constitutes a direct and constant threat to the financial well-being of our farmers. We contend sincerely that the present surplus situation and attendant ills exist as a result of a combination of several other major factors also. These include the recent responses of farmers to wartime demands; failure to offer to sell our products competitively in world markets; the existing uncertainty of world affairs; increased technological development on our farms resulting in increased production and foreign agricultural expansion promoted by the United States. If the present trend continues, by 1960 the potential farm vote will be less than 10 percent of the total vote. In 1940 about 20 percent of all people of voting age lived on farms. Today it is 12 percent.2 Today, only about 22.2 million people are on farms compared with 30.5 million 15 years ago. The proportion to total population showed an even greater decrease from 23.1 percent in 1940 to an estimated 13.4 percent in 1955.2 Louisiana's population growth of 27.7 percent in two decades (1930-50) exceeded the national increase of 22.7 percent, but the movement from farm to nonfarm pursuits in the State were much more emphatic than those in the remainder of the Nation. In 1930, 39.3 percent of Louisiana's people lived on farms; by 1950 that proportion was cut almost in half to 21.2 percent.3 In 1910 the farmer's share of the national income was 16 percent. By 1940 it had dropped to 8.1 percent. The estimate for 1955 is only 5.5 percent.' Back in 1947, American farm income was $17 billion. Last year, farm income was $12 billion. This year, it will be even less. The annual rate of farm income during the first 9 months of 1955 was $10.2 billion. This is the lowest level since 1942, when it was $8.8 billion. This was reported recently by the President's Council of Economic Advisers-highest economic authority in the Government." It's plain to see that farmers aren't sharing equally in the bounding prosperity that has touched most other elements of the economy. Farm people had an average income per person of $907 last year nonfarm average income was $1,831. Farm per capita income has risen 15 percent since 1947, but nonfarm average income has gone up just twice as fast. 1 Louisiana Agricultural Extension Service, September 26, 1955. 2 Mid-South Cotton News, October 1955. Louisiana Business Bulletin, LSU, July 1954. 4 Congressman Otto Passman, news release, October 20, 1955. 6 National Agricultural Research, Inc., Washington, D. C., October 24, 1955. • Farm Journal, November 1955. 1952 agricultural income, including both wages paid by agricultural enterprises and returns to farm operators, made up less than 10 percent of Louisiana's income and only 6.7 percent of national income." Among forces which will mold the future of Louisiana's farm people will be market forces as they affect the price levels of the products that are produced within the State. These market forces will be influenced by the dynamics of national population, by imports and exports of farm products, and by the prosperity of the Nation's total economy. The plight of American farmers in this competitive economy of ours is puzzling indeed. As farm production efficiency increases, surpluses grow and prices are impaired. Farm prices, like all commodity prices, hit an all-time high in 1951. But since that time they have declined steadily while nonfarm prices have remained firm or increased. We United States farmers-the world's largest exporters of agricultural commodities-hit our peak volume of foreign sales during 1951-$4 billion. The volume was $3 billion in 1954.8 Twelve cents of every dollar earned by the United States farmer comes from the sale of farm products overseas. One acre of every 10 of our farmland is producing for export. But this overall figure fails to reveal the virtual dependence of some crops on export markets. In 1952 we exported over one-half of our rice crop, two-fifths of our wheat, and one-fourth of all tobacco and cotton grown in the United States. Exports are also very important for soybeans and grain sorghum." Two conclusions seem obvious from this brief background of the American farmer: First, the farmer is already heavily dependent upon sales of his commodities to foreign customers for a substantial portion of his income; secondly, he is going to have to greatly expand his foreign markets if increasing stockpiles of surplus commodities are to be diminished. Fortunately the farmer shares with American industry a vast potential for greater sales abroad. Three commodities alone-cotton, grain, and tobaccoaccount for two-thirds of our dollar volume of exports. Five countries receive more than half of our exports (Japan, United Kingdom, Canada, West Germany, and the Netherlands)." The Agricultural Trade Development Act is an aggressive effort to develop additional foreign markets for farm surpluses. Twenty-one agreements with 17 countries during the first 10 months of the program yielded contracts for the disposition of $468 million in surplus products. This amounted to two-thirds of the program's original 3-year goal. Encouraged by accomplishing in less than a year two-thirds of what was planned for 3 years, Congress doubled the goal at the last session. The Commodity Credit Corporation is authorized to dispose of $1.5 billion in surplus farm products." Continuous, dependable access to the newly found markets established under the Trade Development Act is vital to the American farmer. Our present and future prosperity depend on it. Without access to these markets, the farm surplus disposal proram will only serve to create new markets for farmers in other parts of the world. Jobs, prices, production, personal income, spending, and especially domestic purchases of farm products, are affected by the volume of export-import trade. The International Cotton Advisory Committee, an intergovernmental organization of 32 cotton producing and consuming countries, on October 22 reported that cotton production is increasing so rapidly in the free world outside the United States that within another 2 or 3 years there may be no necessity to buy United States-grown cotton. Free world production outside the United States has increased every year since 1947-48 and has almost doubled over this period.10 No one in this country likes the idea of United States cotton being grown for domestic consumption only. Historically, it is an export crop. Loss of foreign markets for cotton is already keenly felt by both the farmer and the shipper. The result of the announcement is to make the American cotton farmer and other elements in the industry more than ever determined to regain lost markets abroad. The first step toward this objective should be renewed and concentrated efforts to expand the program for the sale of surplus cotton abroad at competitive prices." Louisiana Business Bulletin, LSU, July 1954. 8 Mississippi Valley Association, October 10, 1955. Mississippi Valley Association, October 10, 1955. 10 Cotton, ICAC, October 1955. Cotton Trade Journal, October 28, 1955. |