Mr. ADAMS. The three he mentioned would be the only ones left out, which are California, New Mexico, and Arizona. The rest have quite a few individuals that need that help. The CHAIRMAN. As you may know, Senator Schoeppel, if you take, let's say 2 percent, out of the national acreage allotment and give that to small farmers on a certain basis this percentage is taken from all States and it is not all States that have the same number of small farmers. Senator SCHOEPPEL. That is what I understand. The CHAIRMAN. There is where the trouble comes and that is why we received serious opposition from California and New Mexico and they succeeded in getting some of their friends together that caused us to forget about that method of approach. Senator EASTLAND. The arid regions of Texas would oppose it? The CHAIRMAN. The South became divided. We had our majority leaders against us. Of course being majority leader he had a few votes controlled out there where things were equal they voted with him rather than with the southern cotton boys. I am not criticizing him for that but I just thought I would indicate the problems that it poses. You see, Texas, as you know in the western part, grows a lot of cotton on irrigated lands, and you have the same conditions there as prevail in Arizona, California, and New Mexico. Mr. ADAMS. My testimony so far has been for the Agricultural Council of Arkansas. There has been discussion here today about this diverted acreage. We have not had a meeting and discussed this particular item but I have some viewpoints on it I would like to discuss. The first thing, I am for diverting a certain percentage of acres and paying rental on them to the farmer. The CHAIRMAN. You mean on all acres or just diverted acres? Mr. ADAMS. Diverted acres and pay the farmer on productivity of land diverted. The CHAIRMAN. What do you mean by that? Mr. ADAMS. In other words, a piece of land that is submarginalThe CHAIRMAN. You mean what it would not produce? Mr. ADAMS. Yes. Going back, some people talk about this wheat yield we have in our county. The State of Arkansas in 1950 had 31,000 acres of wheat and in 1954 it had 84,000 acres. In 1955 we will have more. Our State average yield is 26 bushels per acre. On this same wheat land we can harvest a wheat crop and come back and plant a crop of soybeans or milo behind it and get two crops off the same land. Senator EASTLAND. What percentage of that wheat acreage is planted in cotton areas? Mr. ADAMS. In my particular locality Senator EASTLAND. I don't mean in your locality. I mean 84,000 acres. Senator EASTLAND. Fifty percent of it is in cotton areas? Mr. ADAMS. That is right. In my particular locality on the Mississippi River wheat produced us more money per acre than any other crop and we were fast growing into that when your controls came on. Senator SCHOEPPEL. Do I understand that previous to these years you did not have a wheat history as such? Mr. ADAMS. Yes, we did. We started growing wheat in 1950. Mr. ADAMS. That is when it started, about that time, in 1951. We did it for two reasons. One was because of the money item and next was shortage of labor we had and wheat we can make it produce and harvest it with much less labor. Senator SCHOEPPEL. Could you give me the potential wheat acreage increases on adaptable land, even though it has to be a projected figure, but some figure, if you have it, for the next 5 years? Mr. ADAMS. No, I couldn't give it to you because our land, I imagine we would have probably 200,000 acres or more to put in wheat in that valley. Senator YOUNG. Are you in a commercial area? Mr. ADAMS. Yes, sir. Senator YOUNG. How did you get this increase in acreage, small pieces of less than 15 acres? Mr. ADAMS. Support price is $1.64, I believe. Maybe $1.62. Mr. ADAMS. I didn't think-I might be mistaken. I should know it offhand, but I do not know it. Senator YOUNG. What is your cash price? Mr. ADAMS. We sold our wheat because most of it did not, allotments didn't go into the loan, we sold it from $1.68 to $2.02 a bushel. We have a good grade of wheat, the mills think. Senator YOUNG. If it is a good grade of wheat it will sell for more than $1.68. Mr. ADAMS. When we sold it Senator YOUNG. Wheat in Minneapolis, practically all of it, spring wheat is selling at $2.30 to $2.45. Mr. ADAMS. You have a different freight rate. Most of our wheat went for export, shipped to New Orleans. Senator YOUNG. You are a lot closer to markets than we are. You are closer to the cheap Mississippi River shipping and closer to the New York area, the big consuming areas. Mr. ADAMS. Close to the mills. Senator YOUNG. We have to ship this east, on the railroads and Great Lakes; we are a long way from the Great Lakes. Mr. ADAMS. We have no mills close. Senator YOUNG. The point I make is that if it were a good grade milling wheat it would be selling for more than $2 a bushel. Senator SCHOEPPEL. What variety of wheat do you raise and what is the average protein content? Mr. ADAMS. I have 75 acres of wheat myself. That is how much wheat I have. I buy seed from Coker, a Coker breed of wheat; it is soft winter wheat. Senator EASTLAND. No. 2 Red grade? Mr. ADAMS. Yes, sir. Senator YOUNG. Your acreage isn't much more than-you had 32,000 acres in 1954 and 54,000 acres average from 1928 through 1937. Mr. ADAMS. 1945 we had 65,000 acres planted, 39 harvested. Senator YOUNG. In 1953 you had 83,000 acres, 83,000 harvested, as against 63,000 this year. Mr. ADAMS. If you look at the right, the yield jumped, wheat changed its location. That wheat was grown in western Arkansas and in the mountains at that time, and it had a very low yield. This wheat moved into alluvial land and the yield jumped. Senator YOUNG. And new varieties which are big yielders and poor quality. We could do the same thing and will if the Department of Agriculture keeps on providing the same level of price support for poor as for top quality. Mr. ADAMS. The Senator from Kansas asked about milo. My average in the county is 3,000 pounds per acre on milo. We had one particular person, a vocational teacher, that produced an average of 80,300 pounds on 3 acres. He fertilized it and irrigated it. We can also produce milo. Going back to what I call the soil-fertility bank, I think we should have, the first 3 acres should have, regardless of what productivity of land is, it should give a high rental, say, $25, $15, and $10. My reason is to take care of these small growers, small farmers and in place of what you were talking about, a guaranty on so many bushels or so many bales, put it on 3 or 4 or 5 acres, pay a high rental on that particular land to retire it. That has been my way of thinking. You referred to it a while ago, about high price for the first thousand bushels of wheat and second and third thousand. That is my way of giving them payment on this diverted land for 3 or 4 or 5 acres to compensate those small growers. The CHAIRMAN. Anything else? Mr. ADAMS. That is all. Thank you very much, and I appreciate the opportunity to appear before you, and it is nice of you to come down to the grassroots and see us. The CHAIRMAN. Thank you. (Mr. Adams' prepared statement follows:) My name is Charles Adams. I am a farmer from Hughes, Ark., and am president of the Agricultural Council of Arkansas. The council is a nonprofit organization concerned with the economic welfare of farmer interests as a whole; with respect to cotton, it is a member of American Cotton Producer Associates and participated in the many formal and informal meetings that resulted in the testimony presented by that organization here today. These remarks will be in addition to and in support of such testimony. We appreciate the opportunity to personally appear before this committee and attempts to visualize, as it appears to us, a foreboding picture of the cotton industry as a whole in the United States unless immediate and drastic steps are taken to promote and protect the merchandising of raw cotton and cotton textiles both in foreign markets and here on the homefront. It is absolutely imperative that this Nation maintain an economically sound farm population in order to produce needed food and fiber for a rapidly expanding peacetime population and without which it would not be possible to maintain our Armed Forces or win a war. This cannot be done if continued reduction in acres planted to basic crops so reduces the income of our farm population that a large percentage are forced to seek employment in other lines of endeavor. Arkansas, like a great many other States outside the industrial areas, depends to a great extent on its income from agriculture. This means not only farmers but the merchant, the banker, the lawyer, the doctor, the tax collector, and our State, and local governments. The total value of principal crops produced in Arkansas in 1954 amounted to $397 million dollars. Of this amount cotton was responsible for $260,868,000. Rice, the acreage of which is also being drastically reduced each year, was second, accounting for $68,853,000. It can therefore be readily seen that further decreases in production of basic crops, especially cotton, could cripple the ability of farm people to produce to an extent that would seriously affect communities, the State and the Nation. We in our State are not only concerned with the immediate reduction in cotton planted acres and our income, but we view with considerable alarm such statements as were made recently by the International Cotton Advisory Com mittee that "cotton production is increasing so rapidly in free-world countries outside the United States that within another 2 or 3 years there may be no necessity to buy American grown cotton." I am sure this alarm will verge on panic when they realize a large percentage of this cotton is destined for shipment to the United States in the form of sheets, towels, dress goods, shirts, and gray cloth which our finishers will convert into a thousand and one specialty items. Gentlemen, we have been told upon good authority, and presented with facts and figures in confirmation, that cotton textile finishers, brokers, and large chainstore buyers are flocking in great numbers to foreign countries to purchase finished cotton apparel and unfinished cloth at a price with which domestic mills cannot compete. This is being accomplished before officials of our Government can be shaken from their lethargy sufficiently to take some action to salvage what there is left of our foreign trade and protect both the cotton producer and his best customer-the domestic mills-from permanent disaster. This is one time when the American cotton farmer and our domestic mills are in the same leaky boat and if someone doesn't start bailing, as of now, it's going to sink with all aboard. The International Cotton Advisory Committee reports an alltime record production of 17 million bales of cotton in the free world outside the United States for the 1955-56 season. This total combined with an estimated American production of 14.8 million bales constitutes a single year's record production. While the United States cotton surplus is the highest in the Nation's history, no effort is being made by the Department of Agriculture or the administration to sell surplus cotton from the Government-owned stocks competitively in the foreign market, which it has full authority to do. Regardless of where the fault lies for the accumulation of these stocks, the Secretary cannot deny that he has it within his power to relieve the situation and preserve what is left of our historical share of the foreign market. He cannot blame cotton farmers because they have voluntarily voted each year since the surplus accumulated to drastically reduce their planted acres. Mr. Chairman, we as cotton farmers are principally interested in continuing to grow cotton, which is our livelihood. If there were other cash crops which are not also in surplus supply to which we could turn, it might be a different story. We might acquiesce to the one-world planners who evidently feel that the American cotton farmer and the industry as a whole is expendable. As we see it, the following axioms are self-evident: (1) The American cotton farmer cannot produce cotton as cheaply as foreign countries. The reasons are readily apparent. His investment in land, machinery and equipment is still steadily increasing. Labor and the cost of fertilizer, insecticides, machinery, and so forth, all of which are governed by laws and administrative regulations, are set at a level above the rest of the free world and show no signs of declining. (2) While the American cotton farmer cannot continue to grow cotton to be sold at a market price below cost of production, we are also quite certain that he will not continue to be supported by a loan from any source, at any level, unless it can be moved into a market, either domestic or foreign. A situation of this kind would of course mean that the United States would be unable to compete with foreign cotton producers and be forced to discontinue the production of a commodity the importance of which in times of war has been credited with being second only to steel. (3) The only customers to which the American cotton producer can look are (a) domestic mills; and (b) foreign mills. The intermediate allied interests such as the banker, gins, merchants, compresses and oil mills are essential only to the extent of consumption by domestic and foreign mills who in turn must have a consumer market. First, let us consider the foreign mills as customers. Japan alone now has one-fourth of the total world trade in cotton goods, is buying 3 out of every 5 bales of her cotton requirements outside of the United States, and is continuing to expand. The Toyoda Co. of Japan recently completed a 50 million peso plant in Mexico for the manufacture of looms, spindles, and other textile equipment. We are told that favorable factors in the foreign-marketing picture are expanded purchasing power abroad and increased foreign consumption levels. However, the value of American cotton exported in the July to September period of this year was only 35 percent as large as a year ago. It is apparent that as foreign countries manufacturing cotton textiles are in an economic position to do so, their purchases of American raw cotton due to price competition, trade agreements and discrimination are becoming less and less until as predicted by the International Cotton Advisory Committee there will be no American cotton purchased. In the past cotton farmers have been under the inpression that regardless of the amount of raw cotton exported we could always depend on a fairly consistent market to United States mills for domestic consumption. We, of course, overlooked the fact that while there are import quotas on raw cotton there are none on manufactured cotton, wearing apparel and fabrics. We were astounded to learn that while Japan exported 12.8 million yards of cotton textiles to the United States in 1951, it had increased to 68.7 million yards by 1954 and a preliminary estimate based on the first 5 months of 1955 indicate 128.9 million yards for this year. As a matter of fact, the Japanese Ministry of International Trade and Industry has reported that in August 1955 it validated orders for future delivery in the United States totaling 52 million square yards of cloth. These figures are for yard goods only and do not include towels, sheets, apparel, and so forth. As we stated previously, we have been informed that American buyers are flocking to buy foreign manufactured cotton apparel and unfinished cloth, some of which is finished in this country and sold domestically and exported under American trade labels. The American cotton producer and all the allied interests involved in the entire cotton industry in the United States are not only in grave danger of losing their entire foreign market but a large percentage of their domestic market. This would be a national calamity. All of which, as we see it, has been brought on by administrative failure to shoulder responsibility and use the authority with which it is vested to save this most important segment of our economy before it is too late. There has been too much talk about long-range programs and not enough action to accomplish what is needed to be done now. Any merchant with a large surplus of any one commodity knows what to do. He holds a sale and moves it. When the pasture gate is open and cattle are escaping to the hills, does a smart farmer close the gate or start talking about building a new barn? In our opinion the first step in an attempt to salvage an already deplorable condition is for the Congress to direct the administration to use its authority to sell CCC-owned cotton competitively on the foreign market. This must be done without delay or it will be too late. We believe that the domestic market for American cotton producers should be reasonably assured by import quotas on cotton apparel and cloth produced from lower priced raw cotton and cheap foreign labor. And, that American mills should be permitted to purchase at competitive world prices from CCC an amount of raw cotton equivalent to their exports of textiles to foreign countries. We have been told by mill executives that certain grades and staples of cotton are going into the loan, for which there is no demand. We, therefore, recommend that the loan basis should be adjusted to discourage and penalize the continued growth of cotton for which there is no market. This organization has always been opposed to the sliding scale or flexible support price for cotton. Experience has taught us that the only way to control production of cotton is through allotments and marketing quotas. Regarding the loan or support price for cotton, we feel that if the CCC will sell competitively on the foreign market it will soon set a pattern with respect to foreign market prices, which, combined with the economic balance between cotton and synthetics on the domestic market, will enable cotton producers to weigh and balance production costs against a possible dual price market. We feel that this can only be done after the effects of a trial run by CCC selling competitively abroad. It is quite possible that the result of such a trial run might indicate the feasibility of a dual price system which, combined with acreage controls, might result in a large percentage of the crop moving through normal trade channels. The CHAIRMAN. At this point I will place in the record a statement of the Hon. Dave L. Pearce, Commissioner of Agriculture for the State of Louisiana, Baton Rouge, La. (Mr. Pearce's prepared statement follows:) Under present day federally controlled farm programs, Louisiana farmers are fast having their rights to produce a volume of cotton, rice, sugar, and tung nuts for which we have the productivity and know-how taken away from them. As long as farm costs continue to rise as a result of spiraling increases granted various segments of labor and industry, some resultant of national legislation, |