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With regard to cotton allotments, our members feel that a basic allotment of 2 acres of cotton per farm is neither economically sound nor practical for any purpose, and would recommend that this minimum be raised to 5 acres, so that the small farmer can use his equipment and mule to advantage.

The CHAIRMAN. That was the law several years ago, but we found the farmers usually shifted to a better paying crop.

Mr. KELLEY. In that respect, any cotton allotments turned back to the ASC be relocated on an impartial basis and such allotments be made public.

With regard to Farmers' Home Administration, the consensus of opinion among our members is that the FHA is of no practical value as now administered to the operating farmer. And in view of surpluses in all farm products we do not see the advisability of the Government bringing into competition with us, new farmers operating under Government subsidy.

Farming to us is a business which must show a profit on investment and less emphasis should be placed on family-sized farms unless such farms are economically sound.

Two practices of FHA have come in for criticism. The first is their practice of charging interest on loans from the date of the Government check, rather than from the date the money is made available to the borrower. Under FHA regulations, the local office has authority to hold up delivery of loan checks for 21 days during which time interest runs against the borrower. This results in a charge to the borrower of an average of $2 per thousand for this period. In the overall operation this will run to two or three hundred thousand dollars annually on appropriated funds, unjustly charged to a class of borrowers least able to pay.

Second, local office personnel are not permitted to give a signed receipt when the loan is paid off in full. The FHA retains lien on mortgaged property for 2 to 3 weeks after the loan is paid.

With regard to farm credit, long-term farm credit is a necessary tool for the farmer's operation, and is generally available to farmers throughout the United States. In Beauregard Parish no such credit is available. The Federal land bank does not operate in this area except on 1936 appraisals which give a maximum appraisal on improved farms of $12 per acre.

The Federal land bank has recently made a survey of the area at the request of our representatives in Congress, the result of which is that they see no reason to change their present practice.

Senator LONG. What do you think the actual per acre value is?

Mr. KELLEY. I have here, which I will leave for the record, a copy of a survey made by the Louisiana State Department of Agriculture that gives an average value of land for Beauregard at $60 an acre.

Senator LONG. The Federal land bank is only loaning on 20 percent of the actual value of the land.

Mr. KELLEY. Average value of that; yes.

We are unable to reconcile these two surveys and request appropriate legislation so that long-term credit become available to farmers in this area who are able to offer adequate security.

Beauregard Parish up to 1945 was cut over pine land. In 1945 the chemical companies came in and have removed up to 75,000 acres of stumps from land. That land, where it has been brought into cul

tivation with proper methods, has yielded good. There is nothing wrong with the land, the climate is good, we have adequate water for irrigation if we need it but due to high cost of operation in farming we do need additional funds to develop that land, but we are asking it only for those farmers who offer security.

Part II: Our discussions led to the conclusion that the farmer's problem today is not only the problem of prices and surpluses, but also a problem of production costs.

Others will no doubt deal with the question of obtaining more money for their products, we decided that we would place the emphasis of our statement upon production costs.

It is our opinion that due to the policies followed during the past 2 decades, Congress has lost control of the economy of the country. And, although we believe Congress is now powerless to help us in this respect, we will still state our opinion.

Anything that Congress may do to pay farmers more money for their crops or increase the price of agricultural production will require money and must of necessity be reflected in the cost of living to the consumer.

Any increase in the cost of living to the consumer at the present time automatically results in an increase in wages for the workers in the mass production industry.

The mass production industries have a rough rule for determining the price of their products to the consumer. This is, to add the cost of the material to the cost of labor and multiply this sum by three, which gives them the consumer price, and roughly take care of profit, interest, and distributing costs, et cetera. It follows therefore that any increase in the cost of living will cause an increase in the price of labor and every dollar increase in the price of labor is multiplied by three which is the price the farmer will have to pay for each dollar increase he may receive for his products.

It follows that it would be an idle gesture on the part of the Federal Government to increase the price of farm products unless at the same time they could devise some methods to keep the farmer from being penalized in his production cost for such increases.

It will also be well to note in this respect that any increase in taxes which may be levied also is reflected in cost of living and organized labor has protected itself from paying its share because the automatic increase in wages also protects them.

In addition, due to high production costs, we have priced ourselves out of the world market which prevents us from disposing of our surplus.

It has been said in order that the working class obtain control of a country, it is first necessary that they seize control of the tools of production. We don't think that it can be denied that at the present time, organized labor does control the tools of production to the point to which management has no choice except to give in to their demands. This results in repeated across-the-board increases in the cost of labor without regard to the productivity of the individual and management does not even today control the rate of production.

All these increases ultimately must be paid for by the money of the farmer and other consumers but labor and management have been dealing in secret. So we would suggest that all labor-management

contract conferences be made public so that the public will know how our moneys are being bargained away.

In conclusion, we would suggest that the cost-of-living clause in labor-management contracts be outlawed as against the general public welfare, and that in addition to having open bargaining, organized labor be made subject to the same terms that apply to the manufacturers with regard to fixing of prices.

We believe if Congress can obtain these results, the farm problem will solve itself.

The CHAIRMAN. Thank you, Mr. Kelley.

Mr. Johnson, please.

Our time is short and may I suggest if the rest of the witnesses who desire to speak on rice kindly relegate their testimony to something new and not covered by previous witnesses. You may state you agree with what they have said or expand on some of the plans and suggestions.

STATEMENT OF LEWIS J. JOHNSON, PUBLIC RELATIONS DIRECTOR, ARKANSAS FARMERS UNION, LITTLE ROCK, ARK.

Mr. JOHNSON. Mr. Chairman, I am Lewis J. Johnson, public-relations man with the Arkansas Farmers Union, which is a private farm organization owned by its membership with some 18,000 family farmers in Arkansas.

As you know, Mr. Chairman, the farmers of Arkansas believe very strongly that the Secretary of Agriculture, Mr. Benson, is failing to provide the leadership that it is his duty to provide to gain for farm people their proper place in our national life, and their fair share of the national income. He is following bad advice, he is acting on faulty theories, and he is following mistaken policies. As a result there is serious fear and confusion among the farmers. We are aware that it is not within your jurisdiction to change the man who holds the job. But we call this to your attention to stress the particular importance of spelling out in legislation very clear limits upon the discretionary authority left to the Secretary.

Arkansas has lost 40,000 farms in the past 5 years, the census shows. The farm people have gone too, not very often to better jobs, but instead for the most part to begin at the very bottom of the economic ladder in the cities. There they have lost all the value of the skills and usually all the capital acquired in lifetimes of farming.

We are, in reality, making the strong stronger, and the weak more weak. In the economic liquidation of our family farmers, we are taking the heart out of our agriculture, and putting our agricultural future on the auction block for quick sale to the highest bidder. This trend can only lead to the concentration of power in the hands of a few. Already much farmland is owned by corporations and people who made their money in other enterprises. Their capital is far out of proportion to that of farm people-young farm couples who are forced to compete with these interests for their place in agriculture. Often family farmers are being squeezed by nonfarmers who have the aid of indirect subsidies in the form of tax losses that are charged off against income earned in other businesses.

Our family farmers are the very same people who were considered excellent and efficient farmers when the Nation's need for food was

critical during wartime. But now they are called inefficient because they met the demands made upon them for increased production to meet the national emergency, and produced a little too much. The truth of the matter is that both during the emergency of wartime food shortages and right now our family farming system is the most efficient that the world has ever seen.

We have today in Arkansas competition that we think is unfair. Now we represent family farmers, people that are farming to use their income must have that income to educate their children and to have a decent standard of living and then we have nonfarmers who have outside income and they have surplus money and they have come into agriculture solely for the purpose of getting a large net return on that money.

Now, that has worked a hardship against our family farmers. Mr. Chairman, any legislation that you gentlemen come up with, keep this in mind: People are going to be hurt, we know that. We are going to ask you to put the burden of that on the people that are better able to stand it.

Mr. Chairman, we recommend the elimination of the sliding scale. It is not eliminating surpluses, but it is eliminating family farmers. 2. Support prices of basic commodities and other major farm commodities at full parity.

3. Use production payments in combination with commodity loans, direct purchases, marketing agreements and orders, and other methods, to support and protect farmers' incomes with a minimum of waste and full use of our agricultural abundance.

4. Limit the amount of Government price and income protection given to any one farmer to what corresponds to the scale of a family farming operation.

5. Expand consumption by using production payments, passing a food-stamp plan to provide adequate diets to needy families, and expanding the school-lunch and special school-milk programs and getting more schools to take part.

6. Set up a conservation acreage reserve plan to prevent serious surpluses of food exceeding what our Nation needs to feed its own people and for commercial export and for use to combat hunger and communism in other countries. This plan should enable farmers to voluntarily lease land not needed for production to the Government, with direct payments to the farmers equivalent to the going rental value, to be taken out of production and devoted to soil building and conserving practices.

Mr. Chairman, agriculture is a combination of thousands and thousands of small-production planters. In the wartime they hollered for more food and fiber and the farm people went all out. It is true they produced a little too much. Tomorrow you may come back and holler to go all out once again in production.

Now, we know that we must idle some of these plants. We must slow them down. The farmers are not able to stand that slow down. It is so important to our national welfare and our national economy then that the Government step in and share the responsibility in that slow down, in the processes of it that we keep our soil more productive and care for it and preserve it for the future generations that are to follow.

All of these things, Mr. Chairman, and there are other things we could mention that we will not at this time, which deal with farm credit and some other things we will bring it to you in the spring. Senator SCHOEPPEL. What would you consider a family-sized farm in acreage and/or in income?

Mr. JOHNSON. Senator, as I told you awhile ago, we were diversified so let's get over into the cotton country.

Senator SCHOEPPEL. I am talking about your area now, if it is a cotton area.

Mr. JOHNSON. I came from northwest Arkansas where we are in the dairy business and are in the fruit and vegetable business. In other words, I have been in agriculture for the last 17 years and just sold my farm 3 years ago when I took this job. Now up there it takes around 15 head of good dairy cattle to bring an income. That particular county

The CHAIRMAN. To bring an economic income sufficient to maintain a family.

Mr. JOHNSON. Just a moment. In northwest Arkansas we have approximtely, in Washington County, 6,000 farms. Now, 60 percent of those farms are 40 acres or less, 75 percent 60 acres or less. We have diversified farming. A man will have an acre of strawberries, maybe 3,000 broilers at a time, milk 10 or 12 cows. I think you will find that per farm and per capita of farms in that county they have the highest ratio of tractor equipment and those things of any place in the State. When you get down to rice, I am not a ricegrower. I have attended meetings where they say it would take a hundred acres or more, and cotton maybe will take 50 acres or more; in other words, 50 bales. We would like to see it put on the basis of bales.

So it is just where you live, and if you had, and it would fit into our program, we have 1 member president of a county organization in southeast Arkansas with 23 tenant farmers. They are family farmers. They are looking to that farm for their income.

Senator SCHOEPPEL. That is why I wanted that in the record, because this committee has heard in a number of other States where these family units exist that they vary, and so when we go back to Washington and analyze all this testimony and try to come up with needed changes we find it is a terrific task because of the lack of any uniform unit, since they vary so very, very greatly all over this country.

Mr. JOHNSON. May I answer the question you asked a man this morning about would he recommend price supports on all crops? We would, until he had drawn full parity up to decent family income. The CHAIRMAN. Which would be how much?

Mr. JOHNSON. Which would be different for different sections.
The CHAIRMAN. Who would establish that?

Mr. JOHNSON. Let's say this: Take northwest Arkansas again. A man has some dairy income. He has got some broiler income, and maybe some sheep income, income from the sheep. Senator Young, we grow some sheep, too. That figure can be figured out with your economists in your Department of Agriculture.

The CHAIRMAN. You have difficulties in Arkansas?

Mr. JOHNSON. Yes.

The CHAIRMAN. All over the State?

Mr. JOHNSON. Yes.

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