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produce at a profit, but can't produce peanuts. That would help. Some farmers prodúce peanuts and some not. By moving from one farm to another, it would make all the difference in the world in the net income of that farmer.
We would like to see that considered and it is in our general resolution to the Farm Bureau, unanimously adopted at the State level, and if other States would adopt it, it would be a big help to us.
The CHAIRMAN. Any questions?
Mr. Strickland, do you desire to say anything or endorse what he said?
STATEMENT OF ERNEST STRICKLAND, CLAXTON, GA. Mr. STRICKLAND. I think Mr. Matthews maybe didn't make it quite plain enough that with the high cost of irrigation equipment maybe my neighbor could put his 1.1 acres of tobacco in the same field with my 3 and with the same irrigation equipment from 1 pond irrigate all of that and save a lot of unnecessary fabor and trouble. We have had quite a bit of experience with that. I do quite a bit of irrigation.
The CHAIRMAN. T'he plan that you envision, as I understand it would be this: That even though the transfer were made, the farm from which it was transferred would not lose that
acreage. Mr. STRICKLAND. No, sir. That could be done with the ASC, by the supervision of the ASC committee without combining those farms.
I have a similar situation where I have to take care of my father's farm and this coming year I have definitely made up my mind, after 4 years, to combine those farms to get that tobacco where I can handle it and those sharecroppers had rather tend it there than try to take the big job of transferring this portable irrigation equipment to do the job.
While I am here, if I may I would like to say one word about cotton, as I have studied cotton more than I have tobacco, having been on the State committee for 5 years. I heard nobody mention it at all today and I may be out of line but I wanted to hear something about stockpiling a bunch of cotton. It doesn't get out of date like guns and jet planes and tanks and other things, and to me it is one of the best things for the security of our Nation, in my opinion, to stockpile at least 10 million bales, take it off the market, earmark it for war emergency only. It wouldn't rot overnight. You fellows know how we can handle cotton.
That would relieve some of the tension on cotton and maybe make our enemies take a second look at what we were trying to do. And in case of emergency, as flexible as farming is, we could turn to food instead of fibe for a couple of years and be able to fight a war.
That is worrying me. Maybe you don't see it like I do, and I hope you don't, but I am worried about another war.
That would about conclude my remarks for today. I thank you for listening to me.
Another thing I want to say is to compliment you on the soil conservation program because God knows I don't know what we would have done without that. Right now any minute I want a technician he is as close as my telephone. And time we want to build a pond he is there to run it or a terrace, he is right there. I want to commend you fellows on soil conservation.
Mr. MATTHEWS. On the idle acre proposition, we would certainly like in Georgia, and a lot of other States I am sure would like to see idle acres set out in pine timber because we will never have too much good lumber. I lost this hand cutting lumber. I know the situation. We would like to see the Federal Government put us out in timber.
The CHAIRMAN. It is a pity Kansas and North Dakota could not grow pine. This program would work fine in Southern States, and I hope the farmers themselves take that up because it is a good way to create wealth in the near future. I understand you can grow timber here in 7 to 10 years.
Mr. STRICKLAND. I am in favor of the fertility bank. That is one thing we will need in the near future if we don't change our way of doing
The CHAIRMAN. We are going to hear from the man who has all the answers, Stephen Pace. Give us your name and occupation.
STATEMENT OF HON. STEPHEN PACE, AMERICUS, GA. Mr. Pace. Mr. Chairman, this is Stephen Pace of Sumter County, Ga., an old, broken-down lawyer.
Mr. Chairman, your introduction is somewhat embarrassing because I do not have the answers and the reason, Mr. Chairman, I do not have the answers is I don't know where you want to go.
The CHAIRMAN. I was just trying to be facetious. I am sorry you took me seriously.
Mr. PACE. I did not. What I mean, Mr. Chairman, is it would be very helpful certainly to me, and I think to every witness who is here today and to every farmer across this Nation, if they could get an understanding of what the Senate Committee on Agriculture, the House Committee on Agriculture, and the Congress, what they want to do about agriculture.
For instance, Mr. Chairman, do you want to give the farm people an equality of treatment? Do you want the farm people to have a fair share in the national income? When you legislate
The CHAIRMAN. That is what we hope to do and want to do. Have you a plan to attain that goal! If so, let us have it because that is what this committee wants. That is what I want to do, I know, and if you have a plan whereby agriculture can be put on the same level as other segments of induustry it ought to be done because without a successful agriculture everything else will die on the vine.
Mr. Pace. I agree with you and if that is the view of the committee, certainly we are prepared to sit down and work out the legislation that will do that job.
Mr. Chairman, another inquiry in my mind is when the Congress legislates in favor of one segment of our population, does the Congress intend to provide some comparable protection and benefit for those who till the soil? I have specifically in mind, Mr. Chairman, the recent action of the Congress in increasing minimum wage to $1 an hour. I don't know whether you have had the statisticians attached to your staff to calculate exactly what the effect is going to be on agriculture and its consumers of agricultural commodities.
I have a rough estimate, Mr. Chairman, that the increase in the minimum wage from 75 cents to $1 per hour will increase the cost of producing the agricultural commodities of America between 3 and 5 billion dollars annually. That, Mr. Chairman, is reflected up and down across the board, the increase in farm wage in the highly competitive labor market we have now and the increase in the manufacture and processing of everything the farmer purchases. But in addition to that, Mr. Chairman, it is also estimated that the increase in the minimum wage from 75 cents to $1 per hour will also increase the cost of the food commodities to the consumers by another 3 to 5 billion dollars a year.
At the outset I attempted to bring to the committee some statistics, but I learned early this morning that the chairman and all members of the committee are well versed in statistics. But there is a statistic I have in my previous case here showing that the cost of processing and selling agricultural commodities is between 30 and 40 billion dollars a year.
Now the point has been made here that the price of a loaf of bread was a certain figure 4 or 5 or 10 years ago and that now the wheat grower is getting less the price of bread has gone up. That isn't any. thing in the world but wages—the wages of the men in the flour mills who make it into flour, the wages of the men that work on the railroads to transport it to your hometown, the wages of the man that bakes and wraps the bread and delivers it. It is all.
I have here the last marketing situation of the report of the Department of Agriculture showing the enormus and rapid increase of taking a farm commodity and delivering it into the hands of the housewife. Therefore, as I see it, when the Congress increased the minimum wage—I make no complaint about that; I believe in good wages, but I believe in equal treatment—and when the Congress increased the minimum wage from 75 cents to $1 an hour you decreased the return to the man that work in the field that produced the commodity by from 3 to 5 billion dollars, but at the same time you increased the cost that the housewife must pay in the store. Do I make myself clear
The CHAIRMAN. Why should the processors and all those who handle that food make such enormous profits as time goes on? It strikes me something ought to be done in that direction. All the steel producers and everybody else seem to make more and more profits irrespective of what Congress does about wages. Why could it not work both ways?
Mr. PACE. I take no exception to the fact that the processing profits, the handling profits might well be looked into, but, Mr. Chairman, there is one I did look into. I looked into that loaf of bread because I wanted to get the answers and I started out with a view in my mind that the baker and retail store was the one that was mopping up. To my astonishment I found that the profit to the baker was not 1 penny more on a 19-cent loaf of bread than on an 11-cent piece of bread, and I found that the retail store profit was substantially identical as it had been.
Now I know some of these big corporate interests handling food commodities are making big profits-reports show they are--but the point I make now is, Mr. Chairman, I think the Congress of the United States has by one stroke and I am serious about it--decreased the return to those that work out in the fields in the sun to produce the commodity and at the same time has increased the cost to the housewife who is the consumer of that commodity.
What I am asking is, What are we going to do about that? Do we want to establish a policy in the Congress that at the same session the same moment that the Congress enacts legislation that helps one segment of this economy of this population, it is going to see that those who are adversely affected thereby are going to be adequately compensated for that additional burden? Is that the policy? If it is, I want to help you write it. The CHAIRMAN. What is your suggestion? Mr. Pace. Let me get a little further along.
Now, in connection with wages, I must mention steel. The steel workers are one group that doesn't have to go to Congress. They can, at the call of their leader, walk out. They did this summer. They stayed out. They got the wage increase. The next day the steel companies increased the price of steel 5.8 percent which not only compensated them for the increase in wages, but also included substantial other items.
You heard Mr. Cox testify a few moments ago that the tractor he bought this week went up 7 percent over what he could have gotten it 2 weeks ago. Do you know why? That was the impact that had finally hit down on the farm of the 5.8 percent increase in the price of steel.
Now that brings up a very interesting question. Is the Congress going to protect those who must buy those commodities, the people on the farm, or is the answer—and I think if we don't get it in Washington maybe we will get it across the farms—or is the answer going to be that the farmers of this Nation are going to organize where they, too, are going to have a voice in what they get for their commodity?' Must that be the answer?
Now on the same question about wanting to know what you are going to do, Mr. Chairman, does the Senate Committee on Agriculture and the Congress believe in parity prices? Does it understand and believe that a parity price is a fair price both to the consumer and to the producer? If it is, I can rewrite that legislation. But somebody before we can differ about this, that, and the other about cotton, corn, wheat, rice, tobacco, and peanuts or other commodities to write the program somebody, other than a political promise, we have had those, has got to know what can be expected of the Congress of the United States.
Mr. Chairman, there are two problems that you spoke of last evening in your short talk to the distinguished guests at the dinner, and that have been mentioned here today. I should like to discuss those.
First, I observed the Chair and members of the committee, rightfully so, are disturbed about the surpluses. Well, maybe I am different in some way but you know, Mr. Chairman, in a way they could prove to be the greatest blessing that ever happened to the American people. What are we going to strike at, Mr. Chairman? Have you had an opportunity to sit and meditate on what the situation would be if there were scarcities instead of surpluses? I want to give an example which happened in peanuts last year and was testified to a few moments ago.
We have a terrific drought in the Southeast and Southwest. There was a shortage in peanuts. They made the allocation, the acreage was made than sufficient to produce the quantity needed and a surplus. We had a shortage in peanuts. Mr. Chairman, the price of shelled peanuts went up from 18 to 27 cents a pound.
Now you will observe that that is exactly 50-percent increase, and, Mr. Chairman, if you and I ever attempt to try to cut the pattern of allocated acreage in this Nation to the point where it is exactly going to meet demand, you and I would be playing with dynamite. Every allotment has to be cushioned under normal yields, every allocation the Secretary of Agriculture makes with normal yields will produce a surplus, every single one of them. Of course, they are enormous surpluses now due to the fact that our yields are so far in excess of normal.
Now, Mr. Chairman, I would hesitate to talk and discuss seriously with the distinguished Senator from Kansas on disposing of the wheat surplus. I had the privilege at times in my life to be guided on wheat by the advice and counsel of the distingtished former chairman of the House Committee on Agriculture, Clifford Hope. Cliff was my guide and I followed his advice. But there are about a billion bushels-is that right?
The CHAIRMAN. 1,030 million bushels.
Mr. Pace. Too much wheat. You can't dispose of that wheat in a day. The testimony is you have got 14 million bale carryover of cotton on the 1st of next August. You can't dispose of that in a day.
I tell you what I recommend to you, Mr. Chairman. Let us take cotton for an example. I will have to get the Senator to adapt it to wheat. Of the 14 million bales the normal carryover under normal supply in round figures is 4 million bales. The present authority of the Secretary of Agriculture on the set-aside is a maximum of 4 million bales. I understand now the set-aside is about 2.3 million to 2.7 million.
Mr. BROOKS. Three less what we have taken out of 480.
Mr. Pace. I would recommend to the committee, and I am talking about trying to rehabilitate the situation we are now in, the farm people of this Nation, I would, for support-price purposes, reduce the normal holdings of cotton to a normal supply which is domestic consumption plus exports plus 30 percent for purposes of carryover. That would take care of 4 million bales of that 14 million. I would increase the set-aside and make it mandatory from a discretionary 4 million to 5 million bales of cotton. I would not only set that aside, but I would agree with the last gentleman on this stand that the Congress should then enact legislation making that a permanent set-aside to be unlocked only upon declaration of war by the Congress.
you turn back, I think it was in 1952, Mr. Brannan was Secretary then, he could have invoked marketing quotas on cotton. He didn't do so and he made the statement that I am requesting of the cottongrowers; to increase their cotton acreage because I think for defense purposes there should be a 5 million bale supply available for war purposes, and you have it. You set aside, you normally carry over his 4 million. If you set aside his 9 million you have 3 million bales of cotton left. Let us get busy disposing of the 3 million bales, but in the meantime the legislation would not let it be taken into account in determining the support level.
Then, Mr. Chairman, there is a lot of thinking going on on this. If you have done that, can't you set up some permanent programs in