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support system for agricultural products—a system which insures the farmer a high price for a product for which there is already a surplus and will increase further the present surplus. The Government cannot justifiably continue indefinitely to pay the farmer to produce a product for which there is no need. I am in full accord with the principle of the flexible price-support system now in effect except that full cross compliance should have been included. However, I realize that it alone will not solve the problem. In addition to the flexible support system I should like to support the basic principle of the program suggested by the United States potato and vegetable growers to reduce overproduction of agricultural commodities by an overall reduction in commercial crop acreages, observing the principle of complete cross compliance which prevents one segment of agricultural from benefiting at the expense of the other, and the establishment of a national soil fertilization stockpile. We have already the facilities and personnel in the State and county ASO committees set up to operate such a program.
I respectfully urge that you give your fullest consideration to the basic principles of the above plan.
STATEMENT FILED BY J. E. DODSON, CHULA, VA. We are considering America's largest industry--agriculture. In wealth per man-unit the largest user of electricity. The largest user of our railroads, the largest buyer of manufactured metal, and the backbone of American life and stability.
Now drifting as a ship without a rudder, and as sure to destroy the prosperity and economy now enjoyed by our brothers and sisters not in agriculture, as a rudderless ship on a rocky shore with pounding waves.
Today and for the last 2 years farmers are going deeper in debt draining their bank accounts and the fertility of the soil and forest at a more rapid pace to survive the pinch. Many pieces of farm machinery would be replaced this week if the farmers had the price in reserve.
Can we find reason in our minds how anyone can buy on a high market and sell on a sliding-down market and continue in business? I believe the answer is "No." Yet I believe we all can agree that the American farmer is making his purchases in most cases in a much higher market and selling on sliding and fluctuating markets.
I firmly disagree with those who believe a sliding parity payment will stabilize agriculture even with rigid controls. Who could produce a commodity at cost based on 80 or 90 percent of parity and come marketing time, parity payment would be down below cost of production?
Or can we expect a producer or a manufacturer to cut his production below the point of overhead cost? I believe we would come up again with the answer, "No."
A 90 percent of parity and rigid control would be more acceptable and better for the producer. Yet that has a lot of trouble for the producer. Can we find a manufacturer, a merchant, a broker, or anyone who could survive on 90 percent income against 100 percent expenditures?
It has become quite fashionable these days to publish and broadcast the tremendous subsidies being paid agriculture when our Federal Government subsidizes our merchant marine engaged in foreign trade. Likewise manufacturers of many articles, airplane carriers, and others which you gentlemen are aware.
For instance, July 1953 issues of News and Reports, Washington, D. C., Postmaster General Summerfield asked to compare subsidy paid to agriculture with that of second-class mail from July 1, 1933, through June 30, 1953, and he stated: “Agriculture cost for the 20 years was less than $800 million, while second-class mail cost us $2,400 million.” Have you seen these figures make headlines? I haven't, but every time the Department of Agriculture releases cost of present support to the farmers, which is too frequent, will make the headlines or the front page. This I believe to be unfair because it helps to destroy good will between the producer and the consumer. I do not believe this will help to prevent a failing farm program.
It burns me up when I hear farm organizations and influential people stating that agriculture is being socialized. When there is so much of American business and other functions of Government receiving help from the tax dollar. What is good for Pete, should be good for Tom. If not we fail to back up our form of Government.
Democracy in my way of thinging is simply living and let live "Do unto others as you would have them do unto you.” When we won't do that, then it's your duty, gentlemen, to see that Tom is not overrun by Pete.
Now if all the wheatgrowers or all cottongrowers or all tobaccogrowers or potatogrowers or any other farm commodity should go into an agreement to produce any given commodity to meet the consumer demand, it would not work without your help in making laws to block the nonproducer from flooding the market with any of our basic commodities soon as that commodity was showing a return over cost of production. That was the downfall in all past efforts on the part of farmers doing something to improve his conditions. There was no law to stop thousands of nonproducers of a commodity switching to production of that commodity when the return was to his advantage, without taking into consideration his increased production would crowd the market and send the price down. Yes, give us controls with teeth in them is my plea.
During World War I, I was in Europe and there I saw American merchandise sold on a competitive price and, no doubt, it is doing so today. If so, you know how it is being done. I do not; but it is my belief that there is Government support in some way.
With the millions of our brothers and sisters in Christ in need of our surplus farm supplies I ask you to consider very strongly this outlet and see if the need of such a movement for the American farmer and the stability of our America, and the filling of hungry stomachs abroad would not overweigh our State Department's objections to such a move. To me it is a Christian duty and, I am sure it would please God.
May I close by quoting verse 38 of the sixth chapter of Luke, Revised Standard Version :
"Give and it will be given to you; good measure pressed down shaken together running over, will be put into your lap, for the measure you give will be the measure you get back."
STATEMENT FILED BY PAUL D. MCKEE, CHILHOWIE, VA. Mr. Chairman, and members of the Senate Committee on Agriculture, I am Paul D. McKee, a dairyman and beef cattle producer from the mountains of Virginia. I also produce some 50 to 60 hogs and keep from 125 to 150 head of breeding ewes. I also produce burley tobacco. My entire income is derived from my farming operation and I think that having had experience with both supported commodities and nonsupported that I have some observations that apply to the problem at hand.
I think that I am correct in assuming that support prices were applied during wartime to encourage production and to provide farmers reasonable protection against price collapse and thereby provide for orderly market adjustments.
As a wartime measure this program was justified but since the end of the war period these supports maintained at high rigid levels without regard to supply and demand have caused an accumulation of about $8 billion in surplus commodities which is held in Government storehouses. These huge surpluses are wrecking our domestic market and limiting the farmers freedom to manage his own business. We have priced ourselves out of the world market and are presently serving as an umbrella for European goods.
We hear a great deal about price supports at 90 percent of parity as opposed to the present flexible price support of sliding scale. As I see the situation, neither the flexible support price system or 90 percent rigid support prices will entirely remedy the situation. Don't get me wrong, I think that the American farmer is entitled to 100 percent of parity at the market place but he will never achieve this by the Government giving incentive payment to farmers to produce goods for which we have no market.
The fallacy of the control program is that we have controlled acreage but not production. For instance last year the cotton acreage was reduced 12 percent and from reports the production has increased 14 percent. This has been true on all the other supported crops. Tobacco yields per acre have doubled since support prices went into effect. Better farming methods due to improved machinery, farm research, and better fertilizing methods have completely nullified the effects of acreage reduction.
The flexible price support program as I see it is designed to act as a brake. We can compare it to a heavily loaded truck on a slick road. If we apply the
brake suddenly we end up in disaster. However, if we apply the brake gradually we have an excellent chance to avoid disaster.
We are told daily that flexible price supports are not working. As a dairyman, I am convinced that the lowering of price supports was a lifesaver for that industry. The dairy interests were forced to get out and sell milk and milk products. During the past 12 months the Government bought 55 percent less milk and inventories of dairy products dropped 60 percent. We were told at a dairy meeting a few weeks ago that during the month of September not 1 pound of butter went into Government storage under the support program.
What then is the answer to this problem? Frankly, I don't know, but I do know this: A program to be a success must first control production and allow the surplus to move out of storage.
Secondly, it must apply to all segments of the farming industry. Failure to control diverted acres has shifted the problem of surpluses to other commodities. A lot of this acreage goes into feed crops which in turn stimulates the production of livestock, poultry, and dairy products.
Since 1952 there has been a reduction of 29.8 million acres planted to wheat, cotton, and corn as a result of acreage controls. During the same period there has been an increase of 25.9 million acres planted to sorghums, soybeans, barley, oats, and rye. On October 1, 1955, we had 200 million bushels more oats than last year. In sorghum grains the jump was from 11,348,000 bushels to 44,862,000 bushels. Barley, rye, and soybeans also increased tremendously.
On October 1 reports indicate that there were 19 percent more cattle on feed than the same date a year ago. This report coupled with the record number of hogs being marketed indicated to me that the surplus grain and forage crops from the diverted acreage is being marketed through livestock.
The third requirement for a workable program is that it must be acceptable to the public. We cannot continue to hold the support of the general public to a program that holds up prices and creates a burdensome surplus at the same time.
The fourth requirement of this program is that it be based on consumer de mand. We must create a market for our products. The dairy industry has increased consumption of milk through an organized educational and selling campaign. Other commodity groups are beginning to do the same thing.
The fifth requirement is that we expand our foreign markets to absorb more of our surplus products. This requires that we go in for competitive pricing rather than subsidized dumping of United States farm products.
Sixth, any program worked out should be on a long term basis rather than an emergency program.
There is considerable pressure politically to go back to 90 percent rigid support prices on the basic commodities. This program has put us virtually out of the tobacco business and failed us in the dairy business. I started with 2.2 acres tobacco allotment and am down to 0.6 acre and will be reduced to 0.5 acre next year. In a report coming out of Washington this week, a spokesman for the tobacco branch stated that to get the supply of burley tobacco in line, production should be cut 50 percent next year. Anything less than 1 acre of tobacco is an uneconomical unit so far as I am concerned and I am perfectly willing to donate my 0.5 acre to the cause but I shall resist with everything I have any effort to place high rigid support prices on my cattle, sheep, hogs, and dairy products.
Back in the mountains of Virginia we produce a brew known as moonshine. It has been known to produce a hangover and the favorite remedy of our mountain people for a hangover was known as "the hair of the dog that bit you."
Of course, this cured the "hangover" for that day and even though it produced a bigger and better “hangover” the next day, it was no cause for worry. The same remedy could be used over and over.
This seems to be the same kind of thinking that the people who are advocating going back to 90 percent rigid support prices are using.
In conclusion, I should like to quote from Genesis 25: verses 29–34. "Once when Jacob was eating pottage, Esau came in from the field and was famished and Esau said to Jacob. “Let me eat some of that red pottage, for I am famished.' Jacob said, “First sell me your birthright.' Esau said 'I am about to die, of what use is a birthright to me.' Jacob said, 'Swear to me first.' So he swore to him, and sold his birthright to Jacob. Then Jacob gare Esau bread and pottage of lentils, and he ate and drank, and rose and went his way. Thus Esau despised his birthright.”
I recommend that every farmer in this Nation give this passage of scripture his careful consideration.
STATEMENT FILED BY NORMAN A. RANDALL, CHAIRMAN, BURLEY COMMITTEE,
NORTH CAROLINA STATE GRANGE, LEICESTER, N. C. I am Norman Randall, chairman of the North Carolina State Grange burley committee, from Leicester, N. C.
As Mr. Caldwell has told you, we meet at least once a month, and right at present one of the principal questions is, What are they going to do about burley and are they going to force poundage controls on us? It is a good question ; if that is done it will cost our small farmers from one to three hundred dollars per acre, based on the average production in the burley belt as a whole. We are proud of the fact that we have been able to build our average production to over 2,000 pounds per acre from 1,200 pounds since the program started. Evidently this has not lowered the quality of our tobacco, as has been reported, since we again led the whole belt in price per pound last year.
To limit the pounds that can be sold from an acre will also penalize the small farmer who needs to make every acre of his small farm produce to the limit in order to have sufficient income to have a decent living. According to reports from Washington, the representative of the burley tobacco Warehouse Association and the Kentucky Burley Growers Association stated last week we would not need a further acreage cut next year as it looked like the present strict enforcement got the surplus under control. Why try something new when the present program is working so well? Most North Carolina growers would pre fer a further acreage cut to poundage control.
We also feel that poundage control will be a problem to enforce. Policing the warehouses to prevent the surplus tobacco from being sold will require a small army of men. Poundage control works a hardship on farmers since a surplus can only be declared after the tobacco reaches the scales, thus entailing labor and expense and the use of cropland that could produce other crops.
We insist that the minimum acreage provision should be used to control burley tobacco production in order to guarantee some income to the small farmer. In summing up, we believe the existing law will adequately take care of the situation if given a fair chance.
The North Carolina farmers have never tried to force other farmers to a low production level but have tried to raise the grade of our product as well as to equal and sometimes to exceed the standards, in both grade and poundage, of other States. It would be unfair to penalize good farming methods.
STATEMENT FILED BY John B. VANCE, PRESIDENT, VIRGINIA FARMERS UNION,
RICHMOND, VA. For the record, my name is John B. Vance. I am State president of the Virginia Farmers Union, the Old Dominion's second largest general farm organization representing approximately 20,000 farm people. I am indeed grateful for the privilege of presenting this statement to the committee today to express our views and recommendations with respect to some of the many serious economic problems confronting farm people. May I also say that we in Farmers Union feel that the Senate Agriculture Committee is to be commended for holding this series of hearings over the United States so as to make it possible for the farmers themselves to discuss their own problems directly with you. Since the legislative branch of our Government has traditionally been the branch most responsive to the needs of our people, it is therefore natural that the farm people are today looking to the Senate Agriculture Committee and the Senate of the United States to take appropriate legislative action to correct some of the economic inequities which are squeezing the very lifeblood from the veins of the American farmer.
What should be the desired end of the legislation you author next year? If I interpret correctly the feelings and thinking of the farm families I represent, and I sincerely believe that I do, they are concerned over whether they can sur vive as family units on the land or whether they are doomed somewhere down the road to the status of a day laborer. It is people in the United States that are important-not the assortment of economic doctrine of one brand or another you have had paraded before you. The farm families I represent will not worry about the kind of legislation the committee authors next year as long as they know you hold foremost in your deliberations the human considerations. You have had testimony on many different phases of the agricultural situation. With
few exceptions, however, the opinions expressed have been related to how to preserve our family-type pattern of agriculture.
Parity and how to obtain it is of great concern to farm families in Virginia. The interest in the level of farm prices grows out of the concern of farm families over the question of survival. The farm families I know best are interested in parity farm prices as a means of attaining the good life. They are not interested in getting rich.
Farmers are in trouble. Make no mistake about that. Caught between high, rigid, inflexible production cost on one hand and falling farm prices on the other, there is a very definite question as to how much longer the average family farmer can withstand the pressure without being forced out of business. Since 1952 net farm income is down by 23 percent; prices received by farmers have dropped an average of 19 percent since 1952. The farmer's share of the consumer dollar was only 40 cents in July of this year, which is the same as the 1935–39 average and is down 3 cents from a year before.
A release dated October 31, 1955, issued by the Agricultural Marketing Service of the United States Department of Agriculture entitled, “The Farm Income Situation,” had this to say regarding the current farm situation :
RECENT TRENDS IN FARM INCOME
"Farmers' realized net income in the third quarter of 1955 was at an annual rate of approximately $10.3 billion. This was about 5 percent less than the second quarter rate and 10 percent below the rate in the third quarter of 1954. The number of farms in the United States has declined approximately 212 percent a year since 1950.
“The decline in realized net income and a similar decline in net income of farm operators which includes the value of inventory change-was due primarily to lower prices of farm products accompanied by only a small reduction in expenses. Prices received by farmers averaged 4 percent lower in the third quarter of 1955 than in the second quarter, and 5 percent lower than in the third quarter of 1954. Marketings were about the same except for seasonal changes."
In brief, this release tells me that (1) farm income is continually falling at the rate of about 5 percent each 6 months; (2) the drop in farm income is due to lower farm prices and rigid production cost ; and (3) over 300,000 farm people are being forced off of the farm each year. I submit, Mr. Chairman, that this is a situation which is not good for agriculture; it is not good for business; and it is not good for our country.
In sharp contrast to the deepening farm depression are the glowing reports we farm people hear about the enormous profits being piled up by big business. Stockholders' dividends up 19 percent since 1952; corporate profits up 32 percent after taxes since 1952; manufacturing workers' weekly earnings up 13 percent since 1952; the average person's income up 14 percent since 1952. Let me make it clear that farmers do not resent the fact that business, industry, and labor are prospering. We do not begrudge labor a minimum wage of $1 per hour. We do not begrudge the approximate $5 billion cut in corporate taxes allowed big business by act of Congress last year with approval of the President. No, the farmers only ask for an opportunity to earn a fair share of the great productive capacity of this country, and we do not believe that 90 percent of a fair price is too much to expect for the things we grow on our farms.
A major part of the responsibility for the dilemma in which American agri. culture finds itself today must rest squarely on the shoulders of the Eisenhower administration and more directly on the shoulders of Secretary of Agriculture Ezra Taft Benson. About all the farmers have gotten from this administration is an occasional pat on the back and hollow assurances that “You are not as bad off as you think you are." The greatest injustice ever promulgated on the farmers of this country is the so-called flexible price-support program. In fact, it is a no-support program rather than a low-support program. Any person who has farmed for the past 25 years knows that its basic theory is completely unsound and unrealistic. The theory, of course, is that by manipulating the level of price supports you can control production. Its basic philosophy is that farmers can be forced to stop producing by lowering the level of prices. This cock-eyed theory has already been disproved. In this connection I would like to cite the following production figures as reported by the Crop