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All of you know that my major assignment in the Congress of the United States is with the defense of the Nation. But, being a farmer myself, and representing one of the greatest agricultural areas of the State of Georgia, I have a deep and abiding interest in the welfare of our farmers and their families.
Therefore, in welcoming you here among my home people, permit me to speak briefly to emphasize the plight of agriculture of this section, and humbly to suggest some remedies.
The most urgent, the most pressing concern of our Nation's domestic affairs today is the growing distress among our farm people who are caught in a cruel cost-price squeeze at the very time that every other major segment of our economy is booming as never before.
In your long journeys you have seen it. Hard times are again creeping onto our farms. Obvious to all of us is the frightening parallel to what happened to agriculture in the years immediately ahead of the great depression of the 1930's.
The situation is a menace to the welfare of the Nation itself.
Farm operating costs remain near their record high. In fact the October report showed they again are on the increase.
Net farm income in 1954 was 31 percent below 1947 and 10 percent below 1953. The downward slide continues unchecked, with another 5- to 10-percent drop indicated in 1955.
The parity ratio in October was at 82 percent, down from 87 percent in October of last year, and at the lowest point since depression days. Farm dept is increasing. The value of agricultural assets has declined over $10 billion. Farmers purchasing power, in terms of 1935–39 dollars, is the lowest since 1940. Hog prices have dropped 25 percent since October of 1952, and now are at the lowest since 1942. Cattle prices are down 33 percent since 1952.
We in the South and Georgia are alarmed to hear that, unless Congress acts, the support price on cotton in 1956 may drop from 90 percent of parity down to 80 percent.
What does all this mean?
We have only the past to guide us. And in looking back we see danger signals flying.
There are many of us here who can remember the late 1920's when agriculture went into a price tailspin. Our farmers called for help. But the rest of the economy—then as today—was running at boom proportions. The farmers' cries scarcely were heard.
Inevitably, the ruin of agriculture began to clap like thunder over the Nation. Our whole economy tumbled into the great depression.
It was only then that this country came-belatedly—to a realization of the importance of the prosperity of agriculture to the strength and health of the whole economy. It took a near fatal catastrophe to bring this to pass.
That was when our farm program was born, 22 years ago.
You know that the income of agriculture, in this program and with the enlarged markets of the war and postwar eras, multiplied 6, 7, or 8 times. You know that the cash receipts of all farmers were only $4,735 million in 1932, but had risen to $32,693 million in 1952. Look at what happened in Georgia during those years. Georgia farmers took in from all marketings in 1932 only $68,546,000. In 1952 Georgia farmers received $649,199,000.
You know the great market that better farm income has created throughout the country, for the sale of things that are produced in the towns throughout the country, for the sale of things that are produced in the towns and cities.
You know that this has made jobs and has kept factory wheels turning. You know that rural people have been able to buy the conveniences and comforts hitherto available only to homes in the cities and towns.
You know that farmers have been financially able to mechanize their farms and apply the new sciences and more and improved plant food, to bring the blessings of abundance at low cost to their country. You know how farmers with the means to do it, have devoted their resources and energies to the restoration and conservation of our most precious resource the soil.
In these years, since the farm program came into being, the output per farmer has increased by more than 50 percent. And the farmers' customers in the cities are getting more and better food today for a smaller part of their earnings than at any previous period in history.
Now, in these remarks, I have tried to give you my impression of the nature and proportions of the problem that confronts us. It is a national problem, and it is a local problem right here in Georgia.
We need a change of philosophy in agriculture.
It must be a philosophy that represents the aspirations, yes, the prayers of our farm people everywhere. A farm program must aspire to, it must strive for, a fair share of the Nation's income-an equality of economic opportunityfor the farmers and their families who feed this Nation. With this kind of philosophy in mind, I suggest the following:
1. Restoration of 90 percent of parity price supports for the basic crops, thereby heading off the further price catastrophe that threatens millions of farmers in 1956 under the sliding-scale supports.
2. Creation of a national soil fertility reserve, by direct conservation payments to farmers, to hold out of competitive commercial production and to build the fertility of the millions of acres of land now diverted from the basic crops under the production adjustment program.
3. A broad expansion of the existing program of soil conversation, with special emphasis on reforestation.
4. A stepped-up program for distribution of our Government-held surpluses to needy people in our own country, through revival of the stamp plan or some other more effective system. Our program for foreign sales and gifts to the needy peoples abroad also should be intensified.
5. A two-price or domestic-parity program for wheat, assuring growers 100 percent of parity for that amount of wheat consumed as human food in the United States, with the remainder competing in the world markets at world prices.
6. A 90-percent price-support program for the dairy industry, when milk producers work out some means of adjusting their production to market requirements.
7. An earnest effort by everybody concerned in agriculture to bring harmony among the producers of various commodities, and among the farmers in different regions, for an open-minded, unison determination to work out
our problems. Mr. Chairman, I think the merits of these seven points are obvious. We know that the sliding-scale program has not brought more freedom to farmers, has increased rather than decreased our surpluses; and only has lowered the income of our farmers.
As for points 2 and 3, I know that if my land is not better when I leave it than when I got it, then I have placed a liability on those who succeed me.
While we have a national debt of some $250 billion for the next generations, it is sensible that we try to balance off some of this by bequeathing them rich fields and broad forests by which these next generations may feed, clothes, and house themselves.
I think there is no disagreement on point 4, for the distribution of our surpluses at home and abroad. I support point 5 because Representative Clifford R. Hope of Kansas, and the wheatgrowers, want this, and if they get this program and prove its feasibility I'm hopeful that it may provide some answers for cotton and some of our other exportable crops.
As for point 6, we are aware that some people in America have been rather successful in prejudicing dairy farmers against producers of the basic crops, especially against the producers of feed grains. I think that we can assure the dairymen of all the States that when they come forward with a price support and production adjustment program on which they themselves agree, they will have the backing in Congress of the Members from all the States producing the basic crops. I shall not discuss point 7. You are all aware of the deliberate effort to divide our farmers, and you know the urgency of bringing us all together again in one objective and one effort.
Now, Mr. Chairman, I have taken up too much of your time, so I want to sum up quickly by telling this committee how I feel, and how the people I represent feel :
We cannot let the history of the 1920's repeat itself. We cannot accept poverty as normal in agriculture. We cannot sit still and permit agriculture to deteriorate and again drag down the whole economy of the Nation.
I thank you.
The CHAIRMAN. The first witness on the agenda this morning is Mr. H. L. Wingate. Will you step forward, Mr. Wingate?
Mr. Wingate, will you give your name in full for the record and your occupation, please!
STATEMENT OF H. L. WINGATE, PRESIDENT, GEORGIA FARM
BUREAU FEDERATION, MACON, GA.
The CHAIRMAN. Do you have a prepared statement ?
The CHAIRMAN. Proceed. I hope you have the solution to our problem.
Mr. WINGATE. Senator, I certainly hope so, too. It is a tremendous problem and I want to take this opportunity to thank the committee for coming to the State of Georgia. I certainly want to thank Senator George, our very able and distinguished Senator, for inviting
The CHAIRMAN. We did not need much coaxing,
Mr. WINGATE. I am delighted to hear that, Senator. From the very fine remarks that were made last night, Senator, I think we are all struggling to try to solve a problem, and I certainly agree with you that there is not any politics, and certainly not any so far as I am concerned on it, and I hope there is not any with any others because we are faced with a problem that is most serious and something must be done about it.
I am delighted to see our Georgia delegation, some of them, here this morning. I wish they were all
here. I understand that Congressman Forrester could not be here. He is sick in bed and we are sorry to hear this because he was very anxious to be here I know.
Gentlemen, I know we all agree to this one fact: That the workingman can buy today more food and fiber with 1 hour's work in this country than they can anywhere in the world. I think we all agree on that and I think that is a statement that we should lay out here to point out the fact that when we talk about farmers being in bad shape, with the low prices, I want to say that even during the war, when prices were high and above parity, that the laboring man could still buy more food and fiber with an hour's work then than they could anywhere else.
I certainly think that agriculture is No. 1 in the basics of our economy. In other words, it comes ahead of everything. We must have food and we must have fiber and there never has been a time in the history of this country when it was in a prosperous economic condition very long when the farmers were not receiving a pretty fair price for their commodities. In other words, when farmers' prices are down the economy of the Nation follows it.
Now, gentlemen, we are in a price squeeze. We have heard a lot about that and I will not try to dwell on that. I will say that these Department of Agriculture figures that the cost of production of farm commodities in this Nation has gone up 29.9 percent since 1947. The net income to the farmer has gone down 30.08 percent. Those figures may not sound too good and they are not, but I would like for us to get it down to actual figures that we know a little more about and then I cannot agree with that, either, because when we talk about billions of dollars, I do not know a thing in the world about a billion; I cannot imagine what a billion dollars is.
A fellow told me one day, and I thought he was joking, that if a man was 21 years old on the first day of January in the year 1, and started operating a business and lost $1,000 every day since he had been in business, and you would go to him this morning and tell him “Listen, I understand business has been a little rough and you lost $1,000 every day since January 1, the year 1.”
He said "Well, that is true."
Well he said the fellow told him "If it does not get any worse than it is I will be here 750 more years, and he felt that if it did not get better he would retire on the few millions of dollars left.
That sounds unreasonable. A man would be over 2,700 years old spending $1,000 every day, to spend $1 billion. I just cannot imagine that. But our net income is off approximately $6 billion a year;
the farmers'. That is 30 percent. It is costing us approximately $7 billion a year more to operate.
Gentlemen, that is a price squeeze that we are in. And I certainly think we are all in agreement that the farmers are in a real price squeeze.
The CHAIRMAN. You are stating the problem. What we would like to have is a solution. You know we have all the statistics to indicate what the problem is and what we have done.
Mr. WINGATE. We all know, Senator, that the costs of everything are up and the big problem is surpluses. That is the big problem we are faced with today and how to work that out.
In the first place, our farmers have done a grand job, Senator, working out and furnishing food and fiber for wartime. We were never awarded any "E's” or anything, but have done a great job. and I want to say that the surpluses we have had going into the wars have been a blessing. But wars cause our expanded farm program and cause a surplus situation. I certainly won't go into that because we know we have the surpluses here.
But, gentlemen, I would like to state just as positively as I can, that there are so many people have said the 90-percent programthat is part of my program—has caused the expansion of the farm program and that is not so. It was the wars that caused it.
Now industry expanded during the war and after the war was over the War Production Board sold over $42 billion worth of surplus war equipment for less than $7 billion. They had to go ahead producing these things; they asked us to go ahead producing food and fiber. We all wound up with a surplus, but those things were taken off the hands of industry. Contractors and laborers got theirs. We asked them, as you know, to remove some of our surpluses and they said, “We are sorry, we are going to have to cut prices, cut acreage," and so on.
The solution, Senator, that I have and that I am recommending this morning is that we continue our 90-percent support program, not the flexible price-support program. The flexible price-support program has us headed downward today and we are going further and
further down with that price program and there is no other way out under that program.
You just can't go up on it. There is only one way you could go up and that is to get into disastrous conditions; and if you didn't have the price-support program it would go up anyhow. It is a question of how low you are going to set your guaranty with the surpluses we have. That means the price today. In other words, Senator, I mean that if we go down to 50 percent of parity, guaranty, corn would go there, cotton would go there, wheat would go there, just as sure as we are sitting here. So I say definitely that flexible price supports are not the answer.
I am going to say right here that I don't think 90 percent is the whole answer. I have another recommendation to make there, but first, let me say, Senator, about the surpluses that we have before I leave them.
We had surpluses in the thirties, we have had surpluses before, in all wars.
We have had them wiped out and always would get back into trouble before we could get our farm program contracted. There is what we are in trouble on. Industry contracted. The Government cleared all things out of their way, everything out of their way, and they were left with a clear road to travel. As I stated, we were left with our surpluses.
Now there is no way that the farmers, with the surpluses they have on hand today, can get out of it except to take some acres out of production, just like industry takes—well, let me say the steel people. They vary every week nearly a little in their productive capacity. They don't turn out 100 percent every time. But a year and a half ago they were down to 65 percent capacity. A year ago last week they were down to 76 percent. We can only attempt this once a year and that is something that we are going to have to do.
That brings me up to this soil bank program.
The CHAIRMAN. Mr. Wingate, in the meantime have you anything to offer to us as to how to get rid of these surpluses that we have now. That, to me, is one of the most vexing problems.
As you know, this year we produced on 3 million acres less than last year, 1 million more bales of cotton.
Mr. WINGATE. Yes, sir.
The CHAIRMAN. And 90 percent price support by themselves will not do. We certainly cannot keep on increasing our surpluses and producing at that rate. Something has to take place in between. What is it in between that you suggest ?
Mr. WINGATE. Let us be fair about this. We are never going to know what we are going to produce, and I hope we still break records every year. I can go back and say maybe next year we won't produce over 9 million bales of cotton. Some would argue with me on that, but in 1950 we produced less than 10 million bales on 17 million acres harvested. That is a problem; we have got to try to get rid of some of this burden, some surplus first, and then we will have to try to control to keep it in line.
Senator, I will tell you we have to sell some in foreign countries and get rid of it some way. The Government got rid of the surplus war equipment, tanks, trucks, jeeps, tractors, automobiles, everything; electronics of all kinds. They swept it out, sold over $42 billion for