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STATEMENT OF E. H. AGNEW, PRESIDENT, SOUTH CAROLINA FARM

FEDERATION, COLUMBIA, S. C.

Mr. AGNEW. Mr. Chairman and gentlemen of the committee, I am E. H. Agnew, a general farmer from Anderson County, S. C. I farm 266 acres as a combination cotton and small grain and beef cattle farm.

I am here quite in sympathy with your avowed intention of hearing primarily from individual farmers in South Carolina as to what they want with respect to the future farm support price program. I ask your permission to tender a statement that I have prepared on behalf of the South Carolina Farm Bureau Federation of which I am president.

The CHAIRMAN. Is that in line with the general policy of the Farm Bureau ? Mr. AGNEW. American? The CHAIRMAN. Yes. Mr. AGNEW. To a great extent, yes, but not altogether.

The CHAIRMAN. There is a little difference of opinion, I think, as to whether or not the Bureau is for rigid or flexible price supports. What is your plan as to supports? Does the Farm Bureau of South Carolina want rigid or flexible price supports ?

Mr. AGNEW. Senator, we don't think there is any such thing as a rigid price support because the price is variable according to parity calculations. We are for 90 percent of parity support prices for basics.

The CHAIRMAN. That is what I mean, a rigid fixed amount, a minimum without the sliding scale.

Mr. AGNEW. But we do believe that a producer group among those six should conform to the adjustment principle and be willing to adjust production to consumption in order to earn and justify and defend the obtaining of a 90 percent support price. We don't feel that a commodity producer group, the majority of whom do not subscribe to the adjustment principle are entitled to the same level of support price as a producer group that does try to do a good job in adjusting production to consumption. If I may clarify that

The CHAIRMAN. I wish you would because I don't follow you. Mr. AGNEW. As far as tobacco and cotton, our two principal cash crops in South Carolina, are concerned, historically our farmers by some 98 to 99 percent majority of those voting have continued to approve marketing quota programs. We believe in that.

The CHAIRMAN. That is about the only crop you have here, tobacco and cotton. Mr. AGNEW. And peanuts.

The CHAIRMAN. How about peanuts? Do you believe in 90 percent on peanuts? Mr. AGNEW. Yes. The CHAIRMAN. How about wheat? Mr. AGNEW. Well, provided the wheat farmer subscribes and practices the adjustment principle to the point that he is willing to cut his acreage and control his production to the point that he can justify it. The particular point that I wanted to make

The CHAIRMAN. In other words, you are advocating the old program then of 90 percent of parity on the basics ?

Mr. AGNEW. That is right.

The CHAIRMAN. Because that contemplates a curtailment of acreage in proportion to whatever level is placed by the Secretary of Agriculture in keeping with the supply on hand and demand abroad and a certain amount over and above our requirements.

Mr. AGNEW. That is right, but we do not believe corn, for instance, should be at 90 percent of parity just because cotton and tobacco are. The corn farmers ought to take the same attitude and practice the same principle of adjustment of production to consumption if they are to have the same level of support price. You know there are no marketing quota provisions of law for corn and corn farmers as a rule by majority do not conform voluntarily to the voluntary acreage allotments program.

The CHAIRMAN. You would put corn out of the program? Mr. AGNEW. Their product should be supported in relation to the supply. If they overproduce and create a surplus under those conditions they are not entitled to the same level of support as tobacco and cotton farmers.

Senator JOHNSTON. You are saying you think all six basic commodities should be controlled alike if they receive the parity of 90 percent?

Mr. AGNEW. At least they should have the privilege of using the same kind of machinery if they want to. If the corn farmers want the kind of program they want we are quite willing for them to have it and the present provisions of law predicate the support price now on corn based on supply and not on a fixed 90 percent.

But we farmers, as you have brought out, Senator, very clearly this morning, are in a tight squeeze. During the last several years the average price of our products is down 23 to 25 percent and the average cost of production is up 29 to 30 percent. We have got to approach that thing on both ends and the support price level, be whatever it may, doesn't hold any hope for a complete solution of all the problems of the various commodity producer groups. There are many other things that enter into it, some of which you have intimated this morning.

While we have reduced the acreage of cotton in this country by 8 million acres, foreign countries have increased their production by 17 million acres. What the Congress does, what the Department of Agriculture does, has been on occasion considerably stymied, if you please, and influenced by rulings and practices of the State Department. Now, you did a very fine job in making a billion and a half dollars available under Public Law 804, the expansion of foreign markets of United States agricultural products for foreign currencies. Then the State Department may come along and stymie that program to a considerable extent because of the fear from Russia or somewhere else of being accused of dumping in foreign markets. Presumably the fear stems primarily from friendly countries.

The CHAIRMAN. I believe you are very modest when you say the State Department may. It did. Mr. AGNEW. It certainly has.

The CHAIRMAN. It has done it, and, as a matter of fact, under the law as now drafted, the law today in effect, the Secretary of Agriculture could, if he desires, sell these surplus commodities without consulting the State Department, but you know the only way you might be able to enforce it is impeach somebody and I don't want to do that. The State Department today has nullified our efforts in a measure to dispose of this for fear that they might hurt somebody. The people they are hurting now are these farmers and we might get a change that will make them do these things next election, and I am not trying to use politics in this. Mr. AGNEW. Why, sure.

[graphic]

The CHAIRMAN. The farmers of this Nation need something now, be it Republicans or Democrats, that will do the job together or separately, we have to have something done, not in 1957 but now. Mr. AgNEW. That is right.

The CHAIRMAN. If it is left to me and this committee we are going to do something.

Mr. AGNEW. I wish it were possible for me to suggest a complete and workable solution for all our multiple problems.

The CHAIRMAN. That is what I thought you would do for us this morning, sir. That is what I am waiting for. I am waiting to get that spark from you.

Mr. AGNEW. I accept that as a facetious remark.

The CHAIRMAN. No, it is not a facetious remark. That is why we came here. We did not come here to hear organizations. We have too many of them maybe on the Washington scene now. They don't play politics of course, but they are there.

Mr. AGNEW. They do exert some influence.

The CHAIRMAN. They are there on the scene. We have come here to hear the farmers and that is why we want you, if you will, forget that you are a member of the Farm Bureau now, you are a farmer and you have been in the farming business a long time and you might have a little spark to throw to us that may light the way for us. Let's have it if you have it.

Mr. AGNEW. Due to the fact that the number of people working on farms has decreased by one-third in the past 15 years, we have been able to keep going under present conditions. If we had as many people on farms to divide this income among as we had 15 years ago, we would be virtually on starvation.

A lot is said about the preservation of the family-type farm but the trend of today is exactly in the opposite direction, away from it, bigger units from the standpoint of efficiency, we have to have very efficient production because farmers don't have anybody to pass their additional costs and charges back to.

The CHAIRMAN. Do you think that is a good policy? Mr. AGNEW. It is a necessity. I don't know that it is desirable from all standpoints. Certainly we must preserve something of the American family type operation, but it itself is becoming a bigger operation on the average than it has been heretofore.

Senator SCOTT. Right at that point, wouldn't it be well to encourage that smaller type family farm getting larger within itself through improved machinery and improved production practices ? That is what we need to do as much as anything else, is it not?

Mr. AgNEW. You are right, Senator Scott. South Carolina has approximately one-third of its farms with no more than 20 acres in cultivation, another third with no more than 40 acres in cultivation and a little more than 2,000 farms in this State with more than 100 acres in cultivation. We are a State of little farmers.

Senator Scott. So are we in North Carolina, but shouldn't we give the family-type farm help in getting adjusted upward in its size? Mr. AGNEW. Senator, I think we have no alternative Senator SCOTT. I mean in the acreage as we have it now. Mr. AGNEW. That is correct, because they cannot be an efficient unit from a mechanized operating standpoint unless they are adjusted upward.

The CHAIRMAN. How would you do that, by liberal credit to give them the chance to buy more land so they can utilize it or make it big enough to afford machinery?

Mr. AgNEW. You certainly can't force it but the fact that the investment in farming is so high per worker now, most of the people who can get away from it are going to more lucrative forms of employment and it is naturally adjusting itself. We have classed as farmers a great many people in South Carolina in the Piedmont section where we are industrialized to the point of practically no availability of farm labor, practically all farmers are part-time farmers and that within itself presents a problem. But certainly in the language that somebody in the Department of Agriculture expressed recently the farmers have been walking about in a dream world, that doesn't seem to make sense to me in view of the fact that at the highest point of the average prices for farm commodities 3 or 4 years ago, which was 103 percent of parity, then the statistical record bears out the truth of the fact that per-worker income on the farms of the country was even then only half the average per worker income of people off the farm.

So a hundred percent of parity as it is presently calculated doesn't at all guarantee the farm people parity of income. After all, that is the basic thing that we are aiming for. That is the thing that you gentlemen have distinguished yourselves in trying to help to do and get a program moving.

It is a very difficult thing and it has to be approached in many angles, not just farm-price-support level is enough, we have to do something about expanded export markets. There have been many proposals made the 2-price system, the 3-price system, compensatory payments, now the soil-fertility bank—and so far as we are concerned based on our observation of the way the compensatory payment plan is operating with respect to the wool industry this year that doesn't hold much promise. It is going to be extremely expensive and the wool producers actually aren't going to maybe get the major benefit.

It seems to me that the wool industry itself may benefit to an even greater extent than the wool-industry producers. If my information is correct, and I think it is reliable, only about a third of the wool clip of this year has been sold, and that is the lower grades at prices from 35 to 40 cents, and that two-thirds of the better grades are still awaiting sale; the wool industry is patiently stiting by until the time the year begins to expire and the wool producers must sell their clip in order to collect from the Government the compensatory payment, and then the wool industry has benefited and the thing is going to be expensive.

Some time ago it was estimated to cost $55 million or $65 million and actually may be higher than that. So compensatory payments don't hold much promise. If we applied them all across the board to all agricultural commodities the cost would simply be prohibitive.

We have no sources of tax revenue from which to get any such money. As far as the two-price system is concerned, our people in South Carolina don't look with very great favor, or haven't up to this time, we have another policy development session the 21st of November, 1 week from today, and we may change, but up to now we haven't looked with a great deal of favor upon the thing because we realize that the surplus portion produced above the requirements for domestic needs would be a burden on the market and that that thing would certainly be a very expensive proposition.

The CHAIRMAN. Mr. Agnew, your views so far have been negative—that is, you talked against certain things that have been proposed. Now, have you any proposal of your own? Forget you are a farm bureau member and think as Agnew the farmer. What would you suggest to this committee?

Mr. AGNEW. I would suggest first, as a very serious consideration, give consideration to something to come out of the half dozen proposals made called soil-fertility-bank proposals. It seems to me for that area is a supplemental program to the present support-price program, but not as a substitute, for a support-price program, it may be that something can be worked out that will afford these people, who lose income by reason of reduced acreages, may find a way to take acres out of cultivation and not put them into competitive crops that are also in surplus and yet have a little additional income that will enable them to pay taxes and survive during the period that we are working over the surpluses.

The CHAIRMAN. All right, sir. Is that all, sir?
Any questions?
Mr. AGNEW. I would like to make 1 or 2 more statements, if I may.

The soil-fertility-bank program has a very desirable aspect in that it obviates the necessity for so much attention being given to the control of diverted acres. We get them out of production and don't have to control them. Now if we control absolutely control-diverted acres you are almost forced to control the planting of every acre on every farm because you can't put your finger exactly on those diverted acres.

We farmers in South Carolina are not favorably inclined toward mandatory control of the use of diverted acres, although we realize that there is the hazard of putting those acres into crops maybe not eligible for price support but in surplus position.

The CHAIRMAN. Mr. Agnew, in that connection let me ask you this, sir. Suppose that the Congress should write into the law a provision to set aside 10 percent of the land on any farm and let us asssume further that this 10 percent does not equal the amount of diverted acres that a farmer could plant, let's say, in peanuts, cotton, and wheat.

Mr. AgNEW. And tobacco.

The CHAIRMAN. Tobacco. You have those three here in South Carolina. Do you think it is fair to other producers of commodities to permit the farmer to plant whatever difference there is between the 10 percent and the amount of diverted acres, let's say, if it is only 10 or 15 percent more, do you think it is fair to let him plant crops that would increase the difficulties to the wheatgrower up in the North or the ricegrower in Louisiana or any other grower of a crop that is suffering the same as cotton and others?

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