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Mr. RAWLINGS. No, sir; we said I think-I meant to say anywayit was our position so long as the producers subscribed to marketing quotas and acreage allotments and yield as prescribed by Congress.

Mr. COOLEY. If the beef cattle or poultry or dairy people could work out some control program and present it to Congress then I think they would be justified in asking for the same support level given to row-crop producers who are controlling crops. As Mr. Murray pointed out, the dairy people realize they have a difficult problem in trying to control production.

The CHAIRMAN. All right. Mr. RAWLINGS. We recommend repeal of the present minimumallotments provision whereby the minimum national allotment is now fixed at 1,610,000 acres so that allotments and quotas for edible purposes could be fixed lower closely in line with demand. However, together with this—and it is the most important thing to us-is the necessity to amend section 358 (c) (2) of the Agricultural Adjustment Act of 1938, as amended, so as to remove the discretionary authority of the Secretary of Agriculture and in general assure that the original intent of this section is complied with.

The CHAIRMAN. Would you recommend that we provide no acreage floor but just leave it to the administrator?

Mr. RAWLINGS. No, sir. We say do that but together with it we want to be clearly understood, that we don't want to remove this unless a good bit of the discretionary authority now vested in the Secretary under section 358 (c) (2) is eliminated. And in order to conserve time I will state that the recommended revisions of section 358 (c) (2) are outlined in our full statement which we are filing with the committee, sir.

It gets into the recommendations, which are fairly well detailed, sir. Virginia peanut growers have been, and are now, giving thoughts to means of further improving the peanut price-support program, a program

which we consider one of the more effective and better programs now operative. We are especially interested in a practical method of permanently putting the program on a self-financing basis and at the same time provide a continuing fund which would permit an effective, year after year national campaign to promote and increase the per capita consumption of peanuts and peanut products.

At this time our thinking is not final and we realize, this together with other recommendations, must not only be refined but thoroughly coordinated with growers in other States. However, our present thinking and approach is along the following lines.

In addition to the elective price-support programs before outlined from which peanut growers would each 3 years also be permitted by referendum to elect a self-financing and promotion program. In event the program had appeal to the growers of some other commodities to which the program was reasonably adaptable, as we believe it would be, certainly we would favor them having the same opportunity of choice.

Six dollars per ton would be added to what would otherwise be the support price; $12 per ton would be deducted from producers by buyers and remitted to a central fund by buyers, on all peanuts marketed by producers, to cover the cost of handling and diverting peanuts not

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needed to meet edible requirements and provide adequate promotional funds.

The law should make it possible, with grower approval in a referendum to within reasonable upper and lower limits, increase or lower the $6 and $12 on the same pro rata basis, as experience indicates necessary. The amount of the payment could thus be fixed each 3 years to provide funds estimated to be needed to cover handling, diversion, and promotion costs for the next 3 years, plus any amounts owed to CCC or minus any surplus carried over in the fund from prior years.

A predominantly grower committee, but providing for sheller, broker, and manufacturer representation would be established to jointly administer the fund with the USDA.

As much as 35 percent of the total yearly fund, the exact amount to be determined by the committee, would be made available on a contractual basis by the Secretary of Agriculture to an agency or agencies designated by the industry committee for us in publicizing peanuts and peanut products and promoting their increased consumption.

It is estimated, the funds accruing to the general fund from payments of $12 a ton by growers would be sufficient, after allowing for the maximum promotional funds, to cover the cost of diversion of surplus averaging 8 percent of the total production.

We believe this basic approach offers much promise and we ask your study of the general approach as we continue to work on refinements and coordination with other growers in other areas.

Mr. COOLEY. How on earth could a program of that kind possibly be constitutional ?

Mr. RAWLINGS. We have been told by people within the Department of Agriculture that in the opinion of the legal people over there that this thing would hold. We knew on the surface at first we raised the same question, sir. I don't know that it is an official opinion from the Department of Agriculture but we have been told it has been checked by the Solicitor's section and on an approach along that kind could be made so it would hold.

Mr. COOLEY. The processing tax was eliminated ?
Mr. RAWLINGS. Yes, sir.

Mr. COOLEY. You know that you cannot use a tax field with the Federal Government to raise revenue for a particular purpose, beneficial to a particular group. I do not see how you could possibly bring a program of that type within the four corners of the Constitution. I think the industry might do something of that kind just as the dairy industry. They have a self-help program and they are trying to finance and help solve their own problems. It seems to me that it would be well for the peanut industry to try to work it out within the industry itself.

Mr. RAWLINGS. Bear in mind what we are proposing assuming that it would hold water legally—and we had been advised in the Department it would—it would be a completely self-supporting program and at the same time it wouldn't require any kitty to start us off or anything else. We would have a continuing fund year after year to get out and do a job on promoting increased consumption of peanuts and peanut products.

Mr. COOLEY. That would be somewhat in the nature of price insurance which I have been trying to have the Department officials explore for several years. It seems to me that if the insurance companies of the country can insure everything that they now insure, we certainly should be able to work out a price insurance program.

The CHAIRMAN. Mr. Snelson, please. Give your name in full and your occupation.

STATEMENT OF DAVE SNELSON, LEICESTER, N. C. Mr. SNELSON. I am Dave Snelson, a dairy farmer and a burley tobacco grower from Buncombe County up in the mountains of this State in the last congressional district.

Well, I would start off by saying we have in the county that I am from, Buncombe County, a little more than 3,000 burley growers. They have fifty-three one-hundredths of an acre each on the average. That is a very little. That is the class of people that you have been talking about here in the hearing this morning, the one-gallus crowd.

Those people live on the farm, 9 out of 10 of them. They have I guess the smallest income of any farm group in the United States. That fifty-three one-hundredths of an acre of tobacco grown by those people buys more washing machines, more refrigerators—where they have electricity, some don't have I would say, than all the tobacco grown in Kentucky with those big 100- and 200-acre allotments out there. These are poor people that grow this tobacco up there in the mountains. They own their little home, the most of them do. And when they cut the minimum acreage back to fifty-three one-hundredths that was the wrong thing for those people up there. I would love for it to have been left at 7 anyway. I think it ought to have been.

I don't make my living from burley tobacco, though I do have an acre and eight-tenths allotment on my farm. Me and my two boys live on the farm. The thing that we are very much concerned about up there, you take a farm, a man starting out to try to make a living on the farm, he will have invested forty to fifty thousand dollars. The man that works at public works at these big places, I am not objecting to high wages, that is all right, but he has more take-home pay and he doesn't have anything invested except maybe a dollar and a half or $2 dinner bucket. He makes as much money as we do off of a forty or fifty thousand dollar investment.

I I don't see how you could expect them to stay on the farm.

The CHAIRMAN. Mr. Snelson, are you telling this committee that a small farm in the mountains has an investment of as much at $50,000?

Mr. SNELSON. Some do where they are in the dairy business. I am in the dairy business.

The CHAIRMAN. The little farmer who has five-tenths of an acre of tobacco has something else; does he not?

Mr. SNELSON. That is about all of his money crop. He makes everything he eats on the farm. This goes to buy their clothes and what little, probably their children go to school and maybe the Government helps them about buying milk at school. The buses pick them up and bring them to school. They are too far back to work at any public works and it seems to me that if the maximum allotment could be left at seven-tenths it would have benefited more of the poor people that are trying to stay out on the farm. I am talking about one county. There will be probably somebody here with all the figures for all of the burley belt in this State. We at present are getting along very good in the dairy business.

We did have about 3 pretty hard licks below the belt, 2 bad dry years that dried up everything and then last spring everything was froze, the temperature dropped to about 12° when our barley was just about ready to go into the silos and froze everything down. We was declared a disaster area and I thought maybe you could tell me what that meant.

The CHAIRMAN. That means you could get cheap money to recoup.

Mr. SNELSON. Yes, that is right. And we had some little better spirits there for a few days and then we went into this designated place where we were to receive our little allotments and I went in and of course I happened to know this gentleman very well that was in that place, and I asked him what the chances were to get a little handout and he said, “Dave, my Lord, if I was to let you have some money every banker in this country would jump on the boys up in Washington.'

He said we can't let anybody have money here that can get it anywhere else. My Lord, if that is disastrous—we was declared twice disaster areas and we never derived a penny yet. I don't think there is not too much use of asking any more.

Two years ago when all of our hay was gone and looked like all our cattle was going to starve, then we got declared a disaster area but we didn't get no help.

Senator, did you boys get any down here?
Senator Scott. No, sir; they stated we were doing all right.

The CHAIRMAN. Have you any suggestion to make to us as to how to solve this farm problem?

Mr. SNELSON. I would like for the minimum allotment to be raised back up to seven-tenths of an acre.

The CHAIRMAN. That was done just recently.
Mr. SNELSON. Was it!
The CHAIRMAN. Yes.
Mr. SNELSON. It is raised back?

The CHAIRMAN. No, it is not raised back. You would have to repeal laws you passed last year or this year, but we will be glad to consider it.

Mr. SNELSON. I will tell what Kentucky wants to do. They can use them big farms out there to raise some of these short-tail horses for Great Britain so you fellows will loan them the money to buy them with and we will get them to do away with their allotments for

years, they say if they can lose their farm for 5 years and still hold their allotments they will do that and not raise burley tobacco. That would be a fine trade to make if we could make that trade.

The CHAIRMAN. We will consider it, sir.
Any questions?
We thank
you very

much. Mr. Blalock, please.

STATEMENT OF H. G. BLALOCK, PRESIDENT, VIRGINIA FARM

BUREAU FEDERATION, RICHMOND, VA. Mr. BLALOCK. H. G. Blalock, farmer in Mecklenberg County, and also connected with the Virginia Farm Bureau Federation.

Senator SCOTT. Mecklenberg County, Va.?
Mr. BLALOCK. Yes, sir.

I have a statement prepared, but in order to save time, with your approval I will file this with you. The CHAIRMAN. It will be filed for the record.

(Mr. Blalock's prepared statement follows:) We appreciate greatly the opportunity of appearing here today to discuss with you some of the critical problems now facing farmers.

There isn't any question in the minds of most farmers that we are in a very tight situation. We are fortunate that you are concerned about this and we are even more fortunate that you are willing to examine the problem calmly and without prejudice on a bipartisan basis. Finding one way out of the present situation will not be easy and there are no single shot cures. We are suffering already from too much aspirin and paregoric-medicines which are popular to prescribe and easy to take but in this case the patient needs better medicine.

Farmers are specialists in production and the record shows that we do very well at it. We are not, however, specialists in marketing and merchandising and it is here that we need help if we are to clear the pipelines of distribution which are presently clogged with about $872 billion worth of surpluses—rapidly becoming worse and more burdensome every day.

This surplus production is coming from thirty-odd-million acres, for the products of which we have been unable to find satisfactory markets. Many of these acres should never be in cultivation except during periods of national emergency. To keep them under the plow, subject to constant wind and water erosion, producing products for which there is no need and no market, violates sound conservation and economic principles. Farmers know this and we have made and are constanly making attempts to withdraw surplus acres from production. We succeed in taking acres out of tobacco, cotton, wheat, peanuts, and a few other crops perhaps, but these acres, for the most part don't stay idlethey are shifted into the production of some other crop. This transfers the problem from one group of farmers to another but does little to solve the total problem. Our present efforts to eliminate the waste involved in cultivating unneeded acres have developed into a childish game of passing the hot chestnuts. We should be able to do better than this and we can.

We are now spending around $3 million each day on price-support operations. About 1 million is for storage and about 2 million is required to cover losses representing the difference between the support price and the selling price.

The margin of profit per acre on many of our surplus acres is necessarily very slim, representing a very low net return to the farmer. Yet the production from these acres depresses the price and reduces the net which the farmer would otherwise get on his more productive acres. We believe that very serious consideration should be given to a program under which surplus acres would be retired from production and buttoned up in soil-conserving crops, in which condition they would steadily improve in fertility until such time as needed by our rapidly growing population. We should be able to accomplish this for a fraction of what we are spending on our present price-support operation.

Such a program would have many advantages over the present one from the standpoint of the Nation as a whole as well as for farmers. Strictly from a farmer's standpoint, it would help us to move gradually away from features in the present program which have placed severe restrictions and limitations on our ability to earn satisfying net incomes.

Our tobacco program, for example, is often cited as being a model after which other programs should be patterned. From the taxpayers' standpoint it is. In many other respects it is a case of the grass looking greener on the other side of the fence.

In Virginia our average flue-cured allotment for 1955 was 4.2 acres. duce three other types of tobacco. Average 1955 allotments for these types are as follows: Sun-cured, 1.35; fire-cured, 1.31; and barley, 0.64. This is getting fairly close to the breadlines, and these allotments are gradually becoming smaller. The average 1955 allotment for all 4 types produced in Virginia is 2.41 acres. This program is often said to be especially good for the small farmer. How much smaller does he have to get before it isn't good for him any more?

A study conducted by Senator Eastland and other members of this committee last summer indicated that much this same thing has been happening to our cotton farmers. We would like to urge that similar studies be made on all of our principal crops. If the results of such studies were widely publicized, producers would have a much better understanding of just why our products are

We pro

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