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to these paper companies they can make paper out of it. Considerable work has been done along those lines.

If a farmer could plant crotalaria with no fertilization, nothing to do but sow it and harvest and reap $40 or $50 from paper industry and save small trees, we would go a long way toward solving this problem.

The CHAIRMAN. Have they made experiments sufficiently far that you can produce paper from it?

Mr. UPCHURCH. Yes. The so-called Products Co. at Hartsville, S. C., made cones out of it. Considerable work has been done on it. The pulpwood people are worrying about where they will get the pulpwood for the future. It will take twice as much pulpwood in the year 2000 as it does now.

The CHAIRMAN. Maybe we have too many pulpwood mills in North Carolina.

Mr. UPCHURCH. They don't have enough to meet demand. Pulpwood price is going up. Newsprint prices have gone up 2 or 3 times. That is the one thing the little farmer and big farmer and everybody could grow. They can harvest that mechanically and carry it to the pulpwood mill.

The CHAIRMAN. The first thing to be assured of is a sale. these people to make paper out of it and you won't have trouble disposing of it.

Mr. UPCHURCH. I think you could give State college a half million dollars and they could work out the details and get the pulpwood

The CHAIRMAN. We are giving them a lot now. We have four laboratories.

Mr. UPCHURCH. I did a lot of work several years ago on it and ended up like this: The laboratory at Savannah, Ga., I contacted them and they said they would like to experiment on it, and if I would harvest it and pay the freight down there they would run some experiments. I said I didn't have anything to gain by it, so why should I pay it and I dropped it.

I think we have to get away from the thinking that this high nave to think different from what we have done to solve the problems of agriculture. We just simply can't take less with industry getting more. The thing I can't understand is why no manufactured product is regarded as surplus.

In my town they have literally thousands of vehciles and some of them are brand new, made in 1955, out in the weather. They are Army surplus but they are stored there. You don't hear a word about those. The people that manufactured them got 2 or 3 times the labor involved, got 2 or 3 times what the farmer got for his labor.

The CHAIRMAN. You are stating the problem now. Have you got anything else to offer?

Mr. UPCHURCH. Those are the things, I think one thing you could do for these farmers who have been hard hit, especially like the ones in North Carolina due to the hurricanes, and tornadoes and droughts, we could set up a program to loan them commodities rather than money. Let them replace those commodities in 3 years. The Government would be better off because they would be getting new grains that might be going out of condition. The farmer would repay it in 3 years. The CHAIRMAN. What would he do with it?

Mr. UPCHURCH. Process it and sell it or feed it to cattle or do anything he wanted to, just like he owned it. He would put that grain back in 3 years, he would divide his loss in 3 years, it wouldn't make any more grain because he would have to grow the grain on allotted acres. I think it would save North Carolina farmers in the eastern part of the State a great deal of money right now. If a man lost his cotton crop loan him three-fourths of the number of bales he actually grew.

The CHAIRMAN. That cotton would find itself back in the channels of trade and it wouldn't lessen our burden any, would it?

Mr. UPCHURCH. It would to the extent that that farmer did not make any cotton that

year. The CHAIRMAN. The fact that he doesn't make it, of course it is too bad for him. We have had lots of people to suffer in my area with hurricanes and by the way, of course I don't wish any bad luck to anybody, but you know since 1926 we have been able to shoo most all the storms to the east of us and I hope we can get them farther east. But those are things you can readily understand, that if there is a calamity in one place, the farmer

Mr. UPCHURCH. I am not wanting the Government to give the farmer anything, just loan him something.

The CHAIRMAN. What good would it do if he put it back?

Mr. UPCHURCH. It would save the Government appropriating money to bail him out rather than-loan him commodities they already have.

The CHAIRMAN. To fed his stock? Mr. UPCHURCH. Yes, or in the case of cotton, loan a man threefourths of his cotton.

The CHAIRMAN. What would he do with the cotton? Mr. UPCHURCH. Sell it. The CHAIRMAN. How could you get rid of supplies that way? You take it out of the warehouse, give it to him, and let him sell it to the trade.

Mr. UPCHURCH. Yes, and he would put it back and the Government wouldn't be any worse off. They would save an average of 18 months' storage on the deal.

Mr. COOLEY. Did you explain who you are and your official connection?

Mr. UPCHURCH. I am president of the North Carolina Cotton Growers Association.

The CHAIRMAN. Thank you.
Mr. Sugg, please.

STATEMENT OF JOE S. SUGG, EXECUTIVE SECRETARY, NORTH

CAROLINA PEANUT GROWERS ASSOCIATION, INC., ROCKY MOUNT, N. C.

Mr. Sugg. I am Joe S. Sugg.

Mr. Chairman, here is my statement. I think it will require about 7 minutes.

I am here as executive secretary of the North Carolina Peanut Growers Association and as a peanut farmer of Edgecombe County, N. C. The North Carolina Peanut Growers Association is a nonprofit, producer-supported organization representing the peanut growers of North Carolina, or approximately 60,000 farm families.

On behalf of these farm families, I wish to express their sincere appreciation for this opportunity to discuss with you briefly and, I hope, constructively, some modifications which we feel will improve the present peanut program.

Before discussing the proposed modifications, I wish to make it crystal clear that the peanut farmers of North Carolina have believed in, cooperated with, and approved overwhelmingly the peanut programs which have been in effect since 1933. This approval has been evidenced by the very substantial majorities with which all grower referendums have carried. These programs have added stability previously unknown to the peanut farmer. As aware as we are of the benefits which have accrued from the peanut programs, we are cognizant also of the criticisms which have been directed against itparticularly the alleged high cost to the taxpayer.

As a means of strengthening the peanut program, the following modifications and changes with price support and marketing quotas continued in effect as now provided by law are presented for study and consideration.

(a) The definition of “normal supply” would be corrected by changing the allowance for the carryover from 15 to 30 percent of the estimated domestic consumption, plus estimated exports. Such a change would assure consumers of ample supplies in years of abnormally low production and would not, when coupled with other changes proposed herein, create any excessive cost.

(6) The present national minimum allotment provision would be modified so that allotments and quotas for edible purposes would be fixed more closely in line with demand, except that such allotments could be reduced below the present minimum of 1,610,000 acres by more than 5 percent per year.

(c) Under the present program $9 per ton is deducted from the support price of all peanuts marketed by producers to cover the costs of handling and diverting those peanuts not needed to meet edible requirements. For example: With support now at 90 percent of parity or $242 per ton for the 1955 crop, the market level is established by the announced support less $9 per ton or an average advance of $233 per ton for all types.

We suggest for consideration that the full announced support be advanced to producers and a payment of not more than $12 per ton be paid on all peanuts marketed by producers to cover the cost of handling and diverting those peanuts not needed for edible requirements. The payment would not exceed $9 per ton for the 1957 and 1958 crops, or $12 per ton for the 1959 and subsequent crops.

If the fund was inadequate to pay diversion and other costs in any year, Commodity Credit Corporation would pay the deficiency and would be repaid out of the fund in later years.

The amount of payment would be fixed each year to provide estimated funds required to cover handling and diversion costs for the year plus any amounts owed to Commodity Credit Corporation or minus any surplus carried over in the fund from prior years.

(d) In lieu of the present penalty on peanuts marketed in excess of the farm quotas, an amount in addition to (c) above would be paid on all such excess peanuts equivalent to 60 percent of support price

or cost of diversion, whichever is greater. Also, none of the excess producers' peanuts would be eligible for loan. Ás now provided by law, peanuts harvested in excess of the allotment for any farm in any year would not be considered in the establishment of the allotment for the farm in succeeding years.

(e) Not more than $250,000 annually would be made available by the Secretary of Agriculture from funds derived from (c) and (d) above for use in publicizing peanuts and peanut products and promoting their consumption.

An industry committee would be established by the Secretary of Agriculture, including growers, shellers, brokers, and manufacturers, to advise him on the most constructive use of this fund.

(f) We recommend strongly that peanuts be supported at a level of not less than 90 percent of parity.

To summarize the operation of the peanut program as modified by the above suggestions, the following conditions should prevail:

(a) Commodity Credit Corporation would operate a “sound” program for purchase and diversion of No. 2 peanuts so as to minimize more expensive diversion of farmers' stock peanuts. This should permit reduction of the general payment on all peanuts below the authorized maximum of $12 per ton.

(6) Use of marketing cards would be continued. Buyers would be responsible for payment of the specified amount per ton for each year on all peanuts marketed by farmers and would be authorized to deduct such amount from the price paid. The buyer also would be responsible for payment of the amount determined for excess peanuts and would be authorized to deduct such amount from the price paid to growers. Peanuts placed under loan would not be sold for edible use at less than the support price, plus a markup of 15 percent of the loan.

(c) The $9 per ton which is now deducted from the announced support and penalties collected for excess peanuts are not credited to the total cost of the peanut program. Under these proposals the funds obtained from the general payment of not over $12 per ton would be sufficient to cover the cost of diversion of surplus averaging 10 to 12 percent of the total production. The funds obtained from the payment on excess peanuts would cover the cost of handling and diversion of such peanuts.

(d) We recommend an increase in research and education, on production, marketing and utilization. These suggested modifications will, in our opinion, strengthen the producers position, protect more amply the consumers position with respect to supplies and reduce the costs of the program.

Thank you, gentlemen, and I offer to you our cooperation and assistance in every possible way in connection with solving the problems of the peanut grower which may come before your distinguished committee.

The CHAIRMAN. Thank you.

Mr. Cooley. Do I understand that you are advocating a price support at 60 percent of parity on excess peanuts?

Mr. Sugg. A penalty. In other words, a man who plants in excess of his allotment would pay the $9 to $12 a ton just like the man in the allotment.

In addition, he would be penalized 60 percent of the support price for overplanting. He would have to sell to the oil mills.

Mr. COOLEY. Does the Government get $9 a ton now!
Mr. Sugg. Yes, sir.
The CHAIRMAN. Thank you, sir.
Mr. Pope, please.

STATEMENT OF HUNTER POPE, ENFIELD, N. C. Mr. POPE. I am Hunter Pope of Enfield, N. C., I am a farmer and I am director of the North Carolina Cotton Growers Association, a director of the Peanut Growers Association and member of the National Cotton Council.

Senator Ellender and members of the committee, I hesitated to appear before this committee, as I wrote Senator Scott, but upon advice and talking with our county agent and upon talking with a humble Negro farmer, I come here to represent him first of all. Wylie Plummer is his name, 67 years of age, in Halifax County. He has a total acreage which means 58 cultivated acres; 2.8 acres of tobacco, 8.4 acres of cotton, 8.7 acres of peanuts, and an allotment of 14 acres of corn.

He has himself and wife, a son and a wife and two children who live on this farm. He asked me to speak to the committee for him and for thousands of others whom he represents. He has a direct problem of living and that of earning a living on the farm.

As Senator Ellender stated this morning, what you are interested in primarily is these folks who want to live on the farm and stay there and make a living. Can that man with the proposed reductions that are coming this year make a living on his farm by himself? As 1 compute it, his gross income this year will be less than $5,000 for those 6 people.

Out of that $5,000 he must take all expenses of growing those crops. Does he need help from the United States Government in some form or other? I contend that he does. He wants to stay on the farm. Can he stay on the farm unless you provide some way of assisting him in his income? I would say that a proposed rental of his diversified acres in some form that you could work out successfully would assist him in that proposition.

The CHAIRMAN. Have you any ideas on that?

Mr. POPE. I believe that the matter that was proposed in the West of a rental of those acres would materially help him.

The CHAIRMAN. What would that rental be based on, the value of the land, sufficient return on his investment by way of a reasonable interest rate plus taxes? Mr. Pope. I think that would be a fair way to compute the thing:

The CHAIRMAN. We have other suggestions that at least half the income that he would make on those acres should be given to him as compensation.

Mr. POPE. That would assist him. At the present time as you know, if the proposed acreage that has been given here of tobacco is carried into effect thousands of people in eastern North Carolina will be forced off the farms. That has been going on for the past several years. Now, as for my own position, I happen to operate and work with and for several tenant farmers and when you reduce the amount of acres or have a minimum number of acres then you

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