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or cost of diversion, whichever is greater. Also, none of the excess producers' peanuts would be eligible for loan. As 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.

(b) 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

not only hurt me but you hurt the farmers that I am working with. They are low-income people who are not able and have not been able to take care of themselves economically otherwise. For them I speak because it affects directly me and them. I believe there are hundreds of farmers in North Carolina, eastern North Carolina particularly, that are affected very adversely by the acreage reductions that have come. I myself diversified, have diversified very largely and consequently I have gone out of-formerly I had about 20 tenants on my farm. At the present time I am using 10. And still we are not able to make a reasonable living in comparison with industry such as was pointed out to the committee this morning by Mr. Caldwell of the grange, which I think was a very fine and very comprehensive statement in regard to the comparative estimates of our standards of living in comparison with that of labor. We believe that the United States Government should take steps to reduce the amount of cotton that we have on hand by selling it to the world at world competitive prices.

If that is taken off our market we would come nearer in future anyway of being helped by it.

That is about the extent of my statement to you particularly from the standpoint of this Negro farmer. I speak for him wholeheartedly. I believe you are sympathetic with what he needs and what he wants. Mr. COOLEY. Mr. Pope, your tenants are in exactly the same distressing situation as Wylie Plummber is in.

Mr. POPE. Yes, sir.

Mr. COOLEY. A result of these drastic cuts. You think we should not make the reduction in tobacco acreage any more drastic in 1956 than 12 percent, do you?

Mr. POPE. I am one that is to be convinced of a larger percent until the reports finally come in in regard to the production this year. Mr. COOLEY. Even if it takes 2 or 3 years to absorb the surplus, it would be better to do it gradually than all in 1 year, would it not? Mr. POPE. I agree.

The CHAIRMAN. Thank you, Mr. Pope.

Ladies and gentlemen, this committee has the pleasure of having before us the Governor of your State. I am happy to have him here before the committee and I understand, Governor, that you have a short statement. He is a busy man, we all realize.

We will be glad to her from you, Governor. You may have the answer to all the problems we are trying to solve.

STATEMENT OF HON. LUTHER H. HODGES, GOVERNOR OF THE STATE OF NORTH CAROLINA, RALEIGH, N. C.

Governor HODGES. I doubt that is the case. It is good to be here, and have you here in the State of North Carolina with our people. Senator Ellender, Senator Scott, Congressman Cooley, Congressman Fountain, ladies and gentlemen, I would like to express my appreciation to the committee for providing North Carolinians this opportunity to express themselves on the farm situation. Of all the 48 States, North Carolina has the largest percentage of population living and working on farms. Next to Texas, North Carolina has the largest number of individual farms. Naturally, as Governor of this State I am immensely concerned over the farmer's place in this selective prosper

ity which some of the Nation's citizens are enjoying at this time. I would like to emphasize what has already been said by various peoplethat is, that we cannot hope to have continuing general prosperity if a large segment of our population is caught in an economic depression; that is, on a comparative basis. If the history of the 1920's teaches us anything, it teaches us that if farmers are left out of prosperity eventually everybody will be out. I join my voice with the other voices we have heard today in saying that something constructive must be done. I assume, of course, that this committee is interested in securing our views on what the Federal Government ought to do with respect to this situaiton. I would like to say that we here in North Carolina are fully aware that there are things which can and ought to be done by State leaders. Indeed I would like to call your attention to the fact that we are doing something about it in this State. We have already in motion a small industries plan, designed to provide jobs whereby the income of farmers and farm families may be supplemented without the necessity of their moving from their farms.

It is my belief that our small industries program in due time will provide great help. Perhaps it would be preferable that farming be made so profitable that all farmers could supply their needs and wants without other employment, and I believe you should continue to work toward such a solution for as many farmers as possible. However, while this solution is being sought, our farmers are in need and we intend to try to provide the means for satisfying at least some of those needs by helping create small industries located near the farms and by encouraging the development of food processing industries which can use some of the products which the farmers grow. In the meantime, the Federal Government ought to change its present agricultural policies.

What we need is a return to rigid price supports along with a controlled acreage program. We know that rigid supports will provide the farmer with sufficient income to live on, and we also know that sliding supports will not. Even if, before controlled acreage can take full effect, such a program should continue temporarily to build up the surpluses we hear so much about, it is still necessary that we have it. I am somewhat impatient with those people who point to the existence of agricultural surpluses as evidence that the farmer is creating a burden to be borne by the American public. Actually the existence of these surpluses is evidence that the Federal Government is at least getting something for the money it spends in aid of the farmer.

Furthermore, by their very existence these surplus commodities provide a reserve which helps to keep consumer prices down to a practical level. And I call your attention to the fact that the agricultural commodities held by the Federal Government are at least as much, if not more than what the Federal Government gets for some of the money it expends in aid of other segments of our population; to be specific, transportation subsidies through mail contracts and other means, tax writeoffs for certain industries, defense contracts with guaranteed profits, et cetera. Mind you, I am not criticizing these other things, I am simply trying to emphasize a point made by Senator Kerr Scott in a recent speech-namely, that the farmers are not the only ones who receive help from the Federal Government ; it just happens that they give a tangible product in return for what they receive.

The existence of these products in surplus amounts-I want you to get this point-unduly highlights the aid which the Federal Government provides for the farmers. We do not seek preferential treatment for our farmers, but we do seek some approach to equality of treatment. We are aware that all of us including farm organizations and groups have much long-range planning to do to reach a permanent solution of the farm problem, but for the present at least it is my belief that only through rigid supports and controlled acreage is the farmer going to be able to secure his share in the wealth of the Nation.

Thank you for the privilege of appearing before you.

The CHAIRMAN. Governor, would you mind expanding on one statement you made there about this self-help, the help to the farmers? What is the State doing?

Governor HODGES. What we are proposing here, we have had it in operation in plans for some months to create here grassroots industry, small industries starting in the localities. We are a State of small towns and villages primarily. What we believe is more fundamental to the final rising economy of the State, and we need it because we are still down 43d in the Nation in our per capita income, is to get a larger proportion of our communities with some little home industry. We raise things; we take things out of the water, out of the fields, and we send them away to somebody to process and package and to make money as middlemen, and merchandising.

We propose as far as we can, and we are raising money to that effect, have credit corporations going, in the coming months we have in mind, already have, applications for two and a half million dollars of credit from these little industries throughout the State.

The CHAIRMAN. That is the kind of aid you are making available. Governor HODGES. We hope we can keep the people on the farm as far as possible, and if you can get aid in that way we can get up processing plans.

The CHAIRMAN. Thank you, sir. We are glad to have had you.

STATEMENT OF S. L. HOKE, WESTMINSTER, MD.

Mr. HOKE. I am S. L. Hoke, from the Free State of Maryland. I am a seventh generation farmer. A fellow said this morning he is a fourth generation. I top that by saying I am a seventh generation farmer.

Without going into the brief I prepared, there are two points that I thought of making. I think we are all familiar with the situation that we are in. I think we are all, the Congress of the United States, the farmers of this country, are attempting to work out a plan to get us out of this present situation into a better situation or position. I have given a great deal of study on this matter over a number of years, I have been associated, besides being a farmer, a beef cattle farmer, I am one of these beef cattle fellows, I served on the national advisory committee for 10 years of the American Farm Bureau Federation and I have witnessed their policymaking by farmers from every region of the United States on a commodity basis, and in my opinion I don't think there is any place in this country where, when you get peanut growers from the regions, cotton growers from various regions, cattle

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