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Reporting Service of the Department of Agriculture for several major commodities on which the Secretary has reduced the price-support level:
Now, gentlemen, what is already a serious injury to agriculture is about to be compounded further in 1956 if the full force and effect of both the flexible price-support system coupled with the modernized parity formula is allowed to take effect. Just let me cite what the additional loss will be to Virginia farmers alone in 1956. The figures I will use are for commodities which will be most severely affected in 1956—peanuts, wheat, cotton, and corn.
It is estimated that Virginia will produce approximately 100,000 acres of peanuts in 1956. If the 1956 yield should be 1,750 pounds per acre, which is a conservative yield figure, our total 1956 crop will be about 175 million pounds. Using present parity of 13.5 cents with price supports at 90 percent of parity, this crop would have a gross value of about $21,175,000.
In 1956 modernized parity will become effective on peanuts. This will probably lower parity itself from 13.5 to 12.8 cents. This is a reduction of 5 percent which is the maximum allowed in any one year under the transitional formula. Now, according to the most recent estimates I have seen, it appears that the total supply next year will exceed 130 percent of normal consumption. This means that the Secretary will have the authority to reduce the price-support level to 75 percent of parity; and if we can judge the future by the past, this is exactly what he will do. Under a lower parity, plus supports at 75 percent of parity, the support level in 1956 could very well be only 9.6 cents. A 175 million pound crop at 9.6 cents per pound would gross $16,800,000.
The loss which Virginia peanut farmers will take in 1956 as a result of flexible price supports and modernized parity is $4,375,000.
Using the same process of reasoning and applying the provision of the modernized parity formula plus flexible supports, Virginia farmers will stand to lose at least $13 million as a result of lower price supports on wheat, corn, and cotton in 1956 alone.
This will then mean that Virginia farmers alone will be at least $17 million worse off under the flexible modernized parity price-support program than they would have been under 90 percent of present parity.
The already weakened farm economy of my State simply cannot stand to have an additional $17 million siphoned off without serious repercussions. I submit that it is not only in the interest of the farmers, but it is in the best interest of every businessman, every banker, every worker, and every other person in our State to prevent this bone-crushing loss to Virginia agriculture.
On behalf of the membership of the Virginia Farmers Union, I wish to submit the following recommendations which we believe if adopted will largely correct this gross hardship on the farmers of our State and Nation :
1. Enact legislation which will restore price supports on all basic commodities at no less than 90 percent of parity effective for the 1956 crop.
2. Enact legislation which will provide for use of dual parity instead of modernized parity. In this connection I would like to point out that the modernized parity formula as provided in the present law helps no one and works a grave injury on the producers of peanuts, corn, wheat, and cotton. It helps no one, since the few commodities on which it provides a higher parity price are those commodities which the Secretary has refused to authorize effective price supports. The dual parity formula would simply give the farmers the advantage of the higher of the two.
3. Enact legislation which will provide the producers of dairy products, beef cattle, and poultry, as well as all other agricultural groups, the legal authority to use marketing quotas as a means of maintaining the proper balance between supply and demand as is done in the case of the basics. The law should further provide, as in the case of basics, that quotas shall
not be effective unless approved by the producers themselves in a referendum. If the producers of any agricultural commodity approve the use of quotas, then we urge that the price of that commodity be supported at no less than 90 percent of parity through the use of production payments, commodity loans, or any other method which will insure that the effective price to the producer will be at least 90 percent of parity.
4. Generally speaking, we are opposed to the method of price supports now being used by Secretary Benson in attempting to strengthen the hog market. When $80 million of the taxpayers' money is used to support hog prices, it should be so used as to insure that the producers of those hogs will receive the direct benefits and not the packers. If the purchaseprogram method of supports is to be continued, then any packer from whom the Government purchases bogs should be required under penalty of law to pay the producers not less than 90 percent of parity.
5. In addition, we favor legislation which will provide for a conservation acreage reserve. Under this program, the Secretary of Agriculture would determine the number of acres of farmland not needed in the year ahead for the production of farm home-used and commercial sales of crops, including hay. The Government would then stand ready to contract with farm operators over the country to put as much of their land into the conservation reserve as each individually cared to, receiving in return a conservation award per acre equal to usual cash rent or customary landlord's share for putting the land into its optimum conservation condition. If special facilities, land treatments, or construction were required, the farmer would be eligible, in addition, for an agricultural conservation payment, under the ACP program to defray a part of the cost. In case more acres were made available for the reserve than the national total, the Secretary would assign each State and county its proportionate share of the national total. An individual farmer could offer to place all, a part, or none of his farmland into the reserves.
6. To bring about a vast increase in consumption of food commodities, Virginia Farmers Union urges :
A. Adoption of a nation-wide food allotment stamp plan.
B. Expansion to all schools of the national school lunch program now serving less than one-third of the schools.
C. Improvement and expansion of the fluid milk for school children program to provide free at least 2 half-pints of milk per child per day and pay local school district administrative costs.
D. Adoption of improved Federal standards and inspection of perishable farm commodities in terminal, as well as shipping, markets with adequate Federal financing.
E. Adequate nutrition standards for the Armed Forces and veterans hospitals, penal institutions, hospitals, and other public and private nonprofit agencies by means of commodity donation or food subsidies.
F. Adoption of a credit program to encourage modernization and im
provement of perishable farm commodity terminal markets. Many United States-produced farm commodities, up to 10 percent of total production, must in normal years find a market outside our national boundaries. This market can and sould be expanded. Additional agricultural attachés and improved advertising and merchandising will help some. But just as in the case of domestic market, the really big increase in market demand for United Statesproduced farm commodities can come only from increased purchasing power in foreign countries, or from United States Government purchases designed for foreign shipment. To raise our export shipments we favor
A. Negotiation and establishment of additional international commodity agreements for all raw materials that enter importantly into international trade, similar to the International Wheat Agreement, which will bring into agreement all of the important nations as well as all of the exporting nations for each commodity.
B. Negotiation and establishment of an international food and raw materials reserve or clearinghouse, to stabilize supplies, relieve famines, and stabilize prices of all food and other raw material commodities that enter importantly into international trade.
C. Continuation and intelligent expansion of the point 4 program of United States aid to economic development of other free nations in a way that will increase coordinated economic growth of the nations of the free world.
D. Continuation of the reciprocal trade agreements providing for worldwide tariff reductions and customs simplification. I assure the members of the committee that we are grateful to them for devoting so much of their time to the study of the plight of the Nation's farm families. Again, let me state that our interest is in agricultural programs that protect the families on the land. We sincerely believe that it is in the interest of all the citizens of the United States to adopt programs such as I have discussed which will preserve our long-cherished system of ownership and operation of individual farms by individual farm families.
STATEMENT FILED BY EDGAR L. WILLIAMS, SALISBURY, MD. I am a fruit, vegetable, and grain grower in the heart of the fruit and vegetable section of Wicomico County, Md.
Being a grower of these commodities, I would like to tell the committee that the land taken out of production of commodities under controls should not go into the production of fruit and vegetables.
STATEMENT FILED BY MISS ISABELLA C. WILSON, CHAIRMAN, MASON COUNTY
FARM BUREAU DAIRY COMMITTEE, ARBUCKLE, W. VA. There the eight ways that I believe the dairy farmer can be benefited in his present calamitous condition. Some of these conditions may be helped by the Congress of the United States and some by our own State legislatures.
I. I believe that the Pure Food Division of the Pure Food, Drug, and Cosmetic Agency should be administered in the United States Department of Agriculture and that adequate funds should be provided to stop the adulteration and misbranding of milk, cheese, ice cream, butter, and any other dairy products.
The Congress of the United States passed a bill making it possible to color margarines yellow and the honorable gentlemen should be as willing to protect the dairy farmer as they are to protect the manufacturer of margarines. Margarine sold at 56 cents per pound uncolored; now it is selling cheaper than lard, even colored, wrapped in waxed paper, cut in quarters, and packaged in boxes printed in three colors.
Somebody told the cotton farmer that the dairyman was against him. Somebody persuaded him to rob the cottonseed meal of its fat to make margarine. This fat is needed in the cow's feed to make a milk rich in cream; and the dairyman is paid for his milk according to its cream content. The price of milk will vary as much as 80 cents per hundred by cream content alone.
The feed manufacturers are now using animal fat in the dairy feed which is indigestible by cows that can digest fat only in the form of oils.
Now I leave it to your imagination where they get that animal fat since plain lard is as expensive as margarine, and tallow (lanolin) is used in beauty preparations.
II. Dairy farmers are not getting 75 percent of parity for their fresh fluid milk.
There is a lot of rubbish being talked about the need of dairymen being more efficient. Any businessman will tell you that sooner or later he will go broke with a business operating at 25 percent or more below what it costs him to produce. There is a fine dairyman in our community who has been operating for nearly 50 years who is spending his life's savings to operate his dairy farm. He plants to sell his herd in the spring.
If you expect a dairyman to produce an essential food like milk he must be protected
There are some individuals and groups that society must protect for its own preservation. Society protects the wife and mother-we must do it for its own protection.
If we want good clean milk from healthy cows we must give the dairyman the cost of production. One form of that protection is against the importing of foreign dried, skim, and whole milk.
Here in our area, the industrial area of the Kanawha and Ohio Valleys, the section hand on the railroad, the truckdriver, the worker in the chemical, metal plants, and electrical plants, receive many times what the dairy farmer with
an investment of $35,000 or more and a labor day of 15 hours makes for himself. The only man who could operate under these conditions is the family farmer, and he can't because his boys won't stay with him. They go away to earn these high wages and his girls won't either. One of our former dairy helpers with four little children is staying home and keeping house while his young wife earns $35 or $50 per week in a factory selling most of its products to the Government. These conditions I know and know too well for we operate the oldest dairy farm on Kanawba River, for 50 years in continuous operation, and I am going to tell you gentlemen something you may not believe. I have been in the dairy barn practically every morning and evening for 4 months feeding our cows because I had no one who knew the cows and their production, and the only reason I can be here today is that one of our old men is there in my place.
III. Surely the Congress can do something to see that these Federal educational agencies such as vocational agriculture, vocational rehabilitation, and the Agriculture Extension Service train unemployed men and women for dairy work.
Two years ago, I wrote our West Virginia Congressman, Mr. Byrd, who represents the coal-mining counties of Kanawha, Fayette, Raleigh, etc., of the need of training unemployed coal miners with a farm background for dairy work. They are used to rising early and have mechanical ability and most of them have a farm background. Neither Mr. Byrd nor myself was successful in getting any cooperation.
The farmers in the Southwest can get Mexican help but we have no help. We are penalized because we don't plant our quotas of wheat but our help with mechanical ability is hired away from us and we have no one to sow our wheat or sudan grass so our milk base goes down.
IV. The milk base as set on pounds of milk is unfair to the dairy farmer under present labor conditions. Now I am going to ask you to ask the United States Department of Agriculture to ask the Agricultural Economics Division to make a study of this and find out if I am not right.
The dairy farmer's price of milk is based on the pounds of milk produced monthly from September to January, or October to February. If he produces 40 gallons per day during these fall and winter months, and 100 gallons per day from April to August, he will receive class I price for only 40 gallons of milk and about $2.50 per hundred for the rest. The base should be set on the average monthly production for the year or, better still, on the number of dairy cows.
The cost of producing milk is based on the cow. It is the cow that you feed, that you breed, that you pay the vet for when she calves, gets mastitis, acetonemia, sterility, sore feet, etc., etc. It is the cow that you house, spray, shear, curry, milk, and care for. The only costs based on pounds of milk are filter discs, milk cans, and refrigeration. Your labor bill is the same for 25 cows as for 50. If the dairymen are encouraged to keep more cows, those low producers can nurse the calves and will help the soil conservation program by keeping acres in pasture, thus preventing erosion, will eat a lot of surplus grain and oil meals, and keep acres out of grain production, thus giving the grain and cotton farmers a better price for their product.
Give the dairyman a break. If any farmers deserve it, he does. He works the longest hours, has the greatest investment, sacrifices the most, and receives the least.
V. The Federal milk orders are administered under the USDA. In some ways they are unfair to the dairy farmer. They operate on a minimum base to be paid to the dairymen and the distributors pay that minimum price.
They figure the cost of milk according to one of several different formulas and usually give 50 percent weighting to the national wholesale and retail indexes.
The railroads, utilities, electric and telephone companies base their prices on true costs plus interest for their bondholders. Our milk prices should be based on our true costs, not on how able the town man is to buy his wife luxuries, fine furniture, and a fur coat-Bossy already has a fur coat. She grew it.
Milk is as much a necessity as drugs, and you know how the drug manufacturer charges.
VI. The price of class B milk for manufactured products was $3.15 last summer but we dairymen only got $2.25 for our surplus milk last summer, and the haul bill and association dues had to come out of that; so we got about 47 percent of parity for our surplus milk last summer. Milk that cost us $6 per hundred to produce. The Milk Control Commissioner of Pennsylvania is paying the dairymen around Pittsburgh $6.05 per hundred for their milk.
VII. When you gentlemen appropriate matching funds for the States for highway construction don't forget the farmer back in the red-clay hills who loses money waiting to get his cattle to market or can't get his milk in on time to catch the through milk trucks on the big highways. Fix it so a certain percent has to be spent for him.
VIII. Our health departments are only interested in sanitation in the summer months. They let other milk produced under lower standards come on in the winter when milk begins to be scarce. The health departments are very hard on the dairymen in June and interfere with his corn plowing, haymaking, etc., thus increasing his costs as much as $1,000 per year, then when milk gets scarce they let class B milk from a long distance come in by tank trucks, and milk adulterated with milk powder, on the market.
This is something our State legislature can do something about. It can make the office of the State health commissioner appointive by the governor and removed at his good judgment, and the dairy farmers can request his retire ment at their will. Health inspection of milk should be under the supervision of the USDA.
In conclusion I will quote you from one of my first cousins who is now about 42 years of age and who was born and reared on his parents' dairy farm which same is the oldest shipper to the Valley Bell Dairy in Charleston, W. Va. He says "Any dairyman who says he is making money today is a damn fool or a damn liar, one." Now I will add another, if he isn't a damn fool or a damn liar, he is a damn rascal.
Point PLEASANT, W. VA., November 5, 1955. Senator HARLEY M. KILGORE,
Senate Office Building: The dairymen of the Kanawha and the Ohio Valley would greatly appreciate a Senate hearing on dairy problems at Marietta or Parkersburg. It is just too far for us to go to Raleigh, N. C., under the present labor situations and we don't know whether we will have anybody to milk the cows. The dairymen from Ohio, Pennsylvania, West Virginia, and Kentucky haven't had a chance to get their opinions voiced.
ISABELLE C. WILSON, Chairman of the Mason County Farm Bureau Dairy Committee.
STATEMENT FILED BY RAYMOND BALENGER, PRESIDENT, WEST VIRGINIA FARM
BUREAU, BUNKER HILL, W. VA. The livestock, dairy, and poultry producers of West Virginia are concerned and disturbed with the prospects of the next session of Congress taking action to turn back to the discredited high, mandatory price-support plan for the so-called basic commodities.
Livestock, dairy, and poultry producers in West Virginia represent nearly 95 percent of all farm income in the State. Only about 5 percent of our farmers produce any of the basic commodities, or have received benefits in any form from the high price support and commodity loan program of the Federal Government.
During the last 2 years we have made an honest effort to make the thinking of our West Virginia farmers known to our Representatives in the Congress. We continue to stand on these fundamental beliefs :
1. The high, mandatory, rigid price-support program was written and designed as a wartime incentive plan to encourage farmers to expand the agricultural plant and greatly increase production for wartime needs.
2. At the close of the war, it was evident that an adjustment would have to be made in the inflated agricultural plant, the Congress succumbed to the baseless cries of scared politicians, and failed to pass the needed legislation to make this adjustment the least painful to all concerned.
3. The direct result of continuing the high incentive program after the end of the war has been a constant drop in farm prices and net farm income, halted only by the Korean war months. We emphasize that this drop of some 30 percent in farm income was almost wholly produced while the high, mandatory price-support program was the law of the land.
4. We believe it is foolhardy and disastrous to the country as a whole to return to a program that produced the present problem. We believe the variable pricesupport program should be given a tryout.