1 Senator HOLLAND. Do your dairies largely supply the Providence and Newport areas? Mr. SMITH. The Fall River area, and Providence, in that area. Some of them are on the other side, the Narragansett Bay side. Senator HOLLAND. Is there a Federal marketing order for the city of Providence or for that area? Mr. SMITH. I could not tell you, sir. I am not sure. The CHAIRMAN. All right. Proceed, sir. Mr. SMITH. Most of this has been covered. The CHAIRMAN. Suppose you skip over those that have been covered and just give us any new ideas. Mr. SMITH. I will say that we do have one on reclamation and irrigation projects. The CHAIRMAN. We have heard that from almost every meeting that we have had to curtail them. That is what you are in favor of? Mr. SMITH. Yes, sir. And the soil fertility bank. The CHAIRMAN. We have had that pretty well, unless you have something new as to how to pay the rental, or have you got any plans? Mr. SMITH. The plan that the farmers down there at our meetings came up with was that they would recommend that the landowners be paid on the cost-share basis of compliance grant for planting and maintaining these diverted acres to soil-building crops, and that none of the crops produced on these acres find their way to the marketplace in any form. The CHAIRMAN. How much would that cost? Have you figured it? Mr. SMITH. No; they did not get into that. The CHAIRMAN. Would you want a payment in the nature of a rental, or merely an amount to pay you for the work necessary? Mr. SMITH. There were both plans discussed. The CHAIRMAN. To build the soil fertility? Mr. SMITH. Both plans were discussed. Many of them discussed the rental. The majority of the farmers in Rhode Island felt they would rather have so much given to help. The CHAIRMAN. To conserve the soil and enrich it? Mr. SMITH. Yes. On the potato situation, we do not quite agree with the State of Maine, because we do not grow potatoes like the State of Maine and most of the potato growers. We have DP's from Maine, I guess. They are potato farmers in Rhode Island who grow from around 30 acres to 300 acres. The potato farmers we have are fair sized. Here is what our president of the potato growers wrote: "The potato farmer, in spite of current low prices caused by high supplies of prior programs, still remembers the unfavorable results of the potato price-support programs of a few years ago and wish to remain on a free-enterprise system." The CHAIRMAN. I suppose that Rhode Island produces just about enough for her own consumption requirements? Mr. SMITH. I am afraid that we have got Maine potatoes in Rhode Island. In fact, we ship an awful lot of them in there. The CHAIRMAN. You do not produce enough in Rhode Island? Mr. SMITH. No; we do not. There are a lot of potatoes produced in Rhode Island. They do not go along with the Government support program, nor the subsidy program, in any form. The CHAIRMAN. Since you do not produce enough, you do not have that heavy freight that the State of Maine has to pay, therefore you ought to be Mr. SMITH. No; I cannot see that. I do not know what the price is. I cannot see that it is very good. It is about $1.50 a hundred. I think that is about all I have to add. And I will just file this statement. The CHAIRMAN. Yes; you may file it as though you had read it. (The prepared statement of Burton Froberg, president, Rhode Island Association of Farmers, Inc., Lafayette, R. I., is as follows:) The opportunity of presenting the viewpoint of the Rhode Island Association of Farmers and the farmers of Rhode Island with respect to issues under consideration by the subcommittee is appreciated. The Rhode Island Association of Farmers is an organization of some 290 farm families and is wholly supported by dues paid by members on a voluntary basis. As an individual, I am president of this association and also a farmer. I own and operate a dairy farm consisting of 200 owned or leased acres, with a herd of 115 dairy animals producing 1,200 quarts of milk daily for the Rhode Island market. I am also a student of the other types of agricultural enterprises, and have been formerly engaged in potato, poultry, and sweet-corn farming. I have also served on the State agricultural stabilization and conservation committee. The continued prosperity of the Rhode Island farmer and the American farmer, too, not only is of concern to me because I am an officer of a farm organization but also as one who is currently engaged in farming and who hopes to continue in farming for myself, and with the hope that my sons will do likewise. This statement is based on the policies adopted at the annual meeting of the Rhode Island Association of Farmers held on November 1, 1955. Prior to the annual meeting, a series of local meetings were held throughout the State providing every farm family in Rhode Island the opportunity to present his or her views at either these local meetings, the annual meeting, or both. The sentiments of the Rhode Island farmer on agricultural policy are clearly expressed in the following resolution which was unanimously adopted at the annual meeting: "Agricultural policy "Agricultural income continues to decline while total national income is rising. Per capita farm income has been increasing, but has not kept pace with per capita nonfarm income. "The primary reason for low farm prices is that the supply of agricultural products continues to exceed the demand. The logical solution would be to expand our markets, both foreign and domestic, to consume this production. The expansion of markets to this extent, however, is questionable. Our continually increasing population likewise is not consuming all the increased production. "There probably will be a period some years in the near future when our population will require a much-increased agricultural production. We should plan now for that period. To bring about a more stable general price level as a means of providing a favorable climate for economic growth and a rising standard of living we recommend the following: "1. That the Government call a temporary halt to Government reclamation and irrigation projects. No new projects should be started. Plans, however, for future projects should be prepared, in preparation for a time when it is necessary for increased agricultural production. "2. That we reaffirm our position of opposing a rigid high price-support program with its accompanying mandatory production controls and stiff violation penalties and that we favor a level of medium variable supports with some production controls, and with the ultimate goal of eliminating all price-support programs and letting the market place determine the price. "3. That acres taken out of production of crops in surplus not be planted to crops that could produce surpluses in other commodities. These diverted acres should be used as a soil-fertility bank which could be brought back into production when more agricultural products are needed. We oppose the Government purchase of this land. We would recommend that the landowner be paid on a cost-share basis, with a compliance grant, for the planting and maintaining of these diverted acres to soil-building crops, and that none of the crops produced on these acres find their way to the market place in any form. "4. That the problem of underemployed people in agriculture (mostly in southern United States) be corrected in part by providing incentives through Government training programs for other vocations. "5. That we continue our efforts to increase our markets, both foreign and domestic. The Government should be particularly active in developing foreign markets and our domestic market by increased uses of the self-help programs." This was the expression of all types of farmers in Rhode Island, both large and small, and composed of the many diversified types which make up our State's agriculture. Many, in fact, expressed the wish that Government should withdraw immediately from all phases of subsidization of farm prices and let the market place determine supply, demand, and price of our products. They logically point out that the most favorable period for farmers to compare the prices a farmer received for his products in relationship to the prices the farmer had to pay for the items he has to buy, was the period before any Government support programs were in effect. Realizing, however, that an immediate withdrawal might prove disastrous to many farmers they felt the most logical approach would be through a flexible or variable price-support program, at least for the present, and with the goal of returning to a true, free-enterprise system. Under the present flexible price-support program, the results of which are just about beginning to have effect, the poultry, dairy, and livestock farmer have, at long last, been able to derive the benefits of lower grain prices, even in the face of higher transportation costs. The dairy picture is better now than a year ago. The poultry farmer, long opposing any price-support program, is in a much better position today than not too many months ago. The potato farmer, in spite of the current low prices caused by high supports of prior programs, still remembers the unfavorable results of the potato pricesupport programs of a few years ago and wish to remain on a free-enterprise system. I believe too, that the taxpayers themselves are beginning to object to the high costs and resulting higher taxes that have evolved from the high rigid price-support programs. It is our humble opinion that the best results can be obtained under the flexiblesupport program. The Government should center its activity on seeking to provide better markets both at home and abroad, for if we can sell our products at a price the customer will pay, we will quickly eliminate our surpluses. Looking into the future, the Government should look to means of improving and maintaining our agricultural resources. Some day, as is indicated by our steadily increasing population, we are going to need the farmers and all the resources available to them for the needed production of food and fiber. Don't take the incentive to produce our products away from us. As farmers, we want to produce what we want, in the amounts we want, in the way we want as determined by what the consumer wants, in the amount he wants, and at a price he is willing to pay. This can only be accomplished by the withdrawal of Government from farming. We want to own and operate our own farms and not let the Government do it for us. Our forefathers fought to establish our independence; our fathers, sons, brothers, and many of us, have fought to maintain that independence. Now, too, do the farmers of this country desire to continue our agricultural independence in a country of peace, prosperity, and God-given happiness. Senator HOLLAND. Does your statement show how many growers your organization represents? Mr. SMITH. Are you talking about the potato growers? Mr. SMITH. All growers. Our organization is only 3 years old. We have 290 members. We had about 200 that participated in these resolutions process. We are an affiliate of the American Farm Bureau Federation member. Senator HOLLAND. About what proportion of the farmer population of Rhode Island do you represent? Mr. SMITH. I would say about roughly one-third to one fourth. Nobody knows how many farmers there are in Rhode Island. You take the United States Department of Agriculture figures, and they claim 3 acres or more of $250 gross income. There are 2,500. There are about 1,200 and 1,000 bona fide farmers. Senator HOLLAND. You have a heavy concentration of population in a very small area? Mr. SMITH. Yes, we do. Senator HOLLAND. About 700,000 people, do you not, something like that? Mr. SMITH. I could not tell you. I just got back from Iowa. I used to live in Rhode Island. I am not sure of the statistics in Rhode Island as to the population. The CHAIRMAN. Thank you. We will next hear from Mr. Dean K. Webster, Jr. Give us your full name for the record. I notice that you have a statement. Have you anything that you would like to add to what has already been said, anything new? STATEMENT OF DEAN K. WEBSTER, JR., PRESIDENT, H. K. WEBSTER CO., LAWRENCE, MASS. Mr. WEBSTER. Mr. Chairman and gentlemen, not much, but possibly emphasis. My name is Dean K. Webster, Jr. I agree with you that because of the late hour I should not read this whole statement. If you will give me a couple of minutes, I will emphasize a thing or two. I am president of the H. K. Webster Co., and although we are representing indirectly, we feel that we have an obligation to represent about 130 feed dealers, who supply probably 10,000 poultrymen and dairymen and turkeymen, et cetera. And two-thirds of them are poultry. In our conclusions we say : 1. Despite our fundamental objection to price supports in principle, we do not now advocate a sudden jettisoning of the existing support program. We feel certain that 90 percent levels were continued longer than would have been desirable, and we would now advocate gradual and consistent downward revision of price support levels year by year in the direction of their ultimate elimination. The present flexible support program is in the right direction. A return to 90 percent level because of unenlightened political pressure would be a betrayal of the best long range interest of agriculture and of the country. I was especially impressed with the testimony of the gentleman who spoke for the poultry producers, and if I may, I should like to read a paragraph that supports what he said, to illustrate a segment of agriculture which is getting along in spite of high cost of feed, without any price supports in its segment. The year 1954 for the poultry industry was one of overproduction, low prices, and general losses to most producers, disaster to many. Without price supports, and with the free play of supply and demand, the pressure of low prices has caused the adjustment of production which was necessary, and 1955 finds the poultrymen again in a healthy condition-production more in line with demand and satisfactory prices prevailing. Efficient producers have weathered the storm and marginal producers have had to drop out. Picture if we may what might have taken place had a price-support program been undertaken for eggs and poultry meat in 1954 (if such indeed were actually possible to carry out. Temporary price benefits would have kept marginal producers in business and encourage efficient producers to expand. The adjustment of production to fit demand would have been postponed, a period of unregulated excess production would very soon compel Government controls, and the poultry industry would be sick for a long time to come. The CHAIRMAN. Thank you, sir. Senator HOLLAND. You mean that the poultry people by their own initiative have put their house in order? Mr. WEBSTER. Yes, sir, by staying out of price supports the natural sources of supply and demand have brought them back into shape. Senator HOLLAND. The poultry industry can bring its house into order in a relatively quicker time than almost any other agricultural industry, can it not? Mr. WEBSTER. That is probably true, but that is a matter of degree. When you make it profitable enough by price supports to keep all of these marginal producers in business they will stay in business, and they will not be eliminated until there is an economic pressure. not advocate throwing the whole thing over by any means. a flexible program of reducing the thing gradually until finally you have enough free markets again. The CHAIRMAN. Thank you, sir. I do I advocate (The prepared statement of Mr. Dean K. Webster, Jr., is as follows :) My name is Dean K. Webster, Jr., and I am president of the H. K. Webster Co., a Massachusetts corporation having its principal offices in Lawrence, Mass., and principal manufacturing plant in Richford, Vt. We are feed manufacturers, distributing formula feeds principally through retail dealers to the dairy, poultry, and other livestock producers throughout the New England States and a portion of New York State. Approximately 67 percent of our feed tonnage is for poultry, 23 percent for dairy, 10 percent for turkey, horses, hogs, etc. Though not directly engaged in any of these farming operations we are vitally concerned with the economic interests of New England poultry and dairy producers and feel that representing them indirectly at this hearing is appropriate and an obligation on our part. The New England area is a feed deficit area. Except for an appreciable volume of oats production in Aroostook County, Maine, and an insignificant grain production in the other New England States, our dairymen and poultrymen are almost wholly dependent for their feed concentrates on grains and feed materials imported from the Western States and Canada. The cost of feed concentrates for the New England dairymen ranges from 25 to 40 percent of their total sales dollars from milk production. In the case of poultry the feed cost is in the vicinity of 55 percent of sales dollars from eggs and meat. The effects of Government price support programs for grains, therefore, in holding their feed costs at a higher level than would have prevailed under completely free markets, is of considerable concern to these dairymen and poultrymen. Although the harmful economic consequence to them from this factor cannot be accurately measured, it is considered to be of far greater importance than any helpful benefits obtained in this area from Government purchases of dried milk, butter, cheese, turkeys, and several years ago, dried eggs. The New England poultrymen and dairymen have looked upon the Federal Government's price support programs for basic commodities with much skepticism and have generally adhered to the basic economic philosophy of free markets. We believe that in the long run any attempt to hold prices at a level above cost of production on efficient farms tends to continue and extend production of marginal inefficient producers and postpone, not prevent, adjustment which eventually must take place; and it is highly probable that the immediate benefits under artificial price support are illusory in that the overall long range economic effects are distinctly harmful. In support of this reasoning we quote a few case histories: |