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The CHAIRMAN. Is it cheaper?

Mr. PERRY. That is right. There is a definite reduction in price usually between one-half to 60 percent of the price of No. 1 potatoes. The low income groups can well afford to eat potatoes.

At the present time they would have to pay the highest price for No. 1 potatoes. But by gearing the supply of No. 1 and No. 2: potatoes, combined to total requirements of all families from the highest income to the lowest would have available suitable potatoes to meet their needs and their pocketbooks.

As in the past, cull potatoes still can go to byproducts plants so as to preserve the valuable outlets for those parts of our crop which are not suitable for market sale.

We recommend that in considering any program, whether it be this one or any other, that the administering of this program would be more or less in the hands of the growers rather than the speculators. We have at the present time in the potato situation a futures market in New York which last year, as we all well know in the potato business, was pretty much of a rigged proposition. And the only one that really suffered from it was the producer. And if any program does go into effect, which I hope it will, I think myself that the speculator will be more or less a thing of the past in the potato business.

The CHAIRMAN. As I stated a while ago, I think that if the potato growers would grow the cooperative way and try to regulate themselves, that may be a way out. You have got to get the farmers to cooperate.

Mr. PERRY. In this type of a program-I have had enough experience with it

The CHAIRMAN. We will consider your program.

Mr. PERRY. I want to thank you.

The CHAIRMAN. Thank

you.

We will next hear from Mr. Gude.

STATEMENT OF ARTHUR GUDE, ALSTEAD, N. H.

Mr. GUDE. Mr. Chairman and gentlemen of the committee, this is a little different. It is in the form of a petition. I would like to read it. Some of it has been gone over. Shall I try to confine myself?

The CHAIRMAN. Skip over what has been gone over and give us any new idea you have.

Mr. GUDE. I can perhaps give that to you orally. The idea of the petition is asking that the price of milk be set by milk boards. It could be done under the Federal order as it is now, but that it be placed on a cost of production basis; in short, that milk be priced as a public utility is priced, not because milk is in the same position as a public utility, but because the Government has passed a great deal of social, economic, and labor legislation which, as you said before, leaves us out in the cold and we are the only group of private enterprise that cannot adjust ourselves to that legislation.

The CHAIRMAN. How would you reach that cost of production? That is one thing that sounds beautiful, you see. But how would you do it? Right here in Vermont we visited several farms yesterday. I am sure that what I saw with my own eyes is true, that the cost of production is not the same in the three farms we visited.

Mr. GUDE. It is not. You may find two farms occasionally with the same costs.

The CHAIRMAN. You would not find any the same.
Mr. GUDE. Not exactly the same.

I would have an average cost of production, either done through a pilot plant or done through national figures, but I would prefer to have it done with the farmers working together, and everything done for them by economists capable of doing it.

For example, the cost of production that some of the universities come out with, the average cost. When we purchase a contract the labor is paid for on that at an average rate. They set a time study. They do not have fastest men in the plant, nor the slowest men in the plant. And they base that rate of cost on an average. We pay that

average.

I believe it would not be too difficult to come to an average cost of production for dairy farms in the milkshed.

The CHAIRMAN. Let us apply your program now to potatoes over here in the State of Maine that produces 450 bushels per acre and up in North Dakota they produce about 250.

Mr. GUDE. I know very little of field costs, because I feed everything. I never sell anything I grow. I do not think it would apply to field crops. I do think it could apply to broilers, for example. I raise some broilers besides dairying. I think the same principle would be applied.

The CHAIRMAN. To other commodities?

Mr. GUDE. I do not know about pork or beef. I am not familiar enough with that.

The CHAIRMAN. Does your program apply only to broilers and not a general proposition?

Mr. GUDE. It would not. I do not think it would go in field crops. There is too much of a variation there. I do think it would apply to dairying and could be applied to that. That is one of the difficulties I think that causes the overproduction, that the price is set so low that we have no way to protect ourselves except to make more milk. That is the only way that is open to us.

The CHAIRMAN. As I have stated during the course of these hearings, some States are able to build a little wall, maybe not too high, but they are able to keep milk produced in Wisconsin from coming in. And also that is true about milk coming in from Minnesota. There they produce it with less expense, I am told, than they can here in Vermont and in Louisiana or Mississippi.

Mr. GUDE. The labor involved takes just as long to milk a cow in Wisconsin as it does here. The advantages they have, perhaps, are in cheaper grain, but they are not overcome by being able to milk cows any more rapidly. The labor is the same. That is something that they are not getting any returns for, their labor, neither are we at the present prices.

Senator HOLLAND. Is it your idea that the milk would be sold to the public at this price?

Mr. GUDE. Yes, it is not a support-price program.

Senator HOLLAND. Suppose the public did not want the milk at that price and have to buy it all, what would happen?

Mr. GUDE. You would not be able to make it if you could not sell it.

The CHAIRMAN. How would you keep the cows from producing? Mr. GUDE. The thing you are talking about is the cooperation among farmers. That is precisely the thing. I believe if we had a price that we could reduce our production and still stay in business, we would be very glad to do it.

The CHAIRMAN. That is a problem we are wrestling with. We thank you for your suggestion. Your prepared statement will be made a part of the record.

(The statement of Mr. Gude is as follows:)

We, the undersigned dairy farmers, do hereby petition and say:

I. That there now exists a state of emergency on the dairy farms of the United States, in that the dairy farmers of the United States are in economic distress. II. That they are in economic distress because:

A. The Government has been and is pricing milk, and said price does not consider the cost of producing same. 1. The cost of producing milk must be reflected in its price because:

(a) Dairy farming is now in the same economic position as any other business in this country, it is no longer a noncash subsistence operation but is a cash cost, mechanized, highly efficient, highly capitalized, high risk, production business.

(b) Dairy farmers must purchase the machines and supplies they must have to produce milk efficiently from American industry which prices its own product on a profitmaking basis based on its cost of production, which includes the osts imposed by and resulting from the social, economic, and labor legislation passed by the Government in the last 2 or 3 decades.

(c) Dairy farmers are unable to hire help because under the present pricing system a man must be hired to work an 80-hour week, 52 weeks of the year, for an hourly rate of about 50 cents.

(d) Dairy farmers must be allowed to realize a profit on their business operation otherwise they cannot absorb the risks which are inherent in their business and cannot replace old machinery or make new purchases of same.

(e) Dairy farmers are now forced to work 80 hours a week, 52 weeks of the year (and to invest $20,000 to $25,000 per man-labor unit) for a total net income covering labor, investment return and profit of about $2,000 per year.

B. The Government has empowered the Department of Agriculture to price milk without holding said Department of the Government responsible for the financial position of the producer. This is scientific statism untempered by the humanitarianism of the Founding Fathers.

C. The Government recognizes the necessity of accepting the cost of production plus a reasonable profit as the only American way of pricing any other service or product whose price it controls, except milk; and allows such remuneration or price as will enable any such business to maintain its plant in perfect condition, pay competitive wages to employees, meet all other expenses incident to operation, and in addition thereto enough more to make a reasonable profit upon every dollar invested. Dairy farmers, American citizens are entitled to the same treatment.

D. The Government has passed legislation which has legislated the dairy farmers out of the economic life of America, and said legislation has been accepted and extended by both of our major political parties; therefore this petition is directed to the Congress of all the people, regardless of political party, because the supreme issue involving all others, is the encroachment of the powerful many upon the rights of the few.

Wherefore we pray:

That the Congress recognize this economic distress and injustice and immediately order that:

1. The Secretary of Agriculture raise the minimum price of all 3.5 milk by $2 per hundredweight, this raise to be above any seasonal raises, in all markets controlled by the Federal order.

2. This increase to be an emergency temporary measure only, for a period of 1 year from the time the Secretary acts, or any extension thereof, to allow time during said period to ascertain a fair average cost of producing milk, based on the American standard of wages, hours, and profit incentive of our economic system.

3. The Department of Agriculture encourage and aid, through the Extension Service, the formation of a voluntary association of dairy farmers, and only dairy farmers, to do the two things that they as independent businessmen, by the nature of their business, are unable to do individually: (1) To determine the said fair average cost of producing milk and; (2) To fit their production to the market, said association to be organized on a county level and all costs to be borne by the dairy farmers.

4. Upon the expiration of said temporary increase all prices of milk established by Federal order shall take into account said fair average cost of producing milk, as submitted by said association or based on such a cost figure obtained by the milk boards themselves or both.

The CHAIRMAN. We will next hear from Mr. Richmond.

STATEMENT OF FRED L. RICHMOND, CHARLOTTE, VT.

Mr. RICHMOND. Mr. Chairman and gentlemen of the committee, I am Fred L. Richmond of Charlotte, Vt. I want to say one thing to you, Senator Ellender. I notice that you made a little mistake. It was not your fault. There are a lot of Vermonters that do the same thing. You said that Vermont was one of the Original 13 States. We were an independent Republic before there were any Original 13 States. I just wanted to get that across to you. The CHAIRMAN. You are really one of the Original 13 States. Mr. RICHMOND. We were an independent Republic.

The CHAIRMAN. Thank you for the correction.

Mr. RICHMOND. That is when Louisiana was owned by France and there was nothing there but a trapping country.

The CHAIRMAN. Thank you.

Mr. RICHMOND. I own and operate a 40-cow Jersey farm of 200 acres in the town of Charlotte, Vt. I have been producing and selling milk to the Boston milkshed for some 17 years.

I submit a 5-point program for the dairy industry of the entire United States.

Point 1. Quality. The quality of a product, whether it be milk, beef, or berries, is of the utmost importance in the continued sale of the product to the consumer. A lowering of quality may increase a dealer's profits and increase sales temporarily, but in the final analysis the market will be lost.

The surest and most effective way to control production of any farm product is by quality control. It helps to increase consumer demand and at the same time limits production.

I might say here it does not hurt the small farmer, because he is in just as good position to produce the quality product as the large farmer, and even more so.

It is with a feeling of deep shame that I stand before you in this State House and say that we have cut our butterfat content of milk to 3.5, and ice cream to 10 percent. The same is true throughout most of the United States. These quality cuts were lobbied through the various legislatures by profit-greedy and short-sighted milk dealers.

Point 2. Elimination of outmoded dealer setup and control boards: The sale of milk in stores at quantity discounts and elimination of costly and wasteful delivery routes.

If the big milk dealers had in the past 10 years done just half the job selling milk as the farmer has done producing it, there would be a shortage today.

Point 3. Cooperation of Government, milk dealers, and farmers to reach a full understanding, which is lacking today, to try and work out a solution to point 2.

A full-fledged advertising campaign to sell fluid milk, but it must have the full support of the dealer to succeed.

Elimination of State and/or Federal taxes to sponsor such advertising campaigns as being un-American, unconstitutional and if long continued, shifting the burden of advertising onto the shoulders of the American farmer.

If no cooperation is forthcoming from dealers an investigation into milk dealers' profits on fluid milk, class 2 and 3 sales, with full power of subpena.

(As long as they continued, Lincoln once said, this country cannot stand half slave and half free, and we cannot stand half of the country subsidized and another group not.)

Point 4. Disaster supports only on dairy and other farm products (with gradual reduction of present supports) and elimination of supports or subsidies to airlines, steamships, copper companies,

et cetera.

While supports are being eliminated, make sure that surplus cream is not made into butter, but put into milk and ice cream where it belongs and it will then be stored in the stomachs of the consumers.

Just a thimble full more of cream in each quart of milk and ice cream will eliminate surplus.

Work towards a goal of 4 percent butterfat in milk. 14 percent in ice cream, through State legislature.

The CHAIRMAN. How much did you say?

Mr. RICHMOND. I figured it out at home. It would probably be about an eighth of an ounce of cream.

The CHAIRMAN. Do you know that we had a witness testify a while ago that he could not live on the milk of 17 cows; if you could get a baby as greedy as he was you might be able to eliminate that surplus, would you not?

Mr. RICHMOND. Yes.

You are supporting butter, but in order to have butter you have to have cream. So you might just as well pay the dealer if you have to, and I would rather that he would do it on his own hook and I would rather that you paid the dealer the money for the cream and put it into the milk and then the consumer would have it in his stomach and then you would have this storage problem that you are having with butter today licked, because the cream would be in the milk where it belongs, and in the ice cream.

Point 5. Surplus disposal: The following may seem a contradiction of my stand on subsidies. But as we have these commodities we must make the best use of them possible.

Let us not be alarmed by an overabundance of storable commodities. At last year's rate of disappearance we have 2.9 months of corn, 15.9 months of wheat; rice, 2.5; cheese, 4.4; dry milk, 3.9.

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