Изображения страниц
PDF
EPUB

Seventh, I guess we can all agree on Government and agriculture working together, and should provide and use every means available to teach our people the value of good diets. And also that the use of public funds to provide health-giving foods in school-lunch programs should be continued. That is, to the end that the general health of our future adults will be better than the present generation.

The CHAIRMAN. I do not think you need fear that will be changed, because we have had it on the statute books for some time and no one seems to object to the program. I am proud to say that I was the author of it, together with Senator Russell, from Georgia. The tendency is to increase and not decrease.

Mr. BENHAM. The value obtained in getting rid of a few additional agricultural products is a very small part of the value of such a

program.

Eighth, we would urge that there be continuous study to determine the varying degrees of improved efficiency and resulting reduction in farm production costs as a result of technical and mechanical advances, to the end that the parity bases for different farm prices should be adjusted to reflect these changes.

The CHAIRMAN. You mean with a view of decreasing the parity price because of more efficiency?

Mr. BENHAM. If there had been a greater efficiency possible, a greater reduction of costs possible in one crop than there had been in another, then if you are to have equitable price levels the prices between those crops have to be adjusted to reflect the fact that greater improvements have been possible

The CHAIRMAN. You would apply that as to crops?

Mr. BENHAM. Livestock, all. If it has been possible. I expect that through breeding programs the productivity of certain types of livestock has been increased greater than in other types as compared with some previous period of time.

The CHAIRMAN. What would you do with the small farmer who is not able to mechanize as compared to a large one who is?

Mr. BENHAM. I assume that no matter where we get price levels established on agricultural products we will have varying degrees of opportunity available to individual farmers, depending on the efficiency, his location, his willingness to work, and so forth. If the fellow is on, we will say, an average farm, we should expect, if he is an able operator, to make a fair living. Someone is fortunate enough to be on better land or larger operations, that gives him some efficiency that the medium sized or smaller farmer does not have, I guess you will have to say he is entitled to make a few dollars more. Likewise, the individual who is on a small farm, or the individual who is a poor operator, has to expect to have a poor income.

In the last point I have I touch on this subject of the support price levels. I am not offering much advice on that. Many people are studying that, probably far more capable people than I am, but we would say that if support prices on a flexible basis must be continued and I think we recognize that certainly in some crops they will have to be--I am not offering much advice what I am saying is they are continued on a flexible basis, they should be administered with a full recognition of the two following points:

First, that low agricultural prices do not reduce production except after a long period of time. I point out some of the dangers of

A

keeping agricultural prices low for a long period of time. We tend to defeat the soil, which is a serious matter.

The CHAIRMAN. The arguments which I have heard against flexible price supports was that is what it does. It does not reduce production. Mr. BENHAM. I am saying that if we must use flexible price supports, let us keep that in our mind all of the time while we are doing it. And secondly, keep in mind that the ultimate goal for agricultural prices should be 100 percent of parity.

The CHAIRMAN. How would you reach that now? That is our goal. Secretary Benson wants that. President Eisenhower, all of us, want it. I want to do it. I wish you would have a prescription for it.

Mr. BENHAM. I had prior to this last statement read eight points which I think would be helpful, and I certainly hope that you have had other suggestions that are sound and would tie in with what we are discussing here and supplement it to the end that we could reach this point. We know that we cannot do it overnight. We are aware of the problems that have been encountered and the farm people have been patient, but I would point out-you will agree with me, I am sure, from the way you have spoken-neither the Government nor the people of this country should expect farmers to continually take less than full parity. We do not hear anyone suggesting anyone else in this country should take less than parity.

I think as Mr. Wright pointed out, the farmers provide the most essential services our system requires. We cannot be treated as secondclass citizens.

The CHAIRMAN. We cannot live without them.

Mr. BENHAM. I do not think that we would too long tolerate anything less than a first-class citizen is entitled to, an equitable share of the Nation's income.

The CHAIRMAN. That is what we are here for, sir. We are glad to hear from you. It is our hope that this coming January or February we will be able to put a law on the statute books that will materially help the farmers. That is my hope.

Are there any questions? If not, we appreciate very much your being here.

Mr. BENHAM. These remarks that I have typed here are condensed from a much larger statement that I had prepared and before I found the time was somewhat limited here. I will leave them both with you. The CHAIRMAN. All right, they will be incorporated in the record at this point.

(Mr. Benham's prepared statement is as follows:)

Inasmuch as representatives of other agricultural groups here in the Northeast have and will present to you a picture of their present situation, I shall confine my remarks, as far as local conditions are concerned, to the position that the 24,000 dairy farmers who are members of the Dairymen's League find ourselves in. These dairymen live in the States of New York, New Jersey, Pennsylvania, Vermont, Massachusetts, and Connecticut. We bring the following facts to your attention:

I. CONTINUING FALLING PRICES

More disturbing than anything else to dairy farmers in our New York milkshed is that while the economy of our Nation is prospering at an alltime high, returns to dairy farmers continue to decline.

In a release by the USDA on October 31, 1955, it was noted that farmers' realized net income for the third quarter of 1955 is 10 percent below the rate in

the third quarter in 1954 "due primarily to lower prices in farm products ac companied by only a small reduction in expenses."

We would like to submit the estimated prices under the New York milk order for the months ahead. These indicate that for this month of November our blend price will be 32 cents under that of a year ago. In December the New York order blend price is estimated to be 26 cents under that of a year ago. This same downward slope continues into 1956. In May the blend price will hit a low of $3.35 for 3.5-percent milk in the 201 to 210 mile zone.

These figures demonstrate the No. 1 problem facing our dairy farmers-inadequate and low prices.

What makes the rub even worse for dairy farmers is that they have heard nothing in recent months but higher wages for steelworkers, higher wages for automobile workers, and higher wages for milk drivers in New York metropolitan area. As important consumers of products manufactured by organized labor, the dairy farmers will be forced to help pay for those wage increases out of their own depressed incomes.

The fact that the milk companies did not see fit to raise the price of milk to consumers as a result of this latest wage hike is an indication that they felt they could absorb the increased cost by paying to farmers lower prices for milk. With milk as with most farm products, increased handling costs between the farm and the consumer, have prevented the consumer from receiving any benefits from the farm price decline.

II. FARM GROUPS WORK TOGETHER

One of the criticisms aimed at farmers is their inability to work together. That criticism is certainly justified in this milkshed. We in the Dairymen's League have taken the initiative in bringing the dairy and farm groups of our milkshed to work for constructive programs. A year ago, right here in Utica, the dairy groups worked shoulder to shoulder in meeting the problems of declining prices. This last August our organization called a meeting of all the farm organizations of our milkshed, including representatives from the granges and farm bureaus of the States of Vermont, New York, and Pennsylvania. Representatives of these groups formed what has been called the Temporary Price Adjustment Committee. A conference was had with Secretary Benson in Washington on October to bring the picture of declining prices of dairy farmers directly to his attention. To date, no action has been taken by the USDA.

The constructive leadership provided by the recognized cooperatives has so far prevented the irresponsibles from seizing upon the present plight of dairymen as an excuse for fomenting serious trouble in this area. Make no mistake gentlemen, thousands of dairymen in our milkshed are hard up against it financially, and need leadership and help.

III. PRICING FLUID MILK ON ITS MERITS

Here in the East the formulas used in milk marketing orders are based on broad economic factors. This contrasts with milk pricing in the Midwest, the South, and the Southwest were fluid milk is priced directly in relation to the price for manufactured milk.

We believe fluid milk should be priced on its own merits in relation to what the consumer can pay. When the wage rates of all other segments of our economy are rising, there certainly is no jurisdiction for the continued decline in the price paid to the dairy farmer for his fluid milk.

Machinery is presently available to the USDA to bring higher prices to dairy farmers for fluid milk without in any way getting into the support question. The machinery we are referring to is the operation of the marketing orders under the Agricultural Marketing Agreement Act of 1937.

Not only are we dairy farmers finding ourselves being flattened out between the cost-price rollers, but so are all farmers in the United States. There is some variation in the degree of pressure, but we are getting thinner while everyone else grows fat and prosperous.

The inequitable situation in which we dairymen and other farm people in this country find ourselves is caused by the fact that our costs, which primarily consist of wages, continually spiral upward while the prices of agricultural products continually tumble downward. Either trend by itself would have

64440-56-pt. 7—18

[ocr errors]

placed a heavy burden on farm people; in combination they threaten disaster in the not too distant future.

You, our elected leaders, have the primary responsibility of working with us toward correcting this situation. You will be wise to face up to that respousibility immediately. A short time ago I listened to a talk by Governor Langley, of the State of Washington, in which he described at some length the high level of prosperity being enjoyed by most of our citizens. Following that he said: "A tree cannot be expected to continue to bear fruit if we allow it to rou at the roots." I was not able to clearly deduce just what the Governor had in mind as constituting the roots of our economic tree, but he and you gentlemen also will do well to recognize our agriculture as being a sizable portion of that root system.

Many persons tell us farmers that we should solve our own problems; that we should cut down our production and develop new outlets for our products. They say then we might be able to catch a ride on the Nation's prosperity train, which, up to this time, has not only left us behind, but has bowled us over with its slipstream.

Let us look at these two pieces of advice. But first, I would again quote Governor Langley as follows: "Government should not attempt to do for the people anything that they can do better themselves." I believe any soundthinking person would agree with the Government in that statement.

With that in mind, let us look at the first of those pieces of advice to farmers that I just mentioned, namely, "cut down our production ourselves."

There are some 51⁄2 million farmers in this country. Each one is an independent operator, his own manager, free to plan his operations as he pleases. Under such a situation you can see why it is impossible for farmers, through our own efforts, to control production. If by some miracle the 51⁄2 million did agree on, and then follow, a restricted production and marketing program, we would soon find ourselves being prosecuted under some one or another of the Federal laws relative to monopolies and restraint of trade. It was not long ago that an attempt was made to prosecute a small group of farmers in this country who had agreed to restrict the volume of a certain crop that would be available for marketing, so as to raise the price to a point where it would cover the cost of production.

Since we cannot control production ourselves, you, our legislators, have attempted to do it for us, with our permission, in respect to certain so-called basic crops. Prices have been pegged by the use of a price-support program to encourage us to accept the acreage reductions. This attempt has not brought the production of those crops in line with domestic needs. Furthermore, the acres diverted from those crops have been used to produce other products that are also in excess supply.

In addition, in Government and other circles, the theory has spread that lowering agricultural prices will cause some of our farmers to give up farming, or at least reduce their production. To name it frankly, this is the: "Starve them out of business" theory. Unfortunately, as far as getting reasonably quick results is concerned, this theory disregards the fact that most of us are farmers because we like farming better than any other way of living, not because we expect to gain great financial profits from it. Our farm is our home, our kingdom. Our savings are invested in our land or in our livestock and equipment or both. We like the country as a place to raise our children, as a place to spend our old age. Most of us are not leaving until the sheriff puts us out.

Also remember that generally speaking the first reaction to lower prices is increased production. That is the only weapon the individual farmer can use to meet the problem of lower prices. He decides that he and his family must get up earlier, work later and produce more, so that when he markets it at the lower price he will have enough money to meet his fixed overhead. True it is trying to lift ourselves by our bootstraps, but what else can we do? We will agree that if prices are kept low enough for long enough period some of the less fortunately situated among us may get starved out. But meanwhile such a program will come within an inch of starving all of us. Carried to completion, such a program could well wreck our entire economy.

Let us stop here and look at another result that we can expect from such a program. A farmer has the responsibility of feeding his family, and also of feeding his land and maintaining his equipment. When there is not adequate money available for both, you know which will go hungry. We will live on the depreciation of our buildings and equipment and drain the fertility of our soil before we starve our family or quit our farms. The buildings and equip

ment can be replaced, if prices go up sufficiently. Risking the depletion of the fertility of our Nation's soil, however, is a serious matter.

It would be most unpleasant ever to find ourselves in an all-out war with a great population dependent in part upon imported foods, with an ocean full' of enemy submarines, and with a depleted soil. We in the dairymen's league are opposed to a policy of low farm prices which will not only result in mental suffering and continuous financial worries for farm families, but may also endanger the future of our country.

We recognize that there are thousands of farm families living upon marginal or submarginal lands who would be better off in some other occupation, at least as long as industrial prosperity continues. If we set out upon a program to starve those people off their farms, however, let me predict that it will not be long before you Senators and our Congressmen will be making large appropriations of public funds for the purpose of assisting these same families stay upon their land where they will continue to produce uneeded products while they make the most frugal kind of a livelihood.

Now to look at the other piece of advice that is frequently handed us: “Develop new markets for your products."

Let us explore the avenues that might be opened to us. First, we will look at the domestic market. The human stomach will hold only so much food. Through advertising or modern merchandising we may be able to change its preferences for food, but the average citizen will still continue to eat less and less due to his more sedentary life and continual warnings that he is endangering his life expectancy by eating too much. Our only hope in this direction is to wait until there are more people. Many more people. The fact that there may be enough people in the United States 15 or 20 years from now to use all we now produce is not much consolation to the young farmer who is wondering how he is going to meet the interest and amortization payments on his indebtedness next year.

So far as developing foreign markets is concerned, the price level in this country has been pushed up so far above world price levels during the years just past that we cannot sell our surpluses on world markets and recover anywhere near our production costs.

Right there lies the major cause of our problems. Our farmers always have produced in excess of domestic requirements. Having an interest in the future welfare of our country I hope we always do. But as anyone who has had any experience in marketing well knows, when operating on a free market the lowest priced market at which the last of a given amount of goods must be sold soon sets the price for all the goods in all the markets, even though there is a very small percentage left that has to seek that lowest priced market. Therefore, we have been forced to look to our Federal Government, the only source of adequate authority, to establish artificial methods of holding up domestic price levels.

I would also mention another proven fact that seems to be entirely overlooked by those who say "reduce your output." The replacing of manpower by machinery in our industries has required huge investments of capital. Everyone agrees that our industrial plants must run at or near capacity if we are to have industrial prosperity, if the owners are to meet their fixed overhead and have profits left. Let us not forget that the same thing is true in our agricultural plant. We cannot have agricultural prosperity, nor can our consumers long enjoy low cost farm foods and fibers unless we allow our agricultural plants to run at capacity. We recognize of course that it might be desirable, if possible under present circumstances, to close some of our less efficient farm plants.

To sum it up briefly, our situation is as follows:

1. Due to the urgings of Government, together with our own earnest desire to do all we could to help win the two recent wars, we have invested our money in an agricultural plant with a productive capacity that exceeds our domestic demands.

2. Agriculture, like industry, has substituted machines for manpower. That means high capital investments and high fixed overhead. We must operate at near capacity if we are to have any chance of prosperity, and if consumers are to long enjoy low farm costs for food and fibers.

3. We are operating on a price-cost level that prohibits our selling our excess products in world markets without taking heavy losses.

4. If we allow world prices to depress our domestic prices, or if we deliberately support domestic prices at a low level in hopes of reducing our agricultural production by starving out some of our farmers, then we run the risk of wrecking

« ПредыдущаяПродолжить »