down on the price structure. That does put him in a squeeze. There is no question about that.

Mr. KNIFFEN. Let me comment about the stable cleaner. The farmers are putting in stable cleaners because they cannot hire labor, and if they can hire labor, they have to pay so much for the employee that they cannot afford to hire it.

Senator AIKEN. That is right. Labor is getting harder to hire to do farmwork, every month, I might say. Some do not want to do it at all. They want the short weeks, which they do not get on the dairy farm.

I spoke to a gathering in central New York of several hundred implement dealers about 2 months ago who were celebrating a record year in sales. That is why I wondered whether in this particular area, your particular area, perhaps the sales were down.

Mr. KNIFFEN. I think that the sales are down in our area.

Senator AIKEN. According to the Department of Agriculture, the biggest farm expense today and the biggest percentage, 22 percent of all of the cost of agriculture, is depreciation on farm equipment, and then you add about 10 or 11 percent more, for electricity and gas and oil to operate that equipment.

In other words, one-third of your total production expense today is charged against equipment and the cost of operating it. That, I submit, is what is contributing materially to the squeeze, because if you do not mechanize you do not keep up with your competitor. Mr. KNIFFEN. I so stated in my testimony.

Senator AIKEN. Do you not think it would be a good idea for the State legislature to take note of the situation and permit a little competition in the sale of milk in New York?

Mr. KNIFFEN. It all depends upon what particular area you are talking about.

Senator AIKEN. The State of New York.

Mr. KNIFFEN. I mean what municipality.

Senator AIKEN. Any municipality in the State of New York-Utica, for instance.

Mr. KNIFFEN. I believe in free trade and free competition, but I do not believe it is sensible to license more milk dealers in a small community than could possibly survive.

Senator AIKEN. You would continue to permit monopolies in the distribution of milk, then?

Mr. KNIFFEN. I would not call it a monopoly.
Senator AIKEN. What is it?

Mr. KNIFFEN. There may be some need for relaxation, sir. Each application in each municipality has to stand on its own two feet.

Senator AIKEN. Your present law prohibits any relaxation, as I understand it. In fact, just recently people have applied in New York, as I understand it, and have been denied licenses to sell milk retail.

Mr. KNIFFEN. I presume that is true. I also know of instances where applications have been granted.

Senator AIKEN. I am sure you will find that that law was enacted, I believe, in 1934

Mr. KNIFFEN. That is right.

Senator AIKEN (continuing). Because something had to be done at that time, I agree.

As the fellow said who was taken before the judge for throwing a brick through the plate-glass window, "It looked like the thing to do at the time" and he did it.

I am sure of that, but it seems to me that that law has caused you a great deal of trouble during recent years, and is partly, if not primarily, responsible for the high price of milk that many New York communities, including New York City, have to pay.

Mr. KNIFFEN. That, of course, is peculiarly a problem for the State legislature.

Senator AIKEN. That is why I say I do not want anyone to get the impression I think the New York milk producer is getting a fair or decent price for his milk. He is not. I just hope you do not adopt any measures which will compound the troubles.

I do hope that you will pay as much attention to Albany as you do to Washington, because Albany is the place where you can solve more of your problems than you can in Washington.

The CHAIRMAN. Thank you.

Mr. KNIFFEN. Thank you.

The CHAIRMAN. Our next witness is Mr. Slusarczyk.

Give us your name in full for the record, and your occupation. Have you anything new to add to what has been said here today? STATEMENT OF ED SLUSARCZYK, FARM DIRECTOR, STATION WIBX, UTICA, N. Y.

Mr. SLUSARCZYK. Mr. Chairman, I have a couple of little ideas. A lot of it is repetitious. I will try to go through it, and leave that

out.

The CHAIRMAN. I find we are having a lot of repetition in the record. May I suggest that your whole statement will be put in the record, and if you give us the highlights, those points in your statement that have not yet been covered.

Mr. SLUSARCZYK. All right; I will try to be brief. I will try to use as little time as possible.

At the outset, I would like to briefly cover the first page of this testimony, and I would like to thank you and other members of the committee for allowing me to speak to you.

This testimony represents the condensation from about 450 sources, farmers and farm leaders, who have written in to our farm programs at our station after announcements that you were going to be here, and some of it is already what you have heard.

They would like to see this cost-price squeeze that we have here in New York State alleviated somehow, with some Federal action. Perhaps some State cooperation with that would aid.

The milk checks are too low. They have been going down the last few years. Farmers find the cost of production is too high in comparison with their income from milk, especially.

Over the past few years, the Federal and State hearings we have been having, at those we have been hearing many comments to the effect that there is great waste and inefficiency in the cost of distribution, and that our milk marketing laws are so written that the present mechanism penalizes the milk producer for this waste and inefficiency.

Many of these letters say they do not feel that is fair at all, and would like to see a correction there.

A special study made by this committee could do something about this, find ways of increasing these milk checks.

We have had studies in the past, but they have always seemed to be written to benefit other interests than the milk producer.

Our dairy farmers on price supports do not like the present price supports. They say that it gives the grain producers an unfair advantage, because it increases the price of feed. That point was made many times. They feel that way.

In going over these milk hearings of the past, in which milk-marketing laws have been written to benefit dealers or processors or distribution folks, some of our letters seem to give us a clue; perhaps a solution of the farm problem lies off the farm.

A look at the farm picture shows a fairly well-mechanized operation, producing a good quality product, with every regard for keeping costs of production down. In some cases, more efficient operations could be introduced but, as a whole, farmers are doing a good job

now.

Looking at the processing and manufacturing and distribution picture, we see something different. A look shows that domestic and worldwide markets in which there is a food shortage, and in this country and abroad hungry and ill-fed people in many lands, while we fill our storages in this country with wonderful abundance of American farms.

We hear of cheese deals where price-support money goes to business. We hear how $85 million will be used to buy up processed pork to try to help the farmer, and other such actions. We wonder if we are justified in talking about price-support money being spent by the Federal Government, when so much is going to business, and some of it may be unethical.

We feel that foreign countries, being forced to use higher costing American ships to transport a certain percentage, is an unfair thing, just as an example, and there are, perhaps, many other restrictions on selling our supplies abroad.

These things have tended to take initiative from American businesses that might be able to move our products to a world market. They cannot move our products to a worldwide market where there is the demand.

We would like to see the Government make a study, perhaps, and maybe figure out an extension type of program, provide research to allow businesses that deal in farm comodities to become more efficient, to develop new products, to advertise and promote more effectively and fill this worldwide demand. We know that is a pretty big order, but extension advice, research help aid to the farmer has been very successful. Why not take a step further?

The Small Business Administration, I know, is doing some of this, but specialize in pieces that are dealing in farm commodities only. Let us see if we cannot streamline this heart of our economy, which is the American farm, keeping the purchasing power of the farm high, so that they buy the products of industry, and keep this thing shooting right out to this worldwide demand. That seems to be a popular idea in the 450 letters and comments.

Here is another idea for our consideration; we do not have any details on it; we can only briefly mention it.

We think that much of the confusion that exists today about agriculture could be cleared up. I am sure you have found it across the country as you talked to the farmers. Many of them do not know what the story is. Their leaders tell them one thing; they read about another thing. They hear it on the radio and see it on the television. They are confused.

We think that if Congress would authorize and provide funds for a National Agricultural Board, with duties to study and recommend action on agriultural problems, this confusion could be dissolved. The national farm organizations should stop fighting over farm policy. It is subtracting, not adding to the solution.

The CHAIRMAN. What would be the purpose of that board; simply to advise?

Mr. SLUSARCZYK. Advise and find out the facts. We have seen here today farm organizations in New York State disagreeing. You suggested that they agree. Obviously, somebody is wrong. Let us find the facts, and then we can see who is wrong.

The CHAIRMAN. We have such a board now that is in operation. You do not want to do away with this committee, do you?

Mr. SLUSARCZYK. No, sir. If you are speaking of the Agricultural Advisory Commission

The CHAIRMAN. Yes.

Mr. SLUSARCZYK (continuing). That is appointed by the executive branch. We would like to see something similar that Congress has. The CHAIRMAN. Do you figure that there might be some dupliation there?

1

Mr. SLUSARCZYK. Perhaps. But the Advisory Commission has not been very successful up until now. It seems to be filled with men who need to pay their own expenses, college professors and businessI would like to see some small operators on there a little closer to some of the problems.

men.

Senator AIKEN. May I make a little statement there?

There are both Republicans and Democrats on that Board. One is from Vermont. He is one of our larger dairymen of the State. He has successfully raised 10 children. He was the Democratic candidate for Governor last year.

I think the Board is pretty well qualified to give advice, but they represent all parts of the country and different commodities. Naturally, their recommendations, in themselves, are the result of compromise.

The CHAIRMAN. I might further add that almost enough Republicans voted for him to elect him as Governor of Vermont.

Mr. SLUSARCZYK. He must be a good man. I am sure he adds much to the value of the Advisory Board.

However, we feel that the Advisory Board, meeting in secret, never is able to give our views to them before hand, is more of a handicap than an aid in solving our farm problems.

I have tried to be brief, to summarize the letters and comments that came to us.

I want to thank this distinguished committee for coming into this agricultural part of our State to hear our ideas.

The CHAIRMAN. Thank you. Your complete statement will be made a part of the record at this point.

(The prepared statement of Mr. Slusarczyk, in full, is as follows:) Thank you, Mr. Chairman and other distinguished members of the United States Senate Agricultural Committee, for this opportunity to speak to you.

I have a report which is a condensation from about 450 farmers and farm leaders regarding the present farm situation in our country. Since it is our understanding this committee is interested in knowing what farmers think, this report, therefore, consists mainly of thoughts and not detailed suggestions or recommendations for improving current legislation or enacting new legislation. Farmers generally in New York State are not as bad off as in some other sections of our country. However, we have suffered a substantial drop in net farm income. Since dairying is our main enterprise, we are mostly concerned with it. We have seen our milk checks go downward month after month for the past few years. There has not been a corresponding reduction in the consumer price of our dairy products. We are told our lower milk checks are due to a surplus of milk. We think there would be no surplus if the per quart price of milk to consumers were also reduced substantially.

Milk dealers tell us that their cost of processing and distributing are high, and that they cannot reduce consumer prices. However, at Federal and State milk hearings held over the past few years, there have been many comments to the effect that there is great waste and inefficiency in processing and distributing milk, and that our milk marketing laws are so written that the price mechanism penalizes the milk producer for this waste and inefficiency.

We pride ourselves in the fact that free enterprise and competition has enabled us to become the leading country of the world, in economic and social development. But our dairy farmers throughout the State are appalled at the lack of free enterprise and competition that exists in the pricing, processing, and distribution of milk.

A special study by this committee or a subcommittee on dairy could undoubtedly find many ways for increasing milk checks to dairy farmers of the Northeast and, at the same time, streamline the dairy marketing mechanism so that dealers and consumers could benefit also.

Our dairy farmers look at price supports enjoyed by grain producers as a very unfair thing. They believe it has increased the price of feed and, therefore, the cost of production of milk, giving grain producers of other sections of the country an unfair advantage. Therefore, most of our dairy farmers and leaders of dairy organizations do not like price supports and look upon them most unfavorably. On the other hand, we recognize the value of supports if a true emergency exists.

Many of us believe that price supports have been a convenient device that some spokesmen have used to confuse issues in our agricultural economy. We don't think they need to be as important as one might deduct they are from the continued news coverage devoted to price supports. We hear repeated so often the statement that rigid price supports are responsible for our surplus which in turn depress our farm prices. Who keeps making these statements? We think representatives of business who want time to continue to buy farm produce at low prices, add their services, and resell at the highest possible price.

This gives us a clue. Perhaps the solution to the farm problem lies off the farm.

A look at the on-the-farm picture shows a fairly well-mechanized operation producing a good quality product with every regard for keeping costs of production down. In some cases, more efficient operations could be introduced, but as a whole farmers are doing a good job now.

A look at the processing, manufacturing, and distribution picture and what do we see? A domestic and worldwide market in which there is a food shortage. Hungry and ill-fed people in many lands while we fill our grain bins, ships, caves, and other storage places with the wonderful abundant produce of America's farms. We hear of cheese deals where price-support money goes to business. We hear how $85 million will be used to buy up processed pork to try to help the farmer, and other such actions. We hear foreign countries must use higher costing American ships to transport certain percentages of surplus commodities if they purchase them, and how until recently we would not honor many foreign currencies although we spent money in those countries.

These things have tended to take initiative from American businesses that might be able to move products to a world market.

We think there are a few bad apples among the business group) dealing with farm commodities but do not wish to blame them entirely for the declining farm price situation. We would like to see the Government give aid to business by