Price-support Program

In a surplus potato season like 1955, it is necessary for all potato areas in the United States to withhold their low grades from market in order to eliminate the surplus. It does little good for one State, or even several States to hold back its low grades, unless all growers in all States do likewise.

A possible remedy for such a situation is a nationwide potato marketing agreement. We request that Congress investigate the possibility of drafting a law which will allow potato growers to adopt a nationwide potato marketing agreement. I suggest that it be written into the law that no nationwide marketing agreement would become effective unless it was voted in by at least twothirds of the potato growers voting in a special nationwide referendum.

A national potato-marketing agreement must have considerable flexibility to meet local conditions.

Even a national potato-marketing agreement cannot be successful in a big surplus crop year unless section 32 funds are used in conjunction with it. That is, section 32 funds should be used to encourage growers to divert the low grades to starch and other byproduct uses in order to reduce the surplus. However, when it becomes necessary to use section 32 funds, the expenditure of such funds should be made in such a way that all potato areas can benefit equally. For example, this year, the USDA requirement is that section 32 funds will only be used for diverting potatoes to starch factories, or for livestock feed, or other nonfood uses. The requirement on livestock feed is that the potatoes are to be cut or sliced before shipment. Such requirements completely prevent Long Island from benefiting directly from section 32 funds. First, we have no

starch factories, although we have tried desperately to establish same.

Secondly, we have no livestock industry large enough to consume an appreciable quantity of potatoes. The requirement that the potatoes must be cut or sliced completely prevented our Long Island growers from supplying potatoes to upstate New York dairymen for feeding purposes. Because of the golden nematode regulations, we have to ship potatoes in paper sacks. As anyone familiar with potato shipping can tell you, cut or sliced potatoes will not carry or keep in paper sacks. The cut potatoes become slimy and decay and the paper sacks disintegrate.

It was absolutely unnecessary to require that offgrade potatoes for livestock feeding be cut or sliced. If this cutting and slicing requirement had not been tied to the use of section 32 funds, Long Island could have diverted thousands of bushels of low-grade potatoes to livestock feeding this fall.

Turning to another phase of potato marketing, I believe there is no actual overproduction of potatoes, but rather underconsumption. In Europe, the consumption of potatoes per capita is 2 to 3 times what it is in the United States. That is partly because the European countries have developed so many industrial and byproduct uses for potatoes.

I realize that United States conditions are a lot different from what they are in Europe. But I believe that many more industrial and byproduct uses for potatoes could be developed in this country. I recommend that increased funds be made available to the United States Department of Agriculture for finding new uses for potatoes and other vegetables. Just a few new byproduct uses might completely solve the potato problem.

Relatively little is known about consumer preferences for potatoes and other fresh vegetables. We may not be growing the varieties that housewives prefer or packing them to best advantage. Additional funds for research on consumer preferences for fruits, vegetables, and potatoes would be a very worthwhile investment.

The golden nematode continues to be a perplexing problem for potato growers. As yet there is no satisfactory control for this tiny pest. A satisfactory solution for curbing this pest is many years away. Therefore, additional funds should be made available for research on the control of the golden nematode. In the long run it will be cheaper to find a way of controlling the pest rather than spending large sums annually in checking the spread of the nematode. Potato growers might be able to get along without any government potato program or assistance such as I have outlined above if there were a change in the income-tax laws. At least, potato farmers were able to survive on their own in the past before income taxes became so burdensome.

In the past before the days of the heavy income taxes, if a potato farmer was lucky enough to make a good profit due to good prices in a short-crop year, he could save his earnings to tide him over in the big-crop years when prices are unprofitable.

Agriculture has one great need that it can not provide for itself because of its unorganized and impoverished state. This need the Government can fill and in so doing benefit every citizen. Congress years ago in the Research and Mar-keting Act set up a plan for ever-expanding agricultural research. The money was never appropriated and farm research lagged behind. It would take some time for efforts in this direction to affect our economy but when its effects began to be felt they would be permanent and would benefit everyone. We have done wonders in research for better production methods. Let us search with greater endeavor for new and beter ways of preparing our agricultural products for market and especially for new crops and new industrial uses for all agricultural products.

These suggestions have been of a general nature but it is not difficult for one familiar with national laws and events to know where corrections are indicated. The American farmer wishes to be free to make his own decisions. He does not come to the Government looking for handouts, as some would have everyone believe. He does look to the Government for protection of his rights so that all segments of our economy may operate on the same level.

STATEMENT FILED BY ARNOLD SCHMUCKLER AND ARTHUR TUTTLE, DIRECTORS OF INTERCOUNTY FARMERS COOPERATIVE ASSOCIATION, INC., WOODRIDGE, N. Y. We wish to introduce ourselves as Arnold Schmuckler and Arthur Tuttle, directors of Intercounty Farmers Cooperative Association, Inc. We earn our livelihood as full-time poultry farmers in Sullivan, Ulster, and Orange Counties. These three counties are the most intensive poultry- and egg-producing counties in New York State. We have requested an opportunity to appear before this committee hearing as representatives and spokesmen of the membership of Intercounty Farmers Cooperative Association. Intercounty Farmers Cooperative Association represents over 500 poultry, egg, and turkey producers in this 3-county area.

The national economy is sound; corporate profits are up; every segment of our economy is in good financial shape and is doing well, be it heavy industry, automobiles, organized labor, etc. But what about agriculture, wherein farm income is continually dropping; particularly poultry farm income.

We, New York State poultry farmers want to be equal to our urban neighbors. We desire equal educational facilities, equal transportation facilities, and equal social standing and acceptance in our communities. We want to make a decent living for the long hours of work and the tremendous financial investments, which are a part of our business. We work a minimum of a 10-hour, 7-day week, year round, aided and assisted by unpaid family labor. Today's average poultry farm investment is $10 per laying bird (quote, Cornell University Department of Agricultural Economics and other leading agricultural colleges). Because of today's high costs of living and other costs, a poultryman must have a large efficient farm unit. It 1940 a farm of 2,500 laying hens equaled a living. Today, 7,500 laying hens are necessary to make a living. This is a $75,000 investment. Interest at 6 percent is $4,500 per annum. How about labor costs, taxes, insurance, repairs, other overhead, and other expenses?

We have just gone through a disastrous period in our poultry economy. Were it not for groups of farmers working together through the power of cooperative purchasing, which enabled us to get feed and farm supplies at some small saving, we poultrymen would have been even deeper into debt. Our farm co-ops have been instrumental in effecting savings through efficient group purchasing practices.

Because of the existing economic situation on our poultry farms, the present younger generation is looking elsewhere for a future. They do not relish the long hours of labor coupled with low financial return. The trend today in industry is toward a guaranteed annual wage, unemployment benefits, sickness benefits, and paid vacations. This also is true of civil-service employment. This is not true of poultry farming today.

Almost everything we purchase for our farm business, be it feed, gas, farm machinery, building materials, even labor, is purchased and paid for at practically full retail price. Our farmers' production, that is, what we have to sell, be it eggs, poultry meat, or turkeys, is sold at below the quoted wholesale market price.

We question the moral right of organized labor to call a strike such as nearly came about this past summer in the dispute between milk drivers and milk distributors, which if called would have inflicted severe financial loss upon the farmers who were not parties to the dispute. The activities of union organizers caused enormous loss to the farmers on Long Island this past summer and labor has served notice that it will not stop until it has enrolled every farmworker. If farmers were so organized that they could withhold agricultural products from the markets and prevent their being brought in by ship, rail, truck, or air, would not labor be the first to condemn them for bringing hunger to the workingman's doorstep? Organized labor should be bound by the same laws and bear the same responsibilities as individuals or corporations.

We feel that every worker is worthy of his hire but we have mixed emotions when we have minimum wage laws for labor and read of their hourly wages and compare it with the 30-cent hourly average for farm operators. All we ask for is equality and we would hesitate to express our views on labor had we not noted that a well-known union official testified on farm problems at an agricultural hearing before the House Committee on Agriculture. Labor costs affect farm costs more than any other item.

We recognize the need for the products of certain industries in national defense. We know that infant industries sometimes need tariffs for protection from foreign competition. When those industries have become strong should not Congress resist the powerful lobbies and reexamine the need for tariffs, subsidies, and like benefits? It is time to inquire if fair-trade laws do not stifle competition and nullify antitrust laws. Industry, today, quickly grants wage increases and accepts other costs knowing that it can pass it all on to the consumer. Stiff competition alone will not help keep prices of manufactured articles down to the level where farmers can afford to buy them.

We know that the farm program as carried on during the past years is definitely not the solution to the farm problem. It has completely nullified the law of supply and demand. As first written, if carefully administered under a modernized parity formula, it might help. Under high rigid supports as extended from time to time the program has forced our Federal Government to buy agricultural commodities at a price which enabled the large operators to realize a profit. This stimulated production. Everyone knows the result. It should not continue.

We feel that if allowed to operate as originally intended the present program with the changes here mentioned might ease us out of this condition. However, a limitation should be placed upon the amount of money any one producer could receive. The program would then act as an insurance against bankruptcy for the farmer in cases such as the end of a war. The same machinery could also be used to stimulate production quickly if a need arose.

We believe that the huge supply of agricultural products in storage depresses our markets. They must be disposed of, down to a normal carryover, as soon as possible. Let us sell or trade them to the needy peoples of the world for anything of value they have in return. Have we lost the ability of the Yankee trader? Let us repeal the law requiring half of such goods to be carried in American ships. Must American farmers alone bear the cost of subsidizing the merchant marine? Let the starving peoples come and get our surplus with their own ships or those they can afford to hire. Let us get trade moving with friendly nations so they will be financially able to buy goods from us. Maybe if we got the law of supply and demand working again, and we kept powerful interests from interfering with it, we would find it a pretty good law after all.

We call your attention to the fact that a serious inequity exists in the Northeast under the present setup. Our products are highly perishable and cannot be stored successfully, hence we do not enjoy the same supports as farmers of other sections. However, we are a large consumer of feed wheat and corn which are supported at high levels. The sale of stored grain not fit for human consumption at reduced prices to this Northeast section would move it out of costly storage and serve to even things up a bit for us. The suggestions that acres taken out of production of the basic crops be rented by the Government or that compensatory payments be made by the Government is one more step toward socialism. Frankly we are skeptical of such plans. The sudden transfer of land from raising supported commodities to unsupported ones will bring more dislocations and hardships. We of the Northeast milkshed protest any large and sudden transfer of such acres to dairying to compete in our already oversupplied market.