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FARRELL LIBRARY

KANSAS STATE UNIVERSITY

HEARING

BEFORE THE

COMMITTEE ON AGRICULTURE,

NUTRITION, AND FORESTRY

UNITED STATES SENATE

NINETY-SIXTH CONGRESS

FIRST SESSION

FEBRUARY 9, 1979

Printed for the use of the

0- Committee on Agriculture, Nutrition, and Forestry

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U.S. GOVERNMENT PRINTING OFFICE

43-651 WASHINGTON : 1979
COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY

HERMAN E. TALMADGE, Georgia, Chairman

GEORGE McGOVE RN, South Dakota

WALTER D. HUDDLESTON, Kentucky

RICHARD B. STONE, Florida

PATRICK J. LEAHY, Vermont

EDWARD ZORINSKY, Nebraska

JOHN MELCHER, Montana

DONALD W. STEWART, Alabama

DAVID H. PRYOR, Arkansas

DAVID L. BOREN, Oklahoma

JESSE HELMS, North Carolina

MILTON R. YOUNG, North Dakota

BOB DOLE, Kansas

S. I. HAYAKAWA, California

RICHARD G. LUGAR, Indiana

THAD COCHRAN, Mississippi

RUDY BOSCHWITZ, Minnesota

ROGER W. JEPSEN, Iowa

HENRY J. CASSO, Staff Director

CARL P. ROSE, General Counsel

GEORGE S. DUNLOP, Milzority Staff Direct or

(II)
CONTENTS

Mc Govern, Hon. George, a U.S. Senator from South Dakota, opening Page

statement 1

CHRONOLOGICAL LIST OF WITNESSES

Garaner, Harvey C., Hydro, Okla 2

Harrison, Darlene, Mobridge, S. Dak 4

Harrison, Howard, Mobridge, S. Dak 4

Kramer, James, Hugoton, Kans 6

Money, E. E., Gordon, Ala 8

Ferrell, Ronald, Bowling Green, Ohio 9

(m)
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AMERICAN AGRICULTURE MOVEMENT

FRIDAY, FEBRUARY 9,1979

U.S. SENATE,

COMMITTEE ON AGRICULTURE, NUTRITION, AND FORESTRY,

Washington, D.C.

The committee met, pursuant to notice, in room 1202, Dirksen

Senate Office Building, at 2:05 p.m., Hon. George McGovern,

presiding.

Present: Senators McGovern, Stone, Zorinsky, Melcher, Stewart,

Boren, Helms, Dole, Lugar, Cochran, Boschwitz, and Jepsen.

STATEMENT OF HON. GEORGE McGOVERN, A U.S. SENATOR FROM

SOUTH DAKOTA

Senator MCGOVERN. Members of the American Agricultural Movement, we want to welcome you to the Committee on Agriculture,

Nutrition, and Forestry of the U.S. Senate. We are here today because

we want to hear what you have to say, and because we want to help.

As ranking member of this committee and a Senator from one of the

most agriculturally oriented States in the Union, I am acting in the

absence of Senator Talmadge, who has been hospitalized and is unable

to be with us today.

Let me say at the outset that it doesn't take 2,000 tractors in Washington to convince me and other members of this committee that you

have a real case to put before the American people.

Those consumers who are worried about food prices need to know

that grain farmers got only 3% cents from this 1-pound loaf of bread

that I bought in a Washington grocery store yesterday for 59 cents;

that's 3% cents to the farmer out of a 59-cent package, which does not

seem to me to be "greedy".

When farm prices for wheat were $4 a bushel, the price of bread went

up, but when the price of wheat fell to $1.80 a bushel, the price of

bread, as you know, did not go down. The wrapper on this bread

actually costs more in the consumer's bill than the wheat in this loaf

of bread. The driver of the truck who moved the bread from the bakery

to the store received as big a piece of the consumer pie as you did.

But you were the ones with the investment and the machinery, and the

inflation has you producing at a loss in many cases.

Now, I bought this box of corn flakes yesterday at the same grocery

store here in Washington. The price was 75 cents. I am told by the

Department of Agriculture that the farmers who produced the corn

in that box got 4 cents out of the 75 cents. I don't think that's

"greedy". I don't know what the box is worth, but I am advised the

cost of that box exceeds the cost that the farmer received for the corn

that comprises that box of corn flakes.

(1)
2

Last year—and I think our consumers need to understand this—

the farmer got only about 39 cents of the food dollar. Consumers also

need to understand that Americans spend only 17 percent of their

disposable income on food, whereas they spend 20 percent of their

total disposable income on their automobiles.

So the time has come to deal with these realities, to correct these

injustices, and that is, of course, what we are here for today.

Our time is limited. We have asked some five members of the

American Agriculture Movement to make brief statements, and when

they have done that, I want to yield question time to my colleagues

on the committee.

Our first witness is Mr. Harvey C. Gardner of Hydro, Okla. Mr.

Gardner, you may proceed as you see fit.

STATEMENT OF HARVEY C. GARDNER, HYDRO, OKLA.

Mr. GARDNER. Thank you, Senator McGovern.

My name is Harvey Gardner and I am a wheat and cattle producer

in central Oklahoma. I appreciate this opportunity to testify before

this committee on behalf of family farmers in Oklahoma and across

the Nation. I am here today representing the true voice of rural

America, the American Agriculture Movement.

This committee has at its disposal reams of testimony that proves

the family farmer is in serious financial trouble. In fact, most economists agree that if current trends continue, the family farm system is

doomed to extinction.

Gentlemen, I submit to you that for the sake of all Americans, we

must not allow this to happen. I would like to address two specific

points, the first being 90 percent parity by loan, and its impact on

the budget.

Yesterday five Oklahoma farmers spent over 1 hour and 40 minutes

with Secretary of Agriculture Bergland discussing this program and

its possible implications. As you are well aware, Commodity Credit

Corporation loans draw interest and they must be repaid or the

Corporation takes title to the agricultural commodity pledged as

collateral. Under this program, the real cost to the Treasury is zero.

In fact, Secretary. Bergland agreed that the Commodity Credit Corporation program operates at essentially no cost to the U.S. Treasury.

On this basis, once the initial outlay is made to cover the individual

loans, the Commodity Credit Corporation will not require additional

financing.

Another important factor, under the Commodity Credit Corporation loan program the market price is normally at or above the loan

price; therefore, by establishing 90 percent parity by loan, the market

price would make an orderly adjustment to the loan level. The oftenstated goal of the American Agriculture Movement is that we want

to receive a fair and equitable price in the marketplace, and this loan

program will help bring this about.

Any time commodity prices are discussed, the question of foreign

trade must be addressed. Again I refer you to statements made by

Secretary Bergland to myself and four other farmers. He said—and
3

I quote—"We all know the U.S. loan rate sets the minimum world

price of wheat."

Gentlemen, in the case a wheat, we control over 40 percent of the

world's exportable grain and certainly we are in a position to at least

set the minimum world price. Under current programs we are exporting agricultural products at prices below the cost of production, with

the end result being bankruptcy for not only farmers but our Nation

as well.

The statement that parity prices would wreck our export markets

is totally unfounded and without basis. U.S. farmers are already

exploited in export marketing through tariffs, export subsidies, and

numerous other trade restrictions. Gentlemen, most other exporting

and importing countries take extreme measures to protect their farmer,

while the American farmer is cast into this arena without the necessary

tools to defend himself. In the area of trade negotiations we have become the laughing stock of the world, and this deplorable situation

must be corrected.

Ninety percent parity by loan will help move us into a dominant

position in world trade and will help America regain respect and

credibility with our trading partners. The other exporting countries

are waiting on the United States to take some action, and we are the

only ones who can initiate a program to increase commodity prices.

No other country controls enough of any exportable commodity

to effectively set the price; however, gentlemen, we do. Many other

countries already use export subsidies to undersell us, and they will

likely continue to do so. However, with full implementation of your

1977 farm bill, all the exporting countries will be competing at profitable levels. Given a reasonable opportunity to make a profit, the

American farmer can compete against any farmer in the world.

However, we cannot effectively compete against governments. This

is why we need your support in setting the loan rate at 90 percent of

parity to provide us that opportunity to compete.

Gentlemen, the decisions you make over the next few weeks are

critical. By your actions you are literally determining who is going to

produce the food and fiber in America. All responsible people know it

is imperative that we preserve the family farm system because it has

almost singlehandedly made our country the best fed Nation in the

world, at the lowest cost to our citizens. I assure you the moderatesize family farmer is in serious financial trouble and any statements to

the contrary are incorrect. We want to continue the fine tradition of

the family farm system, and we need your help to do just that.

We solicit your words of support and, more importantly, we solicit

action. We are reasonable and responsible people who deserve a fair

shake from our Government. The administration must be instructed

to fully implement your 1977 farm bill, and that responsibility rests

on your shoulders. The financial well-being of all America is at stake,

and on behalf of the American Agriculture Movement I respectfully

ask for your active support in this drive for economic parity for

America's farmers and ranchers.

Thank you very much.

Senator MCGOVERN. Thank you, Mr. Gardner.

Our next witness is Mrs. Darlene Harrison, from Mobridge, S. Dak.
•

4

STATEMENT OF DARLENE HARRISON, MOBRIDGE, S. DAS.

Mrs. HARRISON. I want to thank you for giving me the opportunity

to testify before you, and especially I thank you, my own Senator,

Senator Mc Govern.

I am a wife and a mother of three children. I am also a farmer. I have

been farming for 19 years, so I'm not a young farmer. I have not

bought any high-priced land, nor have I bought any more expensive

machinery than I need to farm my operation with.

Without an increase in price, I cannot continue to farm. I came on

the tractorcade because I know there is a problem, and I believe the

problem is in Washington, D.C., and can be solved here.

I am not proud that I had to brill..

6

a tractor here, and I don't like

being locked up. My job on the tractorcade has been to call all my

radio stations in my State to inform them of our problems and anything we encounter along the way. They want the news so much that

they accept all my collect calls, and they are upset when I don't call.

My State is mostly agriculture, and because of the depressed

prices, the small towns are dying along with the farmers. They understand the problems and are backing us.

I went to the City of Chicago during the tractorcade because 1 was

quoted on nationwide TV as saying something I didn't say. So they

asked me to come so I could correct it. While there we did some radio

and TV talk shows, and 99 percent of the consumers that called in to

this talk show are behind us. They are realizing what will happen if

the family farmers are forced off the farms and if the big corporations

take over. They know the price of food will then go up drastically

because no one is as efficient as the family farmer, simply because we

love what we are doing and are willing to work hard at it.

A group of professional people in the heart of Chicago set up an

office, where they donated $1,000 to American Agriculture Movement

and offered to help in any way they could, because they seem to

understand our problems.

It seems to me that the only people who do not understand our

problems are the people on the Hill. We are not asking for a handout or

for a subsidy. All we want is a fair price for our products. Our situation is desperate and we want your help and understanding.

I thank you.

Senator MCGOVERN. Thank you, Mrs. Harrison.

I have asked Senator Dole to present the next witness.

Mr. KRAMER. Senator, I am supposed to speak last. Apparently we

got that turned around. Mrs. Harrison's husband is here, too, and he

would like to say a few words.

Senator MCGOVERN. All right. I think we should have equal rights

here and let the husband speak, too.

STATEMENT OF HOWARD HARRISON, MOBRIDGE, S. DAB.

Mr. HARRISON. Thank you, honorable Members of the Senate,

and Senator McGovern.

I would like to give testimony on my farming operation and, to

speed things up, I will just read what I have down here.
5

I started operating farm machinery at a very early age, 9 or 10,

and since my father was well up in years, I learned to repair the

machinery by trial and error.

.In 1960, at the age of 21, I married Darlene and continued to farm

with my father. The years were poor, with a total crop failure of winter

wheat one year. In the next 5 years my family and I lived on $15

per week salary.

In 1965 my father's health was failing and he offered to sell the

1,512 acres to us. The terms, because of our low salary over the years,

were no downpayment, but we had to pay the going price for the land

at 20-year payments, and at the going interest rate. We bought the

land, and because the winter wheat killed out over the winter, we

planted everything to oats and hit a bumper year of 100 bushels per

acre. This was quite a boost and 2 years later an adjoining 1,380 acres

were purchased with a very favorable contract for deed. We worked

long and hard hours the next 4 years and bought 1,120 acres more.

I also got involved with a 120-cow grazing association which brings

my total acres to around 6,000 acres.

Money was never plentiful, but with good management we were

able to make our payments and modest living expenses.

Then in 1973, 1974, 1975, and 1976, when prices of grain were

higher, the crops in my area were very poor, not averaging much

above 7 bushels an acre. We had our land paid down and not owing

more than $150,000 total, but operating costs rose out of sight and

we had to start borrowing FmHA disaster money—$25,000 in 1974,

$300,000 in 1976, $225,000 in 1977, and $140,000 in 1978. At the

present time we owe around $700,000.

And I might add that we have not increased our operation in that

time, lanclwise.

In 1977 we had to close to an average crop, but with the high interest payment that accumulated and the operating costs, we couldn't

pay everything. Then in 1978 we had the best crop ever, and because

of the low price of grain, I can't make up for the bad past years and

still had to borrow more money.

Last year my banker of 19 years was fired and a hatchetman sent

in. He demanded that farmer loans be brought down to a zero balance

by the end of the loan period. A lot of farmers just can't do that—

they don't have the money—and have been closed out.

We still owed them $280,000—this is the bank—and with the aid

of FmHA, paid everything but $80,000, which showed we were trying.

But after the banker received the last $200,000, I received a letter

demanding the additional $80,000 be paid. He has never been on my

farm, but suggested maybe my size is not efficient any more. I have

had many people tell me that we have one of the best farms m South

Dakota. In 1973 I was voted outstanding young farmer..

The only thing that is keeping me going is the dwindling equity in

my land and the FmHA loans. If the price of grain doesn't rise substantially, we have only 1 year left. We had to sell most of our cattle

last year because of hay shortages, and to pay operating expenses. So

the increase in cattle prices doesn't seem to help me and a lot of

other ranchers I know.

I only hope and pray that the people here on the Hill will understand what is happening to rural America, and have the courage to

43-651-79-2
6

help us in this fight. The fact that there are this many tractors in

the District of Columbia just has to prove there is something wrong.

Why would farmers who sit on a tractor all summer long drive a

tractor 1,800 miles, through cold and blizzards, leaving their families,

if it weren't in desperation. Thank you.

Senator MC GOVERN. Thank you, Mr. and Mrs. Harrison, for

your testimony.

I will now defer to Senator Dole.

Senator DOLE. It is my honor to introduce Jim Kramer, who has

been one of the outstanding leaders, who was here week after week,

month after month, last year—and he's here again this year—making

a responsible effort to come to grips with the problem that the chairman

has pointed out.

I am very pleased that we met this morning, Jim and other Kansans,

with Secretary Bergland. I said afterward I thought perhaps Secretary

Bergland has done all he can, perhaps, with the authority he has, and

that it's up to Congress to give him more authority. I am not certain

just what that authority will be, but I think with the help of people

like we have out front here, we can reach some agreement.

Mr. Kramer has been out front for a long time.

STATEMENT OF JAMES KRAMER, IITIGOTON, KANS.

Mr. KRAMER. Thank you, particularly you, Senator Dole. I appreciate this support on our behalf in the past, and I am proud to represent the farmers in the Agriculture Movement.

I, like Mrs. Harrison, take no pride in having to be here, because

I think it's not good that we have had to be here to bring our case.

The so-called free market system has been eroded and warped out

of existence in the past. To have a free market system, you must

have many buyers and many sellers, and that is not true in agriculture

any more. We have very few buyers. We need to have the same

amount of information by both the buyers and sellers and, of course,

that's not true. We need to be able to adjust to production, and in

agriculture we make that decision once a year and we have no adjustment. So we are really warped out of existence as far as the free

market is concerned.

We need to devote some time, with the help of Government, on

supply management. There is such a steep set of supply and demand

curves that a very small movement in supply reacts dramatically on

the price. So we are here asking the Department of Agriculture and

the administration, and with some push from the House and Senate,

to help us in a supply management program that will, indeed, put

profits back into agriculture.

We think the overbearing problem of inflation, that seems to be

the No. 1 issue in this country, can be helped by what we are proposing.

We believe the imbalance of trade is one of the most critical issues in

inflation today, and we think part of that imbalance was created

because we are underpricing our products on the world market.

Back in the days when gold was $35 an ounce by law, 2 bushels

of wheat would buy a barrel of oil. It now takes upwards of 8 bushels

to buy that same barrel of oil. We are cheating our country on the

exchange rate, and the devaluation of the dollar has been the result of

that.
7

What we are asking for is a supply management program that

uses longer rates, which is not a budget exposure, which is another

concern of this Government. We would like to get away from the

stigma of subsidies that is inherent in the target price type program.

Last year we did get some help, at the insistence of Congress, from

the administration, but in both cases it was a deficit for the budget

because in one case it was an increase in target price, which is borrowed money when the Government is .spending more money than

it's taking in, and second, they helped us much in our credit program

through the Farmers Home Administration, which again is borrowed

money and is not an earned income which is necessary to stimulate

the economy. We think that's unfortunate and the reason we are

petitioning you to help us in a supply management program that

does not have budget implications of the degree of subsidy programs.

I think we need to become tougher traders in the world market,

also, and I want to say that most farmers do agree that the reserve

program is important to consumers, but inherently has been used

against us in pressing down our prices, and unless there is some

guarantee that the reserve program will not be used against us in

the marketplace, we cannot support it. However, we can see its

advantages as far as the consumer is concerned.

We would like to see the Congress of the United States give the

latitude to the -administration that they claim they do not have to do

something about this. It is our hope that the Congress can do that.

We also would like to see the Congress help us offset the deluge of

publicity that has been given to the tremendous increase in net

income for agriculture, because we feel like it is unfair the way the

administration has presented it to the public, and we think the

Senate can do something on our behalf along these lines.

It is also imperative that we get a study going, and I think the

Senate can initiate it. I have looked all over the Hill and USDA, as

well as in the House and Senate, for a study showing the tradeoff

between the price of agriculture products and the amount of volume

when we get on the export market. We think we ought to make

every effort to put on to the marketplace the amount and volume of

grains that can bring in the most total dollars to this country at a

profit level. That is, indeed, possible, and I don't think there has

*been any real effort that has been given to that point.

When we bring in those total dollars, it can do more on impacting

inflation than, we feel, any other single thing, because it helps us rid

ourselves of debts—and interest is an inflationary factor—and it

also helps on the balance of trade.

I will defer now to my friends so we can move quickly and get

into some of the questions and answers. Thank you.

Senator MCGOVERN. Thank you, Mr. Kramer, for your testimony.

I am going to defer now to Senator Stewart of Alabama to present

the next witness.

Senator STEWART. Senator McGovern, and other members, it has

been my pleasure to meet with the Alabama farmers all week. There

are about 700 of them here as a part of the American Agriculture

Movement.

I can say this much from the opportunity of meeting with them,

that they are family farmers and they are experienced with the difficulties in making a living.

•
8

Their spokesman today is Mr. E. E. Money from Gordon, Ala. He

has been involved in the farming business for some 40 years and

he can articulate their concerns a lot better than I can. So with

no further introduction, I will present to you Mr. E. E. Money, from

the southeastern part of our State, who will speak for the 700 Alabama

farmers who are up here and who I, by the way, am very proud to have

the opportunity to represent in the Senate.

STATEMENT OF E. E. MONEY, GORDON, ALA.

Mr. MONEY. Thank you, Senator, and thank you, Senator

McGovern. It is my privilege to be here to represent the American

Agriculture Movement in Alabama and across this Nation, which we

feel is the true voice of the American farmer today.

I have been a farmer all my life. I am married, the father of four

children, and my only son John is a partner with me in my farming

operation.

Now, as to off-farm income—by that I mean if I had to go out and

get a job to subsidize my farming operation—I might acquire the

volume that was needed so that I might continue to farm.

The parity ratio between input and return on investment has

created undue hardship and is making it impossible for me to continue

farming.

I met with President Carter some 14 months ago, and I earnestly

appealed to the President at that time that he take some action to

alleviate this dilemma that we are faced with. He arranged a meeting

with Secretary Bergland, and not only have we met once, but more

than once, so that we might work out something.

Now I would like to read from Public Law 95-113, section 102(a).

I certainly share the convictions of Congress. I firmly believe that—

. . . the maintenance of the family farm system of agriculture is essential to the

social well-being of the Nation and the competive production of adequate supplies

of food and fiber. . . .

I further believe—

that any significant expansion of nonfamily owned large-scale corporate farming

enterprises will be detrimental to the national welfare. It is neither the policy nor

the intent of Congress that agricultural and agriculture-related programs be

administered exclusively for family farm operations, but it is the policy and the

express intent of Congress that no such program be administered in a manner that

will place the family farm operation at an unfair economic disadvantage.

Farm income being up, as has been reported by the Department and

the administration, does not reflect the true picture in agriculture. It is

true that some commodities are up—and I would allude to just one

of them, the cattle industry. But the people who reap the benefits in

1978 are minor in number in regard to the number of farmers in

America.

We feel that the administration and Mr. Bergland are using these

figures, these statistics, to deceive and mislead the public.

They also use these figures to pit one farmer against another. For

instance, the grain producer against the feeders and feed lots, the

dairymen and the poultrymen, et cetera. And we also feel the political

propaganda—and I refer to the briefing paper that I'm holding in my

hand—we feel the political propaganda such as the ASCS briefing

paper of February 7, 1979, is questionable use of USDA power.

I do not feel that my need and request for fairness makes me greedy.
9

If 90 percent of parity was essential for farmers a few years ago when

Mr. Bergland requested it, why has he changed so much now?

Can we trust the Nation's agriculture future in the hands of a man

whose philosophy changes so fast? We farmers have our act together.

We have specifically asked for 90 percent of parity loan levels, just as

Mr. Bergland did a few years ago. We therefore respectfully request

that the Secretary fully implement your 1977 farm bill.

Thank you.

Senator MCGOVERN. Thank you for your testimony, Mr. Money.

Our final witness is Mr. Ronald Ferrell from Ohio. Mr. Ferrell, I

notice your prepared statement is somewhat longer than the others.

If you could just give the highlights of that, and then we'll have your

full statement made a part of the record. It will give us a little more

time for questions.

Mr. FERRELL. All right.'

STATEMENT OF RONALD FERRELL, BOWLING GREEN, OHIO

Mr. FERRELL. My name is Ron Ferrell. I am a Midwestern farmer,

from the eastern end of the Corn Belt. I farm about 1,500 acres of

nonirrigated land with my father and my brother. I also own a feed

lot, not currently in production.

For the past 3 years the price of corn in the Corn Belt has hovered

below the cost of production. Three years ago wheat was approximately

at the cost of production, but for the past 2 years it has hovered below

the cost of production.

During the past year we have experienced some price improvement

in our products. This is primarily due to two factors, neither of which can

the Carter administration take any credit for, although they are willing

to.

A year ago the Corn Belt was shuddering from $1.50 corn. And $1.50

corn is $1 below the USDA's own estimated cost of production.

Midwest farmers were absolutely shocked by what had occurred

during the harvest of 1977.

The agriculture movement was formed at that time to try and get

something done, so that it wouldn't happen again. We came to

Washington, and we were told that the work we were about to try

and get accomplished would be absolutely impossible. But we worked

with you Congressmen and we found that by putting enough pressure

on and by offering legislation, and by using the support we were

willing to give you, we were able to encourage support both here and

throughout the country for the problem we were facing.

A bill passed by the Senate of the United States would have done

a great deal to solve the problems that were plaguing us. On the eve

of the vote- of this bill in the U.S. House of Representatives, in an

effort to kill that bill, the Vice President and Secretary of Agriculture

announced a modest set-aside program. They altered their farm

program for 1978 in a way where they had refused until that time

to do. Had they done that, maybe some of the belligerence that

occurred in Washington as we tried to get some equitable pclicies

would not have occurred. But no, we had to wait until the final

minute, until the administration was afraid we would pass legislationt

1 See p. 27 for the prepared statement of Mr. Ferrell.
10

Also during the past year there have been improvements in farm

income, again not due to anything the administration has done, but

tattle prices are up, in spite of the fact that the administration has

increased beef import quotas in an attempt to lower farm income.

This change in agriculture policy during the past year has some

very positive effects on farm income. Even though this was a modest

program, it is not the equivalent of the bill that was being offered in

the House, and not the equivalent of what American agriculture

wanted. It took 1014 million acres out of production throughout the

country. It also sealed into reserves, or removed them from the market,

2 billion bushels of grain.

We have seen some modest improvements in the past year, but at

this point we are facing 1979 and have again seen the Carter farm

policy altered. We were told in the late summer that we would have

the announcement of the 1979 farm program at an early date. The

date kept getting put back. It was announced we would hear of the

program no later than October 15. October 15 came and went.

At first I thought the administration, if they were willing to announce their program so far in advance, maybe it was going to be

ea uitable, that they would announce it before the election. It became

apparent when election day passed that there went our hopes of an

equitable farm program.

The farm program was announced, which took the benefits, even

though it was marginally, decreased the benefits participating in

last year's set-aside and reserve program, to the extent that farm

magazine polls across the country have concluded that farmers are

not going to participate in the program.

We are reaching a point where we are at or near 20-year highs in

feed grain carryovers, at a time when the only rational decisions that

American agriculture can reach is that we must reduce production.

The Carter administration has altered the farm program so that ag

economists from the Corn Belt are estimating that most of the 10.5

million acres will go back into production in 1979.

As I look at the consequences of bringing 10.5 million acres additionally into production in 1979, when facing near 20-year highs in

feed grain carryovers, I feel that as a producer I am staring down the

barrel of a shotgun.

I think the consequences, if this program is implemented in its

present form, will be that we will have a worse farm income problem

in 1979 than that farm income problem that brought us to Washington

in 1977.

We are not here just to talk about farm policy. Let's face it. When

we talk about farm policy we speak also of food policy. When we talk

about increasing our production under this Carter program, these

products won't come out of the air. It will take vital resources to produce this additional product which will give us, as farmers, negative

incomes, and we as a Nation, an increased deficit in international trade.

Agricultural products are subject to a demand schedule, and even

slightly increasing our production will give us a lower price for our

product overseas, and it will also increase our need for foreign oil

supplies so that we will have the diesel fuel to plant those additional

acres.

This has an inflationary impact on the consumer. We are competing

for vital resources. We are going to expand soil and fertilizer. It is not
11

a renewable resource. Our fertilizer comes from mines in Florida and

Canada. The mines aren't expanding, but the holes in the ground are.

We are at a point where we can make some rational decisions

regarding agriculture's output, where we can reach a compromise

between the American consumer and the American producer, in which

the American producer, who is efficient—no one has made a legitimate

charge that the American farmer is in this problem because of inefficiency; it is their efficiency that has brought the plague upon us.

So we are at a point where we can make some decisions to try to

achieve some rational farm and food policies, some farm and food

policies that can carry us into the 21st century with something that

we as Americans today can be proud to say we had a part of in the

future.

I would only ask that those who are proud of the Carter farm policy

please sign their hand to it, so that they may be responsible for it in

the future. Those who are concerned, I would ask, that you please act.

Thank you.

Senator MCGOVERN. Thank you, Mr. Ferrell.

I want to express my appreciation to all the witnesses for not only

but for staying within the time constraints that we suggested. We had asked each one of the witnesses to hold their opening

remarks to approximately 5 minutes, and now I will try to apply the

same rule to those of us on the committee.

We will go around the table, beginning with Senator Zorinsky, and

give each Senator, if he wishes to use it, 5 minutes for anything he

would like to say.

Senator Zorinsky, as I think most people in the room know, is the

author of the resolution that some of the rest of us have joined in

cosponsoring, that would mandate not less than 90 percent of parity

on basic farm commodities. A cry is obviously going to be raised

against that in some parts of the country, that it's inflationary, that

it raises the price of food to the consumer.

As I tried to point out here at the outset today, if you buy a 1-pound

loaf of bread like this one for 59 cents as I did yesterday, you can be

sure the farmer gets only about 34 cents out of that loaf of bread.

So even if you raise the price of wheat by one-fourth or one-third,

we're talking about adding at the most a penny to the cost of that

59-cent loaf of bread.

It's the same thing on corn flakes. Those who argue that 90 percent

of parity on corn is going to raise the price of corn products, the consumer needs to keep in mind that the farmer gets 4 cents out of that

75-cent box of corn flakes. I hope all of our fellow citizens will keep

those statistics in mind when they give consideration to the proposal

that Senator Zorinsky and others in the Senate and House will be

offering to fry to strengthen farm income.

So without any further comment and deferring my questions, I

would like to yield to Senator Zorinsky of Nebraska.

Senator ZORINSKY. Thank you, Mr. Chairman.

It certainly gives me a great deal of pleasure to participate in this

hearing, to listen to the many people with whom I have visited during

these past few weeks, months, and years. This isn't a new problem,

although many people back here in Washington seem to think it is.
12

It saddens me to realize that past administrations, and now this

administration, has taken the attitude that one way to keep the

budget down is to pit consumers against agriculture once again.

The administration obviously is not aware that loan support prices

for the most part are paid back. As a matter of fact, if the people who

use food stamps would pay those back with interest as the farmers

do price support loans, we could balance the budget of this country.

We should take this opportunity to look back and learn from the

history of other nations and their experience of putting the family

farm institutions out of business. Let's look at a country that has been

in the news quite a bit lately—Iran.

In 1955 Iran produced 100 percent of its domestic requirements in

agriculture. Since 1955, they embarked on a policy of importation, of

deemphasizing the family farms and of switching to economic incentives for industry.

Last year, before the current political turmoil in Iran began, the

country imported over 50 percent of their agriculture needs from other

countries. Our country should learn from this example what happens

when you put the family farms out of business and conglomerates

begin to control necessary commodities. The exporting nations become

aware of this country's inability to provide for itself, as it is today in

energy and in coffee; other countries begin to set the price on the shelf

for the same consumers that the administration is trying to protect.

You know, I feel that we've got a misordering of our priorities. We

are all working to better this country, to make it a better place in

which to live and raise our families. But when I see in my short term

in office, in just the last 2 years, a Congress that is willing to pass laws

to help everyone but the family farmer—and I'm going to use a good,

classic example—the built-in cost of living index, built into the minimum wage bill that we passed last year.

They tell me they have got to pass these laws here in order to provide an adequate income for the American people. The farmers of

America are Americans, also.

I don't know how many of you are aware that 2 years ago, in

questioning Bob Bergland during his confirmation hearings I asked

what he thought the cost of production on various farm products was.

And you know, we had figures from the USDA, figures from the University of Nebraska and other land grant colleges on the cost or production for family-farm produced goods. We even had cost of production figures from the U.S. Senate Agriculture Committee.

All those people gave us very different costs of production, but they

all had a common denominator—they are all paid their salary by the

American taxpayer, and they all had different costs of production.

Not a cry has been raised yet to go to a farmer and ask to see his

books and find out what his costs of production are. It's time the

bureaucrats did this, too.

With that, I will defer my opening remarks back to the chairman.

There are some questions I would like to ask, Mr. Chairman during

the questioning period.

Senator MCGOVERN. Thank you, Senator Zorinsky.

Senator Lugar of Indiana.

• Senator LUGAR. Mr. Chairman, I appreciate very much the testimony that we have heard.
13

I would like to use my 5 minutes to try to think through with one

of the witnesses some, of the actions that might be useful.

I was appreciative of your testimony, Mr. Ferrell, in which you

mentioned the very considerable problems that are. going to occur in

our country if millions of acres are farmed and not set-aside. And, in

addition to the expenses for the farmers that will be. involved, you

mentioned that there are expenses in terms . of increasing energy

problems, and various other costs to our society, if a larger portion of

our cropland is not set-aside.

Now, in February, we are .at the stage where we are well down the

trail timewise. But in your judgment, :just thinking off the top of your

head today, would it be useful for the administration to announce a

substantial set-aside program for corn—because you're involved in

that crop, as are many people in the State of Indiana—and if so, what

should be the extent of that program?

Can you give any details, if you were working with the Secretary

presently, that you would advise him?

Mr. FERRELL. Yes; really, that goes right back to the heart of

what we have been requesting since we came down here. We have

been requesting an output reduction to rational levels. Certainly,

you do not have a rational output level when you have a predicted

price for your product below your cost of production.

I feel that agricultural producers are as much entitled to share in

the bounty of this country, if they are productive individuals, as is

any other. citizen.

I feel that what we have to do is come up with a set-aside program

to accomplish the output reduction, and the only way we'll accomplish

that with a set-aside program is if. we have proper incentives to bring

about cooperation with the program.

That is the precise problem with the Carter farm policy. Its .not

that the set-aside is not there. The set-aside is there, but the incentive

is not there, and all the agricultural economists are in agreement that

there ought ,to be compliance in the coming year.

Now, what we have been requesting, or what we have been suggesting, as one of the most acceptable methods of inducing a producer

to cooperate in the program, is that he be given the benefit of a. 90

percent parity loan. This is an inducement to cooperate and to reduce

the output. And if the program works, the market price of the grain

can drop and it doesn't result, in. a loss to the Government.

But whether th.e Government has a loss on the program will depend

on whether it carries out the program faithfully. The farmers will

respond if it's a good program.

Senator LUGAR. What should be the extent. of the set-aside in order

to qualify, in your judgment, for the 90 percent parity loan? In other

words, can yau quantify a. bit more how much you want to set-aside—

or is this a sliding scale or a one-shot affair?

How would you characterize your best judgment. on that?

Mr. FERRELL. Well, we're talking about dynamic situations. We're

talking about something that will have to be changed from year to

year. I mean, just as the agricultural output. changes from year to

year.

So I suppose if I could go over to Independence Avenue and punch

in the right questions to the computer, that I could come back with a

43-651-79---3
14

lot better information on which to base this decision. But I do know

that all four major farm .organizations in this Nation felt that because

of the relatively high 'carryovers we're experiencing, that a 30 percent

set-aside was going to be necessary to prevent prices below the cost of

production. And here this is something the .NFO, the Farmer's Union.

the Amermerican- Farm 'Bureau Federation, an d- the American Agriculture,Movement all concurred in. •

•- Thiswas just thrown out the window when they Made this request.

,Senator LUGAR. Essentially leaving the set-aside where it is now,

you're suggesting that in • return for a 30 percent set-aside from the

normal basethat is defined, that if the farmers 'set aside that amount

of land .he orishe ought to qualify for a 90-percent parity loan on the

pro( I ice from' the other • 70 • percent?

Mr. FERRELL. What we have said is that's an *acceptable .inducement. But we think to bring about participation, if I'm going to have

to put a figure that we think we need for a set-aside, I'm • going to

defer to the other. farm organizations, Who have had a'great deal Of.

input: I have to assume this is a rational decision that they reached.

'Senator LUGAR.. But that's sort of an involved 

Mr. FERRELL. 'I would Say in that area.

Senator LUGAR. What would' be yoUr prediction,' as a farmer in the

field now, if such a policy *were-to be announced within the next 30 days

Or so? What kind of participation is likely? • - •

You can argue all over the . ballpark; . 1 suppose, but do You think

it would be substantial enough to make that kind of change in policy

hold up?

Mr.. FERRELL. What is my prediction as to the ilikelihood of signup

of producers in compliance with the program?

Senator LUGAR. Yes.

Mr. FERRELL. ;I can only say that 90 percent of parity loan rate

would' give Me an opportunity to' Make some 'money, even if I had to

cut My •production somewhat. • •

At the present time; My Share of that 1,500-acre operation is onethird. I would •predict that if We -.plant the extra- 10.5 Million - acres

that were taken out last year—'-and keep in mind. Secretary Bergland

testified i• believe yesterday that the reserve, the' administration's

reserve requireMent had pretty' much been met. We had a 'little crisis

last year even with taking a billion bushels Off the market. I can. only

predict that if go ahead and plant without a program, I'm probably

talking about losing $1 a bushel. So there is incentive' to cOoperate With

this program..

Senator, LUGAR. Thank you, Mr. Ferrell.

That's all the questions, Mr. Chairman.

Senator MCGOVERN. Senator Melcher of Montana.-

Senator MELcHEE. Thank you, •Mr. Chairman.

First of all, I want to welcome all of the fine people of the American

Agriculture Movement who have come here. frond - across the .country

to bring us their mesSage. • -

I think some of you have gotten some pretty bum breaks since you

have been here, and some pretty bum - press from time to time

But I want to tell you that I am very pleased that you're here.

I was very pleased when you were here last year, and I want to

encourage you to stay on as long as possible. I think you always have

some impact.
15

You represent and talk commonsense when you tell the American

people about agriculture' and its importance in our economy.

Even when you are right, you can't always get what you want here.

in Washington acting alone. So you have to have alliances, and you

have to put the votes together.

Now, in 'speaking' about cornmonsense and the Message you're

bringing, you know pretty much the Way free trade is as is in practice

in the world now': When wheat leaves America at about $3.50 per

bushel f.o.b. vessel; it goes over to the Common Market countries

in 'Europe, • or to japan. ThOse-cOuntries put $2 or '$3 on top of that

before it reaches the millers. The only way that resembles tree trade

is' that the 'American farmer in this country has given away—free—the

additional price that. either the Common Market' Countries or the

Japanese Government puts on it. -

The message you are telling us—and several Of you have alluded to

it in your testimony here today, - and T have received it :through letters

from thousands of you. Over the cOnrse of the years—the message

you're telling us is that we should have commonsense in our trade

policy. When" talk about putting votes together, there' are 'a lot of

other people in America besides those in agriculture who believe we

need a Commonsense' trade policy. Label' believes it, for example.•

• This is a year of decision 'here in the Congress. We will face the

administration's request for a 'continuation of a waiver of countervailing duties. Bob Strauss, on behalf Of the President, seems to be

endorsing, .or 'seems: to be 'guaranteeing, that a bill will pass here in

Congress waiving, countervailing duties, followed by that with an

agreement. or disagreement,' an acceptance or rejection' of the . Geneva

Trade Agreement. .• • • •,

• Now, it it's a continuation Of the 'faulty trade policy that has almost

wrecked this country, given us a deficit trade balance and brought .us

into this Weakened dollar position, and this poor economy, besides

hurting you on the farms—if it's a continuation Of that policy—I say

that we're going te need all the help you can giVe Us and all the help

you Can muster up to defeat such a policy.

.[Applause] - • • . .

, 'Senator McGoVER/.t.. We enjoy this applause, but in the interest of

time I am wondering if at this'pOint Wel-shOnn't revert to what' is

the usual procedure in congressional hearings, to withhold any 'applause until .' the hearing' is over.' I hate' to cut my 'colleagues Out of

this delightful sound'. lint We do. have .a short time here, and the

rules Of the Senate call for us ' to Maintain order in the hearing mom.

So if you would 'plefthe withhold 'your, applause until all the Senators

have' had • a Chance to make their statements and •complete their

testimony.

'I would now like'to turn to 'Senator BoschWitz from Minnesota.

Senator BoscHwiTz. I, too, am 'Pleased to see the large number. of .

farmers :who 'came. here from Minnesota., and I have met With them

a number .of ,

don't • consider 'anybody greedy for acting in accordance with his

self-interest. I think' that's the 'very .hti§e' of our 'American system.

Certainly I have participated to that end, and I would not want, to

be called greedy. I continue to be mystified about how a country that

controls 40 percent of the market is unable to get a better price on
16

the world market. Certainly no country in the world oil market controls 40 percent of the supply as we do of feed grains.

This is one of the reasons I'm on this committee—and I have just

come to the U.S. Senate. There is no question about the reason I

chose this committee. Not only is agriculture very basic to Minnesota.,

but also my feeling is that the American Government has not been

very toughminded in negotiating the kinds of international agreements

that are going to help the family farmer and that will help the economy of, this .country.

So' one of the very basic things that, I have some difficulty with,

and I would. like to ask Ron Ferrell for his explanation, is why the

farmers will lay aside or set aside? If there .is a feeling among farmers

that there's going .to be a set-aside, and 90 percent parity loans are

going to be made, why will there not be some freeloaders?. Why will

there not be some people who think the price is going to go up, and

I'm going to plant and transfer to other things?

You know, I don't want to Undermine what .you're trying to do.

But in a free society such as we have, and which I want to preserve,

bow can we compel people not to produce upon their own lands?

Mr. FERRELL. We can't compel people not to produce. We can only

give incentives toward rational output goals. And if the rational output goal is something less, than consuming resources at the maximum

rite that agriculture is capable of, if the level that's rational is below

that, then we can only offer inducements to achieve that level.

No program is going to have . universal cooperation. I .guess the

ministers of this Nation can tell us that. But we have to move in the

direction of the welfare of the American farmer and the Nation as a

whole. And I think that while we won't see univeral participation, we

will still see a movement toward what we know are acceptable circumstances for agriculture.

Senator BOScHWITZ. Well, I must tell you and tell this group that I

really have not made up my.mind on what to do and what to support

as have some of my colleagues who have spoken already.

However, there is no question that I'm on this, Agriculture Committee to serve the interests of the farmer, to find a. way to see that the

farmer gets a better price for his goods. I understand ,that all of the

kinds of problems you face are secondary and that most of them would

disappear if you get a good return on your investment.

I'm a businessman, and I understand the business of buying low and

selling high. I sometimes think the farmers get that confused, perhaps

through no fault of their own. I will do what. I can and I will strive as

far as I can to see to it that the farmers—who are now getting such a

low return on their investment that it's a business, almost that one

would not want to get into—I will see what I can do to help the farmers

improve their lives, to get a better return on their investment. That,

of course, means getting a better price.

Mr. FERRELL. If I may speak a little further on the parity loan, the loan program of the Commodity Credit Corporation is one of a host of alternatives that the Congress gave the Secretary- of Agriculture to accomplish Set-a-side programs. You have given him the authority

to use target prices; you have given him the authority to use diversion

payments.

Now, the reason we have selected the Commodity Credit Corpora- tion loan program is that we feel it is most likely to cost the Govern-
17

ment the least money. That's why we have selected it as the first

alternative.

But the overriding thing we have to accomplish is the rational level

of output. We are not going to quibble on how you do it, but we will

make our suggestion as to how we think it might be done most economically.

Senator BOSCHWITZ. I spent a couple of hours with a group from

Minnesota in my office today, and brought along some folks from the

Agriculture Department, and also a staff member of this committee.

I must say, quite a convincing case was made for higher price from the

standpoint of helping the farmers in distressed areas of the world. In

my mind, it seems inconsistent that when hundreds of millions of

people in the world are starving, we should produce less. It's just an

inconsistency in my mind, that by giving or trying to help other nations

with low prices, that this discourages the farmers from operating in

those countries and, indeed, lowers their production.

So I think there is an answer, and I'm going to be very active in

seeking it, certainly seeking it for the benefit of the farmers who I

represent. The whole basis of our economy in Minnesota is agriculture.

That's why I'm here.

Mr. FERRELL. As you well recognize, when you control 40 percent

of the world's grain trade and destroy the price of that product,.

you destroy the price of your product.

Senator BOSCHWITZ. Sure; I was in the building materials business, and if I controlled 40 percent of that, watch out.

Senator McGovERN. Thank you, Senator Boschwitz.

Senator Stewart of Alabama.

Senator STEWART. I would like to ask a question and give you an

opportunity—I've got a good speech to make, but I will defer that.

I want you to express some of your thoughts about some long-range

proposals.

I would like to know if a set-aside, coupled with a loan program,

is a short-term answer to the problem that we are now facing? As I

understood it in talking to you all last night, one of the things you

were all concerned about was just the life itself of the family farmer

in this country.

What are some of the things that you, Jim Kramer, and some of

those who were with you last night, would suggest for a long-term

policy decision that we can make as members of this committee,

Members of Congress and the Senate, to protect the family farmer in

the long run? I know you've got a short-term solution that you're

proposing here, and I'm in favor of that. But I would like to know what

some of your thoughts are about the long-term situation.

I know its a long haul up here, and I don't want you all to have to

come back up here next year. We want to make the decision this year

that will help solve the problem. I think we need to busy ourselves

with that, but we have a tendency sometimes in Government to come

up with stopgap measures, and I think, frankly, that's why you're

all back here again.

Jim, or Ron, any of you, E. E., if you would like to give us suggestions. A lot of the things I got are good, commonsense suggestions,

and they make sense to me.

Mr. MONEY. I could make about a two-sentence answer to that,

and maybe my colleagues would like to answer as well.
•

18

When we were here a year ago, American agriculture offered the

services of 50 men to coserve with the Secretary of Agriculture to

answer some of these problems. We left our destiny of the largest

industry in this country in the hands of other people. We certainly

feel this is part of the problem.

But if we can get a short-term solution, then I reaffirm that the

American Agriculture Movement will offer its 'services—and we have

some very capable people that will help to accumulate the data, the

possible or necessary data, that will help us come up with a long-range

solution to agriculture in this country.

Senator STEWART. Of course, I hear from Secretary Bergland, but

you have to help me have you help him.

Jim, do you have some suggestions or ideas?

Mr. KRAMER. Well, there are implications here that need to be

addressed. You have the problem of intergenerational transfer of farms

within a family. It seems like youngsters have to buy that farm back

every time they lose their parents. I think there are some real concerns

that need to be addressed in this area.

• We are also noticing particularly those commodities that are high

on the parity scale right now are beginning to become more and more,

or have become so vertically integrated from the top down, I might

add, that it would finally level up. They are beginning to be able to

protect the price—the lettuce and vegetable industry, for example.

Those people are now structured whereby they can protect their price

clear down to the producer level, and that producer doesn't happen to

be the family farmer, except that he's on a contract basis which makes

him more like a serf than a farmer.

In the beef business right now we are seeing a tremendous impact of

vertical integration. One of the largest grain companies in my area of

High Plains is absorbing many of the feedlots. They are now becoming

collectors of the grain by buying local elevators. They are also now

buying one of the large packing industries and are trying to become so

vertically integrated that they will in time have the beef industry

much like the broiler industry.

We think that's unfortunate. We think it's not good for the country

in the long run, not good for the family farm system, which we desire

to keep.

Senator STEWART. Well, what does that ultimately mean to the

consumer as far as pricing is concerned? Is that something you can

make a direct relationship to?

Mr. KRAMER. Well, once they get in a position internally, where

we're with 40 percent of the grain in the import-export trade, then they

are able to control the price. Unfortunately, our Government isn't

able or willing to be a price controller at the 40-percent level in the

export trade. Those companies will be when they get that production,

and they will set their price at what they want it to be, and we consider

it to be higher than what we're talking about as family farmers.

Senator STEWART. That's all the questions I have, Mr. Chairman.

I do want to say one thing. I have difficulty in making a philosophical distinction of making loan guarantees and providing tax incentives

for other segments of our economy and not protecting the family

farmers as we should. I can't make that distinction. Maybe I'm just

hardheaded; maybe I don't have the intelligence that you have to have.

But I don't think I will as long as I serve up here.
19

Senator MCGOVERN. Before I recognize Senator Jepsen of Iowa,

I just would like to ask my friends here from South Dakota, Mr. and

Mrs. Harrison, if they could comment on a question we have heard a

lot about here in Washington for the last 2 or 3 days. I know what the

answer is, and I think most of the members of this committee do.

There has been a lot of comment about how people who are going

broke can come to Washington with an expensive tractor. Would you

explain that for us?

Mr. HARRISON. Well, we have back home, for every farmer here,

we have at least 10 back home, or more than that, and they have all

kicked in and helped us. So, say everyone kicks in $100, $200, or $500,

it's still hard to make it.

Our farm tractors, you know, we haven't got them paid for, by

any means.

Senator MCGOVERN. Some of those tractors belong to the banks,

don't they?

Mr. HARRISON. I know the biggest share of mine belongs to the

bank.

Mr. KRAMER. I might say one of the fellows from my county said

his gas mileage was 9 miles to the gallon. He said that's better than

his pickup would do.

Mrs. HARRISON. We not only have farmers supporting us, but we

have businessmen back home that recognize the problem. Just like

I told you about the professional businessmen in Chicago. They told

us they would help us in any possible way they coul.

This is how we were able to come to Washington. We couldn't

afford to do this on our own.

Senator MCGOVERN. I think there's another answer, is there not?

It costs a lot of money to buy a tractor, and that's something the

farmers have to take into account when they figure their costs. That's

part of the cost of production, too. It doesn't mean they're on easy

street because just the opposite is true.

It also has something to do with the efficiency and productivity of

the American farmer that has made you the envy of the world in

terms of output.

Well, I mention that because I, and I know other members of the

committee, have been asked that by some of our urban friends, who

look at those tractors as a sign of prosperity, rather than looking at

it as a farmer does. That is another cost he has to meet out of what he

gets for his produce when he sells it.

Senator Jepsen.

Senator JEPSEN. Thank you, Mr. Chairman.

I was sent here by the farmers of Iowa to represent them, and I

was born and raised on a farm in Iowa. My people have been farming

since 1884: My brother had several hundred head of cattle. He was

hurt by the program on July 1 of last year when the beef import

announcement was made by this administration. I can tell you it

smarts when you watch the prices go down $10 in 10 days, when you

do the arithmetic on that.

I was on the campaign trail at that time and it was hard to keep

my cool.

I want to express to you some concerns that I have and hopefully

to put them in perspective, something that I know is in all of your
20

hearts and all of your minds. As I said to the farmers from Iowa

who I visited with this week on several occasions and welcomed.

This is what America is all about—the dreams and desires of the

farmers today are no different than they were yesterday, and they

will be the same tomorrow and in the years to come. The farmer

wants the opportunity to provide himself and his family a good

standard of living and to acquire land for his own personal future

security and that of his children.

Our farmers, as has been mentioned here earlier, are the most

efficient food producers in the world, and they want to produce and

sell this food domestically and throughout the world with as little Government assistance and involvement as possible.

Farmers, like all other businessmen in the free enterprise system,

are concerned with the bottom-line income of their individual operations. They desire to make a reasonable return on all their families'

labor and expenses, and a return on their investment in the yearto-year operation of their business.

I want to point out that today industry, business, and labor, are

able to adjust their activities in the economy to seek the most advan.

tage. They enjoy this advantage without facing the risks of nature

that are inherent in farming.

I do suggest to you, and will in my activities here suggest to the

public and my fellow Senators, that it is time to take the steps required

to make agriculture an equal partner with industry, business, and

labor.

When we do this, there is no simplistic answer. I have not made

a final judgment, which I have indicated in public, whether to support

90 percent of parity, because I do feel that when you talk about

statistics and averages, getting a fixed price on the basis of a relative

average of something that was based years ago and so, there is some

inherent danger in that.

You know, a person who has one hand on a cake of ice and one hand

on a hot plate—on the average he ought to be pretty comfortable.

But it doesn't always work out that way.

In looking at farm programs that will aid and assist the farmers

to do—in my opinion, my philosophy—where they want to arrive

eventually—where the marketplace provides for the farmer and

not the Government, because when the Government gets involved

too long and too much, soon the incentives and freedom of the lid,

the bottom becomes the lid on this type of thing. That we must not

have happen to our free agricultural system.

We have got to be concerned that we do not use American food as

a weapon. I think the manipulation of the price of American food is

an inducement favoring change for some foreign trade concession. We

have got to take into consideration—and I would advise you that in

my weeks here I have spoken with representatives of the Department

of Agriculture regarding top multilateral trade negotiation. I wonder

if all of you realize that that will soon be presented to this Congress.

To the best of my knowledge, although I hope to correct that, a

good deal of the public and a good number of the Members of this

Congress, me included, do not know what's in this multilateral trade

negotiations. I have asked—and I'm just a common country boy

myself, .coming from Iowa, and I just can't understand it. I get the

impression around here that sometimes the bureaucrats think they're
21

-the ones that got elected, and the "tail kind of wags the dog." There

are a lot of us here now that aren't going to stand for that very long.

We haven't got the answers to this, but believe me, we will get

them. We hope to have this information made public so that the

people can have an input on something that affects their very lives,

their very economic being in this country. Agriculture has a very

large stake in what happens in the multilateral trade negotiations

and they have a right to know.

I have really gotten on a "soap box" here, but I admonish you to

remember that the critics can kill the play, but very few critics can

write one. You have been most constructive in your remarks and I

commend each and every one of you for it.

When we look at our total farm program, remember, besides 90

percent of parity, we have a problem and a need to develop markets.

We want to make sure, for example, that we don't get a set-aside

program growing so large and so intent that our international competitors will get the advantage of us if they are embarked on a fullproduction program. We have got to look at the balance around the

world or we'll get caught.

We have got transportation needs. We have to move our products.

There is a need for research. We look at the total picture, and that

isn't all. There are things in Congress, where you look at the tax rolls,

the carryover basis, it's not healthy for the family farm. We will be

having open hearings on that. You might think of tax depreciation

and the replacement cost of your machinery, and this kind of inflation.

We are going to take a look at that, rather than the cost that you

purchased it at 4 or 5 years ago.

Well, that sums up what I have to say. I appreciate the opportunity

to have a few words, and I welcome all of you here. You're doing a

yeoman service. There are a lot of people on farms who will benefit

from the attention you have brought to one of the greatest professions

in our free enterprise system—farming.

Senator ZORINSKY [presiding]. Yes, Mr. Harrison.

Mr. HARRISON. I would like to say something to Senator Jepsen if

I could.

Senator JEPSEN. Please do.

Mr. HARRISON. With the 90 percent parity loan rate, all we're asking

for is short term farm legislation, so that we can get by this next year

,or two. Then we can go into a longrange program. But this is something

-that we're going to have to take a little time in changing and everything. This 90 percent loan rate needs to be done quickly. That's what

-we are after at this time.

Senator ZORINSKY. Thank you very much.

Senator Stone from Florida.

Senator STONE. Thank you, Mr. Chairman.

I am going to be brief, because when I finish my remarks I will be

meeting with the AAM delegation from Florida in my office, and I

want to be able to spend a little time with them to hear more directly

and more personally some of the specific suggestions that they and you

have.

I don't think it's impossible to get a plan of Federal and private

teamwork in agriculture so that the result benefits both the American

citizen and the farmer. The reason I think it's possible is that last year
22

we went to work on the readjustment of two specific Southern agricultural programs, peanuts and tobacco. In the face of drought and

frost and everything else that we had to face in Southern agriculture

over the last 18 months, the growers of peanuts and the growers

of tobacco were able to make it. The volume was adjusted properly.

The quantity being grown was tailored to the foreign and domestic

market properly. The price and CCC loan levels were adjusted

properly to the world and domestic market, so that the quantities

came out about right.

In the face of all that problem that we had in the South last year,

those farmers, who grew those crops, were able to survive, and to

cover their production costs and make a dollar. Therefore, it can be

done.

The cost, may I say, to the Nation was minimal, something like $10

million for the whole peanut program last year, and we began to expand

our exports and pretty well broke even to cover the costs of tobacco.

This is to say nothing of the tax proceeds that tobacco brought in at

the State, national, and local levels. So it is not impossible. It can be

done with skill and with brains, and with a little experience.

Now, I admit I'm an amateur when it comes to grain, particularly

Midwest grain. But I'm willing to learn, and I know that it can be done.

I want to also say another thing about another Southern crop,

which is also a Western crop, and that is sugar. We need an appropriate

support program and we need an appropriate import program. I am

a cosponsor and cointroducer of last year's bill—it almost passed and

we almost made it. Had we made it, we would not have hurt the consumer. We would have helped the producer, both on the mainland

and in Hawaii, and they would have been able to make it properly,

instead of piling up that commodity in the sheds, worrying about

where to store it. And this was while the European market dumped

their commodity on us.

There is one other thing I want to say, that this is our winter vegetable market. We are perfectly willing to share it during times that

we don't supply it, and to the extent that the sharing of it doesn't

mess up the coverage of our production costs.

We don't want to put the Mexicans out of the produce business, but

we don't want to be dumped out of our business, either.

The same goes for all the commodities. It goes for beef. We are

perfectly willing to share our market to the extent that we can survive

in our own market, and that is in the interests of the American

citizen, not just the American producer.

So I want to close, before going to see your delegation, by saying

that it is not an impossible task if it is done skillfully and carefully. It

doesn't have to cost the taxpayer big dough. It can be done, and we

have examples that it has been done in the past.

What you are asking for, and what we have to put our shoulders

to the wheel on with you, is to come up with something that fits. Let's

cut the cloth to fit the suit and let's try go get it done with some

brains this year.

Thank you very much.

Senator ZORINSKY. Senator Cochran from Mississippi.

Senator COCHRAN. Thank you, Mr. Chairman.

I was very pleased to see that Senator Lugar from Indiana began a

discussion with respect to specific suggestions for implementation in

this year, something that can be done now.
23

I didn't get the answer, though. Maybe I misunderstood Mr. Ferrell

or one of the other witnesses. But is it or is it not too late this year for

a change in policy by the USDA to be implemented which can help our

return on investment and in meeting the cost of production this

crop year?

Mr. FERRELL. I think we have ample evidence to determine whether

a program could be announced at this time and have any effect. You

recall the program that I told you took 10.5 million acres out of

production. It had a positive impact on not just the Corn Belt but

the whole Nation as far as agriculture is concerned. It was announced

during the Easter recess of the Congress last spring, so we have time

if we care to work.

Senator COCHRAN. Let me ask you this—I didn't get this clear.

One suggestion that was made was for the 90-percent parity loan

with a 30-percent set-aside. Would this be helped at all with any

flexible parity system, so that if you set aside 20 percent you have a

smaller reduction?

There was some conversation I remember hearing last year about

some kind of program like that. What's your reaction to that?

Mr. FERRELL. Yes. I would say that what we're talking about is

essentially meeting the task that we have to accomplish. On the one

hand, the output reduction, the task that we have there, meeting it

with an equal force, OK?

Now, like I said earlier, it can be done with any one of these tools

that Congress gave Secretary Bergland and President Carter, or it

can be done with a combination of those. We only suggested the one

because we thought we could go with the least cost that way.

But certainly, there can be combinations that can achieve the same

goal. It's the goal that we're trying to reach. We will argue a lot less

over the tools than we will the goal to be achieved.

Senator COCHRAN. I appreciate having the benefit of that recommendation. I think that's a sound approach to this very serious problem—and I do think it's a serious problem. If it wasn't serious, I

don't think you would be here.

I know the people from Mississippi who are up here, and I met with

them last year when I was a Member of the House. We worked on a

task force over there to come up with a comprehensive approach to

deal with the ever-increasing problem of trying to operate a farm at

a profit. I think the Government sometimes gets tunnel vision looking

at the problem.

There are many, many things that in my judgment the Government

can do to help increase the opportunity to make some money in our

farming operations. I don't see why we can't look at the investment

tax credit that is provided to manufacturing and some other businesses,

and provide an investment tax credit for the investments in farm

buildings and equipment. This would be an incentive to try to help

increase the opportunity to make money in the farming operation.

We ought not to limit ourselves. We ought to look at the wide range

of things that are available. I know this committee doesn't have

jurisdiction over our tax laws, but I believe if we presented that

testimony and urged the Finance Committee, whatever committee,

and Ways and Means in the House that have jurisdiction, to take a

look at these problems, that we can get a comprehensive approach to

solving them.
24

I was thinking this year, for instance. Mississippi State University

just compiled some figures for me at my request on the cost of production in farming. Mr. Money probably knows down in Alabama,

and the gentleman from Oklahoma as well, that right now with the

anticipated yields for next year, with the prices as they are now,

about 58 cents a pound, they are right about at the cost of production.

If you rent land or have a mortgage on the land, then you're sure

enough not going to be able to have a yield that would meet the

cost of production.

It bothers me, too, when we see one Department of Government,

like the State Department, working at cross-purposes with what our

agricultural interests are here in the United States. I am disturbed

that we are seeing efforts made to build up Third World agriculture

to such a point that it is undercutting our American farmers. We are

trying to sell beans in Asia, and we are finding the South American

bean farmers being able to undercut us. This is because of the actions

of our own Government.

I think we want to be good neighbors and we want to have our

friends able to feed themselves, those that are poor and need that help.

We don't object to that. But getting them in shape so they can destroy our ability to sell in our markets, the ones we have developed

abroad, is working at cross-purposes. I think we ought to upgrade

the agricultural attaches in our embassies so that they rank along

with commerce representatives. So when we talk about expanding

new markets and developing new markets, we will have a bigger voice

in these areas overseas on the part of those who represent our farmers'

interests.

I see my time is up, Mr. Chairman, and I apologize. Thank you

very much.

Senator ZORINSKY. Senator Boren.

Senator BOREN. Mr. Chairman, I want to say how pleased I am

that these farmers have come to our Capital. I for one welcome them,

because I don't think there is another group in this country that has

contributed as much to the economic well-being of the rest of this

country, and at great sacrifice to themselves. I certainly think it's

appropriate that they are here in their Capital talking with their

elected representatives.

I think one of the real challenges before us—and you have heard

the Senators around this table, and you can recognize by hearing where

they're from—that most of us around this table are from States that

have a very important and large agriculture community. So, in some

sense, we are talking here, back and forth at this meeting today and

I think it's important that we translate what we're saying into language that the rest of the people in the United States, the 96 percent

who are not farmers, and to the Senators that come from States that

don't have a large agricultural sector, so they can understand what

you're talking about and what we're talking about is not just doing

something for the farmers. We are talking about doing something

to preserve the economic well-being of this entire Nation. I think

we can see that.

We welcome the fact that this week, in 1 day, the value of the

American dollar compared to gold, in terms of increased price of

gold, in terms of dollars, dropped about 6 percent in 2 days. When

we think about the fact that in 18 months, primarily because of the
25

large trade imbalances that this country has, the value of the American

dollar compared with other leading currencies in the world has dropped

37 percent in 18 months.

We talk about developing a market for our agricultural products,

and we are talking then about saving the value of the American

dollar, whether that dollar belongs to a farmer in Kansas, or Oklahoma, or whether that dollar belongs to a housewife in Brooklyn, or

the small businessman in Philadelphia.

One of the things that we need to do, as I mentioned in a previous

meeting of our committee, is let the 96 percent of the people who are

not farmers know all of the facts.

This morning, coming in, I heard on the radio—and I'm sure many

of you heard it—we heard that the cost of living had gone up again,

and the commentator always adds one sentence: "Food prices were

among the leading causes of the increase in the cost of living."

As long as the vast majority of the people who are not farmers

continue to hear this sort of thing, without having it explained, we're

going to have problems. It is high time we set ourselves a priority,

insisting that the Department of Agriculture and the Department of

Commerce, and others who put out these statistics, tell the people the

whole truth.

They need to add, after the fact that food prices went up, that the

share of the food dollar going to the farmer, to the producer, declined

again for the 100th straight month.

We have got to have these statistics set straight, and at the same

time the Department needs to be telling the American public that the

family farmer, in terms of purchasing power, of net income, is far

below where it was,25 years ago.

What is going to happen again to that consumer in Philadelphia or

Brooklyn or Boston, when the family farm is replaced by the large

corporate entities, which owns the farm only as a part of its total

operation, what is going to happen to the price then in terms of the

value they have? So one of our first orders of business has to be getting

the facts set straight and getting the statistics accurately reported by

our own Government, so that the consumers in this country can realize

that the cause of the farmer is their cause as well, and it is the cause

of every American citizen. So I would urge we do that as a priority

and get the facts straight, to insist on accurate statistical reporting,

along with taking the actions we need in terms of immediate support,

in terms of 90 percent of parity and the need to get a marketing

mechanism.

I don't apologize for using our food as a strong bargaining mechanism for the support of the American dollar, where they are putting

tariffs on our wheat in Europe, taking the money that they earn from

the American farmer and using it to subsidize their own farmers in

the world market.

That is something that not only the farmers can't afford; that is

something that no American citizen, who is interested in the value of

the dollar, can afford. So we need a flexible marketing mechanism with

the other leading producing countries of the world to insist that we

begin to have some kind of market control.

If the Arabs can do it as effectively as they have been able to do

it with oil, surely a country as sophisticated as we are can do it in

the area in which we have something to bargain with, and which we
26

must bargain if we're going to preserve our economy. So those are

the two priorities that I would urge you to work on, along with the

working on the 90 percent of parity.

Thank you.

Senator ZORINSKY. At this juncture I would like to extend my

apologies for one of my colleagues, Senator Helms of North Carolina.

He indicated he would like to have been here; however, he has been

on the floor of the Senate involved in the debate on a rules change

over there. He has asked me to present his apologies to you.

Senator Lugar, do you have any further questions?

Senator LUGAR. No.

Senator ZORINSKY. All right.

I have been asked questions by members of the news media, and

some of my colleagues, about why aren't there other farm people

here in support of the American Agriculture Movement. They imply

that there are other farm people back home that do not support

this type of movement.

Of course, that is something that on the surface could be inferred.

I want to respond to that question right here and now, because I

speak to many farmers—I have advisory farm committees back in

Nebraska—and I asked many of them and they told me, "Ed, what's

the use? We gave up several years ago." So I want the people back

here to know that you farmers from the A.A.M. are representing

many times over the people that didn't make it to Washington.

This is one of the reasons why there is a lack of interest in national

and local elections. People who don't go to vote tell me the same

thing.

I would like to close this meeting with a story I heard, and the

hope that we don't have to congregate any more for the same reasons.

There was a doctor that inherited $1 million and a farmer that

inherited $1 million. They were talking to each other. The farmer

asked the doctor what he was going to do, and he said, "Well, I'm

going to turn the office over to my associates and I'm going to retire

and spend the rest of my life enjoying life."

He asked the farmer, "What are you going to do with your $1

million?" The farmer said, "I guess I'll just keep farming until it's

all gone." [Laughter.]

I hope we can end that here this year. Thank you very much.

We are adjourned.

[Whereupon, at 3:50 p.m., the committee adjourned, subject to

call of the Chair.]
APPENDIX

STATEMENT OF RON FERRELL, BOWLING GREEN, OHIO

My name is Ron Ferrell. I am a midwestern farmer. I am from the eastern

end of the corn belt. I live near Bowling Green, in Northwestern Ohio. I am a

cash grain farmer. I farm 1,500 acres of non irrigated land with my brother and

father. We also own a beef feedlot which is not currently in production.

I farm very fertile lakebed soils which command relatively high prices because

of the combination of fertility and favorable climate. I am sincerely concerned

about the future of agriculture in this country. I see it on the verge of great

change, if not on the brink of disaster.

Prices 1 of corn has for the past 3 years averaged below the cost of production

in the corn belt. Wheat prices 3 years ago averaged very near the cost of production and for the past 2 years averaged below the cost of production in the corn

belt. Sugar beet prices have become such a disaster that the industry is being

phased out. The oat price/cost relationship is about the same as it's feed grain

big brother, corn. Soybeans have been the salvatio.n of the corn belt farmer in

recent years. However there is concern that the depressed level of the alternative

crops will promote an increase in soybean output sufficient in 1979 to depress the

price of this last holdout.

While corn and wheat prices were still below USDA cost of production figures

in 1978, this was a substantial improvement over 1977, as the spread between

cost and price in 1978 did not result in as great a negative figure as it did in 1977.

Soybean prices also improved in 1978. As a result even though I will have negative

income in 1978, that is, as the Secretary has reported, better than I had it in 1977.

During the past year these price improvements have been due to primarily two

factors. On the eve of a final vote on amendment of the 1977 Food and Agriculture

Act, the Carter administration, in an effort to head that legislation off at the

pass, announced a feed grain set-aside program which modestly removed 10%

million acres of cropland from production. The 1978 Carter farm program also

sealed into reserve (isolated from free-stock supplies) over one billion bushels of

feed grain and wheat. Were it not for the above two factors, which as you know

were prompted by pressure put on the administration by farmers and the Congress,

the disastrous prices of the fall of 1977 would have been repeated or even worse

in 1978.

Livestock prices have improved in the past 18 months in spite of efforts by the

administration to repel the strength of these markets.

• As a corn belt farmer, I am fully aware that my lot was better (even with

negative income) in 1978 than it was in 1977. But I have grave concern over the

scenario developing as I enter the 1979 crop year. Feed grain carryovers are at

or near 20 year highs. We are in a situation where we know that .a logical decision

regarding grain output would dictate a reduction in planted acres, with accompanying conservation management on the set aside acreage. But the Carter Administration has altered it's 1979 farm program sufficiently to prompt an almost

universal reaction—farm polls 2 indicate that farmers do not plan to participate

in the 1979 set-aside program. Therefore, at a time when we know an output

reduction is essential, we are likely to return most of that 103/2 million acres setaside in 1978 to full production in 1979. An additional consideration affecting my

1979 outlook is that the Secretary has reported that the grain reserve's objectives

have been just about fulfilled. Therefore there is to be over one billion bushels

decrease in the demand for my crops in 1979 from 1978. I feel like I'm starting

down the barrel of a shotgun in 1979, if the Carter Administration remains

intransigent on it's 1979 farm program.

1 This price and cost information is consistent with data published by USDA in it's

1978 Handbook of Agriculture Crisis. Ag/Handbook #551.

2Refer to Farm Journal February 1979 issue.

(27)
28

Perhaps it seems ridiculous for over-production to so plague the American

farmer. After all, why doesn't he just reduce his output sufficiently to improve his

price as do other businessmen?

There are reasons the farmer has not done the obvious. There are several million

farmers. An output reduction by any individual has no impact on either total

output or price of the product. This is pure competition. The farmer's total cost

consists of two entities: (1) Variable costs, and (2) fixed costs. An individual is not

compelled to stop producing a commodity until the price for that commodity falls

below his variable cost. The fixed cost is a sizable portion of a farmers total cost.

Therefore, economics dictate that even though the farmer is losing money (price

below total cost), he must continue to produce (thereby minizing losses) as long as

the price he receives is above his variable cost. Because of this, agricultural output

does not tend to correct an overproduction situation until producers of the commodities have suffered great losses. The farmer knows what is a rational level of

output on an aggregrate scale, but because he operates in a climate of pure competition he is nearly helpless to solve his problem himself. One of the primary

reasons government exists is to solve those problems that are too great for society

to solve on an individual basis.

The problems we have experienced and the problems we face are not unique to.

any particular region. Producing a 7 billion bushel corn crop when there is sufficient

demand for only 6 billion bushels has a universal impact, not only in the corn

belt, but around the world. If this grain supply imbalance continues, it will most

likely result in a livestock supply imbalance. The pig crop has already responded

to depressed grain prices by increasing 17 percent this spring. Pork prices are now

expected to fall 20 percent. Because of natural elements, beef production will takelittle longer to respond, but if grain overproduction is not corrected we will precipitate depressed cattle markets.

We live in a world of scarce resources. Agriculture output consumes great

quantities of natural resources, most of which are non-renewable. It is in this area

that over-production by agriculture is likely to create irreparable damage. The

damage is two-fold. America's agricultural output was unharnessed by a previous

administration which promised free access to customers in a hungry world. Shortly

after unharnessing ag output (fence to fence farming) that "free trade" philosophy

came face to face with political reality and lost. The result of that free tradeperiod was a series of export embargoes, and moratoriums, which robbed agricultural producers of $40 to $50 billion in income that was rightfully theirs.

Today, unharnessed agriculture is beginning to look like a runaway locomotive.

Commodities are being produced at a breakneck pace only to drive product prices.

below the cost of production. The marginal production which destroys the farmers

income, consumes vital resources: fuel, fertilizer, machinery and soil. This marginally addition fuel consumption depletes fuel reserves and puts pressure on the cost

of fuel to all fuel consumers. This marginally additional fertilizer consumption

robs future generations of their food supply inputs. Since a sizable portion of ag

inputs come from abroad, the added inputs used to in turn depress income, increase trade deficits. And finally the flood of excess production destroys the price of

these vital food products, decreasing revenue from our grain export sales and again

compounding international trade deficits. Wise soil conservation techniques are

abandoned in this overeroployment of agricultural resources, again robbing future

generations of perhaps critically important productive capacity.

Failure to respond responsibly and intelligently to Agriculture's problems, or

palming off irresponsible ag policy, may serve as a near perfect example of late

20th Century political expediency to distressed 21st Century consumers.

As I plead my requests before Congress I am repeatedly reminded of this.

administrations anti-flation mood. Let's take a brief look at the equities of the

anti-flation policy proposed. Industry and labor are subjected to voluntary guidelines limiting their increases to 7-9 percent annually. There is a proposal that

those who limit their wage pacts to the guidelines will receive some tax package

benefits should inflation exceed certain levels, fine. But if we look at USDA

predictions of 1979 farm income we find farm income most likely will fall by

10-15 percent. I have not heard of any tax package benefits for such a valiant

anti-inflation gesture by America's farmers, and frankly such a tax package is

meaningless to those with negative income who will have given their all to defeat

inflation. I don't mind fighting inflation, but I'd like to see someone else match

my effort.

The Secretary lays 'blame at the feet of many young farmers who responded to

the call to gear up for all out production to feed the hungry world. But who
29

should be blamed, those who issued the decietful directive, or those who answered

the call only to be robbed by export embargo. Certainly young farmers are in

trouble. But certainly those young farmers are the ones who can feed this nation

in the future, not those older men who can survive until retirement.

Land prices are a problem. But the prices are high because of income that was

predicted, not because of the income that was received. And were it not for the

embargoes, the predicted income would have been received. Allowing farm income

to rise to the reasonable levels we are requesting cannot be expected to trigger

dramatic land price increases as the income request we are making falls far short

of the income predicted to befall us in the now aborted "Golden Age of Agriculture".

Correcting agriculture's problems today is possible with minimal consumer

impact because livestock markets are relatively close to parity levels. The

consumer buys most of his grain in the form of meat. And part of the consumer's

increased food bill will be returned as agriculture's competition for scarce inputs

reduces inflationary pressures on those goods, and as increased revenue from export

sale of grain at improved prices increases the value of the dollar overseas.

Also, we are speaking of price stability for ag products under our proposed

gystem of reserves and set-asides. Consumers are familiar with the food distribution system's ability to pass through increased farm product prices, and its comparative inability to pass through farm product price decreases. Injecting stability

into farm product markets can moderate this "ratcheting" upward of food

prices due to volatile farm commodity markets.

During the past week some question has arisen as to who represents the American

farmer. The American Agriculture Movement consists almost exclusively of

farm operators and their families. I am also a member of the Farm Bureau which

purported to represent my best interests here last year by fighting me and

ridiculing my efforts. That organization in some ways is more exclusive than the

AAM in that it includes doctors, lawyers, merchants, insurance executives and

anyone else who can save some money on a multi-car discount auto insurance

policy. The Farm Bureau is vertically integrated both ways from my farm, from

the phosphate mines and fertilizer plants to the grain export terminals, and while

the past three years have been rather severe for me, the reports I get as a tiny

stockholder indicate that the Farm Bureau's multibillion dollar petroleum, grain

export, feed mill, fertilizer, publishing, broadcast and insurance conglomerate is

doing quite well under full-tilt agricultural production.

We are not just talking of farm policies today. We are talking of food policy

for future generations of Americans. If we make grave mistakes today in furtherance of political expediency, we will suffer irreversable consequences in the future.

Let those who are proud of today's farm policy sign their hand to it. Let those with

conviction act.
•
4
I,