farmers to do this. But to be fair to farmers, we should either give them the same authority as that exercised by steel corporations or to make it up to farmers in some other way. If we were to authorize farmers to drop market supply to the extent that we allow the steel industry to do so, a 45 percent cut in less than a year, this would certainly increase food prices and would raise prices received by farmers by more than 500 percent. But there would be a lot of hungry people. Obviously, if we are going to be fair to farmers, and I think Congress should be, and if we are going to safeguard an abundance of food and fiber for consumers, and I think Congress should, the only way to reconcile these aims is to adopt legislation along the lines of the principle in our bill. That is to provide for a marketing quota equal to full employment, full prosperity consumer demand at fair prices; with the provision to maintain this supply even in periods of recession, with farm income to be maintained by means of parity income deficiency payments. I do not believe that we who represent consumers can afford to set up a marketing quota system for farmers that protects their rights and income based upon cutting supply lower and lower as consumer demand drops, due to unemployment, and wrong national economic policies, such as the tight money policy that seems to have added fuel to the current depression that started on the farms of the Nation. Here is an example-I will not try to use the exact figures, but they could be obtained from the experts in the Department of Agriculture. Let us assume that the parity income equivalent price for manufacturing milk provided by our bill is $5 per hundredweight. Our bill provides that the price shall be maintained at not less than 80 percent of that figure, or $4 per hundredweight. Let us assume that the market, assuming less than 3 percent unemployed, will buy 115 million at this price. This 115 million would be established as the marketing quota for milk in the year ahead. If actual unemployment should be 3 percent or above, the market obviously would not return $4 per hundredweight but something less. In the year or period with full employment, the entire marketing quota would clear the market at the $4 price, no surpluses would accumulate in Government ownership, there would be no costs to the Government except for administration (and part of that would be obtained from the charge for within quota marketing fees). However, in the unemployment example, if a full prosperity supply or marketing quota of milk sold for an average of only $3.85, then a payment would be made to the producer equal to 15 cents. This payment would not be a special subsidy to the farmer, rather it would be in the nature of an antirecessionary program to help get the economy back on the upgrade and out of the depression. The cost of the payments thus would be chargeable not against the farmer but against the total cost of pulling the Nation out of recession or depression. A moment ago, I used a term-parity income equivalent prices-which may beg definition. This is the price of any commodity which, when multiplied by the aforementioned "normal" or full-employment supply, would give the producer group its proportionate share of a national farm parity income. That share would be the percentage which that commodity had of total farm income in some base period. We suggest the most recent 10-year period in this bill. The total national parity income figure, of course, would be that amount which would provide agriculture as a whole with a standard of living comparable to that afforded the nonfarm population. I might add that at present, taking account of its investment in land, equipment, and so on, agriculture is getting considerably less than parity income. There are other features of the bill I have introduced that will be fully covered by other witnesses. My purpose here is to invite the attention of the committee to two of the major principles incorporated in my bill which I feel should be given serious consideration in any long-range farm bill that the House of Representatives may be asked to consider. I realize that when farm income improvement programs are put into operation, the program for each commodity or group of commodities must be tailored carefully to the unique needs and characteristics of each commodity. We have not tried to set up separate programs for all the different commodities in our bill. Rather, we would leave that job to the administrators and technicians in the executive branch. However, I have no objection to the Congress actually so doing in legislation, because I realize the practical value of so doing. But I believe it should not be done piecemeal but as part of one program. I believe there are these general principles I have discussed with you that should be included in each of the commodity proposals in some workable manner and combination. Let me summarize. First, I suggest that we must set up programs that in years of, full prosperity and full employment will operate practically without cost to the Federal Treasury. To that extent, Mr. Chairman, at least all of the programs ought to be designed to do as well as the tobacco program. To do that I have suggested that the programs must provide for a workable device to keep market supplies in line with full employment demand. I have suggested marketing orders and marketing quotas. Second, for most commodities I suggest that bushelage and pound quotas would be more workable and more effective for the tough job of market supply adjustment and proration than are acreage allotments. Third, I suggest that what we are trying to do is to preserve and improve the family farm, and have no particular reason to give unlimited eligibility to larger than family farm factories in the field. Therefore, the legislation should provide for a cutoff at the upper limit family farm production. Fourth, I have discussed at length the need to provide for use of parity farm income deficiency payments during years when dropping supply down to stay in balance with a high unemployment consumer demand would result in hardship to consumers. No doubt the question will arise in the minds of committee members as to the cost of the program. I have not tried to make an exact estimate. The figures and statistical analysis needed for such a careful estimate are not available to me. However, let me say that my bill is designed deliberately so that the program will not cost any net to the Federal Treasury in years of less than 3 percent unemployment. My bill provides that the market supply will be set at the volume for each commodity that will clear the market at the mandatory price protection level. Therefore, no costs could arise except costs of administering the marketing quota system. My bill provides for a fee of not more than 1 percent of the parity income equivalent price of the commodities to cover administration. In years of depression or recession with more than 3 percent unemployment, the cost of the program would depend upon the degree of unemployment. According to recent studies, we can expect each 1 percent point increase in unemployment to bring about a 1 percent drop in consumers income. Each 1 percent drop in consumer income means an approximately one-fifth percent drop in prices received by farmers for the full prosperity supply of all farm food products, at fairly high income levels which now characterize our Nation. Preventing the drop in farm income usually attendant upon such a development probably would return to the Treasury in income tax more than the payment program would cost. But even if this item is not allowed, the cost of the program would be controllable through the total national economic policies used to bring the economy back to a full employment condition. The payments to farmers involved would be a part of the total program. If 7 percent of the civilian labor force were unemployed this would appear to mean a drop of not more than 2 percent in prices received by farmers for the marketing quota volume. This would mean that the entire program, if the entire program were in operation, that the total annual cost, even in 7 percent unemployed years, would be less than $1 billion. This seems most modest com. pared with the $3 to $5 billion per year spent by the current Secretary of Agriculture in recent full employment years with farm family income allowed to decline to less than half of a parity income level. It is not my thought that the bill I have introduced and which your committee is considering today is a complete farm and food policy for the Nation. Far from it. This bill covers only the farm income protection and improvement and market supply adjustment features of a complete policy. In addition, our Nation needs to eradicate malnutrition and hunger in the United States through such programs as the proposed food allotment stamp plan or other means. Our Nation and, indeed, the entire Western World, should begin immediately to make full use of its farm productive power to use food to preserve peace and provide the means to move toward universal disarmament, by progressive steps. We need to explore and put into operation specific governmental safeguards to prevent speculation and profiteering in the food processing and distribution channels. But currently, we all must recognize that the longest standing economic depression in this country is on its farms. Now that depression has moved to town. But I hope that in our excitement about the nonfarm depression we do not forget or overlook the farm depression that led and fed the nonfarm depression. Correction of the maladjustments and other features of the chronic farm depression can help us to correct the nonfarm depression with its distressing aspects of unemployment and dramatic wastage of resources and potential production. You on this committee know better than I that depression does not show up on the farm as unemployment. In fact, farmers probably have to work harder in a depression. Depression on the farm shows up as falling prices, dropping income, reduced farmer purchasing power to buy the products of industry and commerce and professional people in rural and urban areas. I do not presume to request that your committee report out the bill Congressman McGovern and I have introduced. That was not our intention in introducing it. Instead, our purpose was to invite the attention of Congress and of this committee to certain basic principles which I am deeply convinced should be incorporated in the farm program of this Nation. These are principles which, in my view, if they not be included in the program, will result in the program being less adequate than it should be for family farmers, more costly than it needs to be to the Treasury, and less safeguarding than it must be to the over 170 million food consumers of our Nation. Mr. ROOSEVELT. First, may I say that I have taken quite a bit of kidding as to why I should have any interest in agricultural bills, coming as I do from an urban area or city area. Frankly, my main reason for having an interest in this bill is because of my deep conviction that the prosperity of the United States depends on a rounded economy and that we are not going to have prosperity in the city and in the urban areas unless we also have prosperity in the agricultural areas of the country. I think the tendency has arisen somewhat in the past to divide the economy and perhaps pit one side of it against the other and thinking this is not good for the country and not good for the individual citizens that make up these parts of the community, I have tried with my colleague, Mr. McGovern, to work out a program which I felt could be fully supported by not only those who were interested in agriculture but also by those who were interested in prosperity in the industrial areas and particularly the consumers of the country. And it was this aspect of this bill-and I am not trying to pose as an expert on agriculture, I am not and I certainly would not try to go into the details or perhaps I should say the mechanics of it, but I do feel that having studied this matter very carefully, that in this bill we have something which would be practical from the point of view of the consumer and that he would get the advantage of a falling off in prices in periods of unemployment without at the same time contributing to a continually diminishing income for the agricultural part of our community. That, very frankly, is my main and particular interest in this bill. However, I also have tried as intelligently as I could to go into the other aspects of it and it seems to me that this does provide the one thing which we have not been able to provide in this recent past, which is a way of having a jab into the economy at a time when we were beginning to get into a depression period or a recession period, whatever you want to call it, and that this gives that additional income or that additional assurance of income to the agricultural population and if you add those two things together it seems to me that then you maintain the purchasing power of the farmer and at the same time you give the advantage of whatever the temporary economic situation may be to the consumer and which in essence adds to his income, which means that he has more money to buy agricultural products, and between the two to restore your entire economy to a healthy and prosperous condition. It is very briefly that which I am urging. I would simply want to add one other side of it. I am sure you gentlemen realize we have limited this bill primarily to the family-type of farm. I have done that because I think there is a tremendous factor here which has been overlooked which is the increasingly apparent concentration of agriculture into the hands of a few which is exactly what is happening in industry. Because I am a member of the Small Business Committee, I am tremendously interested in seeing, as I am sure Mr. Hill has also seen, that the same thing is happening in agriculture that has happened in industry and being a tremendous believer in individual enterprise and in the right of the small individual fellow to have his opportunity in the economy, I think that this bill will go a long way to stopping that concentration and restoring vigor to the small independent operator who, I think, is the backbone of our Nation, both economically as well as politically. Lastly, I have not put in here something which I hope that we can stress later on. I believe that there is one aspect of the situation which this bill, and as far as I know, no other bill really does cover and that, of course, is the thing which I think Mr. Anfuso has spent a lot of time upon, which is the spread between the price which the farmer actually gets for his commodity and what the consumer finally has to pay for it, and I hope at some time in the future, because it comes into the field of those who are not directly in agriculture, I hope that we can find a way, perhaps, of working through the Department of Justice, possibly, and have a very thorough examination made to see whether there are monopolistic practices in the distribution of agricultural products, the products which can be looked into and which should be looked into for the very same reasons that we try to curb monopolistic practices in industrial and other manufacturing fields, and if we tie that together, then I sincerely hope that when the committee writes a comprehensive bill, that the principles laid down by my colleague, Mr. McGovern, and myself, will be given effective consideration in order that we may have a united front on the part of both the people in the urban areas as well as the rural areas, all in support of a comprehensive farm program. I want to thank you very much for the courtesy and kindness that you have shown to me and my colleague, Mr. McGovern, in allowing us to come and talk, especially to myself, a city man, allowing me to come and talk about agricultural products. Mr. POAGE. We are mighty glad to have you here, Mr. Roosevelt, and I do wish, speaking for myself, and I am sure for the other members of the committee, I do wish that we had more such people as yourself, before us. I am sure that the other members of the committee as well as I would like to discuss this a great deal further with you and with Mr. McGovern. I regret that we have this time limit and that we will have to defer our questioning so as to allow Mr. Brannan to make his presentation, in view of the fact that our time is not as long as we would want or as we had anticipated it would be this morning. You and Mr. McGovern will be here, I am sure, at future times, and then we can go into this further, I trust, later. Mr. ROOSEVELT. Certainly, Mr. Chairman. Mr. POAGE. Therefore, I am going to defer any questioning by the committee of Mr. McGovern and Mr. Roosevelt this morning. We hope to get them back at another time so as to go into this more thoroughly. I am doing that in order that we may hear Mr. Brannan. Mr. ROOSEVELT. That would be fine, sir. I would be delighted to come back at anytime and answer any questions. Mr. POAGE. Thank you. We do appreciate your interest in coming here. We want the Members of the Congress from urban areas to take an interest in agriculture and to help us solve the problems of agriculture. Mr. ROOSEVELT. And I hope that we can solve them, and I believe that we can, all of us working together and Iwould be delighted to try and help. Mr. POAGE. Thank you. STATEMENT OF CHARLES F. BRANNAN, GENERAL COUNSEL OF THE NATIONAL FARMERS UNION AND FORMER SECRETARY OF AGRICULTURE Mr. POAGE. We will hear you now, Mr. Brannan. We are delighted to have you back before this committee. Most of the members of this committee know the former Secretary of Agriculture, but to those of you who have become members of this committee only recently, I want to introduce to you the Honorable Charles F. Brannan, our former Secretary of Agriculture who has often times been a witness before this committee in that official capacity of Secretary of Agriculture. We are delighted to have you back, Mr. Brannan, and we will be glad to hear from you. Mr. THOMPSON. If I might add, this is the one Secretary of Agriture who has never been controversial [laughter]. Mr. POAGE. Off the record. (Discussion off the record.) Mr. POAGE. Mr. Hill, did you have something to say? Mr. HILL. Well, just as a part of introducing Mr. Brannan, I might say that in his hometown, Denver, Colo., there is a hill also known as capitol hill. There is located the State capitol. Nearby is a beautiful modern building, the Farmers Union Building. My district completely surrounds Denver and from his office in the Farmers Union Building, Mr. Brannan literally looks down my political throat. Ever since I came to Congress the Farmers Union has been watching my vote and my actions. We seldom agree, but I am always glad to listen to their spokesmen, of whom Mr. Brannan is most widely known, when they come to Capitol Hill in Washington. Mr. POAGE. Off the record. (Discussion off the record.) Mr. POAGE. Will you proceed now, Mr. Brannan? |