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Senator ELLENDER. Mr. Davis, the Senate is going to consider a long-range housing program in which the farm homes will play an important part and it may be that something will be worked out whereby this Farmers Home Administration can be tied into the longrange program.

Mr. Davis. I think that may be true.
Senator AIKEN. That is coming up this afternoon.
Senator ELLENDER. Friday or Saturday.

Senator AIKEN. It is the next thing on the agenda after the Commodity Credit Corporation charter bill, but I do not know that

you want to go into this over-all farm credit set-up too much this morning, but after these farm credit agencies become farmer-owned, they naturally could set up their own board of advisers or directors, whatever they want and they are rapidly becoming farmer-owned.

Every production credit association in my State has now paid back its Government money.

What bothered me was whether we should leave this direct lending agency of the Government tied in with them because I do not see how you are going to get away from Government controls over the rest of them if they are all put together. Until the time comes that the credit agencies become farmer owned and set up their own board of advisers or any other board they want, it seems to me that if we have this agricultural council at all they could well consider the over-all farm situation, credit, soil, land use, and prices, because it is almost impossible to consider one of those factors in agriculture separately..

We may decide not to have it at all. We are seeking the advice of witnesses on that. That is why you are here this morning.

Mr. Davis. By making the proposed Council advisory rather than policy-making one can attract men who continue to be close to the day-to-day operations of the programs at the operation level. The; members of such a council can speak freely since they are not committed from above to administration policies.

Nor does an advisory board gradually take on the complexion of bureaucracy as would a policy or administrative board. On any such committee it is very important to have majority representation from the producers.

It is our belief, therefore, that this committee should consider in lieu of the proposed National Council, the creation of a conservation: council, advisory to the Secretary, which would be charged by the Congress with the specific job of advising on the coordination of conservation programs and budgets applying to soil, water, and forest.

Such an advisory council should appropriately be made up of producers and users.

Likewise with regard to the agricultural extension program of the country, we believe that more progress will be made by an advisory council on extension education in coordinating those parts of the De-partment and land-grant college programs, than by legislative finality.

Such an advisory group should include representatives of producers, marketers, and others concerned, with producer representatives in a majority.

Senator Lucas. Let me ask you one question, Mr. Davis..
Mr. DAVIS. Yes.

resources.

Senator Lucas. With respect to the National Advisory Committee under the Marketing and Research Act of 1946, you said you were a member of that advisory committee. Did you receive full cooperation from the Department of Agriculture as a member of that advisory committee?

Mr. Davis. Yes, I think so, more than with any other committee on which I have ever sat.

Senator Lucas. One of the complaints has been, especially during the war, that these advisory committees were set up and thereafter the agency in control paid little or no attention to the advisory committee and proceeded to do what they thought should be done regardless of the advice given by the advisory committee, and I was wondering whether or not you had had the same experience with the Department of Agriculture.

Mr. Davis. I have had that experience on some other committees. That is why I say this one is the best one on which I have ever sat. With possibly one or two exceptions, the decisions that our marketing and research advisory committee have made have been carried through.

Senator LUCAS. You could have been wrong in the decisions ?
Mr. Davis. That is right.

Senator LUCAS. I am glad to get that information because it is a sourch of pleasure for me to hear you make that statement.

Mr. Davis. One provision that is in the marketing and research law is that the people who sit on the committees can have no alternate. You are there or your place is vacant. I think it is an important feature because you can get a continuity that way. If members can send alternates, then one person at one meeting will know nothing as to what happened at the other meetings.

Senator AIKEN. As far as you have gone you have not said anything about the proposed administration of the operating agency. Do you believe that should be done wholly from the national level or from the State and local levels? I have not seen any of your testimony relating to that.

Mr. Davis. We think that a lot of it can be done locally and in the case of conservation we are very strong for the conservation districts. We would like to see them with a reasonable amount of autonomy.

Senator AIKEN. As far as the districts themselves go, do you see anything in the bill that deprives them of their present autonomy?

Mr. DAVIS. No, I think not.

Senator ELLENDER. Mr. Davis, I thought on the first page of your testimony you criticized the advisability of spelling out what these committees should do. I though you intimated it should be more or less left to the Secretary of Agriculture. Am I correct in that?

Mr. Davis. These committees that I was referring to, as I understand it, would be committees that are elected part of them by farmers and part of them by virtue of the position that they hold in the Department of Agriculture. In addition to that, of course, you do have these soil conservation districts out there which are more or less entirely separate and have separate officers.

Senator AIKEN. They are set up wholly under State law.

Mr. Davis. That is right, they are set up wholly under State law. We think that is a very sound procedure.

Senator ELLENDER. What did you have reference to then when you said that Congress should not spell out what these committees ought to do or even suggest the establishment of them but the decision ought to be left to the Secretary?

Mr. Davis. Well, I did not mean exactly that. I meant that we did not think we should go as far as this bill does in reorganizing the Department of Agriculture and spelling it out in law, that these agencies should be drawn together under a social and economic administration, and so forth.

Senator ELLENDER. As to the manner and method in which the bill states that the soil conservation program should be administered, you have no objection to that, I understand?

Mr. Davis. No.

Senator AIKEN. You are simply referring to the set-up within the Department of Agriculture itself and expressing the belief that we should leave the Secretary more freedom there instead of spelling it out?

Mr. Davis. Because we are going to have changing conditions in the future.

Senator ELLENDER. As to the power of the national council, you say that that council ought to be more or less advisory and should not in any manner have any policy-making rights?

Mr. Davis. Yes. First, the policy would be generally laid down by Congress. Then the responsibility of operating the program would be up to the Secretary of Agriculture, but in order that he might have advice from the country you would have a board that was well chosen geographically and with respect to commodities, and so forth, which would come in periodically or on call and advise him.

Senator ELLENDER. Do you think that a council of that kind is necessary?

Mr. Davis. Yes, I think it would be advisable if it would operate on as effective a basis as has, for example, the committee under the Marketing and Research Act.

Senator AIKEN. The only place in the bill where they are given authority other than advisory is in the case of an emergency or unusual condition where the council with the Secretary will raise or lower the support level. Senator ELLENDER. That is what I am going to bring out.

As I understand the council, it has nothing but advisory capacity and it is only in the event of emergency that they are given authority other than advisory.

Senator Lucas. Why give them that power?
Senator ELLENDER. I do not know. I question it.

Senator Lucas. The greatest power they could have would be in an emergency

Senator AIKEN. If that emergency power for the council is stricken out of the bill, it seems to me it would leave it just about as Mr. Davis is recommending, other than we do specify that there shall be four farmers, five farmers really, because there would be four elected by the States and four appointed by the Secretary, representing industry, and so forth, and consumers and one from the land-grant colleges.

Mr. Davis. Actually, most of our farm legislation has been written during periods of emergencies. It seems to me that that is a prerogative of Congress.

Senator AIKEN. We are trying something a little different in that we are attempting to write legislation to prevent an emergency rather than wait until we get into one and try to write legislation to get out of it.

Senator LUCAS. That would be granting a tremendous amount of power to some outsider who was not either elected by the people or confirmed by the Senate of the United States. I just do not believe that is constitutional.

Mr. Davis. Advisory councils of this nature should periodically report to the Congress and recommend changes in legislation and budgets needed to accomplish the coordination needed and to eliminate duplication of function where additional authority is necessary.

Likewise in the States there is need for agricultural councils to coordinate the various Federal and State agencies handling conservation and educational programs, and for the county agricultural councils made up of producers, marketers, and program representatives.

These councils, under proper supervision and encouragement toward coordination and efficiency, will accomplish more real progress than any other type of organization to remedy a confusing situation existing at the operations level.

Title III of S. 2318, dealing with parity formulas and price support is the heart of the bill and probably is the section that will arouse the most controversy.

Before coming to grips with specific points of this section, I should like to outline briefy our general position on price supports to set the stage for the following discussion.

Members of the National Council of Farmer Cooperatives believe that price supports should be resorted to only after all other possible steps are taken by farmers themselves and the Government to move farm products into consumption at fair prices.

If we reach a point where the Government becomes the chief market for farm products or where prices are rigidly set, we tend to cripple our free markets which are our most effective means of handling farm products.

Before support prices are resorted to, we believe that every effort should be made to move farm products by upgrading the American diet through research, education, merchandising, improved marketing techniques, promotional campaigns, and by finding new uses and increasing our exports.

We hope the Research and Marketing Act of 1946 will be of value in this direction.

Several proposals have been advanced for supplementing consumer incomes where the limiting factor to adequate diets is inadequate income. We should give extensive study and research to such programs so as to expand our markets and simultaneously improve our living standards.

On the supply side we favor stimulating employment adjustments in rural areas through development of adapted industries to provide for balanced use of local labor and natural resources.

Along this same line we favor increased vocational training and employment services to facilitate that movement of underemployed farm people into industry. We do not believe in continuing inefficient units in agriculture by the use of subsidies. We urge further systematic study and research into the feasibility of industrializing overpopulated farm areas.

Now with this background let me turn to certain specific points regarding price support in S. 2318.

PARITY FORMULA

We feel that the use of two parity price formulas as set forth in S. 2318 will have the effect of introducing more confusion into an already confused subject. It will also lay agriculture open to criticism of opening another road to the Federal Treasury. We favor the retention of the present parity formula until a better one can be agreed upon.

We believe that the suggested alternative formula which reflects the relationship between agricultural commodities over the most recent 10-year period is sound.

In modernizing the parity formula we urge the inclusion of farm labor.

Senator ELLENDER. Is that hired labor?

Mr. Davis. We think it could be done either way, but we think it makes a difference in the way you set up your formula.

We think the cost of living items, the food items, and items consumed in the home would have to probably be eliminated or accounted for differently if all labor is included. I think the most feasible plan is probably to include the hired labor. You approach a cost of production formula if you include all labor, I think.

PRICE SUPPORTS

Under S. 2318, price supports are mandatory for only seven commodities, namely, cotton, wheat, corn, tobacco, rice, peanuts, and wool. You will hear from the wool people next, I understand.

I might say our wool division is in favor of putting wool in as a basic commodity.

If these commodities are to be supported, we believe that similar security should be provided in one form or another to the producets of all farm products. In 1946, which is the last year for which figures are available, the seven basic commodities accounted for only 20.5 percent of total farm cash receipts in the United States. Actually, he most hazardous farming of all is not with respect to basic commodities but perishable commodities.

In 1946 cash receipts from four of the seven commodities, namely, rice, tobacco, peanuts, and wool, totaled only $1,377,641,000. The total of these four was less than one-third the cash receipts from cattle and calves; about one-half the cash receipts from hogs; about one-half the cash receipts from wholesale milk; and slightly less than the cash receipts from eggs,

Cash receipts from potatoes totaled more than that for wool, rice, and peanuts combined.

To write into law, however, at this time, that price supports are mandatory for all agricultural commodities. would, we believe, be a serious mistake. We think that they should be permissible. If mandatory, it could involve tremendous administrative problems and result in an outlay of billions of dollars in times of depression. We do believe, however, that producers of the so-called nonbasic com

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