Allow me, therefore, to be very brief. We support: 1. Establishing authorization to make domestic equalization payments to reconcile the difference between domestic and foreign cotton prices. This payment to be made to others than the producer. 2. A producer's choice plan which would allow producers a 30-percent increase in their allotment, this increase to be sold at world prices of cotton. Many farmers receive additions to their cotton allotments through the release and reapportionment provision and enjoy also a high price support for these additional acres. A producer's choice plan would allow those farmers who so wish to plant additional acres, and these farmers would pay for this privilege thus actually helping to reduce the cost of the cotton program. This committee received in the past 3 days evidence that the cotton surplus is mounting, and it must seem strange to you that we come before you and ask for still more acres. We live immediately adjacent to the Republic of Mexico. In fact the Imperial Valley is half in the United States and half in Mexico. In this area there are about 1,200.000 acres of rich, all irrigated farmland. All we have to do is to look across the border and see new expansions of cotton acres each year. We curtail on our side and see the increase below the border. We feel that a farmer's choice plan will at least slow down this expansion. It looks to us that we either give an American producer a chance or let the expansion go to foreign lands. Often we hear that a choice plan acreage increase would go to highproducing areas. Very true, but please keep in mind that those acres south of the border are also high-producing acres. Because we are a high-producing area, we have each year about 300 foreign visitors who come from every cotton producing land in the free world. Some stay for 2 to 3 weeks and others that many months. Some have come back for several visits. All are young people with drive and ambition and anxious to learn our know-how. These are two reasons why we think we should be allowed to grow extra cotton at world price. We do not have release and reallocation. Our farmers plant their allotment, but we should also have some of the privilege other areas enjoy, and, gentlemen, we are willing to pay for this privilege. We believe that these two legislative changes would indeed help the cotton industry. The members of our association on April 5 of this year participated in unanimous adoption by the National Cotton Compress & Cotton Warehouse Association of a resolution which had then, and has now, our unqualified endorsement and support. That resolution urges the Congress to enact legislation providing for a long-range program for cotton which will: (a) Expand production and consumption of U.S. cotton; (b) Move as rapidly as possible toward competitive prices for U.S. cotton both at home and abroad—including action to make U.S. cotton available to our American spinners at the same price that cotton is made available to foreign spinners under present law; and (c) Provide for a substantial research program having for its primary objective the development of ways and means to reduce the costs of producing cotton. I am sure that preceding witnesses made clear to you that the solution of many other cotton problems are frustrated by the deplorable effects of the present two-price system for cotton. The longer the folly of the two-price system is permitted to throttle cotton consumption by the U.S. textile industry, the more will the markets for U.S. cotton continue to shrink, while the consumption of synthetic fibers is expanded. As time marches on, it will be increasingly difficult to regain the lost markets. These obviously frustrating and unwise conditions should be corrected promptly. We most respectfully submit that it is absolutely imperative that the price of our cotton be made competitive with synthetic fibers and foreign-grown cotton, both at home and abroad; that domestic spinners must be enabled to purchase U.S. cotton at a price level no higher than that at which cotton is made available to foreign spinners. If the adequate fundamental steps are taken promptly, the U.S. cotton industry can and will recover, and the industry will face the future with increasing confidence. It is my understanding that every element of every segment of the U.S. cotton industry is in complete agreement on the fundamentals recited here. We most earnestly urge your committee and the Congress to drive for enactment of these basic essentials into appropriate legislation. Thank you for your attention. The CHAIRMAN. All right, Mr. Mellen. Good to see you again. Mr. MELLEN. Thank you, Senator. The CHAIRMAN. Mr. Miller. STATEMENT OF RUDOLPH MILLER, EXECUTIVE SECRETARY, IMPERIAL COUNTY GROWERS ASSOCIATION, EL CENTRO, CALIF. Mr. MILLER. Thank you, Mr. Chairman. Mr. Chairman, and gentlemen, my name is Rudolph Miller. I have farmed in the Imperial Valley, Calif., since 1919. I am the executive secretary of the Imperial County Growers Association in El Centro, Calif. You have received an enormous amount of statistics and evidence Allow me, therefore, to be very brief. We support: 1. Establishing authorization to make domestic equalization payments to reconcile the difference between domestic and foreign cotton prices. This payment to be made to others than the producer. 2. A producer's choice plan which would allow producers a 30-percent increase in their allotment, this increase to be sold at world prices of cotton. Many farmers receive additions to their cotton allotments through the release and reapportionment provision and enjoy also a high price support for these additional acres. A producer's choice plan would allow those farmers who so wish to plant additional acres, and these farmers would pay for this privilege thus actually helping to reduce the cost of the cotton program. This committee received in the past 3 days evidence that the cotton surplus is mounting, and it must seem strange to you that we come before you and ask for still more acres. We live immediately adjacent to the Republic of Mexico. In fact the Imperial Valley is half in the United States and half in Mexico. In this area there are about 1,200,000 acres of rich, all irrigated farmland. All we have to do is to look across the border and see new expansions of cotton acres each year. We curtail on our side and see the increase below the border. We feel that a farmer's choice plan will at least slow down this expansion. It looks to us that we either give an American producer a chance or let the expansion go to foreign lands. Often we hear that a choice plan acreage increase would go to highproducing areas. Very true, but please keep in mind that those acres south of the border are also high-producing acres. Because we are a high-producing area, we have each year about 300 foreign visitors who come from every cotton producing land in the free world. Some stay for 2 to 3 weeks and others that many months. Some have come back for several visits. All are young people with drive and ambition and anxious to learn our know-how. These are two reasons why we think we should be allowed to grow extra cotton at world price. We do not have release and reallocation. Our farmers plant their allotment, but we should also have some of the privilege other areas enjoy, and, gentlemen, we are willing to pay for this privilege. We believe that these two legislative changes would indeed help the cotton industry. Mr. Chairman, and gentlemen, we thank you for your kind attention and consideration. The CHAIRMAN. Thank you very much, Mr. Miller. Is it a fact or not that quite a few Americans engage in production of cotton in Mexico? Mr. MILLER. I would say it is more American capital that is down there. The cotton is grown by the Mexican farmer but it is American capital. The CHAIRMAN. That is what I mean. How does the product compare with what is produced by you? Mr. MILLER. Very closely. The CHAIRMAN. Closely. Under the same conditions, same soil? Mr. MILLER. That is right. The CHAIRMAN. And the same machinery? Mr. MILLER. That is right. The CHAIRMAN. Thank you very much, Mr. Miller. Mr. MILLER. Thank you. The CHAIRMAN. I understand Mr. Reuben L. Johnson, director of the Division of Legislative Services, National Farmers Union, cannot be here Monday, and he has requested that his statement be filed for the record. Without objection that will be done. (The statement referred to follows:) Mr. Chairman and members of the committee, I am Reuben Johnson, director of Legislative Services, National Farmers Union. It is my intention to summarize briefly both the objectives and the major provisions of the kind of cotton program National Farmers Union would like to have Congress enact. Members of the Cotton Subcommittee of National Farmers Union met earlier this year and discussed recommendations of the Cotton Advisory Committee and the following objectives and discussion is based upon the decisions of our cotton subcommittee. The subcommittee has not been able to meet for the purpose of discussing specific details of some of the cotton legislation recently introduced. In spite of this, Mr. Chairman, the objectives on which this subcommittee agreed should prove to express adequately the views of National Farmers Union on the bills before the committee. We seek the following objectives: 1. A one-price system applicable to all producers with a price support level set at not less than 100 percent of parity. 2. Any transfer of allotments or quotas from one producer to another producer, allotments or quotas available due to condemnation of land, et cetera, increments in allotments or quotas resulting from increases in utilization, and the national acreage reserve established under the Agricultural Adjustment Act to be allocated consistent with the objective of preserving and strengthening the family farm structure of agriculture. In such allocations, priority should be given to families entering farming and so-called hardship cases where additional allotments or quotas are needed to make a fully sufficient family farm unit. Such allotments or quotas should be managed in such a way as to assure that they are not subject to becoming part and parcel of large, corporate-type farming operations. 3. Statutory authority to provide for direct payments or so-called trade incentives to enable our domestic cotton industry to compete on equitable basis with the cotton industry of other nations. In our testimony before the House Agriculture Committee, December 1962, we supported trade incentive payments to domestic cotton mills or to some other point in the marketing chain. However, at that time there was no legislation such as S. 1190, introduced by Senator Herman Talmadge, which provides for payments directly to growers. Senator Talmadge has made an excellent case for his bill and we understand that the administration has asked the committee to give it careful consideration. Farmers Union has long supported unit quotas such as S. 1190 provides for cotton. It is also apparent that Senator Talmadge's bill would enable the small growers to realize greater returns for their labor. As we understand his legislation, a direct payment of 12 cents per pound would be paid on the first 15 bales of production, 10 cents on the second 15 bales and 8 cents on the balance. This means of enabling small growers to compete is fully consistent with our longtime objectives of strengthening our family farm structure in agriculture. The effect of the differential in payments based on the quantity of production of individual farm units is again fully consistent with the program adopted by delegates to our national convention in New York City in March 1963. The Talmadge bill would permit cotton to move freely through trade channels at the same time protecting the cotton producers who grow and market their quota from the disastrously low world market price. In this connection, Mr. Chairman, we anticipate that very few, if any cotton producers can afford to grow cotton in excess of their quota at the world market price which is ap We understand that Under Secretary of Agriculture Charles Murphy said, "It (the Talmadge bill) would be the lowest cost way of achieving a one-price system for cotton." Like Mr. Murphy, we urge that this committee give the bill careful consideration. We view the Senator Talmadge cotton program as much simpler to administer as compared to the programs set forth in other bills before the committee. From an analysis made by the Department of Agriculture it appears that the program provided by S. 1190 would cost $5.1 million more than the program provided by S. 608. It is conceivable, however, that under the Talmadge plan substantially greater savings would accrue to the Government from the reduction of carryover, inasmuch as existing cotton stocks could move freely into the world market. In summary, Mr. Chairman, we believe that S. 1190, introduced by Senator Herman Talmadge, offers an intelligent alternative in solving some of the problems facing growers of cotton. We urge that the committee adopt the desirable features listed above. We are firmly of the opinion that the bills before the committee offer either individually or in combination, a workable solution to the problems that face both growers and domestic cotton processors. However, S. 1458 is not acceptable to us inasmuch as it would reduce the current price support level. In this connection, a statement made by Under Secretary of Agriculture Charles Murphy is worth repeating: "*** I wish to refer briefly to the effect of reduced cotton prices on farm income. Many people have suggested a reduction of about 21⁄2 cents a pound in the support price from its present level of 31.88 cents a pound. We believe that the average cost of producing cotton in the United States is not less than 24 cents a pound, leaving a margin of profit-or net income of less than 8 cents. A reduction of 22 cents in price then is a cut of more than 30 percent. To some extent, the reduction in price would be offset by increased consumption resulting from the lower price, but even after allowing for this increased consumption, we believe the loss in net income to cotton producers would exceed 25 percent. This is not a consequence to be accepted lightly, and it is the plain and simple reason we have been so reluctant to reduce the support price, especially for small producers. "For the United States as a whole in 1959, there were 188,000 small farms that received over half their income from cotton. Almost half these farms had no off-farm income at all. In addition, there were 173,000 other small farms that produced cotton but received less than half of their farm income from this enterprise. "This means that some 70 percent of all farms producing cotton are small farms whose operators are dependent upon cotton to a significant extent for their total income. Their gross farm sales are less than $10,000 per farm. Since cotton production costs for these small farmers run well above 27 cents a pound, their margin of profit is narrow, even at present cotton prices. Obviously, their net income from cotton is very meager; but when it is all they have, it is important. Some people may feel that since these small farmers produce only a relatively small part of the total cotton crop, their interests should be disregarded. We cannot accept that view. We feel that any new cotton legislation must make adequate provision for protecting their in come. We fully endorse the concern that Under Secretary Murphy expressed for a program to help the smaller grower. In closing, we appreciate your courtesy and attention. We want to assure the committee that we in Farmers Union would like to be as helpful as we can to determine the type of long-range cotton program under which farmers will operate. The CHAIRMAN. I wish to say that the hearings will be extended until Monday to hear four more witnesses, and thereafter the record will remain open, until the following Friday at 12 noon, for the purpose of permitting others to file statements if they desire, provided they are not duplications, and thereafter the record will be printed in the regular fashion, and the hearings will be closed. The committee will stand in recess until Monday at 10 o'clock and Senator Johnston from South Carolina will preside. (Whereupon, at 12:55 p.m., the committee stood in recess, to recon |