DEPARTMENT OF AGRICULTURE APPROPRIATION BILL, 1941 HEARINGS CONDUCTED BY THE SUBCOMMITTEE, MESSRS. CLARENCE CANNON (CHAIRMAN), MALCOLM C. TARVER, CHARLES H. LEAVY, DAVID D. TERRY, ROSS A. COLLINS, WILLIAM P. LAMBERTSON, EVERETT M. DIRKSEN AND CHARLES A. PLUMLEY, OF THE COMMITTEE ON APPROPRIATIONS, HOUSE OF REPRESENTATIVES, IN CHARGE OF THE AGRICULTURE DEPARTMENT APPROPRIATION BILL FOR THE FISCAL YEAR 1941, ON THE DAYS FOLLOWING, NAMELY: FRIDAY, DECEMBER 8, 1939. STATEMENT OF HON. HENRY A. WALLACE, SECRETARY OF AGRICULTURE GENERAL STATEMENT Mr. CANNON. Mr. Secretary, we will be glad to hear any statement you care to make to the committee at this time. The committee is interested in a program which would give the farmers of America a standard of living more nearly in line with the rest of the country and perhaps you especially could give us something on that subject. INCOME OF FARMERS IN RELATION TO WAGES OF EMPLOYED WORKERS Secretary WALLACE. I would be most happy to present anything which may not have been presented by Mr. Tolley the other day. Here is an exhibit which you might like to have in the record which has a bearing on the feeling that many people had during September that the farmers were profiteering at the expense of the rest of the population. This table indicates that the purchasing power of factory pay rolls, on an index basis for food at retail, was 26 percent greater than it was in 1929, in August of this year. It was 22 percent greater than in 1929, in September of this year. It was 27 percent greater than in 1929, in October of this year. In other words, the employed workers today have a greater ability to buy food than at the time of presumably greater prosperity, in 1929. Mr. CANNON. Is that due to higher wages or increased employment? Secretary WALLACE. Well, I would say that it is due particularly to the low prices of farm products, and also to the fact that the unit wages are rather high in comparison to 1929, or putting it another way, the workers' wages compared with 1929 have held up better than farm prices. 10 Mr. PLUMLEY. That is to say the farmer gets less in proportion to what he produces? Secretary WALLACE. Yes; relative to wages. Now, in saying that I am not in anyway indicating that the workers in the cities get too much but I do suggest that the farmers are not getting their proportionate share of the national income. (The table referred to is as follows:) Per capita purchasing power of employed workers, October 1939, and comparisons Mr. CANNON. I believe you said you had just returned from Chicago where, I take for granted, you attended the sessions of the American Federation of the Farm Bureau. I notice in this morning's paper that they passed a resolution to the effect that control of production had not been sufficiently rigid to bring the price of farm products to parity and that payments by the Government to farmers have not been sufficient to bridge the chasms between open market prices and parity prices. Would you say that is true? Secretary WALLACE. Yes, that is true. Mr. Evans has some figures which will be presented later indicating that disparity. RESULTS ACCOMPLISHED OF REDUCING SPREAD BETWEEN INCOME OF PRODUCER Mr. LEAVY. Mr. Secretary, has there been any substantial accomplishment in the last year in narrowing this spread between what the producer gets and what the consumer pays for agricultural products? Secretary WALLACE. I think it will be necessary to bring Mr. Waugh up here to answer that. Mr. Waugh's duties are to look after the question of margins and he can give you a more specific answer. I can only answer in a general way. If you want my general impression I would say there has been no great change in the margin. Mr. LEAVY. But that is one of the very serious problems, is it not? Secretary WALLACE. Compared with pre-war the margins of most farm products are about twice as much. Mr. LEAVY. We heard testimony here that where a consumer paid a dollar for agricultural products the producer gets 40 cents out of that dollar, a spread of 60 cents between what the producer gets and the price when it reaches the consumer. I was wondering what the Department is doing along that line in an attempt to solve that problem, or at least improve the situation so far as the producer is concerned? IMPORTANCE OF REACHING PARITY ON FARM PRICES Mr. CANNON. Mr. Secretary, a great deal of emphasis has been laid in some quarters on reducing the spread between the price the consumer pays and the price received by the producer in the belief that a readjustment of the margin would help the situation. As a matter of fact is it not true that this is a comparatively minor consideration; that relief from the present disparity of income lies not in the reduction in the spread between the two, but in a permanent program which will permanently maintain farm prices at parity and insure agriculture its fair share of the national income; and if you were to reduce to half the spread between the price received by the producer and the price paid by the consumer it would not bring prices up to parity or approach a permanent remedy for our agricultural ills. Secretary WALLACE. I do not look on that as a relief. As a matter of fact, it would only contribute a small part. Mr. CANNON. While of sufficient importance to warrant attention it is relatively incidental. Secretary WALLACE. Also I think this should be borne in mind: That when there is a sudden great outcry with regard to margins the farmers suffer as a result of the consumers tendency to go on a strike of some kind and as a rule when there is an outcry for any great length of time concerning margins the result has been the farmer has suffered. Now in saying that I do not mean to indicate that we should not give consideration to the question of margins but I am merely pointing out that any public outcry you may have with regard to margins usually results in the farmers suffering more than they are helped. Mr. CANNON. Emphasis on that phase of the problem is a disservice to the extent that it diverts public attention from the real problem. It is just like dragging a hare across the trail of a fox so as to get the hounds off the track of the real quarry. The real problem, as indicated by the resolution of the Farm Bureau Federation in its session this week, is that we have not yet reached. parity that the standard of living of the American farm family is proportionately lower than ever before. FARM AND NONFARM INCOME AVAILABLE FOR LIVING, 1909-39 Secretary WALLACE. By the way, Mr. Chairman, if I might, I would like to submit for the record a table bringing down to date the same figures which were given a year ago with regard to parity and income. This just adds 1 more year. This gives the relationship between income of the average farm person before the war and the average nonfarm. In other words, taking the relationship as 100 then for the year 1939 the preliminary figure would indicate a relationship of 73%1⁄2 percent instead of 100, or say 261⁄2 percent below the relationship that existed before the war. Projecting it forward to 1940, which is a risky thing to do, but having our best economist expert make a projection of the trends we get about 74.9 percent for 1940. So there was a shift in cotton acreage to bring about a better adjust- There was a shift in wheat, in comparison with 1937, a reduction In the case of corn a change from the situation which existed in the That makes a total shift of about 43 million acres represented in cot- That shift, of course, resulted in the reduction of certain com- COMMODITY LOANS ON WHEAT, COTTON, CORN, ETC. Along with that we had commodity loans on wheat, cotton, and EXPORT SUBSIDY ON WHEAT AND COTTON Also we have had, in the case of wheat and cotton, an export sub- COTTON AND COTTON PRODUCTS EXPORT PROGRAM Mr. TARVER. To what countries of the world has most of this Secretary WALLACE. I do not have a full break-down of the I have those figures down in the Department. Mr. TARVER. Will you furnish that information for the record? |