NFO-93 (AV10499) US Farm Report: Farm Policy & Parity Prices

welcome to the u.s. farm report a public information program brought to you by the members of the national farmers organization of this local area every American can profit by the successful nfo collective bargaining program for agriculture or farm income such the nation's prosperity u.s. farm report presents a look at agriculture and the economy with some of the top leaders at our nation's capital appearing on today's program to discuss agricultural affairs and issues our Sun of the world Mondale of Minnesota one of Minnesota Attorney General who succeeded the hilberg unprecedented silent manhunt for became vice president and Senator George McGovern of South Dakota a congressman in the fifties and special assistant to President Kennedy and food for peace director in 1961-62 until he resigned to make a successful campaign for the Senate both senator Mondale hundred McGovern our members of the Senate Agriculture Committee and they have teamed up in that committee to work for passage of wheat feed grain dairy thirty price and income and food for freedom legislation they have been asked to discuss today worth understand the outlook the legislative issues of continuing importance to farmers as well as food and fiber problems of consumers in America well George it's a pleasure to be with you today and to talk about what I regard is one of the most important questions before Americans today and that's the position of the American family farmer who's done so much for this country how we're coming on our objective of full parity for the American family farmer and how well we're doing and structuring programs to permit the fire to do his share to work toward the piece and I don't know of any person who's providing more leadership on this issue than you are George and I'm delighted to have this chance to step back from some of our day-to-day work on the Agriculture Committee to in a sense take a look at this bigger picture well let me just say Walter that it's always a special pleasure as far as I'm concerned to discuss the problems of agriculture with you I can't think of anything that's happened in recent years that has brought me any more personal satisfaction than your coming to the United States Senate and more particularly your place on the Senate Committee on agriculture there are some people who feel that at a time when the farmer is a small represent a smaller percentage of our population than he did and years gone by that agriculture has lost some of its significance but you know and and many of us know that agriculture has never been more fundamental to the life of our country and to the life of the world than it is today so it's given me great satisfaction as one concerned about the position of Midwest agriculture in particular that we have another strong voice on the agricultural committee and you take the place of former senator Humphrey now vice-president Humphrey on that committee and to work for the cause of the Midwest farmer and the farmer as a whole I think those of us on the committee were particularly impressed with your leadership in saving the feed grain program and strengthening that program a year ago it's my own judgment that without your leadership and without your voice on that question we would have lost the the feed grain program a year ago there so happened that the chairman of our committee for various reasons was opposed to the program and wanted to end it or at least very seriously reduce it but you brought him around and brought a lot of other people around on maedi to support the program and we're grateful to you as you know George the deep green program is fundamental to the farm economy of our state three out of every five dollars that the Minnesota farmer earns is the direct or indirect results of feed grain production and that's what in my opinion was essential that we sustain our I think quite successful feed grain program and build on what we had and I regarded this as a basic fight necessary for the long-term improvement of the final picture in our state well I think it's important Walter not only because of the direct income that good feed grain prices mean to the producers of grain but also because this is really the economic foundation of our livestock and poultry industry if you destroy the feed grain price structure sooner or later we're in trouble in our whole livestock economy I think to the the leadership that you've provided in the committee and on the floor in legislation to improve our dairy price situation your efforts to knock down some of the phony barriers so-called sanitary barriers on the use of Minnesota milk and South Dakota milk and some of the other markets your concern about adequate food reserves and setting up the commodity reserves is provided in the legislation that you have been sponsored all of these it seems to me are helpful initiatives well George I think you're being a little modest about your role I regard you is the top spokesman for the American family farmer on our Senate farm committee and on the Senate floor I think your background and experience as the food for peace director under President Kennedy has given you an experience and a wealth of understanding that surely in these past few days when we've been dealing with food for freedom has been absolutely indispensable and your leadership in the wheat and the other voluntary programs that we've enacted in the four-year program that we adopted last year I think was indispensable and without it we simply wouldn't have had the kind of program that that we now have and I'm very grateful that when I came on this committee as a newcomer I had someone from the Midwest in your person to help and advise me and I'm very grateful for this I think that we could probably summarize the present situation by saying that the farmer is doing better but not nearly well enough well I think I think we've made we've made good progress while they're there they're good many problems that still looks like merit American agriculture but I have a great deal of optimism about the future I think that for the first time since I've been in the Congress that we're on the threshold of a day when agriculture can move into a real period of prosperity the difficulties of other countries in meeting their own production needs is a very painful difficulty but it's one that provides a great challenge and also a great opportunity for us and I think we're beginning to make some progress towards greater stability for our own producers in the if you look at the statistics I think we can feel good about the fact that net farm income this year is up about three and a half billion dollars over six years ago but we're only at 80 percent of parity and that surely isn't anything to make us feel totally satisfied but I think in addition to this we ought to place great significance because it is truly important in the the problem of farm economics that we finally cleared the surpluses we've spent nearly five and a half years trying to rid ourselves of crushing burdens in 1960 we had I think 1.4 billion bushels of wheat and in surplus right 85 million tons of corn and surplus vast quantities of dairy products and surplus cotton and tobacco practically every commodity that was in any related way related to federal programs was found in vast surplus quantities and one of the biggest business in American agriculture was storage we had an inventory of somewhere around nine billion dollars in surplus commodities at that time five or six years ago and I think it's just a fundamental fact of American farm life that surpluses depress prices no matter how the federal government tries to hold them off the market they're there the trade is conscious of it and it's weakens and softens the market and today we've cleared those surpluses one of the one of the really remarkable developments that's taken place and it's happened so quietly that few people are aware but is that we no longer have a surplus in this country with the exception of cotton and tobacco which we can't eat we have almost no surplus at all now we have a reserve that I would say a strategic reserve of wheat of feed grains of some other commodities but there's no food crop or no feed crop that we have an excessive supply today what we do have is an excess of empty stomachs in the world and that excess is increasing much faster than the ability of the world to feed itself I think for the first time at least in our lifetimes the the world is in real danger of running out of food of being able to meet the needs of the fast growing populations of these developing countries we're told that before the end of this century which isn't very far away some 34 years that will have at least twice as many hungry stomachs on this planet as we do today twice as many people as we do today now that's going to place an enormous challenge on on the American farmer because we're one of the few areas in the world that has unused land that has unused production potential that we can quickly tap and that has to know how to meet that need I think this is a almost an inestimable opportunity for American agriculture it means new income for the farmers of America it means new production opportunities but it's going to take the best brains of all of us to devise the kind of a program that will enable us to utilize that opportunity well George you've provided the leadership in the Congress on this issue and it's now been incorporated in what we call the food for freedom bill and I think you put your finger on it we're in the midst of a world population explosion I saw a figure the other day that up until the year 1600 the world's population increased by three percent every century today it's increasing by three percent every year and except for North America and Australia in New Zealand most of the world is now in a which called a food deficient status they they don't have enough food to food feed their own people and it's usually the same areas that are food deficient that are so poor that they can't afford to buy it and thus we are in the position where we by acting or failing to act we can prevent the starvation of millions or cause the starvation of millions it's just that simple as a question what we're going to do about and of course that's what we're involved in now in our food for freedom program but try to use America's fantastic family farm productive system to produce enough food to prevent starvation or at least our share of that food and at the same time try to encourage these countries and lead them into taking those steps that will get their own agricultural house in order and take some steps in other areas as well that's basically what we're up to as I understand it well that's that's correct and I I think what we have to recognize is that we've moved into a new situation now we're no longer talking about using surpluses we're talking about what we need to do with our domestic farm program to gear it up to meet the needs of a hungry world we're now devoting approximately one and a half billion dollars in government funds to pay our farmers not to produce on some 60 million acres of idle land for very little more money than that we could bring that production that I'd land back into production by the commodities at market prices and use them overseas and in food deficit areas and this is really what the so called food for freedom bill that we're now working on is all about and I think there's another important point here that you've touched on and that is that we're now in a different era when we first passed the food for peace bill and when you were administering it under President Kennedy we were really taking surplus stocks found in government storage now those surpluses are clear they're not there so if we're going to help these people in these backward areas prevent starvation and get their own agriculture moving we've actually got to go out into the market and buy the production of our American family farmers so it for the first time the farmers going to get a direct dollar advantage out of this food for freedom program and secondly if we expand production as we must as you've just pointed out on these idle acres it means that the local communities are going to have money for unlike the money they do not get from idle acres they're gonna have money for fuel oil for tractors for feed and seed and fertilizers and and this is going to contribute to the vitality of the hometown unlike the idling of acreage well there's no no question about that I I think that one of the principal anxieties of our rural kin now I'm not speaking just as farmers alone yeah I'm talking about the man who runs a gas station or a barber shop or a feed store or an implement store in the smaller rural communities one of their principal concerns has been they drag on business that stems from the idling of acres idle acres means idle labor it means tractors that you don't sell it means supplies of all kinds that are not consumed and that pile up in the stores and the business places so as we bring these idle acres back into a production we're not only adding to the income of the farmer but we're putting that farmer back into production when he becomes a full purchasing customer the things that are sold on the Main streets of our towns all across rural America so I see this program is one of a great stimulus to our economy as a whole I think we have to be sure here is you pointed out so many times in the committee that as we expand this acreage and expand American agricultural production that we do two things first of all that we don't develop surpluses again with it this is we have to we have make that mistake in secondly I think the American family farmers entitled to get a decent return for this added production and sometimes world prices do not provide that that basic return that he needs for a decent return and I was glad to see your leadership on this wheat export certificate program because I think this is an indispensable part of if we're going to have a decent return for our farmers along that same mind Walter your efforts to secure them to raise the resale price of government-held grain I think can be be very helpful you've suggested that that be at a minimum of 115 percent the loan price I think that would add millions of dollars to the income of the farmer and would prevent the accumulation of commodities to overhang the market in a depressing way so you're quite correct that we do have to take those steps another thing I think we need to keep our eye on is that this program needs to be used not as a permanent concessional arrangement to feed hungry of people but as a market development tool we've found in in the past that as these countries increase their per capita income even though it's a small increase a few dollars a month per capita a few dollars a year that they make rather remarkable increases in their cash purchases of the things that we have to sell Department of Agriculture did a study of some 34 developing countries and they found that for every dollar that they increase their per capita income they spend another $2 on commercial purchases abroad I can recall that when the food for Peace program was first adapted and started operating one of the complaints heard in some quarters was that this would compete with American dollar sales and since the beginning of the program I think some 13 billions of dollars in America prudhoe has gone overseas and actually at the same time our cash markets have risen and in some of the countries that were once food for Peace recipients are now huge catch cash purchasers of American farm products Japan for example which once received our food for peace free is now I think purchasing American farm products for cash in the tune of nearly a billion dollars a year so that as we contribute to the prosperity of these countries and get them on their own feet they said they soon become or some of them have soon become cash purchasers American farm products water that's been that path in one country after another Japan of course is as you say is the classic example but Italy and Spain Greece Formosa good many other countries that were once receiving food from us on a grant basis are now buying it for hard cash and providing us with markets that we desperately need I think it might be well for us to turn to a different subject that I hear discussed by our farmers and I think should be discussed here and something that I think our consumers should understand and that's the relationship between the price paid to the American farmer for farm production and consumer prices I think every farmer in my state and I'm sure it's true in your state is grateful for your leadership in this field the McGovern resolution which I was proud to support that declared it the sense of the Congress that no federal agency should take any step to depress some parity farm prices and which passed unanimously in the United States Senate with you as its floor leader I think expresses the feeling of so many of us that that until we get the American farmer up to a parity status so that he's getting the same return for his efforts and on his investment as others the federal government ought not to be resorting to efforts to depress those prices indeed they ought to be fulfilling their by after all has been the declared objective of this administration full parity for the American farmer I think we might discuss this fact a little bit well Walter I happen to believe that parody is not outmoded there are some people that seem to be a little bit embarrassed to talk about parody for farmers there doesn't seem to me to be anything old-fashioned about that at all wholeheartedly I think that's fundamental and there's nothing complicated about parody it's simply another word for a fair price it simply means that when the price of everything else goes up price of automobiles and shoes and and the things that we consume in the industrial world when those prices go up that farm prices ought to go up with them farmers not asking for anything any kind of a subsidy or any kind of an unfair concession that isn't available to every other citizen in the economy and what we tried to do with the parody resolution that you supported so effectively and and talk for so energetically from the very day you've arrived here in Washington and before that is to make sure that no agency of the government not just the Secretary of Agriculture but no agency of the government uses their power to drive down or to freeze any farm price that is below parity in other words that said an unfair level and that's the reason this resolution was needed to prevent actions of the kind that the Secretary of Commerce took when he said we shouldn't export our livestock hides because that might raise the price of shoes and after they imposed the restrictions the price of shoes went up and the price of hides went down of course once again the farmer was caught holding the bag so to speak one of the one of the false ideas that that a good many people have is with the price of the food or the shirt or the shoes that we buy in the store is determined largely by farm prices this point has to be made clear to our American consumers in our report out of our committee in support of your resolution we had some figures I think it might be a good idea just to go over them because I think they're very very revealing to show that there's a very slight relationship between improved farm income on the one hand and consumer costs on the other this showed that in 1947 the food cost the American consumers took twenty five point seven percent of their disposable income but out of that twenty five point seven percent the American farmer got less than half of it only 11 percent of the disposable income of the consumers in 1947 went to the American pilot in nineteen sixty-five last year food cost to our consumers was only eighteen point two percent of their disposable farm income in other words it went down seven point five percent in twenty years I think we can stop right here and say that one of the things that the American family farmers done for Americans is to feed them at a lower cost than any other people in the world only 18.2% of their but but the farmer only gets five point three percent of the eighteen percent of the Americans spend on food so that the farmer who works from dawn to dusk to per to provide the cereals and the meat to the poultry and the eggs and the butter that contributes to our high standard of living and these remarkably this remarkably low percentage of our budget that goes toward food only gets six percent of that dollar that's disposed for that purpose and our report further they went on and said that if the farmer got a hundred percent of parity for everything he produced the farmers share of that disposable dollar would go up to only about seven cents seven percent so that if the farmer to get a full and 100% return of parity for his efforts the impact on on the American economy but would be very negligible indeed well you'll remember when we were trying to get the wheat certificate plan through that some of the people who were sharpshooting at that proposal were arguing that giving farmers a fair price for their wheat with some kind of a bread tax on consumers as though the two or two and a half cents that the farmer gets for the wheat and a loaf of read determined the cost that the housewife pays at the checkout counter in her supermarket we know that the wax wrapper on that bread which is usually gaily and attractively a printed cost as much as the wheat that made the the loaf of bread so the farmers part is a very small part of the total one of the things that has irritated me somewhat here just in in recent days is what's happened in our milk situation the Secretary of Agriculture put through a very modest increase 50 cents a hundredweight on milk here recently which would give the farmer somewhere around a half a cent a quart more for the milk that he produces and yet we've had reports of some retailers raising milk prices as much as two and a half cents a quart so they come to the farmer and see what are you doing with this two and a half cents actually he's only getting as you point out barely one half cent increase and it should be recognized as in Minnesota I think the dairy farmer gets about 60 cents an hour for his efforts so this is the important minimal improvement this $4 a hundredweight minimum and some of us are trying to encourage new legislation to encourage production because recently in Minnesota we've been losing about 12 dairy farmers a day it just isn't worth the effort some feel and we're trying to get that return up there in the interests of the consumer one of the things that I think is disturbing about this liquidation of our dairy herds is that it takes a considerable period of time to build a good dairy herd it takes a considerable amount of capital to get started I'm concerned about the loss of these dairy farms all over the Midwest because I think at a time when we're taking on new responsibilities in the world to deal with this problem of hunger when there's such an urgent need for melt dairy products and other high-protein foods that we're putting ourselves in a very dangerous situation to lose these valuable foundation herds what that means is that just at the time when the demands on us are the greatest we're losing some of the essential suppliers in the war on hunger in my judgment that war on hunger is the kind of war that we ought to be fighting it not only means new prosperity for our farm producers here on hoe at home but it opens the way for the conditions that might permit peace to reign in the world someday well George I've enjoyed discussing these fundamental issues of American farm economics and the role of the American farmer in helping to work toward peace I think this is the kind of discussion that we ought to have more of because far more understanding is needed of what we're trying to do and the validity of our objectives and no person has contributed more to this struggle than you have and I'm very pleased to be with you on this program well thank you so much Walter and I look forward to working with you on American agricultural programs and our opportunities abroad in the years ahead us farm report has presented a look at agriculture with some of the top leaders from our nation's capital the US Congress could foresee today's farm problems years ago when they passed the capper-volstead Act in 1922 this is one of the greatest gifts that Congress has granted to the farmer it gives the farmer the same legal right to bargain collectively that is already enjoyed by every other segment of our economy the national farmers organization was organized and operates under the capper-volstead Act the nfo collective bargaining power is being developed at the marketplace for the purpose of obtaining realistic farm prices every American can profit by the successful nfo collective bargaining for agriculture the economic keystone of America the u.s. farm report has been brought to you by the members of the national farmers organization in this area