NFO-94 (AV10500): US Farm Report: Family Farms vs. Corporate Farms

Welcome the US Farm Report, a public information program brought to you by the members of the National Farmers Organization in this local area. Every American can profit by the successful NFO collective bargaining program for agriculture, for farm income sets the nation's prosperity. US Farm Report presents a look at agriculture and the economy, with some of the- some of the top leaders of our nation's capital. I have it today our special guest, I should tell you, maybe, that I'm W. W. Butch Swaim, public information director of the National Farmers Organization at Corning, Iowa. Today, it gives me great pleasure, the guest that I have here, Senator Paul Douglas of Illinois, who's been in the United States Senate since 1949 and has served on powerful Senate committees, banking and currency, finance ,and economic matters. Also from the National Farmers Organization, Leonard Cramp, our national president, I mean, our state president in Illinois. During the recent National Farmers Organization excursion to Washington, when over 400 congressional district, and state, and national leaders visit their congressmen and Senators in Washington, the president of Illinois, Mr. Leonard Cramp discussed some of the farmers' problems with Senator Douglas of Illinois the program which follows the televised recording of their visit. And Senator Douglas, we're certainly glad to have you on this program, because we know that you've done an outstanding job in the Senate, and this we appreciate. And Leonard Cramp, we know that you're doing an outstanding job in the state of Illinois. A few fellows will discuss the farm situation, I'm sure, that everyone in the nation can be much better informed. Thank you very much. Thank you, Butch. Senator, it's a pleasure to be here with you. I'm quite proud of this situation that I'm in. I'm gonna get right into some important questions. That's fine. First of all, Senator Douglas, you serve on the Currency, Finance, and Joint Economic Committee for the Senate and I'm sure you're familiar with the high interest rate situation. Very much so. Well, farmers, because of this, are in a cost-price squeeze, and one of the serious aspects of that problem is interest rates. It takes a lot of capital, to farm these days. Loans are increasingly expensive, whether it comes from private resources or some of the government lending agencies. Some loaning agencies, in fact, are pretty well loaned up, but this is becoming a serious problem. Is anything being done or contemplated to reduce the high cost of loans to get this interest rate down? Well, we're trying to keep interest rates down, but I don't think our efforts have been as successful as they should have been. I think we've depended too much on what is termed "monetary policy", to check the so-called increase in prices, and therefore, the Federal Reserve Board has tried to raise interest rates in the belief, which is probably true, that it will reduce borrowing, and I think it has checked many, and is checking, many proper business forms of expansion. I would like to see us use more emphasis on fiscal policy. And, do two things: first eliminate some unnecessary expenditures, not in the poverty program, not in the welfare programs, but I don't think we need a supersonic air transport, at this time. And I would rather improve conditions on earth then send a man to the moon and back we could save two or three billion dollars right there each year and then in addition I would plug some of the terrible loopholes in our system of taxation. For example, are about 30 people in the United States, every year ,not necessarily the same people, who have incomes over $500,000, but never pay a cent in taxes and this is because they have tailor made loopholes, the 27 half depletion allowance on oil, the fact that they can write off all of their investment, in virtually the first year, or at least 90% of it, their capital gains tax which is very weak, and of course, stock options for business executives, that only about half normal rate of taxation. Plus, the abuse of foundations.So, that in my judgment, we could balance the budget by eliminating some of these unnecessary expenditures, and I- and I'm not for cutting the expenditures on education, health, and welfare. And, also, plugging the loopholes in taxation, and this would to have a stabilizing iNFOuence on prices, and it wouldn't be necessary to increase interest rates, as much as the Federal Reserve Board is doing. Thank you very much. If I may add one thing, we- the increase in prices has been perhaps greatest in the field of metals and machinery. And we passed a few years ago, a 7% investment credit, which is really a 14% reduction in taxes, because of 7% absolutes, at about 14% of the 48 percent corporate tax, and we've been rewarding investment, and this tremendous rush of investment has driven up the price of machinery and metals, so I would repeal that 7% investment credit very quickly, also. Well, thank you, Senator, this leads me to another question. Our big city newspapers, they contain a great deal right now about rising milk and bread prices. But only a little bit about the way farm production costs are going up. Yes, yes. I noticed one story that said farm costs have gone up 8% while farmers prices were rising 4%. Now, iNFOation always hurts farmers. Costs go up earlier and faster than our prices. Shouldn't more be done to control this cost iNFOation and loosen up the cost price squeeze on the farmers and other people? Well, as I've indicated, I think if we repeal the investment credit, there wouldn't be as much competition for machinery and metals. The corporations are putting in enormous amounts of fixed capital and because they're getting a what amounts to a 14% reduction in their tax scales. If this were eliminated, then the supply of metals could be used in a larger degree to meet the farmers need for machinery, and you wouldn't have the price increases in the price of tractors and other farm implements, that we're now getting. Well- If I may come back to that, however, mr. Cramp. There's a lot of exaggeration about the part which farm prices play and the increase in the cost of living in the cities. I think I'm right in saying that a 20 cent loaf of bread has only about two and a half cents of wheat in it and yet, all too often, an increase in the price of wheat which has occurred, is blamed as the cause for the increase in the price of bread, and similarly with milk, whether say, selling at twenty four cents a quart, the dairy farmer in my region gets only is it six and a half or seven- six and a half, six and a half, [unclear] So, that's that's only one quarter of the price. I've always felt that the middlemen have absorbed too great a share. Now, they will excuse themselves, and say that the cost of processing is high, cost of packaging high, cost of distribution is high, but something seems to be wrong, if nine-tenths of the price of bread goes for substances other than wheat, and services other than those of the farmer, and three quarters of the price of milk. Yes, I remember Senator.105 dollar increase in the per capita expenditure for food. 104 of these went to the middleman, and only one dollar went to the farmer. In recent years? Yes. I would like to interject a little thought here for the consuming public and I've used this example many times. I've gotten into discussions with city people and so I refer them to their Saturday grocery cart. Yes. And they complain about high food prices so I said I say this come Saturday when you come out of the store, and pay your twenty or twenty five dollars for your week supply of groceries, when you get home set over here all the food, actual food, set over here the cigarettes, the tinfoil, the nylon hose, and everything that you buy in the supermarket today, and then see how much your grocery basket is. Yes, well, of course, there's an effort being made to set the farmers and city people against each other. Cause and sheets being circulated, showing the increase in the price of pork chops, and bacon, and bread, and milk, and so forth, the implication is that the farmers are guilty of this. On the other hand, farm people are being told that the cost of machinery, and the things that they buy are up, because of the wages of the city workers and so a double game is played to split the two groups apart. And, it seems to me, that we need to keep the general price level down but allow within that general price level individual prices to move rather freely, according to the quantities supplied, and the intensity of demand. And, what is happening of course is that the symphysis of the grains, which were formerly very large, have been diminishing. I've got some figures here. 1960, the supply of corn amounted to almost a billion and a half bushels, and now it's down to, well, pardon me, that should be in terms of dollars, almost a billion half dollars. Now it's down to less than 400 million. Supply of wheat was a million, 100 million, now it's down to 400 million. Soy beans- the supply of soy beans storage of soy- soy beans, virtually non-existent. So, that the farm surpluses have disappeared, largely. People in the cities have more income and as you say spending more on food, this naturally will send up the price of food. And in addition to this, we've embarked and I think justifiably so on a world campaign against starvation and hunger. And so, that, there's a greater demand for a for food, and but we should be grateful for the productivity of American agriculture, the farmer simply should get a larger share. The big surplus, of course, is on cotton. And cotton had about a five million dollar surplus in 1960, that is almost doubled now- that's in terms of bales about five million- 5 million bales, and now over nine million bales. Yes. In other words, cotton, the supply is going up, but the total amount of dollars in farm surpluses, are much lower. Oh, yes. They're way down. This is a real important point. Yes, the total supply in terms of dollars is only about one half what it was in 1960, though the reserve of cotton has almost doubled. In fact, it's the cotton reserve which is largely responsible for the dollar surplus. Now, not the reserves of corn, wheat, or soybeans. This is correct. Cotton too incidentally is, actually, well, there are some feed grain byproducts of cotton, but is more or less the product used for textiles. That's right. We're talking on the other columns about food, and food is the most important commodity in the world. You show me a person that can't use food, and I'll show you a dead man. Well, but most of the world- of the world could use much more food. This is correct. Because I suppose, close to half the population of the world, is so seriously underfed, as to suffer from what is known as malnutrition. Many people in this country that don't have the proper diet, either. That is correct. The proper diet, our statistics show that we would immediately use 10 percent more food in this country, if everybody had a proper diet. Now, this is very important and this proper diet may be in part the result of ignorance but in part is the result of poverty, and if we could eliminate poverty in the country then the demand for food would go up and the farmers would prosper. That is why I've always said that he interests of the workers in the cities and the interests of those in the country are fundamentally similar, that one benefits from the other. Nothing would alleviate poverty like restoring fair farm prices all the way across-. Yes, that would help the small farmer but also we've got city poor too, you remember. Yes, this is true, but this would add more money to our economy at the base and it would generate more income all along the line and the other people profit by it in this way, and this is quite often overlooked by people in this country. No, it is true, I think, that rural poverty is probably greater in physical volume than urban poverty, the people in the Appalachians, the people on the small farms, the people up at the end of the dirt road, so to speak. But there's a lot of city poverty too. And one of the things I've liked about you and liked about another farm organization, is that you're not merely considering the farmers you also consider society. You're concerned with the poor people wherever they are, not merely those on the farm. Very much so. And I think this is the way it should be. Our concern should be for people, not just for one group of 'em. That is right, very, very good, Senator Douglas. This leads me to another important question that I have here, and it's rather lengthy but you'll bear with me, I'll try to get it out properly. I'm sure you will, Mr. Cramp. According to the Department of Agriculture, about 90,000 farms go out of existence every year. Now, the number of farms in this country is now less than half the six million eight hundred thousand that existed in 1935. The NFO believes in family type farming, but we see increasing concentration of agriculture and huge farming operation. I noticed you voted the other day for a limit on the amount of benefits from farm programs going to a single farmer. I certainly did and I thought-. The limitation was defeated. Yes, I thought that the government and the taxpayer should not pay more than $50,000 to an individual farmer. And I thought that this was going to be passed I think we only got a handful of votes. This is a scandal, Mr. Cramp, a scandal. I agree. And the farm program primarily helps the farmers who don't need much help. Another thing, too, and the and the money that's charged up to agriculture, statistic shows, and I think you'll bear me out there, Senator Douglas, that that out of each dollar appropriated for farm programs, that about $2 of this goes for the public, and only about a dollar, or maybe even less than a dollar, actually helps the farmer. This is the thing that the public is mislead in. It's a good deal of paddy. Now, if I may come back to this elimination of the small farm for a minute. I've always felt that we should try to preserve the small farm, and I felt that we should foster off-farm income for one thing, particularly in the winter months, but I've also wondered why it is that farmers, small farmers, could not combine together, to buy and use farm machinery. Now, I've been traveling through Western Illinois, and spent a day in Rock Island, where they make most of the farm implements, and, the modern tractor tends to be a huge affair. Marlin corn picker, the Reaper. Farm machinery is getting so-, and the modern plow, getting so costly, that a small farmer can't buy this machinery. And why couldn't a number of farmers, go in together ,through the NFO, and buy the machinery, and then use it in rotation? Now, I know they'll be quarres=ls with who is too borrow first, but this is too expensive for any one person. It's not too expensive for 10 or 15 together, keep they keep the machinery busy, keep it busy, as a matter of fact, I think most farms are over over machined anyway there you will see this this machinery lying idle in either at a shelter or in some cases right out in the rain couldn't you get your people to cooperate together to buy the machinery and use it cooperatively hey I think we're doing this in many many cases senator but there's another even more serious aspect this is no machinery that we're talking about big giants the farm implement dealers are now becoming quite concerned I've been talking to several of them in the last six months and they now have bigger operations of these corporate type structures who are buying this big machinery they use it for four or five years and they're turning it in on trade the implement dealers have no place to even go with this used equipment the average farmer can't even buy this equipment on a used basis become that serious I didn't get my question finished well you wanna go on excuse me on some thoughts that we have on this situation and we think vertical integration in agriculture by the chain stars and the packers should be forbidden but they shouldn't be allowed to get into livestock feeding and farming operations what are your views on well you have given some of them and maybe we can go into this a little further on the family type agriculture and how can we best promote it well I've certainly I believe in farming as a way of life although I know that the enthusiasm for this tends to be greater amongst city dwellers who grew up in the country and this is for boys and girls but on this question of so-called integrated farming this is godfather so I suppose in the poultry field yes and the poultry and eggs and in many cases now the poultry farmers is just a peace worker being given the the chickens being given the feed and then held out pretty closely on price I regret this and I would favor I would be willing to say that you should have independent ownership with poultry farms and of cattle feeding operations and priming itself no doubt about it it was the family farm structure of agriculture that made the United States of America the greatest nation in the world and it will continue to make it this way but if this is allowed to deteriorate as you pointed out and go to a corporate structure you're going to lose undoubtedly at least a livestock industry of hogs and cattle and this is a serious blow because when you lose these you're losing a great force of free labor because what do you think of this or not hogs and cattle produce food in other words they're a factor within themselves that turn products that we can't consume that are going to waste in our nation into food that people can eat and if we go to a corporate type agriculture which they have in some sections of the world they're going to lose this production of livestock animals there's a million source of food I once spent day going through the Central Valley of California well you have corporate farming carried to an extreme and I remember going into one town where which was surrounded by small family sized farms they had independent merchants doctors lawyers churches a thriving local newspaper political discussions fraternal organizations a live American town and then there was another time which was a trading center for a huge fire or I think something like 25,000 acres and the people there were Mexican Americans nice people but the only stores were there were three stores one they Italian one a cheap grocery store another a store where you could buy overalls and rough clothing that was it the streets were unpaved the people were serfs and there's no question as to which type was it was the healthier and I would favor California eisah and New Mexico and Arizona probably the worst in this respect because they have the old Mexican land system plus they railway grants but it's developing too much even in our own Illinois you get people that own enormous quantities of land and then we'll have tenants we had this situation just occur in my particular area and I won't mention a specific town but 6,000 acres went under the block one day near a small town and seven or eight tenant farmers each one of these phones farming eight and nine hundred acres got their walking papers overnight now the people that have taken over this extensive amount of land no longer will buy just as you say in that community they will be dealing directly with the factories and this is a shocking situation and I want to tell it a little experience I had which emphasizes your point very clearly I had the great privilege of a company and governor Koerner of Illinois on the trade mission to the Far East last fall and one of the biggest impacts that I got on the mission was in Japan and especially in Formosa where Japan after the war came back and they broke up the large land holdings put it down into the hands of the family size farmers two and a half five ten acres in that case and for most of the same thing under Shanghai check with American aid and his advice we did this and I think as of a year ago Formosa went off of American aid that is right there are now producing enough food to feed their people and have a little for export so I think it really emphasizes your point very well which you did a terrific job of well of course that should be accompanied by the use of modern machinery we shouldn't go back to a horse right horse plow ordinary rake and so forth and so on but again I want to stress if I may getting your members to join together for the cooperative purchase and use of farm machinery it would only be one objective of this senator are my laws state that we're organizing for one purpose and this is to join together to bargain for the sale of the of our production and to get a price now this would be fine on individual basis but as an organization as such we would be prohibited in this I see gentlemen our time is about up mr. Crabb do you have any more quick question one quick question here and I wanted to ask it if here you may have to break in cut us off do you think consumers are being honestly told the reasons for food price increases we think that farmers are getting blamed for a whole lot of increases that never get into our pocketbooks now we went into this little bill before like well I think that's true you take the recent increases the price of food at the grocery store they've been accompanied by decreases in the wholesale price of food in the markets in other words the wholesale price has been turning down products slightly and the retail price has been turning up well take this simple figure which i think is true that the average income of a man on the farm is only about 55% what the income man in the city's actually is and while there are added costs of living in the city which are not present on the farm there is too great a disparity now there's less of a disparity than there was six or ten years ago but it's still too great this is absolutely right gentlemen our time is nearly up we're going to have to bring this to a close and Senator Douglas it's certainly been a pleasure it's been to interview here you here today and have you on this program good to be with you and I know that your hearts in the right place for the family farm structure of agriculture and mr. Cramp I certainly do appreciate this opportunity with you again senator have your own programs and family farm structure of agriculture is the thing the backbone of America the thing that will keep America prosperous u.s. farm report today has presented a look at agriculture with one of the nation's top leaders in our nation's capital now the Congress of the United States was looking ahead years ago when they passed the Capper-Volstead Act in 1922 they foresaw today's problems that would be an agriculture it is up to the farmers of America and leaders such as Senator Douglas to bring out the facts and show people the way to a better way of life in family farm structure of agriculture because our nation's economy still depend on agriculture agriculture is still the number one industry with 237 billion dollars invested which is around 2/3 of all investment of all corporate structures in our nation so let's keep family farm agriculture in America must band together as farmers to get a price based on the cost of production plus a reasonable profit through the NFO collective bargaining program thank you for listening