NFO: Special Guest V. P. Erhard Pfingsten

us farm report a public information program brought to you in the interest of agriculture rural business and the well-being of our nation by members of the national farmers organization in this area and others interested in having American agriculture received cost of production plus a reasonable profit the American farmers are building a brighter future for agriculture through the national farmers organization the organization that awoke America and represents the leadership of Agriculture u.s. farm report presents a special guest vice president of the national farmers organization Erhart fingsten who farms at Sergeant Bluff Iowa there is little question that the rural community both agriculture and business are in a deep problem at the last official report that I heard from the US Department of Agriculture's last April April 1967 the American farmer was receiving 74% of parity now parity to a farmer is about the same as cost of living is to the working man but 74% of parity was the lowest point that we had reached since the depth of the depression since 1934 I don't believe that it takes any economists to be able to understand that there isn't a businessman a professional man or anybody in the United States that could pay today's high costs and sell either his production or his services for the same price that he received 20 years ago yet the American farmer is not even receiving that much much less that we received 20 years ago so we have reached a point where credit has taken over and where the farmers basically are confusing income with credit we've reached the end of that to a point now where as farmers we've tied up the business men's money so that credit is becoming tighter and tighter we've reached the point where things are going to come to a standstill unless farm prices are immediately restored but I think the thing that we need to look at is why the farmers are receiving such low prices what is the problem in rural America today its price purely and simply price and nothing else but price and the reason we are receiving those low prices is because the rest of the economy has organized our buyers are now national in scope they're able to bypass any area any individual any market and let us set so we've reached a point where we cannot hope to get fair prices in the methods that we use say fifty or even a hundred years ago the farmers basic method of selling is to go to the market and say what will you give me now I think if you consider just this one statement alone what will you give me this is the farmers way of determining his price he is asking his customers what they want to pay him for his various production and we're selling to corporations and every corporation in this nation without one single exception is set up for one purpose and one purpose only and that is to turn a profit and the very underlying principle in the American profit system is to buy just as cheap as you possibly can and it's a good principle so here the farmers walk up to these corporations set up for the sole purpose of making a profit and ask them what they want to give us and then wonder why we don't get a price now in order to bring a little bit fuller understanding to you farmers in the listening audience let's reverse this let's say that the people that you are buying from your implement dealers your gasoline dealer your fertilizer salesman your feed dealer let's say all of these people that you do business with where to come out to your farms and ask you what you wanted to pay for their merchandise and then took what you offered you guys would have made some money last year wouldn't you and how fact I think you'd have busted everybody that does business with you perhaps in a single year so when you stop to consider this hopeless and helpless method of selling then why should we be so surprised what's happening to us how could we under that method be getting a better price than we are certainly you don't believe that someone is going to pay you a better price just because you need it and if you think so maybe you should take a stock of your own method of thinking or how you think in a particular case let's say for example in a gas war I'm sure that you've had gas Wars in about all communities they have them in my area every once in a while and when they do they get that 35 cent a gallon gasoline down as cheap sometimes as 18 and 20 cents a gallon did any of you ever drive into a filling station when there was a gas war going on and after the station of the tenant had filled your tank did any of you ever tell him now look mister you can't make any money upon 20 cent gas you're gonna go broke that way so better you take 35 cents a gallon out of that bill I just gave you you didn't do it did you nor did anyone else in fact if you'll be real honest with what you were thinking at the time you were actually hoping that they'd keep right on being fool enough to do it till your tank got empty again so you could hook them once more didn't you that's what you really thought now what makes you think when anybody else is going to think any different about you about your situation your buyers are going to continue to buy from you just as cheap as they can just as long as you let them so what is it going to take to overcome this situation what we as farmers have to do to get fair prices well in the first we're going to have to become businessmen we're going to have to sell our production just exactly the way every other good industry in this nation sells their production in other words we're going to have to get into a position where we can put a price tag on it let's take the automobile industry for instance how do they sell their production do they go to their dealers and ask their dealers what they want to pay them for automobiles I hope to tell you they don't they established their own price the price on the basis of what it costs them to produce those automobiles then they tell their dealers this is what you're going to pay me or you don't get any automobiles and the American farmer is going to have to get into exactly that same position so that he becomes a businessman in marketing his production rather than a panhandler begging for a price and in order to do that it is going to take a national organization of farmers this is a national problem it cannot be solved on a local basis so you can't bring this price up on a local area or in a local market if you tried to raise the price in just one area only your buyers would bypass that area try to get their production from the other areas let you set but let's put it another way to let's say that you did succeed 100% of getting a full fair price in this area but you weren't able to do anything for any of the area anywhere around the surrounding areas would soon take advantage of your market here in fact they'd flood your market here and destroy everything that you had gained so it's going to take a national organization dealing in all commodities so that you can bring all prices up in relative balance you can't bring them up commodity by commodity without destroying yourself that way either let's take grain for example let's say you brought the price of grain up but you didn't bring the price of livestock up I think you would soon find that your livestock producers returning to the grain market selling their grain and destroying actually the very market that you had for your grain but let's say you did it the other way let's say that you brought the prices of livestock up but you left the prices of grain down where they are that the green producers we're losing money I think that very soon then your grain producers would start a producing livestock and would destroy the industry in that way so it takes an organization dealing in all commodities bringing them all up in relative balance to prevent the shift out of one commodity into the other but it also takes an organization dealing in all commodities to keep all producers working together to keep from destroying each other or to try to get well let's say off of each other's misfortune and this has really been the case in the past where you have the livestock producers making an effort to drive the grain price down so that they could buy their livestock cheaper or it happened the same thing in the dairy industry so it takes an organization dealing in all commodities nationwide to keep all prices up in relative balance to take care of all agriculture not destroying one for the benefit of the other what's also going to take an organization that does the entire job just the pricing can't be done by itself we have to be dealing in such a way that we are able to take care of any overproduction that we might have now it is our responsibility as farmers to produce what this nation needs to get a full fair price for our production and then insulate whatever is not needed from the market or channel it to secondary markets now in the past we've let one or two or three percentage of the total production set the price on all of our production because we didn't take care of it ourselves we let somebody else do it for you for us and for this I'd like to take an example show you exactly what did happen now of course since the feed grain program we've had no overproduction in feed grain fact we have not produced what this nation needed we've had to dip into the reserves and dip into them deeply but for 11 years straight ahead of the feed grain program we did have overproduction in corn we had an overproduction of a little bit less than 3% on the average for those 11 years but we didn't do anything about it we let it be used to destroy all of our price or let that two or three percent set the price on the entire production we actually paid more to keep it in storage here in this nation then the entire commodity was worth now had we operated under the nfo programs were under a surplus disposal set up in the price incentive which we have in our programs to help regulate this amount and have insulated that 3% from the market it would have had a terrific advantage when this started our average price in the state of Iowa the nation's leading corn producing state was about a dollar and sixty two cents a bushel yet after 11 years disregarding a 3% over production our corn price was down to about ninety percent ninety cents a bushel we had lost way over 30% of our price or 33 percent of our price to 3 percent over production now had we been operating under the program either insulated that 3 percent from the market or seen to it that it was moved to the shrunken bellies of hungry people elsewhere in the world even if we had given it away and had maintained the other 30% of our price we would have be half again as well-off as we are today now in our program also we have the price and City factor to keep from destroying our prices or to keep the supply in balance in livestock it is not the number of livestock that produced too much meat it is what that livestock ways that produces that tonnage in 1955-56 period for example our hog prices dropped from an earlier 2750 price per hundredweight down to 10 and a half and we were told that the reason for it was that we had produced 10 per 6 percent too much pork now had we been operating under the no program under the contracts already signed by processors contracts that go into effect just as soon as enough farmers wake up join our organization so that we can fulfill these contracts we'll be able to use the price incentive in other words we'll be able to place a incentive price on a weight either low enough or high enough to produce the proper amount that's needed for this nation in that year for example if we had been using the NFL program we could have placed an incentive wait on a lighter weight that year the average weight of those Hogs was 235 pounds had we placed an incentive price on 200 pound hogs high enough that a 200-pound hog would have brought more money than a 235 pounds of our farmers would have sold them so actually had that been accomplished it would have brought about of difference of about 17 percent in supply in other words with exactly the same number of hogs we could have created an 11 percent shortage now organized you can do these things unorganized there isn't a thing in the world that you can do about it but I also believe that any organization that ever does this job for the farmers is going to have to use one other tool they're going to have to use the power of the farmers to bargain with now the reason I'm emphasizing this since our August 16th meeting when we had 35,000 nfo members in a meeting in Des Moines collective bargaining has become accepted by the farmers in fact one farm magazine took a poll indicating that 82% of the farmers now believe that collective bargaining is their only solution so as a result other groups have started talking about collective bargaining but are talking more or less in just bargaining and not using a holding action in other words they say they'll just bargain and get contracts that way but my opinion that is about as foolish a notion as any can have that he's going to bargain without using the production or without being able to cut it off let's say for the moment that I am an agent representing such an organization that's going to bargain without a holding action let's say that I'm dealing with you now you're the processor so I come up to you and I say now look mister the farmers are going to have to have better prices for their production and we've arrived at this figure here to give us the price that we need to stay in business now you're either going to pay that price or else or else what or else I'll let you have it at the same price you want to but that you've been paying or whatever you want to pay what else can I do without cutting it off so this is the one basic thing that farmers are going to have to realize in connection with collective bargaining for agriculture that you have to have a means of cutting that production off until you are in that position you have nothing there is no bargaining without using the power that they have just exactly as labor could not get a price increase or could not bargain if they did not use a strike just exactly as the teachers were not able to get their increase for years until last fall they took a strike and when they went into an organized effort it didn't take them two weeks till they had the price increase or the wage increase that they needed so the farmers are just kidding themselves if they think that they're going to keep on doing exactly what they have been doing without making any change and changing the situation as long as you intend to do what you've been doing in the past you've got to expect to keep on getting done to you what's been done to you in the past in other words you've got to figure on taking a good rooking and ever ever lower prices so there is no bargaining without using a holding action the nfo has this method in their setup and this is no different than what every businessman in the United States uses every day to enforce his price there is no merchant in the United States that could operate his business if he let his customers set the price so what we're proposing in nfo is to do just exactly what every merchant every professional man and does every day we set a price on our production a price based on what it costs us to produce we offered that production to every processor in the United States any processor that's willing to pay that price and contract for it he gets it it's that simple now if they refuse to pay us a fair price we can do no different then the merchant is doing if you go into a grocery store you don't like that merchants price you're either going to pay it or failing to do so you don't get those groceries you know it's good in the clothing store in the implement store hardware store anything you want a name they put a price on the product and then you pay it or you don't get the product now this is the program of the NFL to put the farmer in exactly the same position that every other good business and professional man has been in in years but you can't do it as an individual you have to do it as an organized group now we're offering the farmers the opportunity to solve their problem to solve the problem of rural America and in my opinion the problem of the entire economy of this nation it's based on the raw materials of the nation the agricultural products and the minerals serve as the deposit in a checking account you account you cannot keep putting $1.00 in and take out four you have to keep on putting in as much as you take out and the raw materials are the only new wealth that the nation has without them when they're being exploited the entire economy has to go down now we're giving the farmers that opportunity to solve their problem the nfo is the only organization set up for this purpose and this is our only purpose to solve the farm problem we're not going in business of any kind we're not eliminating the processors the handle it is part of our membership agreement that we do not go into business our purpose and only purpose is to organize the farmers into a collective bargaining group to get a full fair price for their production at the same time we're nonpartisan group I think is his evidence buyer convention in Louisville Kentucky vice president Humphrey was a speaker on one evening he's a Democrat the evening preceding that we had the Honorable senator Milton young one of the outstanding farm senators are Republican speaking at our meeting so I don't care whether you're a Democrat or a Republican it makes no difference to me the purpose of our organization is to get a full fair price for our production and do it in a businesslike manner exactly like all other industries and this nation have done it for years now there's no conflict here between our organization and any other farm group processing group co-op or whatever you might have we believe that those other groups or organizations have served a valuable purpose they weren't set up to do what we're doing so I'm not condemning them in any way for not getting our farmers a price this was not the purpose of their original setup their purpose was to give farmers services in other lines they've done that they've done it well but there was a complete vacuum here in rural America there was no way to get a price for the farmers so this is why we built the nfo the collective bargaining organization to do the one job and only one job getting the farmers a full fair price so let me repeat there is no conflict here there can't be any conflict with any other group that wants farmers to have a fair price so we are not urging any farmer to leave his present organization or these do deserve it if you believe that that organization is functioning and giving you the service it was intended for which I think they are then you keep right on being a member of that organization and taking advantage of the services that they give but let me point out that you cannot exist merely on discounts in insurance or buy dividends returned to you from handling and so forth you have to have a price and you have nowhere else to go there is no other organization but the nfo set up to do this purposes are good to perform this function I think the recent decision by the Supreme Court on the Sunkist case as fairly clearly brought this out but it does take an organization of producers and producers only and this is what the nfo is there is no no one can get into our organization unless that he is a producer so we have all along seen to it that we are organized under the legal structure provided for us by the capper-volstead Act this is an act that Congress gave us in 1922 senator capper from Kansas and Walton from Minnesota had the foresight to give the farmers this right to bargain it is the broadest act that farmers could possibly have we hear a lot of talk about that we have to have a Wagner Act the capper-volstead Act is the Wagner Act for agriculture we've been told we have to have a Labor Relations Board in agriculture or an agricultural board to do the bargaining in labor the Labor Relations Board can't do anything without that powerful organization behind it the teachers had access to the Labor Relations Board what good did it do them my daughter is a teacher she suffered under those low wages and terrible conditions and teachers been operating under for years but until they were organized they kept right on taking that low price so this is the only way that the farmers are going to solve their problem is through organization and it must be an organization as ours is an organization of producers only an organization in which the producers themselves make all the final decisions I don't want to ever get into the position again where I have to depend on my price by politics or by government or by the any other group that's going to dictate or direct prices to me I want to be in a position where I as a farmer have the right to establish my own price and my method of getting those prices any time that the farmers hope to let somebody else do it for them they can hope or rather not hope but be assured that it will be done to them not for them this is our past history we have good farm programs when we had 30% of the population out there we had political power then but this is a thing of the past we're down to less than 6% of the voting population anymore and the other 94% believes that it's to their interest to have us producing for nothing and I don't want to get into that position ever again for any other groups that's my price for me we've operated under that long enough this is why we're down where we are but at the same time don't overlook the farm programs that you have we're now in a holding action we're giving the farmers the opportunity to solve the problems so take advantage of these government programs that you have there is no reason why farmers should sell one single bushel of soybeans you have the opportunity to seal them to get the government loan so that you can rest assured that you can hold those beans for 19 months you have already been assured by the Department of Agriculture that you'll be able to put next year's crop under loan you have been assured by the Department of Agriculture that all grains that are sealed right now can be resealed next summer I'm talking about the 1967 crops so there's no reason why any farmer should sell what collective bargaining means farmers working together bargaining together selling together you now have the opportunity to do so and the only reason farmers will be taking lower prices in the future from now on is if there are enough farmers who are willing to take those lower price once the farmers say this is what you're gonna pay that's it it's over with there's no choice but to pay that price it'll be no different than buying an automobile then buying a suit of clothes then buying anything else the producer sets the price and you'll either pay it or you don't get it when the farmer gets guts and backbone enough to stand on his own two feet and run his business like a businessman he can hope to have the same consideration that other businesses have but until then he has to be expect to remain a beggar in the market you have the opportunity the nfo is giving it to you so we urge all farmers to join us to cooperate in this effort because this is an absolute necessity I also urge every businessman in rural America you know what the situation is out there your welfare is at stake here you can't ring up money in your cash register that your customers never received neither can the money that they never get paid you be used to pay off any bills we have to have farm prices and through the action of the NFL we are now able in a position to get a full fair price for the production that we already have to put a profit on last year's production let's do it us farm report has presented vice president of the national farmers organization Earhart fingsten members of the national farmers organization invite you to tune in again next week at this time for more facts on Agriculture and Rural America which is the gear wheel in our economy that produces the majority of our nation's new wealth the farm income pattern sets the nation's prosperity and the national farmers organization represents new thinking in a new generation of farmers