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The fluid-milk business is a dynamic business and is ever-changing. I believe most dairy farmers in Connecticut agree that the Marketing Agreement Act was well written and has stood the test of time with remarkably few amendments.
While we have quarreled occasionally with the decisions of the Dairy Branch and the Secretary of Agriculture about detailed provisions of the New York City and Boston Federal milk orders, in general Connecticut dairy farmers realize that those orders have been of immeasurable help in stabilizing fluid-milk prices in the Northeast, and in helping to maintain a milk price that will produce a living on a family-sized dairy farm operated with reasonable efficiency.
Whatever may be done by the Congress in building a new longrange agriculture program, I am sure the dairy farmers in Connecticut would be nearly unanimous in their desire that the Marketing Agreement Act of 1937 be maintained as an important part of any agricultural stabilization program. I believe history will record that the mlik portion of the marketing agreement and order program has been the best operated of all the Federal Governments efforts to maintain a stable agricultural economy.
It is difficult for dairy farmers in Connecticut to have a real understanding of the problems faced by farmers in the great surplus grain and fiber-producing areas of the Midwest and South. I do not believe anyone can speak, with any certainty of being right, on the question of whether Connecticut dairy farmers would favor a continuation of a program of relatively high rigid price supports under basic commodities, together with drastic acreage curtailment, or would favor bringing about adjustments in production between crops by flexible supports.
do know, however, that Connecticut dairy farmers purchase from the Midwest virtually all of the grain fed to their dairy cows and young stock. As a result, they are almost unanimous in their feeling that they cannot be expected to pay artifically high grain prices which result from relatively high rigid support prices on corn, wheat and other grains, and freight rates which seem to always go up and never come down, without corresponding support prices on butter, cheese, and other basic dairy products which must absorb dairy surpluses, and a continuation of the marketing agreement and order program.
That is the conclusion of my formal statement. I would just like to mention briefly two other programs that are, of course, of very great interest to us. One, the school-lunch program as has been mentioned already this morning, which we consider as doing a very fine job of helping out, and the other, the continuation and even possibly the expansion of the agricultural research program. I think that program has been operated most efficiently. It has amazed me, the ability that the research administration has had, together with the land-grant colleges, to expand research in the agricultural fields as rapidly as they have with as much efficiency as they have.
I believe that concludes my statement. I appreciate the opportunity.
The CHAIRMAN. We thank you very much, Mr. Geyer. Will you stand by, then, for just a few moments so that if the members desire to ask questions a little later you will be available ?
Mr. STORRS. Our principal source of crop-cash income is from tobacco sales $24 million. We also have important production of potatoes, other vegetables, apples, peaches, and other fruits. Mr. William A. Hutton, a tobacco and potato grower from Tolland County, has prepared a statement for your consideration relative to the cropfarmers thinking. Mr. Hutton is vice president of the ConnecticutMassachusetts Tobacco Cooperative Association of about 800 members. He is also secretary-treasurer of the Connecticut Farmers Potato Cooperative which marketed about 20 percent of our 1952 crop.
The CHAIRMAN. Mr. Hutton, we will be glad to hear from you at this time.
STATEMENT OF WILLIAM A. HUTTON, VICE PRESIDENT, CONNECTI
CUT-MASSACHUSETTS TOBACCO COOPERATIVE ASSOCIATION AND SECRETARY-TREASURER, CONNECTICUT FARMERS POTATO COOPERATIVE
Mr. HUTTON. Mr. Chairman and members of the committee, my name is William A. Hutton. In cooperation with my son, I own and operate a 250-acre farm in Somers, Conn. Each year we raise approximately 100 acres of potatoes and '17 acres of Broadleaf tobacco. My son also has a herd of 25 Hereford cattle. Somers is located in the county of Tolland.
Connecticut grows about 10,600 acres of outdoor binder tobacco, Broadleaf and Habana seed, and a commercial potato crop of approximately 8,500 acres. The outdoor tobacco crop in 1950 brought Connecticut farmers over $60 million according to the United States Department of Agriculture estimates. The value of the potato crop is around $4 million annually. Fruit and vegetables bring approximately $8 million more, and shade tobacco, about $15 million.
These figures, plus the $119 million livestock income cited previously, indicate that Connecticut is an important agricultural State and as such, has definite agricultural problems. I would like to discuss specifically the problems of tobacco and potato farmers in Connecticut, for they are the ones with which I am most familiar. May I point out first that tobacco and potatoes, as well as tree fruits and fresh vegetables, are what we might call high-risk crops. Figures from reliable sources indicate that it costs from $600 to $800 an acre to raise Broadleaf and Habana seed tobacco. The production costs on potatoes run around $400 an acre. A high percentage of these costs represent cash outlay in the form of labor, seed, fertilizer, fuel, equipment, and other cash expenses and are recurring expenses.
Tobacco especially has a high labor requirement, and to get this labor, we must compete with industry at wages established by industry. Yet that entire investment can be wiped out in 5 minutes by hail or wind.
Our good neighbors who grow tobacco in Hartford County, which is adjacent to Tolland County, are protected against production losses of this nature by Federal crop insurance. So far we tobacco farmers in Tolland County have been unable to secure Federal crop insurance, although we assume the same production risks and compete in the same markets with our Hartford County neighbors. I believe that the record will show that Federal crop insurance has profited both the Hartford County grower and the Federal Crop Insurance Corporation, and I strongly urge that this insurance be extended to cover all tobacco-growing areas in the Connecticut Valley, including Tolland County in Connecticut.
It seems to me that tobacco and potato farms need a farm program that will first take some of the financial risk out of producing these crops. Second, assure the farmer a fair price for his product. And three, prevent the production and accumulation of unwieldy surpluses.
Federal crop insurance made available to all farmers would help take care of item No. 1 by reducing risks due to the elements, and I might add, diseases and other hazards. However, I would like to point out that the major risk in production is the frequent inability of farmers to obtain a price for their product that will return to them at least the cost of production. This happens far too often, even with the best of management and with the production of a high quality product.
Individually, the farmer has little or no control over supply and demand for his product. He needs help in controlling production, for farmers are not and probably can not be sufficiently well organized to do this job for themselves.
I think we must recognize this. This help could and has come through a Government farm program involving marketing quotas and/or marketing agreements. The question as to whether farmers in this area are willing to accept these controls was adequately answered in the recent tobacco referendum, when producers of binder and filler tobacco voted to accept marketing quotas by a majority of more than 2 to 1. Likewise, commercial potato growers in southern New England voted in 1950 to accept marketing agreements by a similar majority. Farmers recognized the curse of overproduction and are willing to help themselves if given the tools to work with.
My own feeling as a potato and tobacco farmer and as a representative of the organizations that have been mentioned, is that we need a high support level for our crops, and controls rigid enough to keep prodnction in line with consumption. Overproduction is a needless and unwarranted waste of both manpower and natural resources, and must be controlled if we are to have a sound
program of conservation. The tobacco support program has been well received by farmers of the valley, as indicated by the referendum vote last fall. In 1949, 1950, and 1951, several hundred growers of Broadleaf and Habana seed tobacco sold their tobacco through the Connecticut-Massachusetts Tobacco Cooperative, Inc. Incidentally, this cooperative now has a membership of 1,100.
This cooperative was set up specifically for receiving tobacco under the support program. In 1949 particularly the prices paid to the growers of Habana seed tobacco were fought by this co-op and under the support program was far in excess of anything they could obtain on a glutted market, and yet the tobacco taken in by the cooperative in 1949 has nearly all been disposed of to the trade through normal channels at prices that will return the Commodity Credit all they have advanced in the crop.
This program has meant untold thousands of dollars extra to the tobacco farmers of Connecticut and Massachusetts, without cost to the Government, and, as a tobacco farmer, I feel it should be continued.
I think that consideration should be given to ways and means of supporting potatoes and other perishables without encouraging the production of unwieldy surpluses. It seems to me that the McIntire bill should be adopted as an emergency measure so that some surplus removal will be possible pending the development of an adequate potato program and an adequate program for perishables. Past experience has shown that the market price on supported commodities tends to settle at or below the support level.
If this statement is true, and the evidence supports it, then any support price set at a figure below 90 percent of parity is bound to work against rather than for farmers.
Whether we like it or not, the income tax laws have put every farmer in the country in partnership with the Government. "If a farmer has a good year, he can no longer put aside his extra income to tide him over the lean years that are bound to come. His partner, in this case the Government, says to him: "A high percentage of your extra income this year is my share of your prosperity.” We as farmers recognize the need for taxes, but they add one more element of risk to farming and point up the need for a sound agricultural program that will minimize production risks.
In closing, may I point out that we as farmers are interested primarily in maintaining and creating a healthy demand for our products. In securing a price for those products that will reflect the cost of production, plus an opportunity to make a profit that will enable us to enjoy a decent living and a chance to provide for and to properly educate our children, we need a farm program that will help protect the equity that farm families have in their
farms and which will make farming a progressive and challenging vocation that will attract people of intelligence and ability, for, in the final analysis, the conservation of our great natural agricultural resources are going to depend on the type of persons that farm our farms.
The CHAIRMAN. Thank you very much, Mr. Hutton. Do you have
Mr. Storrs. That completes the list that I have arranged to make the statement on behalf of the commissioner, sir. I believe perhaps some other Connecticut men would like to testify later.
The CHAIRMAN. This completes your group, then?
The CHAIRMAN. All right. Your idea was that we would question this group as a group, as I understood it, and maybe toss the questions to you and you can pass them on to whomever you think should answer them.
Mr. STORRS. I will certainly pass them on; yes.
The CHAIRMAN. I do want to make this statement to Mr. Hutton, that I think the crop-insurance bill which the Congress passed in the closing days should make it possible for you to get crop insurance for your tobacco. As I understand the previous situation, whereby the number of counties in which crop insurance would be available, the experimental program we have now has been limited by commodities, and the tobacco counties were practically all used up, as I understand.
Now we have extended the program so that an additional 100 counties may be added each year, and the commodities which will be covered are not specified. That gives an opportunity then for some new tobacco counties to come in. So I would suggest that you get in touch with the Crop Insurance Corporation or with your State PMA committee, with a view of getting some of that insurance placed in Connecticut.
Mr. HUTTON. We will certainly go to work on it.
I might say also to you that the committee in the closing days of the session reported the McIntire bill. It is on the calendar of the House at this time. However, we have not decided what further steps will be taken because we were hoping that the potato industry will come a little nearer to getting together on this legislation before we do anything further with it.
Are there any questions? Mr. Andresen has a question.
Mr. ANDRESEN. I am not sure which is the leading agricultural enterprise in Connecticut. I believe you stated the biggest income came from livestock products, and I think the gentleman representing poultry said that was the No. 1 industry. I want to know just what place the dairy industry takes in your agricultural economy.
Mr. STORRS. On the basis of the published cash farm-income figures, poultry is first, dairy is second, and the two combined are substantially greater than the income from crops.
Mr. ANDRESEN. What percentage of your milk goes into manufactured products, say during the last 10 months ?
Mr. STORRS. I would like Mr. Geyer to take this dairy question. Mr. GEYER. The last 10 months? Let's say the last 12 months and that will give us a year about 15 percent.
Mr. ANRESEN. And that goes into butter and cheese?
Mr. GEYER. We don't make any butter. We make some fresh, perishable baker's cheese, but there is no butter made in the State.
Mr. ANDRESEN. What is your present grade A milk, class 1 milk, return?
Mr. GEYER. The class 1 price for 3.7 percent butterfat delivered at the market at this particular time is $6.48 per hundredweight.
Mr. ANDRESEN. We get about $3.15 for the same milk. I know you claim yours is better milk than we produce.
Mr. GEYER. It is a little better. Mr. ANDRESEN. What is the blend price? Mr. GEYER. Since this new price went into effect, seasonally the 1st of July, our blend will probably be slightly under $6—$5.80, or $5.85. It was very much lower than that in May and June because of the seasonal prices. I think our blend for June was about $4.80.
Mr. ANDRESEN. What is the average retail price for the milk?
Mr. ANDRESEN. Do you think you could increase the consumption of milk if the price to the retailers would be lowered ?
Mr. GEYER. You mean the price to the consumer?
Mr. GEYER. It wouldn't do any good to lower it to the retailers because they probably wouldn't lower it to the consumer anyway, but if you could lower it to the consumer and get some of the featherbedding out of the costs of getting it from the farm to the consumer, certainly a substantially lower price would sell more milk. Right now our consumer incomes are very high, and we are having no complaints from consumers, virtually no complaints on consumers' prices.
Mr. ANDRESEN. Your producers are now receiving between 12 and