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STATEMENT OF CLIFFORD BELDEN, TOBACCO GROWER,
Mr. BELDEN. Mr. Chairman and gentlemen of the committee, I am Clifford L. Belden of Hatfield. I grow, with my sons, tobacco, potatoes, corn, and cucumbers. I am also president and manager of the Connecticut-Massachusetts Tobacco Cooperative, the local organization that handles tobacco for Commodity Credit Corporation under the tobacco-loan program.
It is my purpose to present to you a few of the production and marketing problems peculiar to our types of tobacco and which show the extent to which we have used the tobacco-loan program.
In this Connecticut Valley there are approximately 3,000 growers of tobacco. The average grown per farm is about 7 in Connecticut and about 4 in Massachusetts. The crop requires a tremendous amount of hand labor and an expenditure of $150 to $200 per acre for fertilizer, and an investment of $1,000 or more per acre in curing sheds. To mention the more important factors in the cost of producing the crop, since our types are used in the manufacture of cigars, we anxiously watch every cloud formation from mid-June until the crop is in the curing sheds. A hailstorm of but a few moments' duration can make our crop worthless as cigar binders, and if as cigar binders it is worthless, no grower can afford to harvest it for scrap purposes.
When the crop is placed in the barn, the grower is still confronted with the elements. Adverse weather conditions can and often do reduce the value by as much as 75 percent or more in extreme cases. After producing, harvesting, curing, and bundling, the crop is ready for market. Previous to the time the provisions of the tobacco-loan program were made available, the grower literally had to wait for a buyer to come and inspect or buy or offer to buy his crop. Of course, there have been exceptions to this, especially during the war years.
In many cases if the grower failed to sell on the first offer, he was later forced to sell at a lower price if he chose to market his crop. In 1949 a group of tobacco growers from Connecticut and Massachusetts anticipating a long supply of cigar leaf binder, proposed seeking aid under the tobacco-loan program. A cooperative was formed to handle our types of tobacco under the provisions of this program.
The primary purpose of this organization was to enable our growers to take advantage of price support for their 1949 crop of tobacco. Tentative grades were established by the Standards and Technical Research Division, Tobacco Branch, Production Marketing Administration, under authority of the Tobacco Inspection Act.
Tobacco graders were furnished by the Marketing Services Division. The cooperative is operated and manned by growers familiar with all the aspects of handling of this highly specialized crop. During the winter months tobacco is scheduled for delivery to the receiving station where it is weighed, graded from samples, and a loan granted to the grower on the basis of grade and quality, loan rates having previously been established by Commodity Credit Corporation to reflect the average loan rate established for the particular crop and type.
As the receipts of bundled tobacco accumulate, the cooperative offers the various grades for sale at a market sufficient to cover all costs, including that of the United States Inspection Service. Tobacco not sold is transferred to packing warehouses under contract with the cooperative, where it is sorted, sized, packed in cases, and sweateda fermentation process requiring a certain degree of heat and humidity for 5 to 6 weeks. Following this sweating period, the cased tobacco is transferred to our warehouses in Holyoke. There the cased tobacco is then offered for sale on a market basis similar to that of the bundled tobacco to amply cover all costs involved.
Carrying charges are added each month to the effective price to cover the cost of storage, rent, and so forth. Since we organized in 1950, we have not dumped a single pound of tobacco. I have attempted to outline briefly our methods of operation. I will try to be as brief in submitting figures showing our receipts, inventories, and so forth.
In 1949 we took in 314 million pounds, at an average rate of 30 cents a pound; 90 percent of that crop is sold; in 1950, 3.8 million pounds, at an average rate of 39 cents; 86 percent of that crop is sold.
Of the 1951 crop, a little better than 413 million pounds, at an average rate of 42 cents, 55 percent of that crop is sold.
In the 3 years of operation we have received nearly 111,2 million pounds from growers who generally were unable to sell their crop in the open market at satisfactory prices. In some cases our loan rates were not to their liking, but when the United States graders explained why certain crops didn't bring higher prices, complaints were the exception and not the rule.
When the entire receipts of tobacco for a particular crop year have been disposed of, participating grower members are entitled to their pro rata share of any profits made on that particular crop. Present indications lead us to believe that participants in the 1949 and 1950 programs will receive dividends that these crops have or will move into the normal channels of trade at prices sufficient to more than cover all costs, including interest on our loans from Commodity Credit.
The grower has had the advantage of price support and as a member of the cooperative he has exercised some control over its affairs. It is my understanding that the purpose of this hearing is to get the thinking of the farmers insofar as the tobacco loan program is concerned. We are well satisfied with its provisions. Any changes desired would be of a finer nature and probably administrative rather than legislative.
In our opinion, the program should be continued as is. The personnel in the Tobacco Branch of PMA deserve a great deal of credit for the manner in which they conduct their work. The many years of experience in ours and in the other types of tobacco have been very beneficial for this program and to our growers.
To maintain a loan program of price-support program without markting quotas would be disastrous to tobacco growers. Without marketing quotas we conceivably could overproduce. To the extent that there would be huge quantities of our type of cigar leaf in the stockpile, we as growers do not want this. We are well aware of the threat to our market when stocks are allowed to accumulate beyond the 3-year supply. And that, by the way, is about normal in tobacco.
As evidence of our growers' belief in marketing quotas, I submit the Massachusetts and Connecticut voting records of the last cigar-leaf referendum-you have those figures Connecticut, by 68 percent, and Massachusetts by 89 percent. That means in favor of quotas,
If any changes were to be made in marketing quota legislation I would recommend that serious consideration be given to separating the filler group from the binder group, especially for referendum purposes. The two groups are not competing, whereas the types which each group are producing are competing.
I want to publicly express my own annual growers' sincere apprecia'tion for the work and efforts made by the Tobacco Branch in connection with our tobacco programs to make them the success they most certainly are. We especially want to commend them for the efforts they have made to secure for us a fair share of the foreign trade in tobacco. We also hope the practice of holding PMA conferences periodically with representatives from every segment of the tobacco industry will be continued.
In summary, we think the present price-support and marketingquota programs for tobacco are accomplishing just what was intended to provide growers with the most stable market where supplies are more nearly in line with demand and the resultant prices fairer to growers, manufacturers, and consumers.
I would like to thank Commissioner Broderick and the members of this committee for the privilege of appearing before you in behalf of the tobacco growers of this valley.
The next witness will be Mr. Russell Sturtevant, of Massachusetts. STATEMENT OF RUSSELL STURTEVANT, PRESIDENT, FEDERATION
OF POULTRY ASSOCIATIONS OF MASSACHUSETTS
Mr. STURTEVANT. The armchair pessimist would have it that democracy is nearly dead in the United States, but the fact that a farmer such as I has the privilege of appearing before a committee like this would seem to prove that it is very much alive.
As president of the Federation of Poultry Associations of Massachusetts, director to the Northeastern Poultry Producers Council, a director of the Brockton Poultry Producers Cooperative, and as a poultry breeder and hatchery man, I would like to present the attitude of the majority of the poultrymen of Massachusetts toward certain issues being considered by the present administration.
The economic welfare of the poultry and egg industry probably affects more farmers over a wider area today than any other crop. The gross income of the poultry industry is third highest in the United States, first in New England, and first in Massachusetts. This income has been accomplished largely without the aid of a Government-support program or similar Government activity.
Farm products, by and large, are now in a period of falling prices. Farmers are increasingly caught in a squeeze between high costs and falling incomes. Therefore, there is economic as well as political justification for some definite farm aid in these times, for we live in a pressure-group society wherein nonfarm groups are getting subsidies, tax easements, handouts, easy loans of public money, minimum wages, pensions, and a host of special dispensations. | High, fixed supports would inevitably saddle the country with unmanageable surpluses and the farmers with rigid Government control. Politically, they will be opposed by 130 million consumers.' On the other hand, no aid at all does not fit the conditions of the times. Therefore, we wish to be on record that we are opposed to price supports, subsidy payments, and production controls for agriculture, and in particular, for the poultry industry.
In the event that freedom from these controls and subsidies is not possible under Government policy, then we strongly support a program that any price support or subsidy program applied to the poultry industry should be flexible enough to permit prompt adjustment to meet competitive and changing economic situations, and low enough to act only as an insurance against economic disaster within the industry.
It would seem that present methods of determining market quotations are inadequate to accurately report the actual prices at which poultry products are sold. More efficient methods of distribution could be made available to the poultry industry, increasing the income of the poultry producer, and decreasing the cost to the consumer. Therefore, we feel that market-research funds should be used for these purposes rather than attempting to develop stopgap measures to take care of some temporary difficulty.
The 1951 Internal Revenue Act provides that livestock held by the taxpayer for 12 months, used for breeding, draft, or dairy purposes, may be considered as capital, and gains or losses therefrom treated as capital gains or losses. Turkey and poultry flocks are excluded from treatment as capital gains, and yet they are subject to the same financial stress as breeders of other livestock.
We feel that the poultryman should be accorded the same treatment taxwise for breeding stock for turkeys, chickens, ducks, and other poultry as is accorded livestock used for breeding, draft, or dairy purposes under the Internal Revenue Act of 1951.
Agriculture in the New England States is definitely a deficit feedgrain area, and the livestock industry is dependent almost 100 percent on outside sources for its feed supplies. The New England dairy and poultry farmers have already felt the burden of Government regulations granting high support prices for western grain that they are required to purchase. The New England farmer is forced to bid against the high price-support grants to western grain growers for his supplies to feed his livestock. Any regulation of the Government that would by decree further increase the cost of any of the feed grains would further aggravate the agricultural problem of this area.
The Canadian oat crop supplies the principal source of oats fed to the livestock of the New England States. Feeders of livestock in this region have historically bought oats from Canada for the feed requirements of their livestock. It is currently estimated that this region uses about 15,000,000 bushels annually of Canadian oats. This supply is not only convenient to transportation to this area, but in addition, the high quality of oats from Canadian sources is in strong demand by Massachusetts poultrymen.
It should be pointed out further that the adoption of any restrictive trade measures, especially with our neighboring Government of Canada, would not be in the interest of the national welfare of the United States. As has been pointed out, our national economy needs to develop an interchange of trade and commerce between neighboring nations, just as we in the United States have learned the need of unrestricted trade and commerce among our own States.
Mr. DAGUE. Thank you, Mr. Sturtevant. The next person appearing will be Mr. Arthur Hodges. STATEMENT OF ARTHUR HODGES, MASSACHUSETTS DAIRYMAN
Mr. HODGES. Mr. Chairman and gentlemen, my name is Arthur Hodges. I am an independent dairyman and operate farms in the northern end of Massachusetts and also southern Vermont. Anything that I may have to say would be a direct duplication of what Mr. Goldbeck and Mr. Evans had to say. Therefore since your time is limited, I am going to say very little.
I am thoroughly acquainted with 50 or 60 other veterans who went through the training program the same as I did and were operating farms and were doing pretty well at it. I think, though, on the whole, and what I can find out from them, if you continue ACP practices such as lime, fertilizer, and technical assistance, we are going a long way on this. I want to assure the gentleman from Texas that there is
Time fertilizer lying around my area. Mr. DAGUE. Thank you, Mr. Hodges. The next witness will be Mr. Glenn Shaw. Is Mr. Shaw present? Then the next witness will be Mr. McKinney.
STATEMENT OF C. H. MCKINNEY, MASSACHUSETTS DAIRYMAN
Mr. McKINNEY. Mr. Chairman and gentlemen of the committee, my name is C. H. McKinney, a dairy farmer of Huntington, Mass., a working dairy farmer. I have been honored by election as president and director of the State and other cooperative organizations in the State. I have been meeting with many dairy leaders and therefore feel that I know something about their attitude about these affairs.
The feeling among leading farmers of this area is that high price supports are definitely a damage to farmers of this area, as well as to the country as a whole. The dairy and poultry farmers of New England are heavy purchasers of grain held at a high level by too high price supports, while competition keeps farm income at a relatively low level.
The law of supply and demand should gradually be reinstated, with supports available—not to keep every inefficient farmer operating, but to prevent disaster and on a temporary basis, for the efficient commercial farmer. Any other position will sooner or later cause a general collapse of our whole economy.
The farm economy is sick. If it weren't sick, we wouldn't be going to Congress for help. What kind of help have we received? It seems to me that it is like a sick man who has appendicitis. He goes to his doctor and the doctor says “We have got to cut your belly open and take our your appendix.” “Well,” he says, “that is going to hurt." "Yes ," the doctor says. “And it is going to cost me some money.” “Yes,” the doctor says. Then the fellow says, “Isn't there something you can do that will stop this pain ?”
“Yes," the doctor says, “I will give you some morphine and you won't feel the pain and you won't have to spend money." High price