Comment

Comment by truth on April 10, 2009 at 11:49pm

public informed of both
the level of prices and the consequences of
forced adjustments so that society can deter-
mine within its sets of values whether it is
willing to incur the costs of these adjust-
ments. ''■■';_ ■" '
■■ Role of the public sector -.-..:
The agricultural industry should" operate
with a minimum of direct Involvement by
the public sector. Ideally, the public sectors
role should be limited to the establishment
and enforcement of rules which will allow
the industry to maximize its contribution to
the national welfare. Such rules might in-
clude restrictions on the use of certain pro-
duction practices or inputs, or restrictions on
the use of land for purposes other than
agriculture, or for purposes excluding^ agri-
culture Once established, "■ the industry
through free market forces, would have^ to
make the necessary adjustments. The public
sector-might provide assistance to alleviate
the burden of such adjustments; but such
assistance should be of limited duration,•-__
In general, the rules established for tne
agricultural industry or any other industry
should be limited to those which result m
more efficient use of natural and human re-
sources. The private sector will utilize re-
sources efficiently only to the extent that the
price structure reflects the true costs of these
resources. We should not expect t»e private
sector to cease dumping wastes in*° «f ijf:
tlon's rivers and.lakes if it is ^.B*$*£***
from doing so and-does not.have, to.bear..the
Page 5
Page 6
ime 21, 1972
CONGRESSIONAL RECORD—HOUSE
21739
cer bushel of projected yield" rather than
i restrictions on total payments. Kestric-
ons of total payments encourage inefficient
irm organization.
2 Over the same S-year period, non-re-
ourse loan rates would be reduced to a "dis-
=ter price" level for feed grain crops and
/heat and to eero for all other crops. The
isaster price level would be one that is
ufficiently low that it rarely sets the price
ithoueh it may have & seasonal effect on
rice in many years. Bather than taking
!ver a large volume of stocks in the event of
. -vear encountered in which the market price
rotad have remained below the loan level for
irons a reseal program extending if necessary
iver a few years should be instituted so that
•tocks remain in producers' hands rather
■nan in GCO inventory. If reseal stocks start
:o rise the disaster price should be lowered,
-Snce this would indicate that'the loan price
ias apparently become higher than the
»auUibrium price.
3 purchase programs such as the one tor
flau'v products should be phased out over a
few years. Price stability appears to be the
orhicipai justification of the program and
saülc marketing orders appear to be potent
enough to give this stability. ,.„,,.
i All commodities presently supported due
to a critical "national defense" requirement
should be reviewed to see if they are really
critical. Tung oil and gum naval stores surely
are not critical to national defense, Due to
the development of artificial sweeteners,
domestic production of sugar seems no longer
critical to national defense. Neither is do-
mestic production of wool, due to the devel-
opment of synthetics.
It is often argued that a progressive lower-
ing of direct payments and loan rates is no
better than letting the blow fall in a single
year If producers could foretell the adjust-
ment which will be made, this might be the
case. Land values would drop exactly to the
levels reflected by their value in an "adjusted
agriculture." We cannot, of course, anticipate
many of the adjustments even from a na-
tional vantagepoint. Certainly we cannot ex-
pect individual producers to predict ac-
curately the many institutional changes
which will affect them.
Drastic shifts in agricultural enterprises
may be expected from the above recommen-
dations, but adjustments to alternative agri-
cultural enterprises take time. It. is for this
reason that the committee proposes a grad-
ual phase-out of present programs over a
5-year period. For example, should the rais-
ing of -beef cow-calf herds become more
profitable than cotton then it will take time
to make this adjustment. Beef cow herds
can only be economically built up over time.
A crash buildup could lead to disaster for an
individual producer lacking managerial
skill's in beef cattle production. Too rapid
a buildup would also mean chaos for present
beef producers as it would cause precipitous
changes in livestock prices.
Too rapid a switch between crops also
causes managerial difficulties for producers
as can be witnessed by talking to producers
who are growing soybeans or grain sorghum
or many of the speciality crops for the first
time.
Even if price support adjustments are
phased over a S-year period, land prices will
probably drop more than is warranted due
to uncertainty as to the effect of the chang-
ing levels of support. But at least progres-
sive decreases in support levels win give
more time for the future to be known and
should result in land prices not dropping to
as low a level as they otherwise would.
The question of how to handle the reduc-
tion in land values resulting from elimina-
tion of present farm programs was debated
at length by the Committee. Fairness would
dictate a policy of reimbursing'those Who
purchased land at prices including the cap-
italized value of farm program benefits, but
such a policy would be impossible to ad-
minister. The question then becomes one of
whether the inequities of eliminating the
capital value of program benefits for those
who paid for them is greater or lesser than
the inequities of reimbursing all landowners,
including those who neither earned nor paid
for the benefits. The Committee felt that the
inequities of the latter were greater and,
therefore, concluded that land owners should
not be reimbursed for their losses.
The Committee would not, however, want
to see this issue stand in the way of elimi-
nation of present farm programs. Should
political realities dictate that payment in
total or in part be required, such payment
should be made. The long-term benefit to the
Nation would justify such a compromise.
Other Pkogkams Affecting Fabmeks ahd
Fakm Income,
The Department administers many pro-
grams other than price support and direct
payments which have an impact on the farm
sector and individual participants in this
sector. These include credit, crop insurance,
market information, domestic and foreign
market promotion, and market research and
dissemination. The nature and scope oí this
report prohibits a full and detailed analysis
of these programs. What follows are the
Committee's views on the general direction
that should be taken by these programs and
an identification of issues that should be ex-
plored in greater depth.
Farm Credit
The credit needs of agriculture are great
and will likely increase in the future. Con-
sistent with the objective to assure adequate
supplies of food and fiber, the Nation must
see that the credit needs of the farm sector
are met. But the farm sector, to operate
effectively within a free market environment,
must not be given a competitive advantage
in the capital markets. Discrimination in
favor of agricultural borrowers would raise
the possibility of over-investment in the
farm sector.
There is some evidence to support the
argument that our supply management prob-
lems are, in part, due to excess availability
of capital in the farm sector brought about
by discrimination in favor of agriculture in
the national allocation of money.« Clearly,
to avoid excessive availability of capi-
tal in agriculture over the long-run,
the farm sector should compete for funds
in the capital markets along with other in-
dustrial sectors. If farmers, in the aggregate,
are receiving equitable returns to resources,
sufficient capital, barring any imperfections
in the capital markets, shouid.be available,
private lenders,' along with .the Farm Credit
System, should be capable of providing the
credit nee'dsVof agriculture. The Farm Credit
System'should continue to. compete for funds
in the money market; their bonds should re-
main uninsured by the Federal government
and their loans free of any interest subsidy
to the borrowers. It will, of course, be neces-
sary for the Department to monitor the
credit system to see that imperfections in
the money markets do not impair the pro-
duction of adequate supplies of food and
fiber. , . .
The large amount of capital required to
develop an economically viable farming
operation does serve as a formidable barrier
to entry. For this reason, there are those who
argue that subsidized credit should be made
available to those wanting to enter the farm-
ing industry. If farming is to be treated as
an intìustry rather than as a way of life, this
position cannot be easily supported. A basic
justification for subsidized loans to new
entrants, regardless, of the industry, is to
maintain competition and allow for technical
innovation. But in agriculture there are
a "Agricultural Finance Review," Economic
Research Service, U.S. Department of Agri-
culture, August 1971.
presently too many firms to provide adequate
income for all participants, and technical
innovation in agriculture has not been, nor
will it be in the foreseeable future, dependent
on new entrants who require subsidized
credit. Por these reasons, the Committee rec-
ommends elimination of the FHA Farm
Ownership Loan and Farm- Operating Loan
programs, ' . ' " :
The FHA Emergency Loan Program needs to
be continued/Private sources of capital are
not likely to be adequate to cover the credit
needs of farmers affected by natural dis-
aster nor are farmers generally prepared to
meet the full cost of financing such loans.
The Committee would, however, prefer to
see increased use of insurance by farmers
to cover such losses. In this way, the full
cost of risk would be borne by the market
system. The Committee feels that the sub-
sidized sou and water loans, to individuals
and associations and loans to grazing asso-
ciations need to be fully reviewed. There
may exist a need for such loans, but it is
unlikely they can be supported on grounds
of aiding commercial agriculture or, as they
are aligned in the Department's program
structure, supporting farm Income.
Domestic and Foreign Market Promotion
Domestic Market Promotion: The Commits
tee ieeis that expenditure of public funds for
domestic promotion of agricultural products,
or for the administration of funds collected
from producer groups for this purpose, is
highly undesirable. At- any given income,
consumers will not likely increase their ex-
penditures for food as a result of. market
promotion. Trade-offs between commodities
might occur, but this is merely benefiting
one group of farmers at the expense of an-
other with little or nò net social benefit. Ex-
penditures for such purposes and with such
known benefits can be justified by com-
modity groups whereas such expenditures by
the public sector cannot. The same holds
true for non-food items of agricultural ori-
gin Here the trade-off Is primarily with prod-
ucts of nonagricultural origin, but the argu-
ment against expenditure of public funds
for promotion remains valid as no, or little,
net sociai benefit is gained.
The exception to this line of reasoning
would be promotional and educational activi-
ties aimed at improving human nutrition.
The objective of such a program would have
nothing to do with improving farm income,
but rather, would be directed at improving
the diet of the target group. The Extension
Service's Food and Nutrition Education Pro-
gram is an example of this type of. program.
The expenditure of public funds for this pur-
pose can be fully justified; in fact,, increased
eifoft needs to be aimed towards improving;
human nutrition and our knowledge of hu-
man nutrition needs.. .::.-.. ': ■
"The emphasis, domestically, is to produce
adequate supplies of food and fiber and not
to provide adequate demand for the output
of agriculture. This being the case, public
funds should not be expended on programs
whose sole aim is to increase consumption of
a particular commodity.
Foreign Market Promotion: National eco-
nomic strength is dependent, in part, on
avoidance of trade deficits over extended pe-
riods of time. One clear way to minimize
trade deficits is to establish import restric-
tions But, the Committee feels that the
united States and other countries should
strive to relax artificial trade barriers. It
would be unrealistic to assume or to-propose-
complete free trade in the near future—the
impact on the world economy would be
severe. But, steps In this direction need to
he taken. Some degree of control will likely
be needed with .respect ' to agriculture to
avoid dumping, by the United States or other
countries, of large- amounts of surplus com-,
modities In any given year-. Severe- changes
in the amount of agricultural commodities
moving into world trade would exacerbate
Page 7
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June 21> 1972
CONGRESSIONAL RECORD—HOUSE
21741
mutton. H there Had been only 600,000
institution. oî the average iarm
ieXtZ have been about $90,000. This is well
WÄ toe range of a one- or two-man opera-
?Är most Igrieultural enterprises.
^Srtwïto not feel it necessary to P**f"b*
B ,ïmber ana sise distribution of farms
^tdÄ ancient agricultural system
ne+*7 future, individual farm size will be
** ^ Smtoed fey now well each, unit
íargely deterrai*^ * and marketlng
oaíf nties to IS to all other unite. Un-
aot^« efficiency criteria, a productton-dis-
der »a eBoien^ t, ¿compass farms of
WT™"siÄS numbers, olir major con-
1« is noTwnether agricultureis egg***
ceî" » _mall farina or few large farms, oi
rfmT^mbCt£Hf number Ind size of
s0^ rS it is focused on how eonimer-
f¿ agS«re in the aggregate can best
oial agni, d ^ oî tne Nation
S rf«Ä awarding its own partici-
P^Snoval of the government from supply
mSÄ aÄles will HMiy accelerate
f^Stion in the agricultural industry. But
^îSaîon should not be confused with
m Ä takeover of farming operations
ÄÄ» are that farming; will
? „!rt nf a hlshlv integrated productlon-
™AÌng system we do not feel that large
«*ïï corporations pose a major threat,
ofÄaya dominant role, in tomorrow's
toSt ÄÄW for production at
th^m level to be geared more closely to
fnll Set demands. It is to ««
SSod prices, It is also to the advan-
ce of the consumer. Producers niust In-
tenti» their search for ways of becoming a
S naît of the total process by which con-
sume? demands for food and fiber are met_
Eric Thor Identifies four types of todustry
organiÄ that seem to be developing to
meieySmer?oerͿnized into bargaining asso-
ciatiS negotiate price and terms of con-
tract with processor and pacto ^
2 Larira investor-owned, food-converting
eorporSfons integrated from the ultimate
nn^iimpr back into farming.
CTS integrated multiple-product farm-
«4ÄU between farmer coopera-
ti vés and investor-owned corporations.
tS'Äi in which agriculture s head-
ed and its implication to the nation's farm-
era should be obvious, in order to play a
liable role in the future, today's Producer
muä ahgn his pro«t^ the
distribution system, more closely with tne
rpaulrements and demands of the anal con
uÄhe possible structural arr^g^en
mentioned bv Thor are potential vemcies
Sgh which this meshing process might
oecÄ doubt others «^»«^
The Committee ^dorses public pohciesde
signed to assist ae^ou}to* ^c°^\Xr
marfcet-oriented. The alternati ve is»**£«
cost industry-one which retains toefficient
production patterns and inefficient P^ucers
dependent on income teansiers*r°fJhlo^!
of society. There is, of course, need %o moni-
tor these developments to assure maintenance
of a highly competitive industry. .
These trends-reduction m í^^strv
and increasing coordination among industry
sectors-are consistent with the basicpolicy
framework of the Committee It is impor
tant to note that these ^«nds/^ taktog
place today. Existing P°Hy** &$£*£
with their annual cost of $4-5 »J;
American taxpayers, are leading us to the
same direction as the much less costly policy
a "Increasing Understanding oí Public
Problems and Policies" Farm Foundation,
1971.
CXVIII 1870—Pant 17
and programs proposed by the Committee.
Agíarfan íundímentalists shudder at the
thought of fewer farms or the loss of in-
dependence of our American farmers as a
result of integration such as has occurred
in.the broiler industry, To a large extent it
has been the agrarian fundamentalists who
have created aid perpetuated our present
policy and programs. But that which they
want to protect or preserve is not being pro-
tected or preserved with present programs.
While evidence can be brought to bear in
support of either position-an efficient agrl-
ouiuu-e with resulting bigness, ^gration
etc., vs. preservation of traditional agrarian
values with small independent ís;raíS,^¡
îarmers-the Committee's set of values leads
it to place greater emphasis on an efficient
agricultural industry. We feel the ^o^ural
industry can provide adequate supplies of
food and fiber at reasonable pnoes and
equitable returns to resources, including
Äy labor, with a minimum of government
fÜÍtTae SSSST—ttf that society which
is OS percent urban will be directed by urban
Priorities and these priorities will call for an
agriculture which provides adequate sup-
S of food and fleer at reasonable prices
It would seem unlikely that they would be
vriiung to pay the cost, either in the form of
toes or higher food prices, that wouldresult
from efforts to maintain large numbers of
totally independent fanners^ffltìent agri-
culture may, however, conflict with urban
desires to improve the quality of the environ-
ment. Action taken in recent years indicates
that society is willing to make some sacrifice
In efficiency to gain environmental bene-
fits. The Committee recognizes the need to
improve the quality of the environment But
toe conseq.uences oí actions to accomplish
íto end, both beneats and costs, must be
fully explored and made an integral part of
the decision-making process.
IMPROVING TBS LEVE!, OP LIVING IS
EUR«. AMS8ÏCA
The Committee's recommendations remove
from agricultural policy the welfare consid-
erations of small farmers andJ****™*
residents. Present farm programs have at-
tempted to combine the objective of main-
Sng a healthy agricultural industry and
the objective of improving the welfareof
small farmers. Our attempt to accomplish
lotíTobjetives by a single approach has been
^efficient in meeting the former and inef-
Äe in mee«ng thl latter • ™*f **£
agricultural policy consideration oí the small
fura and other rural residents does not im-
ply removal of their problems from consid-
eration by the public sector. But as pointed
ouTeTrlïer in the report, agriculture cannot
be looked upon to provide employment oppor-
tunities sufficient to maintain the present
rural copulation. If rural towns and com-
mumÄe to survive, and hopefully grow,
more off-farm employment must be lound.
The purpose of tbto section of the report is
to present the Committee's views on what
must be done to revitalize our rural com-
Sunlties, to tackle present rural problems,
md to adjust to present trends that may be
accelerated U our other recommendations are
adopted.
Bural America today—and lieyom,
The plight oí our rural people has been
well documented. In recent years, many task
forces and commissions have been estabided
to study and develop remedies ^ alleviate the
Problems of rural America. While descrip-
tions of the problem and recommended rem-
edies are in ample supply, direct action taken
to implement the recommendations has been
limited. A recent report of the Senate Com-
mittee on Agriculture and Forestry noted
that while much has been done for rural peo-
ple there are also wftMftt!
closed.0 The report Stated that often.tne
Federal response to the recommendations of
the rural poverty report was a series of puoi.
programs, which, when they proved their
merit, were discontinued. These projects were
often begun with great fanfare, indicating to
rural people that the government was going
to get something done, and then the fanfare
withered away into crushing disappotnt-
mThè basic problem in rural areas Is re-
flected in the history oí relative rural pop-
ulation decline. In the past & decades, while
total Ü.S. population has increased from 106
million to 203 million, the rural population
has remained steady at Just »bout 60 mil-
lion i» The iarm sector of the rural popula-
tion however, has declined from 32 million in
1920 (three-fourths of the total rural popu-
lation) to fewer than 10 million (one-fifth of
total rural population). Although the rate of
movement of people away from farms has
remained high, the number of people In-
volved has dwindled, as the size of the iarm
population has declined.
While the farm population continues to
decline, there is evidence of a net increase of
people moving into rural areas. From 1960-
70 the rural counties of the country grew in
population by 9.7 percent, while the urban
counties were gaining by 16.6 percent. How-
ever if the farm population, with its pro-
nounced downward trend, is subtracted from
the total rural population, one finds that the
nonfarm rural population (which comprised
the great majority of all rural people) rose
bv 19 percent in the 196Q's. Thus, the heavy
decline of farm population has tended to
mask the rapid growth oí the nonfarm seg-
ment oí the rural and small city population,
to the 1960's, about 200 nonmetropolitan
towns of 10,000 to 50,000 population grew by
15 percent or more; that is, at a rate above
the national average of 13 percent, thus Im-
plying net immigration.
Although per capita income in rural areas
has been rising at a faster rate than in urban
areas for the past 40 years, the percentage
sain has not been fast enough to narrow
the gap between rural and urban incomes.
In fact, the dollar gap has widened over the
years. Rural personal income, which increased
at an average of 7.4 percent per year com-
pared with 5.9 percent in urban areas, would
have had to grow at the rate of 8.5 percent
per year for this 40-year period to have closed
togspÍte oí improvement in rural income
in the 1960's, there remains a disproportion-
ate extent of poverty among families out-
side urban areas. The rural areas, account-
ins for about a quarter of the population,
have 49 percent of the Nation's poverty and
59 percent of the substandard housing.
The present rural welfare situation is wor-
risome just on the basis that an important
segment of our society is locked into a life
devoid of the opportunities generally avail-
able to our nation as a whole. But it de-
serves concern for other reasons. This Nation
needs to look increasingly to the rural sector
to house and employ our still-growing popu-
lation if we are to avoid further concentra-
tion of people in urban areas. In this regard,
the Committee is impressed with and en-
dorses the related recommendations of the
President's Task Force on Eural Develop-
ment and the National Goals Research Staff.
o "Effectiveness oí Implementation of the
Recommendations of the Presidential Cora-
mission on Rural Poverty," 92nd Congress,
First Session, November 30* 1971.
m Data presented to this section oî the re-
port were obtained from publications issued
fcy the Economic Research Service titled
"The Economic and Social Conditions in
Rural America in the 1970V May 1971 and
"Rural Development Chartbook," March 1971.
Page 9
IHf
21742
The thrust of their recommendations Is that
a national population attribution policy will
ba required for a mora deliberate and plan-
ned dispersion of our total population. If
this is to occur, the rural sector will have
to offer realistic alternatives to the oppor-
tunities for jobs and basic amenities of life
which exist in the urban sector.
Programs for action in rural America
The Committee has reviewed various pro-
gram proposals for upgrading rural Amer-
ica and recommends Federal action in the
following areas.
Income Assistance
Change often takes place at a greater rate
than to which the economy, through normal
forces, can adjust. During such periods, peo-
ple are often without a source of income.
Also, many poor, both urban and rural, are
unable to earn a living because of age, ill-
ness, or other disabilities. The Nation has
long recognized this problem and, over the
years, has developed a series of programs
aimed at providing income supplements to
needy people. Although initiated with good
intentions, the existing welfare programs
have evolved into a bureaucratic nightmare.
They have done more to perpetuate than
eliminate poverty. For this reason, the Com-
mittee strongly supports the proposed Fam-
ily Assistance Plan. Welfare reform is long
overdue and must be given highest priority
by both Congress and the Administration.
Although applying equally to both urban
and rural people, welfare reform would serve
as a basic element in the development of pro-
grams to improve rural America.
The Committee feels that the Family As-
sistance Plan must incorporate the follow-
ing features. First, payments to rural and
urban people should be equal except for ad-
justments in cost of living. Second, eligibility
standards should be established at the Fed-
eral level. Third, ail payments should be in
cash; payments in kind, e.g., food stamps
should be eliminated. Fourth, the Plan
should be financed through the Federal tax
system. Payment in excess of the Federal
minimum or to people not meeting Fed-
eral eligibility standards should be financed
entirely by State and local governments.
Job Training
Greatly improved educational and voca-
tional training are needed so that rural
communities can adequately supply skilled
labor and encourage new industry and busi-
ness to their communities. Effective pro-
grams must meet needs oí both workers and
employers. Bural areas are now getting only
about a third of their fair share (based on
population) of present manpower develop-
ment and training programs. Rural resl-
■ dents should have better access to these pro-
grams. Such efforts as the Concerted Services
in Training and Education (OSTE) and Op-
eration Hitchhike, as well as the Education
and Employment Service program, should
oe expanded to assure that those transfer-
ring out of agriculture and other rural resi-
dents have the opportunity to upgrade their
skills and have access to the full array of
manpower services.
Rural Industrial Tax Credits
An attractive tax credit on plant and
equipment should be offered new Industries
which locate in rural areas. Such an Incen-
tive would attract more industries to rural
America and provide job opportunities lo.
eally so residents would not be forced to mi-
. grate to other areas. The ta» credit could be
t¿%l£ î Crural area«, or it might be
graduated upward as one moves away from
■ * ^l6 metr°PoH*an centers. An objective
«™ <^e T?1?™011* oî a substantial por-
tion of local labor in relation to the skilled
I^0r^Whloli mighi be imported from out-
side the community.
Such tax incentive should be granted
through the Federal tax system, Local com-
CONGRESSIONAL RECORD —HOUSE
June 21, igy¿
íifvh KtìHùim -«-^rt v^ i «^..... ivifcj tínoo ■
ñZn\ ™ S +y t0 Hna t!aey have lQSUÍ- direction is imperative andTtoXk^10^
fnr «™ nUtt0,meet the incr^d demand not believe the aural communttvn6, *<>**
for services-schools, sewers, streets, hospitals, ment Revenue ¿Sp^oSVol-
tile principal thrust toward improvement &e
the rural sector. * ™menS of
The rural emphasis we suggested here a
not necessarily imply that existing ££**
housing and planning programs be s»i¡í ,15
rural and urban components. But the wî0
ership emphasis recommended, alone ™C
the rural directed programs suggested J£t
are essential to assure balanced consS ■
tion of rural-concerns within the p S
Federal structure. Existing general pS
are biased toward the urban sector Tbl ¿5s
partaient of Agriculture, although it ¿t
speak for rural America, does not have fS
force of program options at its disposal
for services-schools, sewers, streets, hospitals,
etc. Since both urban as well as rural peo-
ple will benefit from a more even distribu-
tion of industrial production.in the United
States, it seems only proper that both should
share in the cost.
Rural Development Credit Bank
A credit system should be established to
make credit available for construction of
community services and facilities and hous-
ing. Tue credit should take the form of in-
sured loans.
Research and^Technical Assistance
Research on the complex problems of rural
development should be encouraged to both
private and public institutions. This re-
search must be applicable to the problems
of local communities. The rather limited
amount of research directed toward rural
development has been largely descriptive or
fundamental long-terra research generalized
so that it applies to the numerous and var-
£? w^?tlon found «iroughout tne coun-
try, While such research server a useful
function in the formulation of national pro-
grams, it is of limited value to individual
rural communities. .
Most rural communities cannot employ
officials on a full-time basis who are capable
of formulating and Implementing long-term
development plans. Lack of such technical
SS?„0r? is piacea ruraI ooBununities at a
distinct disadvantage relative to urban
ÏEfîES 0ltleS- X° help fiU tm ***• the
Committee recommends that technical ad-
visors trained in community planning be
made available to rural communities. The
tKîA anlfunaiI1g arrangements for
this could be patterned after the system de-
veloped to provide technical assistance to
otnT^61Tiaad-^nt unlversiS and
£*her state colleges and universities should
be made an integral part of the system.
National Growth Policy
m ™™,ST af0Una pattern of development
in rural America and proper use of natural
resources the Committee recommends üeveT-
nfX?L ™a9ti0IWl fra*»work for land use
planning. The Committee believes It is the
responsibility of the Federal^rnment^o
analyze the various consequences of alterna-
te f ?fta strategies, choose among them,
SJJ«1 Ineate a Clonal growth policy. AH
Federal programs, including tax policies
transportation, housing and urban develop!
ment, resource conservation, and welfare
must be oriented toward attainment of toe
goals of that policy. To accomplish this will
require a major, Federally coordinated analy-
tILf^^ and othet resources we have
available to meet existing and known future
national needs. The approach suggested in
not SÄT ?? P0ll0y >»*lon cai-
?£L thlS?ind of J°b- zt d0«3 encourage a
stronger state role in assuring land use ¿tan-
Bu?uVnl0CaX flevel~aa *™al fhltstep.
But it does not acknowledge the need for
deXment1"1 ^^ °f S™™*
Getting the Job Done
atS a^'lff °Uon'J.t5e ^ß^tee has reiter-
ated an oft-repeated agenda for meeting the
XTT 0Í U7f nerica. The critical issue
pushed " agenda items "aeeom-
The Committee does not plan to suggest
what specific agencies in government should
do the jobs needed to upgrade the rural sec-
ÎSS HoweIer' a vlsIM<*. specified, cabinet-level
body or official must be designated to coordi-
nate rural development efforts. Rural Amer-
ica must have a real voice with the power to
assure that the voice is heard and^IeLd
improvement of the rural sector must be a
national goal affirmed by action programs de-
signed to meet specific objectives. The Com-
A MOMENT IN AMERICAN HISTORY
(Mr. STAGGERS asked and was giver,
permission to address the House L i
minute, to revise and extend his »
marks and include extraneous matten"
Mr. STAGGERS. Mr. Speaker, the d¿
tmguished Senator from West Vheinia
the Honorable Robert C. Byrd, majority
whip of the Senate, used this strikjZ
Phrase at an impressive ceremony fa?
back in the hills of our wonderful State
last Saturday, June 17.
The occasion was the dedication of a
permanent memorial to Nancy Hanks
The place was the birthplace of this re-
markable woman. The sponsoring agen-
cy was the Historical Society of Mineral
County.
Forty years ago a stone marker was
set up on the site. But due to neglect it
was difficult to find in open country. Re-
cently a camp for young people has been
established there, and arrangements
nave been made to assure the mother of
Lincoln the respect that is due her
Considering the difficulty of access, a
large crowd assembled for the ceremo-
nies The Governors assistant presented a
State flag, and it was my privilege to
present a flag previously flown over the
Capitol. Both will be on display at the
site daily.
Senator Byrd's dedication address
pointed clearly and forcefully to the sig-
nificance of a moment in history. His ad-
dress demonstrates that he has equal
claims on our admiration and respect ss
an orator. Both his subject and his treat-
ment of it should be of interest. I include
it in the Record:
Speech by Bobsbt 0. Btkd, a U.S. Senato*
From West Virginia
Mr. Chairman, Congressman
ladles and gentlemen:
It is indeed a pleasure for me to be wit»
you on this occasion, when we are gathered
to mark a moment in American history. I
have always thought it unfair that, through-
out the ages, so many great women have
been bom to blush unseen, because of the
brilliance and success of the unen they moth-
ered or married.
The whole world knows of the greatness of
Abraham Lincoln. The world is very apt to
forget that the qualities that made him
great were born and bred into him. I am
not a student of genetics, but Nancy Hanks,
whose birthplace this Is, undoubtedly had a
major influence on President Lincoln's life.
Every American schoolchild knows that
Abe Lincoln was born in a log cabin in Ken-
tucky, but ï wonder how many of them
know that his mother was also, bom in a log

Comment by truth on April 10, 2009 at 11:49pm

CONGRESSIONAL RECORD—HOUSE
June 21f 1972
I think everyone in this Chamber
knows .what the problem is. A wealthy
school district can finance schools with
a low tax rate on a high assessed valua-
tion. A poor district even with high tax
rates cannot raise enough revenue to
provide an equal-Quality education.
The quality of a child's education
should not be a function of the wealth
of his parents and neighbors. This is a
problem of national scope and one which,
I feel most deeply, must be resolved.
We as Americans have long believed
that the Nation is obligated to provide
every American child with the oppor-
tunity for an equal education. This ob-
ligation is going to place new demands
on us who are legislators.
Therefore, I believe we should begin
now considering the long-range solution
of the problems of schools the National
Educational Association has proposed. I
do not say here and now that it should
be endorsed in toto.
But by the time the 1976 goal for full
operation and funding of our public
school system set by the NEA rolls
around, we should have an idea of where
we are going.
The NEA has proposed the Federal
Government supply one-third of the
total cost of public elementary and sec-
ondary schools.
It is obvious that with old methods of
school financing being successfully chal-
lenged in court, we, here in the Congress,
will have to provide some answers to
distribution of funds to support educa-
tion.
We have the opportunity to provide
the leadership in a new direction in pub-
lic education and I do not want to miss
the chance to fully participate.
Thank you, Mr. Speaker. .
THE YOUNG EXECUTIVES PLAN TO
LIQUIDATE FARMERS: PRODUCT
OF AN OFFICIAI, COMMITTEE
CHAIRED BY THE UNDER SECRE-
TARY
(Mr. MELCHER asked and was given
permission to address the House for 1
minute to revise and extend his remarks
and include extraneous matter.)
Mr. MELCHER. Mr. Speaker, there is
a great deal of interest in the plan de-
veloped by the Department of Agriculture
Young Executive's Committee recom-
mending that we forget about the im-
portance and needs of agriculture by
programs.
Since inserting the summary of the
report in the Record of June 15, my office
has been beseiged with calls for extra
copies of the text, which I do not have,
and I understand that the Department of
Agriculture is issuing only a limited num-
ber, since they do not wish to be held
responsible for the document at this time,
before elections.
The Department copies are issued with
a disclaimer attached to the front which
reads:
Report of the Young Executives Committee
has no official status ta the TJ,S. Department
of Agriculture, It was developed Independ-
ently by the 15 members of the Committee
of young employees of the Department, The
opinions are those of the members of the
Committee. The views expressed are not rep-
resentative of the policy of the Department.
. This disclaimer is signed by Assistant
Secretary Richard Lyng, in the absence
of the Secretary but it must be noted
that the chairman of the committee is.
the Under Secretary of Agriculture.
In all fairness to the 15 young execu-
tives who thus have been given full re-
sponsibility for getting up their amazing
recommendations independently, I think
that the Record should show that their
committee was set up by memorandum
of the Secretary on April 28, 1971, and
that they were handpicked, with the
Under Secretary of Agriculture—the
second highest official in both the Hardin
and Butz regimes—serving as chairman.
dated Aprii 26, 1971, setting up the Com-
mittee was as follows:
April 26, 1971.
Secretary's Memorandum No, 1737
young executives committee
1. Objectives. Throughout the Department
of Agriculture we have many talented young
executives who are in positions of high re-
sponsibility within their agencies. In an ef-
fort to increase their involvement in broad
interagency matters, r am hereby establish-
ing a Yoiutg Executives Committee,
This Committee will bring together indi-
viduals from all of the agencies and offices
of u.S.D.A. to work on issues of department-
wide concern which are generated by the
Office of the Secretary, the agencies, and by
the Committee itself. In this manner, it will
serve to bring additional Insights and per-
spectives to. departmental problems and
opportunities.
2. Membership. Committee members will
be nominated by the agencies and the Sec-
retary's staff. Bach agency administrator and
office director may nominate from one to
three Individuals, Selection wßl be made on
a nationwide basis. Nominees must be 40
years of age or under, and GS-13 or above.
Members will normally be appointed for one
fiscal year, with the exception of the first
group whose appointments will run through
the end of fiscal year 1972.
The Committee will be chaired by the
Under Secretary. The Chairman shall appoint
an Executive Secretary and any other offi-
cers from among the membership, with the
concurrence of the members,
CMFFORD M. HAÎtraU,
Secretary of Agriculture.
Unfortunately, Mr. Lyng's disclaimer
of the document does not specify which
portions of the young executives' com-
mittee plan is not in accord with admin-
istration policy.
The low farm price policy certainly is.
Secretary of Agriculture Butz has
boasted that he killed my bill to raise
loan rates on grains 25 percent by getting
in touch with the "financial angels" of
some of the members of the Senate
Agriculture Committee, which is a rather
dubious boast that the influence of cam-
paign fund money was deliberately used
to make Government policy.
The young executives' proposal to put
busted farmers on welfare is not new.
The House Agriculture Committee was
told that the President's family assist-
ance plan, the new welfare bill, should
be enacted to take care of them during
discussions of a new farm program more
than a year ago by the Secretary.
Actually, much of the young execu-
tives' document is a retread of policies .
that have been coming up to us piece-
meal for some time.
I understand that one of our Repub-
lican colleagues has called for the dis-
missal of the 15 young executives in the
Iowa press.
In my opinion, before such a demand
is made we should determine just who
lectured them at their seminars, and
Just what their instructions were when
they prepared this document and how
much influence the Under Secretary
exerted on behalf of Secretary Hardin
and Secretary Bute.
There may be extenuating circum-
stances which would entitle them at least
to probation; it is pretty tough on a
young man with a family and a career at
stake to defy the boss.
Mr. Speaker, every Member of this
body should read the document in fmi
And in view of the demand for copies of
it, I am including the full text in the
Record so the public can also know the
scheme being touted by a portion of the
USDA. It is a bad scheme that I believe
the American people want rejected.
The material follows:
New Directions foe U.S. Agbicültuhal
Policy
committee members
Gene S. Bergoffen, Executive Secretary
Forest Service.
Allan S. Johnson, Project Leader, Economic
Research Service.
Carol G. Alexander, National Agricultural
Library.
Karen L. Berke, Agricultural Marketing
Service.
John s. Bottum, Extension Service,
John B. Carson, Animal and Plant Health
Inspection Service.
Betty L. Dotson, Food and Nutrition Serv-
ice.
Avram E. Guroff, Economic Research Serv-
ice.
Clarence R. Hanna, Office of Information
Systems.
James E. Haskell, Farmer Cooperative
Service.
Homer R. Hilner, Soil Conservation Service.
Jerome A. Miles, Director, Office of Budget
and Finance.
Gerald C. Puppe, Federal Crop Insurance
Corporation,
Witliam L. Ruble, Agricultural Stabiliza-
tion and Conservation Service.
"J Robert p. Shiner, Commodity Exchange
Authority.
STUDY BACKGROUND
The Young Executive Committee was
established by Secretary's Memorandiitn No,
1727, Apr« 26, 1971. Each of its 15 members
represent an agency of the Department of
Agriculture.
Shortly .after the Committee was estab-
lished and organized, then Secretary of
Agriculture Clifford M. Hardin asked it to
undertake a review of the "farm income
question" and to present its views to him
and his staff.
As part of its information-gathering ac-
tivities, the Committee arranged seminars
with a number of Department officials and
others outside the Department. In Novem-
ber 1971, the Committee divided into sub-
teams of three each and visited four areas
of the country to talk with farmers, food
producers, and others involved in agriculture.
Teams visited South Central Texas, Missis-
sippi, Washington, and California.
Viewpoints were developed on the basis of
position papers developed by individual
members and discussed by the Committee.
When poinds of view were adopted by the
Committee, Individual members were as-
signed to draft report sections Incorporating
the Committee positions.
The entire report has been reviewed in
detail by members of the Young Executives
Committee and is submitted as a Committee
document.
Page 2
June 21,197%
CONGRESSIONAL RECORD —HOUSE
21735
■ 'Farm income is a source^ if not the- sole
source, of personal income for millions of
rural résidence. Increases or decreases in
tabe level of- farm income greatly affect the
well-being of these people. But income is
also a return to resources employed in
agriculture—land, labor, and capital. Tlie
level of resources attracted to the farming
industry depends upon the rate of return
the resources can earn in agriculture com-
pared to other alternatives.
The causes of national concern over the
level of farm income are twofold. First, if
returns to employed resources are low and
remain low over an extended period of time,
the Nation's ability to efficiently produce
adequate supplies of food and fiber is
jeopardised. Second, if returns to resources
are low or, more importantly, the resources
are underemployed, the owners of these
resources will earn incomes below what they
or the Nation deems desirable. In other
words, the income of farm people would be
insufficient for them to obtain a decent level
of living. This problem becomes particularly
acute tf alternative .employment opportu-
nities for these resources do not exist.
Within this framework, we asked the
question, "Is there a farm income problem
and, lì so, what is the nature of the prob-
lem?" Increases in productivity in agricul-
ture have equaled or exceeded that of most
other industries,, ample supplies of food and
fiber are being produced to meet national
needs, and, as a percent öf total income, con-
sumer expenditures for food have con-
tinuously decreased. These are not char-
acteristics of an industry suffering from in-
sufficient resources. While the adequacy Of
returns to resources may be debated, the
symptoms of inadequate returns upon which
national concern should be based, do not
exist.
However, not all. individuals engaged in
farming earn an income sufficient for a
decent level of living. The income of many
farm families is at or below the poverty line.
But, since returns to resources are adequate,
or nearly so, it follows that the farm income
problem is primarily one of underemployed
resources.
Having so isolated the farm income prob-
lem we then asked, "What is the public sec-
tor doing to improve the income of low-
income farm families?" We found that
nearly all resources devoted to the farm in-
come problem are oriented toward increas-
ing returns to . resources—that relatively
little was being done to increase utilization
of the underemployed resources, and hence,
the welfare of low-income farm families.
This finding pointed to the need for adjust-
ments in the present farm, and other rural
programs.
We recognize the sweeping political, as
weil as economic, ramifications implicit in
some of our recommendations. However,
we strongly hope that this report will serve
as a framework for a thorough evaluation of
the Nation's approach to agriculture and
rural America.
SUMMARY Ol? FINDINGS AND BECOMMBUDATIOKS
Farm income—A new perspective
The Committee concluded that the basic
farm income statistics developed and pub-
lished by the Department tend to present a
distorted picture of the true economic con-
ditions in the farming sector. The statistics
include establishments that cannot reason-
ably be called farms and ara inconsistent
with the Department's farm income mission.
The Department's mission is stated in terms
of equitable returns to resources whereas the
statistical measures are concerned with in-
come of farmers, a welfare concept. To over-
come these deficiencies the Committee rec-
ommends: 1) farms be defined as establish-
ments with annual sales of $5,000 or more, 2)
elimination of the parity price ratio, and 3)
development of a set of statistics which
would compare the return to all resources, in-
cluding family labor, used In the production
of each' agricultural commodity ' with what,
these resources could earn outside, of'agrieul-
ture.
A policy framework for ■agriculture ■
Failure to. obtain, public agreement on the
basic goals for agriculture has resulted in
the formulation of individual programs with
conflicting objectives. While proposing a
broad framework for agricultural policy, the
Committee recognizes that its views may not
necessarily represent the majority views of
the Nation. But, the Committee hopes' that,
in making its proposals, it will have stimu-
lated in-depth analyses and discussions of
the basic issues which must be resolved.
The need to obtain agreement with respect
to the desired characteristics of agriculture
is essential to the rational development and
administration of agricultural policy.
The policy framework recommended by the
Committee has thè following characteristics :
1. Agriculture should be.viewed as an in-
dustry which consumes resources, provides
employment, and produces goods of value to
society.
2. National policy for agriculture should be
directed at creating an environment which
would enable the. Industry to provide ade-
quate supplies of food and fiber at reasonable
prices to meet domestic needs and to compete
in world markets. .■..'.■-.
3. National policy should not be directed
at assuring any particular level of Income
from farming, for the Nation's farmers. In-
come from farming should be of concern only
to the extent that it affects the. industry's
ability to produce efficiently adequate sup-
plies of food and fiber. -.■.-.
4. National policy should be directed toward
maintaining agriculture as a viable indus-
try and hot as a way of life.
5. The agricultural industry should op-
erate with a minimum of direct involvement
by the public sector. Thè public sector's role
should be limited to the establishment and
enforcement of rules which will allow the
industry to maximize its contribution to the
total welfare of the Nation.
Effectiveness of the basic farm programs and
recommended changes
The present basis farm programs—the farm
price support program and related direct pay-
ments to farmers—are not consistent with
the Committee's basic policy framework for
U.S. agriculture. The programs are costly,
they limit supplies of food and fiber, and
they are a deterrent to the efficient produc-
tion of agricultural commodities. Because
the program benefits have been capitalised
into land values, their income benefits to sec-
ond generation owners is negligible.
The Committee recommends that the basic
farm programs be phased out over, a period
of 5 years. This should be accomplished by
reducing the payment per bushel of pro-
jected yield rather than by restrictions on
total payments.. Over the same 5-year period,
non-resource loan rates would be reduced to
a "disaster price" level for feed grain crops
and wheat and to zero for all other.crops.
Comments and recommendations concerning
other programs affecting farmers and farm
income
Farm Credit
In concert with the objective to assure
adequate supplies of food and fiber, the Na-
tion must see that the credit needs of the
farm sector are met. Private lenders, along
with the Farm Credit System, should be
capable of providing these credit needs. The
Farm Credit System should continue to com-
pete for funds in the money markets; their
bonds should remain uninsured by the Fed-
eral Government; and their loans should be
free of any interest. subsidy to the borrow-
ers. The Emergency Loan Program admin-
istered by the Department's Farmers Home
Administration (FHA) needs tö be contin-
ued, The Committee recommends elimina-'
tion of the Farm Ownership Loan and Farm
Operating Loan programs and questions the
need for subsidized soil and water loans and
loans to grazing associations.
Domestic Market Promotion '
Expenditure of public funds for domestic
promotion of agricultural products should
be limited to those activities that can be
justified on the grounds of Improving hu-
man nutrition.
Foreign Market Promotion
The United States and other countries
should strive to minimize artificial trade
barriers. But increased reliance on free trade
will require stepped up efforts on the part
of the United States to compete for world
markets. This need to take the form of im-
proved intelligence of trade potentials by
commodity and by country. Promotional ac-
tivities will also be needed.
Crop Insurance .■.-,.
To the extent that crop insurance Is not
available through the private sector it should
be provided by the Federal Government. If
provided by the Federal Government, the
premiums charged and to reßect the actual
risk assumed.
Production and Market Research
The abundance of low-cost food and fiber
in the US. can be attributed in large part,
to publicly supported production and mar-
ket research and dissemination. Such re-
search and associated dissemination activi-
ties must be continued if we are to meet
the needs of a growing population and com-
pete in world markets..
Market Information and Monitoring
Activities
Transferring the functions of supply man-
agement from the public to the private sec-
tor will increase the information needs of
the latter. Only the public sector, with its
legislative authority to .acquire data from
private sources, is equipped to meet these
needs. It will be necessary for the ■ Depart-
ment to monitor the agricultural economy to
assure success relative to the Nation's ob-
jectives to provide adequate supplies of food
and fiber at reasonable prices.
Farmer Bargaining
The Committee supports all assistance gov-
ernment can reasonably give producer co-
operatives and market agreements and orders
should be authorized wherever appropriate.
But the Committee would discourage enact-
ment of any legislation that would exempt
farmer associations from antitrust laws. The
policy objective in this area should be to
bring about a balance in the relative bar-
gaining strength of producers and buyers
without compromising existing antitrust laws
or seriously disrupting the marketing and
distribution system.
Improving the level of living ira rural America
Agriculture cannot be looked upon to pro-
vide employment opportunities sufficient to
maintain the present population base of
rural areas. Neither can agriculturally orient-
ed programs solve rural welfare problems.
If rural towns and communities are to sur-
vive, and hopefully grow, off-farm employ-
ment must be found. Toward this end, the
Committee makes the following recommen-
dations:
1. Immediate enactment of the Family
Assistance Plan.
2. Improved educational and vocational
training for rural residents.
3. Tax incentives for industries locating
plants in rural areas. Such tax incentives
should be granted through the Federal tax
system.
4. A credit system should bè established
to' make credit available for construction of
community services and facilities and hous-
ing. The credit should take the form of in-
pit vpfi lO-ATi-^
5. Technical advisors, trained in community
planning, should be made available to rural
communities. These technical advisors need
Page 3
Page 4
June 21, 1972
CONGRESSIONAL RECORD—HOUSE
21737
would go to the contractor who, to turn,
mtòht be publicly owned. To the extent that
operators such as these become a signifi-
cant factor in the agricultural industry, aver-
ne« farm income or average income of the
firm population becomes quite meaningless.
in all industries except agriculture, the
dominate measure is rate of return on in-
vestment with no concern given to who re-
ceived the income. Measures of average net
income per firm or establishment are not used
to determine welfare of participants in the
steel or food retailing industry or any other
industry group. Only in agriculture do we at-
tempt to come up with some sort of welfare
measure from income per farm or establish-
ment data«
Because a great deal of farm labor is pro-
vided by the operator and his family,, a meas-
ure of rate of return on investment would not
be appropriate for agriculture. But, given the
present objective ol the Department's farm
income mission and its programs to achieve
this objective, a set of statistics comparing
the return to all resources used m the pro-
duction of each agricultural commodity, in-
cluding family labor, with what these re-
sources could earn outside of agriculture—a
measure similar to that developed to the
1967 BBS study for all farmers—would be
more useful than present measures. The need
for adjustments in the price for a particular
commodity could then be supported on the
¡wounds that existing prices are yielding re-
turns greater or lesser than, what the re-
sources employed could earn elsewhere in. the
economy, I» this way the operation oí the
Department's commodity program would
conform to its stated farm income objective.
The Committee has not fully explored the
feasibility of developing such statistics but
recommends that such a study be under-
taken. Even with the changes in Department
objectives and programs proposed in subse-
quent sections of this report, such statistics
would be useful in measuring the health oí
the farming industry.
Continuing comments
Inclusion in Department statistics of a
large number of units that are clearly not
farms yields an unrealisticaily low estimate
of average farm income. This estimate is used
to justify higher farm prices, prices which
may actually result in returns in excess of
equitable returns for.most of the agricul-
tural producto produced. There is a more
subtle but equally negative aspect of the
present definition. By identifying these
people as "farmers" and having public pro-
grams to support farm income, we have given
the public the mistaken belief that the wel-
fare of these people was being adequately
cared for. It is likely this has tended to dis-
courage the development of programs out-
side the scope of agriculture (but not neces-
sarily outside the scope of the Department)
that were and are needed to assist low-income
rural people. ■ ■
The Committee wants it fully understood
that in recommending a change in the defini-
tion of a farm, it does not intend to define
away any income or welfare problem existing
among these people. To the extent these
problems exist, they continue to exist regard-
less of the definition used. But they need to
be treated in the. broader context of rural
development. The ' problem of ' low-income
rural people and rural development is dis-
cussed in more detail in the last section of
this report,
4 POLICY FRAMEWORK FOB AGRICULTURE
Many of the Committee's views of agri-
culture are implicit in the preceding discus-
sion of farm income statistics. The purpose
here is to make these views explicit—to iden-
tify in greater detail the basic principals
upon which the Committee feels agriculture
policy should bé based.
The need to establish a basic framework for
policy determination
Public debate has tended to center on ag-
ricultural prices and program administration
rather than the desired characteristics or
American agriculture. As a result, price policy
and its administration has tended to dictate
the future of American agriculture rather
than contributing to some desired end.
The "ideal" public policy, given an objec-
tive to increase the number of farms, or at
least maintain the present number, would be
considerably different from the "ideal" policy
if the Nation were indifferent to the number
of producing units. Critics of present farm
policy point to the declining number of farms
as evidence of poor policy and poor admin-
istration of that policy. But, the Committee
found no evidence of an agreed upon goal
with respect to farm numbers.
Present policy is affecting the number of
farming operations. But, without a publicly
agreed upon goal or objective, we cannot say
whether the impact is good or bad and, hence,
we cannot say whether the policy is good or
bad. As a result, the Department has no
defense against its critics. Obtaining agree-
ment with respect to the desired character-
istics of agriculture in the years ahead is
essential to the rationat development and ad-
ministration of agricultural policy.
While proposing a broad framework for ag-
ricultural policy, the Committee recognizes
that its views may not necessarily represent
the majority views of the Nation. But, the
Committee hopes that these proposals will
stimulate in-depth analysis and discussion
oí the basic issues which must be resolved.
Serious conflicts exist between objectives of
individual agricultural programs because
basic policy goals have not been agreed upon.
These conflicts are costly and must be elimi-
nated.
A policy framework—the committee's
position
Agriculture should be viewed as an indus-
try which consumes resources, provides em-
ployment, and produces goods of value to so-
ciety. The Committee believes that national
agricultural policy should aim at creating
an environment which would enable the in-
dustry to provide adequate supplies of food
and fiber at reasonable prices to meet do-
mestic needs and to compete in world mar-
Farm Income
The level of farm income earned from the
production, of agricultural commodities,
either per farm or in the aggregate, should
not be an end in itself. That is, the De-
partment's objective should not be to assure
any particular level of income from farming
for the Nation's farmers. Income from farm-
ing should be of concern only to the extent
that it affects the level of resources attracted
to the industry, and, hence, the industry's
ability to produce efficiently adequate sup-
plies of food and fiber. The industry should
not be evaluated on its ability to provide an
adequate level of living for all participants
regardless of the siae of their operation or
managerial ability. If adequate supplies of
food and fiber are being made available'at
reasonable prices, we should conclude ■ that
the Nation has a healthy, viable agricultural
industry. If, at the same time, some individ-
ual producers are earning a level of income
below what they or the Nation deem desir-
able, our assessment of the industry should
be amended to state that it has certain hu-
man resource adjustments' to make. The Na-
tion should then make every effort to facili-
tate these adjustments at the least possible
total cost (economic and social) to society.
The Nation can ill-afford transfer payments
to allow productive individuals to remain
indefinitely in the industry of their, choice.
Farming as a way of life
Agricultural policy should be directed.to-
wards maintaining agriculture ; as a viable
industry and not as a way of life. The num-
bers of farms or farm popifiation siae is
irrelevant except as these influence perform-
ance of the agricultural industry. There is no
objective evidence to support the argument
that there would be a net social benefit If
the farm population were to increase or if
its present size were maintained.
Clearly there is need to avoid further con-
centration of people in large urban areas.
Maintaining or increasing the present farm
population would reduce the rate of migra-
tion to urban areas, but more feasible and
practical alternatives are available. Because
irte rate of substitution of capital for-labor
during the past 20 or 30 years has been
greater than the rate of adjustment in the
supply of agricultural labor arid because the
Nation has the ability to produce food and
fiber beyond domestic and foreign require-
ments, there is need to reduce labor inputs
m agriculture. This, of course, assumes a
national objective to productively employ
the labor force, i.e., the value of labor output
should exceed its costs/including transfer
payments. Although put in terms of an as-
sumption, the committee feels this should be
an objective of our economic system. Given
these conditions, agriculture cannot and
should not be expected to provide employ-
ment opportunities sufficient to preserve the
Nation's rural towns and communities, if
these towns and communities are to grow,
additional off-farm employment opportuni-
ties must be found.
Food prices .
Although calling for the production of ade-
quate supplies of food and fiber at reasonable
prices, the Committee recognizes there, are
no objective measures to establish the level
at which retail food and fiber prices are rea-
sonable." This fact must also be recognized
bv those monitoring the agricultural Indus-
try. We can measure the rate of return to
industry participants given existing prices.
But, having done so, the conclusion ..„hat
they are too high or too low cannot, be
objectively supported. We can also measure
the percent of disposable income spent.for
food and fiber. But, here again, any ooncîu-
sions that it is too high or too low is highly
subleetive. Reasonableness must be deter-
mined by what most people consider reason-
able If they think retail prices of food and
fiber are reasonable, then they are reasonable.
It should however, be the role of the public
sector to keep the.