if and when a marketing order for eggs would be to our best interests. Increased egg production has been encouraged by those who do not own layers but who would benefit by sales to new production units. If the independent and family owned and operated egg production farms are to survive, it will be necessary for us to have production

control.

Thank you for allowing me to express myself in front of you today. Mr. STUBBLEFIELD. Thank you, Mr. Wheelock.

The next witness is Mr. Angus McDonald, director of research, National Farmers Union.

We will be happy to hear from you now.

STATEMENT OF ANGUS MCDONALD, DIRECTOR OF RESEARCH, NATIONAL FARMERS UNION

Mr. McDONALD. Mr. Chairman and members of the subcommittee. I have already passed out our statement which I would like included in the record, and I will undertake to summarize it.

Mr. STUBBLEFIELD. Without objection, your statement will be included in the record at this point.

(The prepared statement follows:)

STATEMENT OF ANGUS MCDONALD, DIRECTOR OF RESEARCH, NATIONAL FARMERS

UNION

Mr. Chairman and members of the committee, I would like to first express our appreciation to the Chairman of the Subcommittee on Dairy and Poultry for his sponsorship of this legislation. I would also like to express to the Subcommittee our appreciation for the unwavering support which the Chairman of the full Committee has given to family farmers over a period of several decades. He has particularly been cognizant of the income and price situation which has been so disastrous during the last few years. Congressman Poage recently commented on the price and income situation as follows:

"While wages and corporate dividends in other segments of the economy have soared during the past 20 years, the prices farmers are getting today * * * actually less than in 1947.

are

"Adequate food and fiber supplies to meet a continually expanding population can be assured only if the farmer gets a fair return for his labor and investment. There is technical know-how to increase production, but the equipment and materials to apply that know-how cost far more than they did two decades ago. "The point I want to make is that the productivity of American agriculture is not now effectively limited by lack of technical knowledge, but it is very definitely and effectively limited by economics-by the prohibitive cost of applying a great deal of this knowledge in the face of the prices farmers are receiving. "Unless the farmer is going to get his money back, he simply can't use these modern aids to production. In other words, over the long run low prices definitely limit the productivity of agriculture. To use 1967 technology we must pay 1967 prices for our labor, our machinery, and our supplies. To pay 1967 prices we must get 1967 prices for what we grow. There is no other source from which these costs can be met."

Support of the family farm, which we feel is related to the legislation under consideration, has been a policy of the Congress and various Presidents of the United States over a period of years. The family farm policy of the United States goes back to revolutionary days when veterans were given tracts of land for farming purposes and when the Homestead Act was passed in 1862 and vast territories were opened up. Subsequent laws, including the Reclamation Act of 1902 and various statutes passed by Congress, seek to safeguard and continue family farm policy. The present Secretary of Agriculture has repeated on various occasions that the policy of his Department was to preserve and encourage the family farm.

President Johnson, in his recent Farm Message, said:

"I have directed the Secretary of Agriculture to focus the full range of the programs under his jurisdiction to help the small farmer."

President Harry S. Truman in an Economic Report to Congress said:

"The long-range agricultural policy of the Government should be aimed at preserving the family-sized farm."

Previously three great Presidents-Franklin Delano Roosevelt, Abraham Lincoln and Thomas Jefferson-had emphasized that the family farm was fundamental to our democratic society.

Clinton P. Anderson, when he was Secretary of Agriculture, stated: "America must aim for maintenance and improvement of the family farm. We don't want our farms to become soulless factories owned by impersonal stockholders and operated by hired managers and hired workers, with success or failure measured entirely by dollars and cents figures in company ledgers."

Claude Wickard, who followed Senator Anderson as Secretary of Agriculture, said:

"The ideal of the independent farm family, busy and secure on its own land, is embedded in the very foundation of our American way of life. Unless that way of life changes completely, the family farm must remain one of its chief foundation stones * *

Later, Charles F. Brannan, Secretary of Agriculture, said:

"Our long-term goals for agriculture include safeguarding the traditional family farm principle as a valuable American institution."

Recent laws passed by Congress are consistent with these statements. For example, PL 87-128, 87th Congress, entitled "The Agricultural Act of 1961," includes the following language:

"It is hereby declared to be the policy of Congress to:

"*** recognize the importance of the family farm as an efficient unit of production and as an economic base for towns and cities in rural areas and encourage, promote, and strengthen this form of farm enterprise;

"Facilitate and improve credit services to farmers by revising, expanding, and clarifying the laws relating to agricultural credit ***."

The importance of the family farm was pointed out in a speech made this year by Paul F. Farris of Purdue University on January 9, 1968. Professor Farris included in his remarks a quote from the proceedings of a conference on family farm policies as follows:

"The family farm permits and encourages the development of a strong neighborhood and community of life. Good schools, churches, cooperatives, and inexpensive forms of recreation thrive in communities of family farms. Under a system of large-scale commercial farms, these valuable social institutions are replaced by poolrooms, honky-tonks, cheap picture shows, and farm labor camps. The family farm does not produce flashy back-slapping personalities, but it does produce men of strong character and moral consciousness. Neighborliness, honesty, industry, and dependability are characteristics of people raised on family farms."

Another eminent writer, Harold F. Breimyer, in a book entitled "Individual Freedom and the Economic Organization of Agriculture" points up the danger of certain economic trends which threaten the existence of the family farm as follows:

"Can agriculture find a way to compromise the conflict between the material productivity of an industrial economy, and the soul-dwarfing regimentation that thus far has accompanied it? Is the administrative form of the modern corporation the only managerial structure that inventive man can devise? Must every manager be an organization man and every person of manual or clerical skill a nameless face in a labor combine? If agriculture, not holding tightly to its own status quo but thoughtfully concerned for its uniqueness, can devise some better institutions-a better system of economic organization-it will not only aid its own welfare but once again will have something valuable to demonstrate before the world."

Despite the long-standing support of the family farm by Congress, the President and millions of citizens, various groups in our country have announced plans for the elimination of at least 75 percent of the Nation's three million farmers.

The Committee for Economic Development some time ago announced its plans for the liquidation of the family farm. The main steps of the CED plan are as follows:

(1) By reducing farm commodity prices to the levels of the so-called free market.

(2) By withdrawing farm land, including whole farms, from cultivation by a greatly expanded soil bank program (and convert at least 20 million acres of western plains grain land to grass land).

(3) By discouraging people from entering farming.

The Wall Street Journal in a recent article states that Federal farm planners say privately that the U.S. will need only about 500,000 farms and that they will be big factory-like operations. The Wall Street Journal does not quote Federal farm planners as to what will happen to the millions of people who will not be needed in agriculture. It does say that there seems to be little chance of stopping the trend toward corporate and super-farm ownerships.

Our National President, Tony T. Dechant, has pointed out on numerous occasions that agricultural problems will continue whether there are three million, one million or even two-hundred and fifty thousand farms which provide the bulwark of food and fiber for the Nation and for export. Furthermore, it is obvious to us that if the time comes when a handful of corporations take over agriculture, prices will be fixed and consumers will be forced to pay many billions of dollars more than they are now paying for food. The Chairman of this Committee, the Secretary of Agriculture and other officials have pointed out many times that the American farmer has made it possible for consumers to spend only a relatively small amount of their incomes for food.

The Arkansas Gazette, on April 15, 1967, commented: "When production of any agricultural commodity reaches a sufficient degree of concentration to permit executives to influence prices through the control of output, efficiency tends to become secondary.” This is another factor which enters into the monopolistic control of farm prices.

The biggest problem of farmers, including these who produce eggs, is that they have little or no bargaining power. As the National Advisory Committee on Cooperatives commented a few years ago:

"*** Individually, the farmer is a virtually helpless bargaining unit. This would be just as true if there were only 1,000,000 farmers, as it is where there are about 4,000,000 farmers. This weak bargaining position becomes more evident as the marketing mechanisms for agricultural products fall into the hands of fewer and fewer buyers, processors, and distributors."

During the last year we have received many reports in our Washington office from the several thousand egg producers in the mid-Atlantic States who are members of National Farmers Union. These reports indicate that the egg industry is facing a disaster situation. Our members tell us that a number of very efficient producers are going out of business because of low egg prices and high costs. They predict that many more will go bankrupt in the near future if prices continue at low levels.

Here are two communications which we have received in the Washington office in the last few months. One is from Mr. Charles A. O'Reilly, Manager of Central Jersey Farmers Cooperative Association and the other is from John Vaccaro, President of the Delaware Farmers Cooperative:

"Two day drop of 82 cents in egg market murderous to poultrymen still struggling to recover from 1967 Disaster. Egg and fowl purchase may give short term relief. Release of twenty-five million dollars in FHA funds may help poultry. men finance replacement stocks. Could Freeman get Talmadge and Stubblefield bills released from Budget Bureau so hearings may be held?

"DELAWARE FARMERS CO-OP, "JOHN VACCARO, President.

"Large white eggs at New York tumbled eight cents last two days from 35 to 27 cents. 1. Strong emphasis on need to get Talmadge bill and Stubblefield bill out of Bureau of Budget and favorably reported by Department so hearings can start immediately on this enabling legislation stop you can cite fact we hold letter of March 21 from Senator Williams of New Jersey and letter of March 14 from Stubblefield that action of Senate and House is waiting on report of U.S. Department of Agriculture on these bills then expected soon stop can Freeman help to blast it out of Budget Bureau? 2. Severity of cost-price squeeze is now so aggravated that if farmers are to escape bankruptcy there must be immediate price bolstering action stop only avenue we see is reactivation of egg and fowl purchase program at once. 3. Twenty-five million additional farmers home funds currently being withheld by Bureau of Budget stop bring to Freeman some idea of the

urgency of the credit needs of low equity farmers. Perhaps Secretary can move in support of this request at presidential level. Regards.

"CENTRAL JERSEY FARMERS COOPERATIVE ASSOCIATION, INC.

"C. A. O'REILLY, Manager."

Recently we obtained figures from the Department of Agriculture in regard to the prices and production of eggs as follows: In 1966, there were 5,438,000,000 dozen eggs sold for an average price of 39.1¢ per dozen. $2,165,000 was received by farmers.

In 1967, there were 5,717,000,000 dozen eggs sold at 30.2¢ per dozen which amounted to $1,823,000,000 received by farmers.

In other words, 311 million dozen more eggs were sold for 343 million less dollars!

As indicated by the documents inserted, the situation in the egg industry has worsened greatly during 1968. Prices of a month ago, according to our information, did not even give the large efficient producer the cost of production. We feel strongly that consistent with the farm policies endorsed by this Administration and this Committee that serious consideration should be given to the approval of HR 15537.

As far as we are able to determine, there is widespread support in the Congress and among organizations for the approval of an egg marketing bill. We have been apprised of communications from egg producers throughout the United States and they all tell somewhat the same story. They will not be able to continue to produce eggs at prices received during the last year and survive. Even the large producers indicate that their credit and financial resources will not enable them to continue production if something is not done to stabilize egg prices and give the egg producer some assurance that he can obtain a price for his eggs which will give him a fair profit on his investment and something for labor and management.

We urge the approval of the egg marketing bill introduced by the eminent Chairman of this Subcommittee.

Mr. McDONALD. I would like to first thank the chairman of the subcommittee for the very fine and fair way that these hearings are being conducted.

I would also like to express our appreciation to the chairman for the arrangements made for the introduction of the bill and the arrangements made for this hearing.

I would also like to express our appreciation for the unwavering support over the years which the chairman of the full committee has given to the family farmer. I quote him in my statement very briefly, something that Mr. Poage said, in regard to low prices and low income. We feel that this bill supplements and complements the position of the National Farmers Union for the preservation and support, encouragement of the family farmer. This is the primary reason for the existence of our organization.

It is not inconsistent with the positions taken over a period of many years by the Congress, by various administrations, various secretaries of agriculture in both political parties, and I have quoted some of these policy statements in this administration, including one by President Johnson, and including statements made over a period of years in regard to the fundamental importance to agriculture and to America for the preservation of the family farmer and independent business and cooperatvie efforts.

Only recently, the Congress passed a bill, S. 109, undertaking to prevent certain practices which had been engaged in that had destroyed cooperatives in the poultry industry, and all farm organizations, I might say, joined in supporting this bill.

We have been alarmed for many years by the trend toward economic concentration, not only in agriculture but in industry. As to a

situation whereby farmers had to pay prices fixed in Detroit, New York, Pittsburgh and other places thousands of miles in some instances from the place where the farmer bought his machinery and supplies: This indirectly has a relation to this bill, because of costs of production have consistently gone up over the years while through the cutthroat competition and I am sorry to have to use that term every farmer has been in competition, every egg producer has been in competition with every egg producer and with a small rise in price, which has been, repeatedly, pointed out at this hearing, causing prices which did not return to the farmer his cost of production.

We are very much concerned, particularly with regard to the situation that exists in the egg industry today, because I have been receiving reports in my office in the last year from egg producers all over the country, most of whom are not members of our organization, but we have been receiving these reports indicating that farmers are dying on the vine, because, in most instances, they did not have the credit, they did not have the resources to continue in a situation where they were consistently losing money. The result we fear is that the entire egg production industry will ultimately be taken over by companies like the Gates Rubber Co. which supplies about one-half of the eggs in the city of Denver today and which, I understand, is building a giant plant today in Texas.

What is happening, gentlemen, in agriculture is that many corporations are going into egg production and broiler production and into other agricultural enterprises. And if the trend continues, the farmer will lose control of his farm, and the family farm will be a thing of the past. We fear for the future.

I think ample evidence has been presented to this subcommittee that the egg producers in this country are in favor of this legislation. I am going to conclude my testimony, because I know you have other witnesses to hear from. I hope that if you have time for questions, I will be able to expand one or two other points.

I would like to conclude by saying that no general farm organization has the right to speak for the egg producers, neither the American Farm Bureau Federation or the NFO or the Grange or the Farmers Union-only the egg producers have that right to speak for the egg industry. That is the reason why I am here today, because we have received, as pointed out before, not only from members of our organization but from others, communications stating "Please get something moving here on Capitol Hill." We have received such not only from members of our organization but from various groups. As far as we have been able to ascertain, the support of this legislation by the egg producers is overwhelming.

Thank your very much.

Mr. STUBBLEFIELD. Thank you, Mr. McDonald.

The next witness is Mr. David London, president, New Jersey State Poultry Association, Somerset, N.J.

We will be pleased to hear from you now.