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livestock industry. But it seems that a good percentage of the cattle stays alive because they have become immune to foot-and-mouth disease and for no other reason. So, it is a country that is very free of controls.
Mr. PAARLBERG. In certain respects. Mr. MARSHALL. Yes. In certain respects. But, in spite of the fact that these freedoms of the individual do exist there, they were unhappy about it, apparently. That is demonstrated by the fact that, in the election the other day, instead of going to support the rightist government they swung away to the left.
There seems to be quite a strong possibility that the fact is that every time you get into a position where you are going to carry on what we might term to be a conservative brand of economics, it seems that lack of controlling the individual, resulting in what you might call an imbalance in society, that the community does have a tendency to swing to the left.
Mr. PAARLBERG. I am not ready to generalize, especially on the basis of the Argentine experience. I am not an advocate of license. I do not confuse freedom with license. When I talk about freedom, I think about constitutional freedom, which solely restricts the individual as to maximize the freedom for the group. This is my concept of freedom. For example, I think that, under some of our marketing orders, there is a restriction of freedom on the part of the individual, to some extent.
I have no difficulty in administering such laws. I do not find them to be contrary to my philosophy. What I find to be contrary to my philosophy is when we enact legislation which does not have the intended effect of improving the farmer's condition, which restricts his operations to a considerable degree. In so doing, instead of improving his economic condition, it loses markets for him and in the end has him wind up with a smaller income. That is the thing that disturbs me.
I am not arguing this as a philosophic point. I would argue it on the basis of what works and what does not work.
Mr. MARSHALL. All right; let us get down to an individual instance that happened to me this year. I sold my hogs from my farm. We had some hogs that were doing extremely well. In fact, we were extremely busy on the farm and some of the hogs had done too well so that they got to weigh more than what the marketing weight was.
Mr. PAARLBERG. Yes. I understand. Mr. MARSHALL. The man that picked up my hogs said, “It looks like these hogs, to me, are too heavy to bring top price in South St. Paul.” So, we picked out three runts—and I will say I hate to admit that I had some, but I did—and we decided to put them in with the others and take them down. Now, these hogs went down to South St. Paul, which is a good livestock market, and because we had these three little hogs in there they brought the weight down. So that the whole group of hogs, with the heavier ones, went through as top hogs. Now, I will say, sir, that, if it takes regulation to give me a fair price, I am through with regulations. I think that is a very poor way to market hours.
Mr. PAARLBERG. That is my opinion, too, if you will forgive my saying so.
DEVELOPING IMPROVED MARKETING SERVICES AND TECHNIQUES
TO HELP FARMERS
I also want to mention this: We are trying to develop in the Agricultural Marketing Service improved marketing services and techniques and procedures to improve pricing arrangements and methods of reflecting back to the farmer the real cutout value of the hog carcass. This would make it difficult for this kind of practice to occur.
Mr. MARSHALL. You can see that, eventually, it would indicate that the hog farmer gets his fair return only through regulation. That is the only way by which we can arrive at an answer to that.
Mr. PAARLBERG. I think that a large share of this can be accomplished by needed modifications of the marketing structure, perhaps, with some legal assistance. It would be my hope that it would not be necessary to regiment the whole marketing process in order to accomplish this objective. A number of very important advances have been made in the marketing area by education, research, voluntary reform. I should think that that is a better pattern, where it can be followed, than making it mandatory for the marketing people to follow certain practices. However, I do agree that, in some cases, there must be regulation, in the public interest.
Mr. MARSHALL. As long as 40 years ago my father sold breeding stock to Canada, which was a Yorkshire hog, which was a meat-type hog. And in Canada, through their regulations of their marketing, they have built up a market for Canadian bacon, which was largely a new-type hog.
But they did it through regulation.
We have been attempting for over 40 years to do that thing in this country by a matter of trying to inform people and so on. Yet, when I sold my hogs in the last fall at a market in south St. Paul-which is a good market, in south St. Paul-I could not get the top price for my hogs because there were three runts put in with a bunch of pigs.
You will agree, I think, that that does not help the consumer and it does hurt the producers terribly.
Mr. PAARLBERG. I agree.
Mr. WHITTEN. I will say that this committee last year called on the Department of Agriculture to see what they could do to develop this and to get off dead center on it. I wonder what happened about that part of the committee report.
STUDIES AND OTHER DEVELOPMENTS ON MEAT-TYPE HOG
Mr. PAARLBERG. Mr. Wells can answer on that.
We sent some men to Canada on that for a study and they made a report.
Mr. WELLS. Several things have happened, Mr. Chairman.
We did send a group to Canada to study what is going on in Canada. Mr. Herrman and Mr. Trelogan will tell you what they did.
Also, the American Meat Institute announced-shortly before July 1, if I remember correctly--that their members stood ready to buy properly sorted hogs on a merit basis. And I think they have done that in a number of places, where they ship what is ordinarly called U. S. No. 1, or Minnesota No. 1, or more generally, a “meat-type" hog.
We have intended to discuss that.
Mr. WHITTEN. We will be glad to go into that. We might even write it into this appropriations bill. So you might give some thought to writing proper language to cover it in the act. It would be subject to a point of order, but you might put it in here, anyway.
(Material referred to follows:) The Department of Agriculture is not at this time in a position to suggest legislative language to force the marketing of hogs on a mandatory sorting or grade basis. Rather, the Department believes improvement should come through research, education, and the voluntary efforts of producers, market agencies, meatpackers and others, including the wholesale and retail trade.
Mr. WHITEN. Now, I have another thing to bring up.
I would just like to point out, with all Que deference to the Secretary personally, that we do have very strong differences of view in agricultural matters.
FACTORS INFLUENCING PRICE SPREAD FROM
FARM TO CONSUMER
From this record, as I see it here, under these regulations that you have been able to put in effect in reducing prices, during that period the farmer's take has decreased to 40 cents.
One way of expressing that is that the farmer got 20 percent more freedom for 20 percent less money.
And the other crowd goes on and gets happy as ducks under the Department of Labor and the Department of Commerce. They have no more freedom than they used to have but they get 20 percent more money. I believe the farmers would like to trade places with them and they might like to trade departments with these other segments.
And I am serious when I say that. Mr. PAARLBERG. I would like to point out that while these changes that you described are underway, Mr. Chairman, the product that the consumer is buying has also changed. From a chicken with only its blood and feathers removed, they have now moved to a frozen broiler that is cut up and ready to put in the pan. Mr. WHITTEN. That is right.
But you must remember that the reason why you had that tremendous change was because the man who did that could pass the cost back to the farmer.
Mr. PAARLBERG. Some he passed back to the farmer, some he passed on to the consumer, and some he took for himself.
Mr. WHITTEN. Maybe that is right. When all is said and done, the farmer today is getting 20 percent less of the consumer dollar, while those between the farmer and the consumer are getting 20 percent more of the consumer dollar. And the consumer dollar is the ceiling on what the farm products will bring at the retail level.
Jr. PAARLBERG. This depends on what basis you are using for comparison. If you are comparing it on the basis of 1947–49, then this is true. If you take a base that is pre-World War II, then you find that the farmer is now receiving I think a little larger share of the consumer's dollar than he did at that period. Mr. WHITTEN. What period was that?
Mr. PAARLBERG. I think if you will look, you will see that is true.
Mr. Wells. That is 1939 and 1940. About the same as for 1956 and 1957.
Mr. PAARLBERG. Well, it is the same. It is the same as prewar.
It all depends on the period with which you compare it. You can compare it with my "dream world” period if you want to. I do not think you want to compare it with the depression.
I think it is difficult to establish just what is normal. We have a fluid situation here, a change in the nature of the form of the product you are talking about. Therefore, it becomes difficult to make hard and fast and really meaningful comparisons.
Mr. WHITTEN. I just want to say this: The American farmer is getting sick and tired of freedom.' What he wants is some money. I thing that is true of every one of them.
When the farmer looks around and sees every other segment of the economy increasing its take of the consumer dollar while he himself is getting less and less, is driving old trucks, and cannot buy new equipment, he is getting sick and tired of it.
EFFORTS TO IMPROVE FARMER'S ECONOMIC POSITION
Mr. PAARLBERG. I am sure we are fighting vitally in every way we know how to improve the farmer's economic position.
I recognize our viewpoint differs from yours in the method we would use in trying to achieve this objective. But the objective that you are trying to achiere, in improving the farmer's economic position, is identical with ours.
Mr. WHITTEN. Perhaps you might spell that out for us here. I think we might take a little time to do that.
What are your proposed solutions as of today, after your 6 years of experience?
I would just like to know what your Department's proposals are as of now, the proposals of the Department of Agriculture. I would like to have you briefly tell me that.
I do differ with you, but I am willing to listen and I would be glad for you to expand on it in the record.
Mr. PAARLBERG. Yes, sir. I will make a brief statement regarding it.
BUILDING MARKETS AT HOME AND ABROAD
In the first place, what we want to do is build markets so as to make it possible to inse the abundant production of our agriculture.
I think we have demonstrated that we cannot, with controls, really hold our agriculture in check. I agree with you on that point. Therefore, since we cannot halt the flow of these farm products we must build markets for them both at home and abroad, commercially and by extraordinary noncommercial methods.
Mr. WHITTEN. Doctor, may I interrupt now-although I have been trying to avoid interruptions.
I would like to discuss markets abroad. Let us get back and point out that you have authority to sell abroad at any price now. So that
to you and no change is necessary there.
Now I would like to ask you about something that you may wish to discuss, and I do wish you would take the time to point it out.
Now, at home, just how much increased consumption of food and filer do you think this country could experience under any kind of price reluction to the farmer?
I would like to have your estimate as to that. And I am talking about the domestic market.
How much did you increase wheat consumption domestically now? Also, how much increase in corn and how much in cotton ?
Can you tell us the increase by major commodities? How much more tobacco would be used if you reduced the price? Could you please just go down the line and let us get this thing down to concrete terms?
Mr. PAARLBERG. Of course, you realize I am not willing to exclude the exports items completely.
Mr. WHITTEN. But let us get that settled once and for all as to what would be the result under the law. Under the law you are entitled to sell abroad at any price that it would take to move the commodities. That has been true throughout the years.
So the indication is that the price-support level has nothing to do with the level at which you export.
Of course, there is authority to sell without limit in competitive trade. That is the way it has been from the time the Agricultural Act was passed.
Jír. PAARLBERG. We covered this point in detail in previous appearances, and I am sure we understand each other perfectly on that basis.
I think that in specific commodities, such as in cotton, we can build our markets a good deal. Pricewise, we can become more competitive.
In wheat, I do not think we can make as big a change, but we are open to some feed uses.
Vr. WHIITTEN. What is going to happen to corn and milo and other grains, if you starting feeding wheat? I am now referring to the domestic market generally.
I am just trying to find out how you and the Secretary, or anybody else, can believe that reduction in price to the farmer could increase substantially the overall consumption domestically of agricultural production. It is my belief that you cannot prove it.
Also, I do not believe that, when you try to spell it out and increase in one place as against what you would lose over in another place, you are going to be happy with your answer.
Mr. PAARLBERG. May I develop the second point then? Mr. WHITTEN. Yes. Jr. PAARLBERG. The first point I said would be to try to build markets at home and abroad by a variety of methods. One method would be by using what we consider better pricing, with proper promotion.
Another way would be through improved quality, by better research, better education. It could be done by advancing utilization research.
Then there would be the school-lunch program, school-milk program. It could be done by marketing orders, but a variety of programs, I would say that that would be the number one thing.