THURSDAY, MARCH 20, 1958. SECRETARY OF AGRICULTURE WITNESSES HON. EZRA TAFT BENSON, SECRETARY OF AGRICULTURE R. L. FARRINGTON, GENERAL COUNSEL, DEPARTMENT OF AGRI- MARTIN SORKIN, ASSISTANT TO THE SECRETARY OF AGRICULTURE CHARLES L. GRANT, DIRECTOR OF FINANCE AND BUDGET OFFICER, DEPARTMENT OF AGRICULTURE FARM POLICIES AND PROGRAMS Mr. WHITTEN. The committee will come to order. Mr. Secretary, we are glad to have you here with your associates before the committee. Secretary BENSON. Thank you, Mr. Chairman. Mr. WHITTEN. I do not believe that we are giving away any secrets when we say that this committee, and most of its members, have had strong differences of viewpoint with you and your Department as far as policies and programs are concerned. FARM INCOME I have before me the speech which you made out in Minneapolis before the Minneapolis Chamber of Commerce on March 3, 1958, and I would like to direct your attention to page 7 of that speech in which you make this statement: Let us first review some of the facts. Income per person on farms last year, including income from all sources, was the highest income per person on record, some 2 percent over 1951, the previous high year. That may be accurate, but do you not think that is misleading when it is used in a farm speech and indicates that the farm picture is good when, as a matter of fact, it includes the $309 annually which the farmer has had to make in town in an effort to make up for a declining farm income? Now, the farm income per person last year was considerably lower than it was the year you took over the Department. The total income per farmer last year, according to the records of your own Department, was $993. That includes some three hundred and nine-odd dollars that the farmer made in town. In adding that figure to reduced farm income, did you take out the cost that the farmer might have in doing that work in town? Secretary BENSON. Well, of course, may I say first, Mr. Chairman, that I have a rather comprehensive statement which covers this and a number of other points. Mr. WHITTEN. We would certainly like to get it into the record in that way if you prefer. Secretary BENSON. If I do not have time to read it. Mr. WHITTEN. I would like to ask you some questions like those that I have just asked in connection with your speech. MEASURES OF FARM INCOME Secretary BENSON. First, may I say that there are three principal ways in which we measure farm income in the Department. That has been the policy for many years. We talk about realized net income of farm operators. That excludes changes in farm inventory. According to this measuring rod, 1957 showed farm income down about 4 percent. Then we also use the figure, total farm net income, and this includes realized net income plus changes in inventory. If we use that basis, then farm income last year was up 4 percent above the previous year. Then we also use per capita income of people on farms, and this in in some ways is the most real gage of income because it more accurately reflects the whole picture, particularly changes in population, and according to this measuring rod the 1957 income per person on farms from all sources, both farm and off the farm, was the highest in history Mr. WHITTEN. $993 per year, of which $684 came from the farm and $309 from outside work. Secretary BENSON. That is right. Mr. WHITTEN. In that connection, since looking into your prepared statement, I note the full story is not presented. I am going to put into the record at this point pages 54, 55, 65, and 71 of the hearings of this committee, volume 1, which are tables prepared by your Department, together with some significant facts which we have drawn from those pages. (The pages referred to are as follows:) Prices Selected data relating to agriculture, United States, 1939, and 1946–57 Farm output Prices re paid Food con Cash receipts Realized net Total farm sumption Agricultural Index Food market basket Farm Market erators 1 2 1 Quarterly data are seasonally adjusted annual rates. Note this is net income of farm operators from farming. Net income to all persons on The market basket includes estimated quantities of farm food products purchased As of Dec. 31. Source: Compiled from Agricultural Marketing Service, Agricultural Research Service, and Foreign Agricultural Service data. 2 Cash receipts from farm marketings, Government payments, value of home-produced food and fuel, and rental value of farm dwellings. 1 Tentative estimates. Preliminary estimates will be published in early March. Revised estimates based on more complete information will be published in July. Realized gross income minus production expenses. This series is total gross farm income minus production expenses. Total gross farm income is realized gross farm income plus value of change in farm inventory. Total net income of farm operators, plus farm wages of farm workers living on farms. 7 Value of farm real estate less value of dwellings, crops held for feed, livestock, machinery, and equipment, less 60 percent of the automobile and demand deposits used for production. Farm debt has been deducted from the value of productive assets. 1 Price Adjustment Act of 1938, $201,000,000; cotton price adjustment, $8,000,000. 2 Production payments: Dairy, $401,000,000; beef, $22,000,000; sheep and lambs, $33,000,000, 3 Preliminary. Farm income and productive farm assets per farm 1940 and 1946-57 1 Realized net income per farm represents income within year and is the net realized return to farmer's labor, management and capital combined. For an analysis of hourly returns to farm operator and family labor, after allowing for 4.75 percent return on capital investment, see following table, estimated return per hour to all farm labor, 1940 and 1946-57. 2 Productive farm assets less farm debt. 3 Preliminary. |