Agricultural Hearing Featuring Bob Dole Part 1

Item

Other Media: c031_067.mp3; c031_067_tr_2.txt

Transcription (Scripto): Read Full Text Only (TXT)
Extent (Dublin Core): 1 Hour, 5 Seconds
File Name (Dublin Core): c031_067
Title (Dublin Core): Agricultural Hearing Featuring Bob Dole Part 1
Description (Dublin Core): In this radio Senate fact finding hearing presided over by Dole, several farmers and farm bill experts offer suggestions for bill inclusions and discuss what has previously gone wrong in the farming industry.
Date (Dublin Core): 1977-02-01
Date Created (Dublin Core): 1977-02-01
Congress (Dublin Core): 95th (1977-1979)
Topics (Dublin Core): See all items with this value Agricultural laws and legislation; See all items with this value Wheat farmers
Policy Area (Curation): Agriculture and Food
Creator (Dublin Core): Dole, Robert J., 1923-2021
Record Type (Dublin Core): radio programs
Rights (Dublin Core): http://rightsstatements.org/vocab/CNE/1.0/
Language (Dublin Core): eng
Collection Finding Aid (Dublin Core): https://dolearchivecollections.ku.edu/index.php?p=collections/findingaid&id=84&q=
Physical Collection (Dublin Core): Collection 031, Box 2
Institution (Dublin Core): Robert J. Dole Institute of Politics, University of Kansas, Lawrence, KS
Archival Collection (Dublin Core): Dole Audio Reels Collection, 1960-1979
Full Text (Extract Text): Unnamed man:
Here again, they say this loan isn’t charged against the legal lending limit of the bank. Two paragraphs down, they put a $275,000 gross receipt limit on this loan. Let me explain further. A man who runs a 2,000 head feed lot, he purchased the calves at $200 per head or $400,000 for the investment in the cattle. To liquidate the original investment, the original investment, at the same price that he bought them at, $400,000, he would be in violation of this loan. This statement has been verified by the SBA [Small Business Administration] office. And, in closing, I have some other things there that–

Dole:
Okay, go ahead.

Unnamed man:
–I have some other things here that I’ve summarized and I’ve got 10 of them and I hope I have time to give them all to you.

Dole:
Let me hear the other witnesses first. Then we’ll come back. Then we’re going to be running out of time. That’s going to be– Dale.

Unnamed man:
Okay, alright. Thank you.

Dale:
Senator Dole, I appreciate this opportunity. First, I am a farmer and a stockman from North Central Kansas, and anything we may say is an expression of concern facing the agricultural plan of the United States as we see it. One of the greatest problems that we are facing right now, and it is going to become much worse during the next 12 months, unless there is a drastic change in prices of farm commodities, is credit. We have already seen a few foreclosures in our area and if one can believe what our FmHA [Farmers Home Administration] supervisor tells us, there will be more farm sales in the next 12 months than we have seen in a long time. This supervisor told me recently that it was almost unbelievable what some of the situations are. One case, where in budgeting for a loan with a normal crop and good luck, the applicant would still lack nearly $700 in making his interest payment alone, not to mention anything else. Another of interest, though very serious, was when we asked the local implement dealer last fall what he was going to do this winter. He suggested that he would be busy trying to collect from machinery that farmers of the area bought right after harvest of 1976, when the price of wheat was still around $3.50 per bushel. They had just harvested an excellent crop, needed the machinery or thought they did, and had the machinery delivered. We don’t have to tell you this, machinery was not cheap. $50,000 tractors, 10 or $12,000 disc ploughs and so forth. Many banks and other lending institutions are loaned to the limit of the law of their assets. Also drive by the manufacturing plants and dealers lots now and see the tremendous inventories of machinery on hand. There is just no way the average farmer can purchase this machinery at present commodity prices. This is all going to be felt in the economy of the country sooner or later. After all, with the exception of few cities in Kansas, the health and wealth of our state depends on how agriculture is doing. I’m sure that you are aware that the livestock people are not faring so well. About 3 years ago when the livestock industry was in real serious trouble, the price of other farm commodities were good and we were able to absorb a lot of these losses. Today, with no enterprise on the farm making much headway profit-wise, the noose has really tightened, so to speak. For the past 10 years or so, we have been blessed with very satisfactory production crop-wise. We are long-overdue for some below-normal production. Right now, we are facing a real disaster in Kansas unless adequate moisture comes soon. A drought doesn’t just come upon us in 1 season, and neither will it end without affecting production for a time. Realize there is no easy solution to the credit situation, but there definitely needs to be some exploring done because we are facing a serious problem. I heard you, Senator Dole, being interviewed in Denver, Colorado just recently and you were asked what might be in the new farm program. I was interested. You mentioned the increased target levels and loan rates. I have noticed the proposed legislation called for about $2.91 as a target per week and the loan rate of possibly 75% of the target price. Personally, I don’t feel this is enough. I’m thinking about target price of around $3.20 to $3.25 per bushel with a loan rate of 75 to 80% of this target level. I am fully aware of the danger of getting either the target level or the loan rate too high, we do not want the government back in grain business. And we must do all within our power to move all commodities into market channels that we possibly can. It has been proved that this can be done under normal worldwide conditions and in our opinion, it’s the proper way to handle our surpluses. Something is surely out of bounds though, if we can’t justify the above prices in comparison to our costs of producing such commodities. I do believe we are going to have to reduce our findings for a time. In visiting with other farmers, most agree that the set-aside approach is the soundest. Most also agree that to be effective it will have to be mandatory. We believe that some type of reseal program on our CCC [Commodity Credit Corporation] loans would be advantageous to both the farmer and the CCC [Commodity Credit Corporation]. We also believe that a better farm storage facility loan program could be effective. A higher percentage of the cost of the structure and a lower interest rate. My suggestion of a fair percentage would be 85% of the cost, then an interest rate of 5 to 5.5%. This needs immediate attention for the simple reason that, should we, by some miracle, raise even a normal crop, we are going to be in real trouble storage-wise. Another concern that I have right now are the present regulations of our disaster program under the present Farm Act. There are inequities in this disaster program. One is the fact that you might exceed, as has already been mentioned, your assigned production by only a few bushels and be ineligible. Rather, if you are that close, you have really had a disaster. It seems that if one does exceed his eligibility by this small amount, there ought to be some way to give consideration to a percentage of disaster relief. In any new farm legislation, a better way to handle a disaster program might be approached through an all-risk crop insurance program. Thank you very much for the opportunity for presenting this information, I realize that we have shot all over the forest, but it seemed rather dark in the forest right now. Thank you.

Dole:
I might say that the bill that I sponsored with Senator [Henry] Bellmon, again, we haven’t fixed any target prices yet. We don’t know what the loan rate is going to be. But under that proposal, I think the target price is about $3.10 for wheat and the loan level is $2.25 plus handling costs. I’m not certain what he has in the handling cost that would make a difference, but we also extend the maturity of commodity loans from 1 to 5 years. So there’s some other–

Dale:
But, Senator, you were already proposing some of the things I’ve recommended or talked about here.

Dole:
Well, there’s some other things you’ve mentioned. So, Bob, maybe Laverne will have some– the thing we’re looking for is things we haven’t mentioned that are feasible. I think we get into the– the higher we go, the tougher it is. I mean, as far as target prices and loan rates. Laverne.

Laverne:
Thank you, Senator. I’d like to start off by complimenting your very capable staff. If they have any shortcomings, it has to be in the area that they have not learned to take a Dutchman for what he means, not what he says. [Dole laughs] When I called in to ask permission to appear on this program, I’m sure I gave them the impression I wanted to talk about wheat and feed grain programs. But all that time I was concerned about the financial needs. That’s what I was thinking, and they mistook me.

Dole:
We got you in the right spot now, though.

Laverne:
Upon arriving this noon, I saw where– what slot I was in, and I started to revamp my written script here. But your staff, upon learning of my dilemma, said, ‘No problem. We’ll just switch it and you’ll be in the proper category.’ By now, my script is in such a mess. Could we maybe talk about cotton or peanuts?
[laughter]

Dole:
I think if your script’s in a mess, it’ll be understood by the members of Congress.
[laughter]

Laverne:
Okay. I have one suggestion on financial help. Why wouldn’t it be possible to give the farmer an open unsecured loan, rather than first mortgage, second mortgage, red tape, and all kinds of strings attached? The country banks are in trouble. I know a lot of small country banks loaned up to 80-some%, and regardless how good your financial statement is as an individual or a farmer, they just don’t have the money. And correspondent banks are reluctant to go along with it. So why wouldn’t it be possible or feasible to give that farmer an open note, so to speak? A loan? To sign a note like we used to 2, 3 years ago when the banker was trying to shove that money to us as fast as he could. He would ask you, ‘How much? And how long?’ He didn’t ask, ‘Now, what do you want this for? And how do you intend to repay it?’ He’d ask ‘How much and for how long?’ Well, this has all changed. You may think this sounds a little ridiculous or farfetched, but if we use our imagination a little bit, what about 2, 3 years ago when let’s say Uncle Sam—rather than past President Ford or Henry Kissinger, George Meany, or Secretary [Earl] Butz—Uncle Sam asked us to plant fence to fence. And shoot the works. Maximum yield. All-out production. This was going to take huge sums of money. In essence, I think Uncle Sam told us, ‘You put up the money, you loan us the money. We promise to pay you back that money plus interest.’ Well, we all know what happened. Uncle Sam reneged. And this is why we’re in trouble. Now I’m asking, turnabout’s fair play? We didn’t even have Uncle Sam’s signature on that promissory note.
[laughter, then applause]

Laverne:
We’re willing to put our signature on a note, but not a lot of red tape. And second and third mortgages. That’s about it.

Dole:
I was just checking while you were testifying, Laverne, because there are some– a couple of bills. I’m not certain they go as far as yours would.
[laughter]

Dole:
You’d have to be a foreign country to get anything for nothing out of the government.
[laughter]

Laverne:
Well, Senator, I’m willing to negotiate, but I wanted to start as high as I could.
[laughter]

Dole:
Well, you’ve been a good negotiator since we were in high school together, so that’s– but the 2 I’m thinking of, and I think you may be familiar: one would increase the operating loan limit from 50 to 100,000, that’d still get into the secured part of it and the other was, of course, farm ownership loans will be increased from 100 to 200,000, but then Keith Sebelius has been taking a little different approach. His loan authority would allow Farmers Home [Administration] to make guaranteed farm ownership and operating loans of up to 350,000, with a repayment period of seven years. Interest rates would be negotiated between the borrower and the local bank, and Farmers Home [Administration] would guarantee 90% of the loan. That might -- and another part of it does just about what the other bill does. I notice we have a Farmers Home representative here, I don’t know whether he’s hiding or not, but we may want to call on Morgan Williams later to get some comments on that suggestion. But I think basically, I want to ask Mr. Laflin. I share your frustration. I just wonder, do you have anything we haven’t touched on that you think we should do, the Congress, should do?

Mr. Laflin:
Well, I think this, Bob, that I think that this is a suggestion to you. You know, the banks are very frustrated people at the present time. I’ve got a couple of letters here that I could show you that banks have appealed to F[m]HA [Farmers Home Administration] to help them out. They say it doesn’t– say $250,000 and it doesn’t go against their lending limit. Well, the comptroller’s office that governs National Bank says that it does. Now these are 2 government agencies that should get together and they should reach some kind of a decision that either is going to be for or against, one or the other. And this is– I think that banks should be– this is a suggestion for you. That I think that you should have some kind of a regional meeting, say take in 2 states, Nebraska and Kansas. Call in bankers that are grassroot bankers, not Kansas City, Omaha bankers that don’t have any idea what the guy that’s out here, that’s doing the slave work, and understands his problems. Call those people in and they could– I’ve spent time with bankers and they’d just love to come and spend time with you and giving you guidance and direction on how to set these loans just like your Federal Emergency Livestock Loan. They have a real hassle with getting those things through. Now just to show an example, and there’s no inference on the F[m]HA [Farmers Home Administration] people, the one banker that I told– talked to, he said you can never get a written commitment out of F[m]HA. To show you an example, they call the F[m]HA and they say, ‘All right, we want a commitment on 250,000.’ F[m]HA comes out and they work all the details out and they say, ‘That’s fine.’ They get back to their home office, either Omaha or Kansas City, wherever it is. And they’ll say, ‘When are we going to go?’ ‘Well, I didn’t have the authority to make that commitment.’ And I think these are problems that, if you would sit down and talk to bankers, like I say, country bankers like Ottawa and Salina, Abilene, Colby, bankers that are right down there and knowing what’s going on, not correspondent banks. They could sit here and they could give you a lot of food for thought. Things that are needed in this Emergency Livestock Loan. It’s a good loan. But it’s written wrong. It’s tough to get, it’s tough to process. I talked to one banker and he said he tried to process 3 and by the time he got 1 processed, he had to write another an amendment, rewrite the thing 3 times and finally just gave up. And these are things that I think that–

Dole:
I think you’re right. I think that’s something that, it’s not in any legislation, but there might be some things we could do to streamline the process. Because I think– I think I’m accurate, maybe it’s changed a bit, but there have only been about 170 livestock loans made under that provision. There’s authority in that law to loan– guarantee up to $1.5 billion. And it’s underutilized. I think it’s about 500 million now, about half a billion.

Mr. Laflin:
Bankers just pull their hair out when they’ve got to process those things, but they need them. People in the rural areas need them.

Dole:
I’d like to have, if you could do it, if those– the bankers don’t care, if I could have copies of the letters that we could put in the record.

Mr. Laflin:
Well, I’ve eliminated the names and the F[m]HA [Farmers Home Administration] officers that they’ve had problems with, but they’re genuine letters. And if you want to know where they came from, I’d be glad, off the record, to tell you where they are.

Dole:
You know, I met with a banker today in Salina, Mr. Jones from Canton, and that’s a grassroots area. And he gave me some of the problems he’s having. And we have his letter. Maybe these would be helpful too. We don’t need to know the names particularly, but– and I think the other suggestions that Mr. Schurtz has made, at least we’ve thought of some of those and you’re right on the disaster area. There’s some question whether we’re going to replace that with some expanded federal crop insurance, but we appreciate your testimony. If there’s anything else you think of while we hear other witnesses, we would be happy to have it for the record. Do you want to make any other comments? I don’t want to shut you off, but I would like copies of those letters, Bob.

Mr. Laflin:
I’ll make one comment. I like Senator Bellmon’s idea about grazing out the wheat. I think this will–

Dole:
Have you looked at that, Dale, here?

Dale:
No, I hadn’t seen that. I hadn’t. I just– I think that was in your report.

Dole:
Right. It’s a new proposal and it’s– I think it’s– but it’s about the way I stated it. I think he– but he needs to get early action on it. Won’t do you any good if it–

Dale:
This is off the subject of credit, but I also would like to encourage a strong ACP [?] program. And well-funded for it in this new Farm Bill because I think this is vital and it’s going to be forced upon us if we don’t do it one way or another anyway, I’m sure of that.

Dole:
Thank you. Our next category is irrigation. Is it Keintz? Keintz? Albert Keintz? Then following that, if anybody who might be interested, it’ll be livestock and dairy. Then food stamp legislation and agricultural research. There are a total of 9, 10 witnesses. And our hearings were to conclude at 4:00, which obviously is not going to happen, but, so if you can summarize, or in any way expedite, it would be appreciated. Otherwise, we’ll proceed any way you wish. Albert?

Albert Keintz:
Well, I happened to be attending the House and Senate subcommittees in Topeka, and I found out how easy it is to be misunderstood. I was sitting in on a subcommittee where they were discussing the land values and reassessment, and they looked like they were going to come up with the idea that, you were going to be taxed according to what the land produced. Well, as I sat there with an irrigated farm, I began to see my taxes going that way, and so I made some comments about what happened in our neighborhood. And we’re 2 farmers, pretty close, side-by-side, raised 120 bushel of corn by putting in the proper inputs and the other fellow with the same land adjoining them raised 12 bushel, so -- and it’s not cheap to irrigate or put on the inputs that are suggested to us nowadays, so -- but this same issue came up in the Senate committee about 3 days later and I was quoted as saying, instead of corn, ‘120 bushel soybeans to acre for yield.’ And we all know that’s not true. Even Campbell State College can’t do that good. But the water supply in the Kaw Valley, and I’m sure I’m going to keep this to Kaw Valley because I’m sure you heard the critical situation in the West. And I’m going to quote from a State Geological Survey as made in 1974 and we could use 4 times the water that we are using now, or used in 1966, with no adverse depletion of the water supply. This is the most fortunate of any place in Kansas. And energy is our most important concern. The need for more legislation to protect the farmers’ rights as we look at it in the future. Food is an important item, and down the road, many– may become more so. The gas in most places is not possible locally and its byproducts are in short supply. This leaves electricity as our best source of energy for irrigation and also the most convenient. The drawback is that irrigation demand peaks when everyone else is using air conditioning to cool their homes. Thus, increased costs to irrigation is probable. Many problems to be solved. The costs have doubled in 2 years and are expected to go higher. Many regulations are being suggested, both good and bad, for the irrigators. At the state irrigation meeting on December the 1st quite a bit of concern was made according to what they were hearing at that time about Kansas Power and Electric Plant and what the legislature might do about the water rights. This situation has been taken care of by a temporary plan drawn up by the chairman of the Water Resources Board. And this seems to be favorable to most all concerned. I feel that all of us in this area should be grateful for the efforts and foresight of Kansas Power and Light Company in the building of the large energy center. We are going to need it. I also think that from a federal standpoint, the Onega Dam needs timely research and federal money to build to help protect this plant’s water needs. I’m sure you’re acquainted with the Onega -- it’s been in the federal -- locally, I’ve heard about it for 20 years and nothing’s been done. Irrigation isn’t cheap, but it’s a good insurance when that 4-inch rain doesn’t come in July following a dry period in eastern Kansas.

Dole:
We had a number of witnesses in Goodland, I think it was. Well, both Goodland and Liberal. Liberal was an informal session talking about irrigation of course, and their primary concern now are natural gas costs and increases in cost. And I assume you’ve made references to.

Keintz:
Yes.

Dole:
Do you have any suggested solutions?

Keintz:
Well, in this area, I don’t think they’re hooking on irrigation, and this is true quite a bit of both the homes too because of the shortage and it’s quite a bit of electricity going into home use. I know what you’re talking about. Those fellows are quite disturbed out there over there. And this was brought up in the legislature, in the Kansas Legislature, and there was a lot of conflicting ideas brought forward about amount of gas there is out there that isn’t being touched and some of the rights have expired and because of their interstate relationship, they’re tied to the Federal Power Commission, and they’re fighting for some free rights there, at least for irrigation and land use in that area. They have not a lot of water problems, they have fuel problems. We’re quite fortunate in Kansas, the eastern part of Kansas, yes.

Dole:
Well, I appreciate very much your testimony and I thank you for coming.

Keintz:
Thank you. I usually get to your blank and never have time to fill it out and kind of don’t know how to fill it out and lay it aside.

Dole:
It’s hard to do. We tried a questionnaire last in December, and I think the return was around eight or 10 or 12%, but with the postage rates they are, that’s probably pretty good.
[laughter]

Unnamed man:
Some of them are still on the way, Bob.
[laughter]

Dole:
Now some of them are too hot. I haven’t opened them all, some are still burning. But we did. We called about 100 of those people who said we’d never read their questionnaire and I remember I said ‘this is Bob Dole’ to one guy and he said ‘he was Yogi Bear’, and I got all kinds of–
[laughter]

Dole:
So, I didn’t convince anyone with a phone call, and then one lady asked me for inaugural tickets, so I fixed her up, so --
[laughter]

Dole:
I didn’t need mine.
[laughter]

Dole:
The next category is livestock and dairy. Byron Brooks and Walter Leets and Ralph Phillips, Harold Bailey, Oren Holly and Dwayne Bergkamp. There are three dairy and three livestock, I think, or whatever.

Radio Host:
You’re listening to KSAC [Kansas State Agricultural College; call-sign of the Kansas State University Radio Network] Manhattan, Kansas State University, and this is a Senate fact-finding hearing by the Senate Agriculture Committee. It’s being presided over by Senator Bob Dole of Kansas, and this particular group coming on, as he mentioned, livestock and dairy farmers to have their turn at bat here, to have their say.

Dole:
I might just say for the benefit of this panel, you can proceed in any way you wish. If you will just go in the in the order the names were read. Mr. Brooks would be first. We are -- could have a time problem here, but you can either summarize or read your entire statement, or if you want to comment on anything that’s been said, you can do that. In any event, your statement will be made, will be in the record.

Byron Brooks:
I have cut down some on this statement. For the past 10 years, I was a member of the Agriculture and Livestock Committee in the House of Representatives in Topeka. I retired last year, and at present I’m here today representing the Riley County Livestock Association. These are just some random thoughts. I’ve tried to cut out some that I thought were duplications. Our government should require the same health and sanitary measures of imported food as we require of the food processing industries in operation in the United States. We must do away with the Free Lunch or Food Stamp programs for those not in real need. Our agriculture policy should be so designed to place food as a higher priority item than it is at the present time. Food is one of the essentials of life, and it should be paid for at a level which will allow a fair profit along the chain of production, processing, and distribution. Our foreign aid programs, like Law 480, should carry clauses that will insist recipient governments are placing a high priority on food and fiber for their people, and that this food, so provided, would be used in the most expedious [sic] manner to serve the people who actually need it. Our government should not provide food for starving people in nations who are not trying through their governmental policies and efforts to provide food and fiber for their people. If we furnish the food and they develop their industrial complexes and war machines at the expense of their people, we are making a mistake. The US [United States] Department of Agriculture should put more emphasis and inputs on livestock and meat research, as there is a dire need for more research funds in these areas in order to best combine crops and livestock to provide higher quality food for man. This is also true in underdeveloped nations. The livestock industries are not harnessed and developed along with the crop industry. Both livestock and crops should receive major emphasis because they complement each other and using our natural resources in a most effective way, which is environmentally acceptable. Soil and water conservation programs should be continued and widened. The cost of building ponds and terraces, waterways, and other land conservation practices should be shared by the government at an increased expense, as these programs leave the country in better condition for their generations to follow and the farmers shouldn’t bear the total cost, as he can’t reap the total advantage of these expensive practices in his own lifetime. Consumers outnumber producers. Therefore, if they are to become an important part of the US [United States] Department of Agriculture, unfair and unbalanced policies will result and a cheap food policy will continue. The consumers do need to be educated that labor is the largest cost involved with the prices they pay at the grocery store. Our food and agricultural exports should be used as a bargaining force for our energy needs from foreign countries. If there’s to be an effort at tax reform, we do not favor, as suggested, a $50 return to each taxpayer. After the tax has been sent to Washington, it would take thousands of hours of work by governmental workers and additional expense to mail a return to each taxpayer. We would favor a deduction of a like amount before the tax was paid. Agriculture is the most important segment of the economy of both Kansas and the nation. We feel the federal government should do everything in its power to keep it in a healthy condition. We do not feel that in the past with embargoes, strikes, and boycotts, the current government has given agriculture the consideration we have a right to expect. And last is an item not along the others, but the Riley County Livestock Association has, in the past and will continue to, oppose the establishment of a Prairie National Park in Kansas. Thank you, Senator.
[applause]

Dole:
Walter.

Walter Leets:
Thank you, Senator.

Dole:
Is it Leets?

Leets:
Leets, yes.

Dole:
Maybe you’ll have to pull the mic over just a bit there.

Leets:
My statement will be very brief. And I’m a dairy farmer from Paxico, Kansas. I’m about an average size farmer in Kansas. And I’d just like to give you some idea of how our cost of production has changed in the last 3 years. We milk about 55 cows and maintain a production of about 15,000 pounds per cow, which is a little better than state average. We raise all of our hay and forage and buy all of our grain and market milk to Mid-American Dairymen and we subscribe to Kansas Farm Management service of Kansas State University and our farm records are supervised and analyzed by this service. We receive a complete computer printout of our financial condition each year and I will use the results of these printouts as a basis for my statement. The current receipts of the sale of dairy products do not pay for current fees and overhead expenses. I have been able to reduce any short-term loans since 1971 and have reduced my long-term loans only by borrowing money short-term to make the payment. To meet living expenses, we must live on depreciation and short-term loans. As I studied in my year-end business and enterprise analysis from the farm management service, several things came to view. Number 1 was the milk receipts per $100 of feed fed. In 1973, I got $124.19. ’74, I got $114.21. And ’75, I got $106.74. The 1976 figures are not available yet, but I do know from my checkbook balance that it’s not as good as ‘75. Also, between ‘74 and ‘75, I increased efficiency of my cows by almost a ton of milk per cow and still my return fell. The farm cost of producing 100 pounds of milk, this is my farm. In 1973, I sold about 12,000 pounds of milk per cow, and it cost me $9.85 to produce it. I got $7.30 market.

Dole:
What, what? ’75?

Leets:
’73. In ’74, I produced 11,655. The cost of production was $11.70. And the receipts, $9.11, about $2.00 under what it cost me to produce it. In ’75, I produced 13,500 pounds per cow. The cost of milk was still $11.60 because I increased production by a ton of milk per cow. And the receipts were $9.27. And then I’ll go to another, the total cash farm operating expenses, using ’73 as a base year. In ’74, my expenses were up 18% over ’73. And my gross farm income, however, was up 15%, which wasn’t bad. In ’75, my total operating expenses were up 20% over ’74. While my gross farm income fell 3%. In 1976, once again I’m up 17% over ’75. And I don’t know what the gross farm income is because my records aren’t back yet, but since 1973, my total cash outlay to operate the farm business increased by a total of 52.25% while gross farm income increased only 11%. I do not know the results of 1976 as yet. The results of the price of milk not raising along with price of farm expenses affects me in several ways. Number 1, I cannot make equity payments on my investment. And I’ll summarize them and you’ll have it later for you. In summary, the present price of milk is not enough to keep my farm operating. This is the worst financial condition I’ve been through in 20 years in the dairy business. Farm operating expenses have increased at least 52%, and probably more, and to retain the same financial position of ’73, the price of milk should increase about 41% to about $13.07 a 100, and if you’d like, I could verify these with any of your staff sometime in Topeka.

Dole:
Right. Now, I think would be helpful to the committee to know how you figured your cost of production. Do you– what’s the–

Leets:
I took these off the computer printouts at Kansas State University. It puts out the -- I put all of my financial information into them. They figure it and send it back. And I think this includes all expenses plus a reasonable cost for labor.

Dole:
Let’s see. Ralph Phillips?

Ralph Phillips:
Yes, I am Ralph Phillips from Manhattan, Kansas. I didn’t go to punching on a typewriter to amount to anything. I -- looks like he did his homework a lot better than I did. But I am a dairyman. At the present time, we’re milking 75 cows. And I’ll back him up anywhere he wants to go on his figures because mine are very, very similar. Last year and the year before, I was averaging about 55 cows on test. And for the past 2 years, I’ve had a full-time man and his term is up tomorrow. It’s the financial situation. The bank just dictated the fact that I couldn’t justify a full-time man anymore, just simply because the income was not paying the expenses. And in ’74, the dairy imports really knocked the rockers out from under everything. I mean, early, January and February ‘74 when the imports were brought in, the milk price ended up dropping about $2.20 a 100, if I remember correctly, over about a 6-month period of time or such a matter. Well, and then the next year, well, the wheat got pulled out from under us and I raised about 300 acres of wheat, so-- and another comment I might make: the F[m]HA [Farmers Home Administration] Disaster Program in ’74 that was implemented to help people who had come to a disaster, it was no problem to qualify, but I might add that 2 more drought years haven’t made it very easy to repay. And something needs to be done in the line of finance to ease the burden. I’m not asking for any handouts, but something needs to be done to ease the burden to where a young man can go ahead and operate, because some of these days everybody’s going to be 65 if they keep going the way it is. Because a young man trying to operate now, it takes an investment anywhere from 3 to $500,000 to operate and you just multiply that times 7 or 8% on the interest, and most people have to pay 9. So, pretty well puts it in black and white, as far as what the situation is. I thank you.

Dole:
Now, of course, dairy is included in the legislation that we’re going to be considering. I assume there’ll be, you know, different groups representing dairy producers, milk producers, but that gets in the question of what the price support level ought to be and whether quarterly adjustments help or whether we have to find some new approach. I assume imports should be looked at again, just as we look at the meat imports, but-- that is, so if you have any specific things or recommendations, I think the information is good indicating no one’s– or, you’re not making any profit. It’s like just the other direction. Let’s see. Harold?

Harold Bailey:
Yes?

Dole:
That’s dairy, right?

Harold Bailey:
Right. Senator, I’d like to thank you for the opportunity to come before you today and I’m going to cut mine pretty short on account of some duplications of what they said. But I also am a member of Kansas Farm Management, and I’ve got the same type of records that Walter’s got that could be made available. And the thing that I’d like to talk on a little bit is imports. We did have 2 billion pounds of milk equivalent brought into this country this last year. And with no countervailing duties, and I think this is one thing that I’d like to see, countervailing duties paid on milk that comes into this country that has come from countries where subsidies are being paid to the farmers in those countries that produce this milk. And this really disturbs me. And another thing that bothers me, probably even worse than imports coming in, is the standards of the quality of the milk that comes in. I think that all milk marketed to United States consumers should meet the same health standards, the same standards in regulations, sanitary conditions, and the same quality control that our milk that is produced in this country. I think maybe we can come closer to competing with this milk if we’re competing on an even scale with this type of milk and this thing is one thing that I really would like to see some investigation done and possibly some changes made in it. And I’d also like to see the CCC [Commodity Credit Corporation] continue to buy their block cheese and their processed cheese, and I think they could go into buying more processed cheese because this is one cheese that can go back into the school lunch program and into welfare programs real easy. But I’d like to see them discontinue buying barrel cheese on account of, basically, because of the shelf life of barrel cheese. And I realize that there is about a 3 cents --

Dole:
What– What is the shelf life?

Bailey:
It’s pretty short. You get a lot of deterioration because you can’t get the air or the liquids pressed out of barrel cheese like they can block cheese and it’s got to come back onto the market pretty fast. I don’t know exactly what the shelf life is, but I know it’s really short when you compare it to block cheese. But that’s--

Dole:
On the import inspection, again it’s legislation and normally we have witnesses testify on imports and very often they testify, but very seldom is anything done. Senator Packwood there from Oregon has introduced a bill that I have co-sponsored, which would try to take care of some of the things you mentioned, but that in itself doesn’t get it through the Congress. It’s going to need some push from dairy groups and, of course, there are always people on the other side of that who allegedly represent consumers, as if farmers were not consumers, but– so, if you have any suggestions, I may be contacting you to send you a copy of the bill so we can get some comments on that.

Bailey:
Okay, that’d be fine. That’d be great. And just in closing, I’d like to see the Senate Ag. Committee to continue to back and support the Capper-Volstead Act. I think we need this as a viable part of a strong American agriculture. Anything that deteriorates this, I’d like to see moves made to keep it strong, keep it in as legislation. Thank you, Senator.

Dole:
Thank you. Oren?

Oren Holly:
Senator Dole. My name is Oren Holly. I’m a hog producer primarily in Marshall County, Kansas. I’m a member and an active leader in the National Farmers Organization. Officially, the organizational testimony was read into the record out at Goodland, as you’ll probably remember from the State President Paul Nauer. And he spent a good deal of time on cost of production. And as a hog producer, I’d like to inform you that I have here a summary sheet of cost of production. He may have provided you one up there as was done by NFO [National Farmers Organization] members at the Convention in Milwaukee, Wisconsin. I would encourage other farm groups to do the same, and I think they’ll find that while they’re talking about these wide variations in the actual cost figures from individual producers, that if they will guide them through a cost study as a group, that they will find them to be much closer than what they had anticipated originally. This is certainly something that we found as an organization. Of course, you get some ridiculous figures from people who don’t have the figures to back up what they’re saying. I’d like to refer to my prepared statement for just a minute, and I don’t think I need to spend a lot of time emphasizing the efficiency factor and so forth in the family farm structure. But regardless of what type of farm structure we have, the bottom line is profit. Now, without it, we’re out of business. Now that concept has to be learned and understood, first of all by the producers, so they can put themselves in a position to demand it. It must be learned and understood secondly by consumers, because they’ll starve to death without it. And it must be learned and understood thirdly, by officials of our democratic form of government, because they have the responsibility to create an economic atmosphere to protect it. And we must all work together to learn and understand it so we can be and remain in a position to defend it. Private enterprise is the basis of our great nation. Profit is the basis of private enterprise. It’s the premise upon which our forefathers ventured to come here. It’s the same basis for which they fought so it could be established here. It’s the same basis for which our young men have several times given their lives, so that it might remain here, and it’s the same basis that all of us need to be concerned about today and from here on so it will be permanent here. The basis of this private enterprise system is the ability for an individual to build from a basis of what he came into this world with, and that’s absolutely nothing, and to plan to work, to build, and develop and come up with something. Now, a nation, a society, must have this atmosphere of a fair return or cost plus a profit. This profit will allow him, first of all, to live. To provide the basic necessities of life: food, clothing, and shelter. Secondly, it provides him the opportunity to educate. That is, training his children, both academically and morally. And thirdly, to contribute to society, to play an active role in the nation of which he is a part. Without profit, he cannot do these things. Other than that, I have touched on a few things that others have already commented on. The time I’ll have remaining, I’ll reiterate, first of all, that we’re concerned about the move by Continental Bank of Chicago and Merrill Lynch Brokerage Firm has several specific instances of moving large quantities of funds into the field of agriculture. We’re concerned about that, as I’m sure all other organizations are. Some did not have time to comment on it here today. We’re also concerned about imports, the inspection standards, they must be the same as ours. And another thing that concerns us about imports is that, first of all, we have to have some price protection. In other words, a proper duty or tariff to see to it that they remain competitive with what we produce here as well as remain competitive in quality. Without it, there again, we’re going to see more of the bankruptcy levels that we have seen as producers. I’d like to comment on several other things, also, that have already been stated. Oversupply, for one thing, I believe if we’ll look at our long term commitments that this country has made on long term grain agreements and so forth, that when you subtract that from what is supposed to be a carryover of this year’s production, that we actually don’t have a lot left when it comes right down to it. In other words, saying that, if for the period of the next several years, we produce only what’s needed here, which would be considerably short of what we have produced the last several years, that really our surpluses would dwindle quite fastly, or the so-called surpluses at least. As far as allotments are concerned, I think we need to put it in the general category of saying that, first of all, we got a price. What will bear a fair price. Everything that’s needed here will bear a fair price. This country has the ability to pay and has the obligation to pay for that production. If, then, we have a surplus, let’s sell it at the surplus price. I would have a few other comments, but let’s finish the testimony first.

Dwayne Bergkamp:
I’m Dwayne Bergkamp from Sedgwick, Kansas. We’re a family corporation. My dad and my brother. Farm about 1,000 acres with 120 dairy cows. I have to agree with everything that’s been said here so far. I’m going to direct most of my comments towards the consumer. In late October, I had become associated with the Agriculture Council of America. They contacted me through AMPI [Associated Milk Producers Incorporated] about going back east to Memphis, Atlanta, and Jacksonville to do consumer education work. And some of the things that we, my wife and I, thought that we would be considered the ‘big bad wolf’ in food prices when we left to go on this trip. But by and large, it was during the Christmas season, so that may have some bearing on how people acted towards us. But 80% of them said farmers aren’t really to blame, you know, or they told us that we weren’t, that it was everybody involved. In the case of beef, it’s handled by about 7 different people, from the packer to the wholesaler to the cutter to the grocery store. By the time everybody gets their little profit added on, the price does get expensive. I’ll have to admit that. The people have never eaten cheaper in the United States than what they are right now. To verify this, in Jacksonville, Florida, the grocery store had 3 cases of tangelos there. Beautiful tangelos, about two-thirds the size of the oranges that we can buy here. He had them on the shelf at 19¢ a dozen. They’d been there 3 days, and he had sold 1 dozen in the 3 days’ time. He gave us 15 pounds to bring home with us and he said ‘The problem is, these people down here where the orchards are fence row to fence row, they see this nice plump orange hanging on the tree and they won’t buy these because they’re too small.’ Yet, in Japan today, that same orange costs them people $7.50 a dozen. Now I realize it costs something to ship it over there. And there’s the export duties and - or the import duties that Japan has, and I don’t know if we got export duties here to please the longshoremen or not. But for some unknown reason, there’s that price differential. Two years ago, 3 dairymen from Switzerland were at our farm looking for bulls. We got talking about grain price. We could receive $2.80 a bushel for corn in our elevator. Before they left home, they was paying $6.20 a bushel for American corn. There again, I realize it costs something to ship corn across the Atlantic. But does it cost $3.20 a bushel to get it there, compared to our price? They were buying that corn and making money on their milk. Due to the Swiss government funding of their costs. But, you know, the milk ain’t worth that much, but the Swiss government made it worth that much. As far as dairy production goes, AMPI [Associated Milk Producers Incorporated] had a good base plan and it was working in the late ‘60s and early ‘70s. Due to, I feel, some board actions that hurt it, especially the government actions, the antitrust actions that the Justice Department put on it wrecked it. Today, we’re way over-producing our milk and since about September, our price has gone down almost a $1 a 100. We’re in a definite loss situation on our milk. I don’t know, I think the national quota system would work real fine if it was run by the dairy co-ops themselves instead of coming from the Ag Department. Because, when I was back in Washington in March, it’s an awful big place and the government is huge, and for them to understand, like I’m sure you understand, what the situation is out here, it isn’t Congress that’s our problem, it’s the bureaucracy back there. The people that have law degrees and economics degrees that really don’t understand what milking the cow actually is. And there was 2 guys from the Agriculture Council of America that were out about a month ago to do a slide presentation on our farm and Wichita as a whole for consumer education. And they had absolutely no idea what milking a cow was, what feeding a cow was, what getting up at quarter till 5 in the morning was. They was used to working an 8:00 to 5:00 day, not a 5:00 to 8:00 day. And those are some, you know, just some of the little things that we’re facing that we need your help on and we’ve got to be understanding also. Farmers are slow to compliment you and our organizations when things are going good. But we’re also too late to complain and to raise our voice and say we need help. But not, like you said, in the way of a handout. Because we don’t want to be subsidized or a sophisticated welfare state because that’s not right for anybody, us or the consumers alike. I’ll close now and let somebody else have it.

Dole:
Well, I appreciate it. I think it’s been an excellent testimony and I think it’ll be very helpful. I think you’re probably right. I don’t really believe that there is an anti-producer feeling among consumers. I think it’s– but I also believe that in the Congress itself, there are more members who represent urban and suburban areas than represent rural areas. That’s not so true in the Senate, because every senator, whether he knows it or not, probably has some farmers in his state. And so we have, maybe, some more success with farm legislation on the Senate side. But, and I don’t say it critically of urban members of Congress, but I think they have other interests that have a higher priority. And sometimes, they may properly feel the best way to assert themselves is to vote against farm legislation, that they’re somehow protecting the consumer. And so many farm groups now when they come to visit Washington, don’t spend so much time with those of us from Kansas or Nebraska or wherever, they try to contact the city members of Congress, the men and women representing urban districts and they’ve had a lot of success. Part of the communications thing you mentioned, and I think perhaps we’ll have some consumer witnesses, I know, on the proposed farm legislation. And I don’t– I know they are concerned we want to increase the support price for dairy products. I don’t remember the formula offhand how much a 1 cent increase raises the– a 1% increase raises the cost of a quart of milk. But I think there are possibilities, as you suggest, to have better communication.

Bergkamp:
Sir, when we talked about the support price, like on milk. Right now, it’s something like $8.26 I believe. And our farm price is– we got paid $9.60 last month for our milk. $9.60 for us is 82¢ a gallon on the farm, but yet by the time it gets to the grocery store, it’s anywheres from $1.79 to $1.93. So, if we could get a $1 increase, or a $1.50, that would put us in a nice profit picture. And we’re not wanting to get rich out here, we just want to make ends meet plus a reasonable profit. But a $1.50 to us would mean a whole lot, but when you put that on a gallon basis to the store price, that’s about 12¢ at the most. But every time we’ve gotten a little increase, the stores doubled their increase. Back in ‘67, we was getting 51¢ for our milk. And the store price, I think, was around 92, and that’s when I started dairying. So, and even before we left on this trip, our price went down 2¢ a gallon and the store went up 2¢ a gallon. They blamed it on labor and fuel cost. But, yet, in the newspaper, it comes back, you know, the farmers get this increase, so prices go up.

Dole:
Well, I think there is some feeling that farmers, not all farmers, but a great many farmers have done quite well and there’s some who have a misconception that they’ve done quite well because of government payments. And if we get into the agricultural budget, about $11 billion, I think it is, and I think less than 10 or 12 or 13%, I don’t know the exact figure, is used for supporting any commodity programs. But we have the Food Stamp Program as part of the USDA [United States Department of Agriculture] budget. We have other nutrition programs and from a standpoint of strategy, it’s necessary to get a Farm Bill through Congress you need to attach something to it that attracts the attention of the urban members, so it’s– when somebody looks at the budget, they think the farmers got $11 billion. The farmers, not the farmer. Well, I guess I can conclude, and then we’ll have the information that you’re going to furnish.

Bergkamp:
Senator, can I make one comment? On this milk that comes in, for every billion pounds of milk equivalent, it costs the American dairy farmer 25¢ a 100. If we could sell that milk here rather than bring imported milk into this country. So basically, the American farmer lost to imports last year approximately $500 million that we could have generated income within our own country and kept it here. And another thing that is going to be a critical situation is energy. And this is in our drying plants where we have to process our milk, and it’s going to directly affect the farmer, because our cheese that we sell is through our co-ops and all has a locked in cost. But, yet, we have to shoulder the cost for fuel. I think these are something that’s going to have to be looked into.

Dole:
I think, too, we want to make certain we have someone as our trade negotiator in Geneva, who has a strong background in agriculture, otherwise, we always end up on the bottom. They negotiate every other sector and agriculture is somehow pushed on the back burner. We have, and I have made that suggestion to Secretary [of Agriculture Robert] Bergland and others who would have some input. I assume Mr. Yodder will be leaving, but I just hope they, and I’m certain they probably will, appoint someone with a strong farm background not to give agriculture any priority, but to give it equity. If anyone else has any other comments.

Unnamed man:
I was handed a sheet after I come in the hall tonight. It isn’t going to take long, but if you would care to answer it, it said, “McGovern, chairman of the Senate Select Committee on Nutrition and Human Needs, defended statements seen by Dole–”
[laughter]

Dole:
Now is that George McGovern or is that…?

Unnamed man:
This is made– this is just quotes from his speech at Salina. And it says, “‘We’ve got to start an educational process in this country working with our livestock and producers and livestock feeders to rely more on grass-fed beef and to reduce what the amount of corn-fed beef that we’re moving to market. The practice of keeping steers in the feed lot and stuffing them full of corn has to stop.’ The center conceded, ‘It isn’t likely wise to say that. Politically-wise, it’s what has got to happen. Otherwise, there’s no real hope in cutting back on heart attacks, strokes, and hypertension.’” The thing I was thinking about, this is– was a surplus of feed grains in Kansas and is, I don’t know if there’s any sure proof what beef does, eating it, I would say probably there’s about as many heart attacks caused from the price they got for their steers as from eating it.
[laughter and applause]

Dole:
It’s the last weekend. We are on the Nutrition Committee. We’ve been hearing a lot of testimony. I’ve sent a copy of what I said on Good Morning America to some of my cattle-producing friends so they would understand precisely what was said. But there’s a second school of thought, one I don’t share, that some members of Congress feel that with the hunger in the world that we shouldn’t be feeding livestock, we ought to be feeding people. And that’s the other side. The one is related to health, but I had the same comment in Goodland that the fellow, that his heart was weak, but not from eating it, but selling it.
[laughter]

Dole:
And I think he made a pretty good point. But we don’t suggest you stop eating meat. You know, we’re talking about stimulating the economy. Members of Congress stimulated their own first, and I assume the pay raise will go through, but we can talk about tax cuts and investment tax credits and public service jobs and public works programs. And it seems to many of us on the Ag Committee that we’re probably, as someone said earlier, I don’t remember which witness, that we’re on the threshold of a crisis in agriculture. And I’m not running for anything, so I’m just saying what we’ve picked up in the Congress. And if it doesn’t improve, then it’s really going to affect not just the farmer, it’s going to affect him directly, but it’s going to affect consumers and higher prices. And I think Senator Talmadge shares that view. I’ve discussed it with him. We belong to different parties, but we both have the same basic philosophy. And I do believe that in the areas that, particularly wheat and dairy, and other areas that we have a real interest in in the Midwest, we’re going to have pretty much freedom to write that legislation. Within reason, of course. So that’s why we think it’s important. I’ve never held– appealed hearings before. I thought perhaps they were a waste of time. They might be viewed by some as some political ploy, but I’m not seeking any office right now. And the Farm Bill is coming up, and so we hope to take what you said and maybe get some more of the figures you had on– you’re going to leave me your hog production?

Holly:
Yes, I certainly will. I’d like to make one additional comment. There’s been a number of references here today toward the general area of finance. Now, as farmers, of course, I’ve been talking about cost plus a profit. Now, first of all, we talked about government guaranteed loans or this type of thing. What business have we got to ask for more borrowed money from a government who really has none to loan? Let’s face it, if we’re going to put more money out here, they’re going to have to collect it from taxes first in order to have it or create a larger deficit on the other side of the picture. Secondly, what I need in my operation is not the ability to borrow more money, but to pay some of that off that I’ve already got borrowed. If I keep borrowing more and more money, my day of reckoning is coming. And it’s not very far away. Now, I would dare say that if most of the people here today line up their short-term assets, along with, that is, livestock and machinery, and the grain on hand, and take their short-term liabilities, that is, the operating capital that they have borrowed right now, they find themselves in a sad state of affairs and the bankers are telling them, ‘You can’t borrow any more money on farmland.’ Now, where are we going to go? Now, government guaranteed loans, great. But those have to be repaid too. Now, somewhere along the line we have got to have a profit so we can pay off the debt. Now–
[applause]

Holly:
This profit picture, or this guaranteeing of profit to the producer out here, costs the government absolutely nothing. Economic facts from the President’s own report of the economic conditions year after year, when you take the periods of prosperity in this nation, will indicate that during the years of time when we had a balance, when we had parity prices for agriculture, we didn’t have overproduction, the farmers were solvent, and we didn’t have a problem with the surpluses at that time very simply because we had generated the income with which this economy can buy what we produce. And when we started putting parity on a sliding scale, first 90% of 100% and then 90% and 90% and then 90% and 81%, pretty soon we got to 68% and the thing was all out of balance. And so consequently, we started a debt-fueled economy. Now it’s not as simple as all that right here, but that’s the basics of the thing. That’s the Wilken Theory of Economics. And until we get back to that, this country is still headed for disaster. It can’t go any other way. And we have got to have cost plus a profit. Now, if it takes the government to guarantee that because the farmers don’t have common sense enough to demand it themselves, then we’d better go that route and we’d better do it soon. Otherwise, it’s going to be too late. That’s our concern in this situation. My concern as an individual, our concern as an organization. It’s time we face those issues.

Dole:
Well, I think in addition to being helpful, if anybody has comments could submit them in writing on whether or not you’ve had any difficulty with the EPA [Environmental Protection Agency] water pollution regulations. If you haven’t had any difficulty, why, that would be unusual, but if you have and if you think there’s some legitimate complaint, then we’d - it’s not part of the Farm Bill - but something we’d like to address ourselves too because we have had some mail on it. Well, I --

Unnamed man:
[inaudible]

Holly:
At least in our area.

Dole:
I think OSHA [Occupational Safety and Health Administration] gets the prize, but–
[laughter]

Unnamed man:
Thank you for admitting it.

Dole:
Well, having heard the testimony, maybe you’d better stick around because the next witnesses are going to talk about food stamps.
[laughter]

Dole:
That’s why everybody’s waiting. Richard Burr and Dave Stewart.

Host:
Up to here, we point out, all of these witnesses have been talking about the farm side, the producer side, and now comes the consumer side, Richard Burr of the Director of Food Services, Kansas Department. He’s here and Dave Stewart, Campus Minister at Kansas State University, talking about strictly the consumer side of food, the Food Stamp legislation.

Dole:
I think we can, again I’ll -- for the information, the witnesses, you can proceed in any way you wish. Extension of the Food Stamp Program is a part of the overall legislation. Patterned much after the bill passed by the Senate last year, but which failed to pass in the House. I assume there’ll be changes made in the Food Stamp Program. You can, any way you wish to proceed is satisfactory, either summarize your statement or read your statement, but in any event, it will be made a part of the record.

Rick Burr:
Senator Dole, I’m Rick Burr. I’m the State Director of the Food Stamp Program. And I’ll try and keep it short. I want to bring to your attention some of the areas of concern in– for the Food Stamp Program. We have a number of eligibility criteria, which I’m sure you’re aware of as you’ve worked with the program last year, that we want to be assured is a part of the Food Stamp Reform Bill. We are recommending that a standard deduction for determining income be a piece of the criteria for establishing food stamp eligibility.

Dole:
I think that’s a better approach. I mean, it seems to me that it makes it easier to administer, and that’s one of the problems, the cost of administration.

Burr:
Well, as you’re aware of, we’ve got a very complex system right now for determining eligibility: verifying all income, we have to have rent receipts, utility receipts, medical receipts, any paid bills. And it’s an administrative nightmare for local staff to deal with it. If we have just a standard deduction for– just a flat standard deduction, or possibly a graduated standard deduction based on household size, this is going to be a lot easier to administer.

Dole:
Would you make any additional allowance for, say, persons over 65 or totally disabled or that…?

Burr:
I think almost all bills have included an additional $25 deduction per household, if there’s a person, I think, 60 or 65 years of age.

Dole:
60, yeah.

Burr:
And there are also, I think, in Senator Talmadge’s bill, a work incentive of another $25 if the family members are working. We have mixed emotions with that because you’re, all of a sudden, you’re going back to a complex system of computing income. We are hopeful of making this as simple as possible for local staff so that they can determine eligibility on a timely basis. The second area that I want to speak on was retrospective accounting. There have been several bills where what they call ‘retrospective accounting’ is, going back, for example, for 30 days or 60 days or 90 days to see what your past historical income was and then determine eligibility on that income. Talmadge’s bill now is for a 30-day retrospective period. And that means that for 30 days, even though you don’t have a dime or any income or resources, for 30 days, you automatically cannot be determined eligible, or cannot participate. You may be determined eligible, but not participate for 30 days. And this is basically a means of reducing participation in the program, which was, I think, the intent of most bills last year. The other area that I want to talk to you about is the area of eliminating the cash requirement, which you are also familiar with. At this time, now I’m speaking from the experience of the Kansas Food Stamp Program, and I know that national statistics are nearly the same and that is that participation has dropped considerably nationwide in the Stamp Program. It has dropped significantly in Kansas. Well, there are a lot of reasons for that, but–
[timer dings]

Burr:
By golly, already.

Dole:
That’s alright. We have time.

Burr:
Right now, households are experiencing terrific energy costs for heating, electricity, so on. We’ve noticed that our participation has dropped off this winter, one of the worst winters we’ve had, compared to last winter, and I think that it’s basically due to the fact that people do not have the money to pay for their food stamps because they’ve spent it on their heating and electric bills. And you know the pros and cons of this element. We would also like to --

Dole:
Well, I think we need to find some middle ground, there’s great opposition to eliminating the purchase requirement. But there may be– maybe somebody can think of some middle ground. I haven’t thought of any.

Burr:
Well, I think nationwide it’s about 50/50, there’s 50 for and 50 against, and I see the reasoning for both sides. One other, I’m just– I’m going to have to speed up here. One other area that we would like for you to push for, or your support, is to authorize USDA [United States Department of Agriculture] to establish pilot projects in the Program so that we can try some of these new ideas and see if they are successful or a boondoggle. You know, it– I’d rather do something on a small scale and see whether it’s right or wrong before we go nationwide with the policy.

Dole:
I think there is a pilot, or an authorization for one in the bill introduced, as far as purchase requirement is concerned.

Burr:
The last thing I want to mention is, to send back with you is, when we get a Food Stamp Bill on the floor and everything’s ready to go, I hope that it’s– will reflect simplicity and eligibility criteria for the– well, for the sake of local staff to implement and to determine eligibility on a timely basis. The other big thing that we have a problem on is local implementation problems on new policies, and the time in which we are allowed to do something about implementation. And I’ll submit further material in writing to you.

Dole:
I appreciate your comments, too, if we may have them in writing, there, on the assets controversy, whether there should be an assets test, and if so, how do you draw the–

Burr:
As far as–

Dole:
–where do you draw the line?

Burr:
We feel that the current assets test is fair and equitable. If we go to putting dollar values on homes, cars, household goods, it’s a tremendous administrative burden for the local agencies to deal with and one that we don’t feel that we can handle.

Dole:
Mr. Stewart? Reverend Stewart?

Dave Stewart:
Yes, Senator Dole. I am Dave Stewart of the American Baptist Campus Ministry here and have been involved in hunger programming and hunger activities of various sorts. I will submit a written statement but would like to simply highlight several things at this point. First of all, I have a deep concern that very often the Food Stamp Program becomes a ‘whipping boy’. And often people are very critical of it, either because they are unaware or else indifferent to some of the very basic human needs and the extent to which they exist in this nation. I happen to believe that the Food Stamp Program in the past has been serving to meet legitimate needs. It is my concern that it should be adjusted to meet still greater needs more effectively. I think presently it is meeting only about half of the need. That is to say, that only approximately one half of the people who do qualify for the program are receiving benefits. I also am very interested in the USDA [United States Department of Agriculture] study, which indicates that fraudulent use of Food Stamp Program stands at something like eight-tenths of 1% and I would suggest to you that’s hardly the haven for chiselers and rip-off artists as suggested by former Secretary Simon. I am concerned with respect to the standard deduction which is written in, at the point of whether or not this will allow recipients to, in any way, keep up with continued spiraling costs of living. I appreciate from the administrative standpoint the kind of detail that is involved with itemized deduction. On the other hand, I wonder if standard deduction will allow for people who are on the Food Stamp Program to keep pace with the cost of living. Presently, the $70-per-month shelter deduction can simply be consumed, or even beyond that figure, is often being spent for heating bills alone. It would seem to me that we might be guilty, at least by default, of providing some of the desperately poor with the choice of either freezing or starving to death, and so that that would be my concern related to the standard deduction. I would suggest that in the new Food Stamp Bill that we press hard for some of the following: 1) to make every effort to assist in the enlistment of those who do qualify for the Food Stamp Program; 2) to do everything that we can to educate for nutritional consumption. Perhaps present stipulations of purchases may need to be reassessed. For example, I understand that presently, the Food Stamp Program will disallow any purchase of soaps or other things which might be considered hygienic needs. And yet, on the other hand, it continues to allow for nutritionally indiscriminate purchases of food. And I would submit that we might need to look at that again. I would favor the elimination entirely of the purchase requirement of food stamps. The period between the time that a participant’s money is sent in and the time when that person receives the stamps is often a long period of time, I understand as much as 10 days, and those days are often days of going without food due to lack of additional funds. Obviously, if money or stamps are lost in the mail, this becomes disastrous. I would also suggest that we need to provide adequate childcare for the younger households. I understand that more than half of those who are involved in receiving food stamps do have dependent children, and I think that adequate childcare provisions would certainly encourage those persons to secure employment.
[timer dings]

Stewart:
I would also, finally, point out some of the positive effects which are involved in the Food Stamp Program, and again call on the USDA [Untied States Department of Agriculture] study, which showed that in the economy of the State of Texas in 1972, $63.9 million in food stamps generated $232 million in new business, over 5,000 new jobs, and over 16.5 million new tax revenues. And so, in spite of some of the public attitudes and even the political attitudes related to the food stamp program, I submit that it is both good government and good business. Thank you.

Dole:
Right. Well, I think there’s probably -- will be probably a widespread debate over the Food Stamp Program, and again, I think their general trust is to make certain that we extend it in the sense that we reach people who should be participating and, at the same time, where we can, eliminate those who should not. And that sounds the way it ought to work, but we have difficulty in trying to put it together. I think Puerto Rico, for example, what is it, you probably know because I haven’t seen it. 60-some percent of the people are eligible for food stamps. The cost is about a half billion dollars a year. And it is their economy. They have a food stamp economy. But I think it serves a good purpose and there are some who again think it’s all greened up by American farmers to unload commodities on the American people, it’s an outgrowth of the program we did have, where you had commodity distribution programs. Whenever people cite that ‘there are so many millions on food stamps,’ they conveniently forget that, what was it, 8 million receiving commodities, and they were phased out and they went on food stamps. So, it’s not really as bad as some would indicate. There probably are abuses. There was an ad that appeared in the paper. “You could have $18,000 a year,” whatever it was, “and still receive food stamps.” And they had an example of an airline pilot who received food stamps and had a salary of– rather, a good salary. But I think we’re– it will be continued. I think the question is how we can design it so it serves the purpose it should.

Stewart:
I think I would add that my own information has it that generally the stay on a Food Stamp Program is short term and is proportionate to the amount of unemployment which we have nationwide. And so, I don’t see: One, the great abuse that many people would suggest, at the same time, I would quite agree with you that where that abuse does exist, then certainly let’s eliminate it. But I think it is important to keep in perspective that this is a short-term thing for most individuals and I don’t think we can find too many people in this nation who really enjoy having to go on to the program and there’s evidence of that very clearly from the less than 50% of those who qualify are presently on the program.

Dole:
Right, I think there is a question of certification that we’ve tried to deal with and that you can look around in the recent coal crisis, where people are thrown out of work. Now, some, I assume in most of the cases, they had savings and assets and whatever it took to see them through the crisis, but there were some where it became a real crisis. And if you have to wait 30 days, the answer is that they can go to the welfare office. Now, is that the correct way to do it?

Stewart:
Yeah, they would just have to ask for public assistance. If there wasn’t– are you speaking of the 30-day retrospective accounting? All they could do is go to ask, you know, unless it was some of the larger cities that have downtown-type assisting facilities for emergencies such as some food and clothing.

Dole:
What about, Reverend Stewart, what about students? Do you have any position on student eligibility for food stamps?

Stewart:
My information is that there’s a very minimal percentage of students who are on the program and a high percentage of those who are on it, and again, I can’t quote specific figures here, but a very high percentage of those who are on food stamps are married students, and many of those are also veterans who are attending the University. So, again, I don’t see this as a student rip-off either.

Dole:
I just wondered if you see any widespread– you know, we had a lot of reported abuses on college campuses, too. And I don’t know what the rate of student participation is in Kansas. Or do you have it in percentages?

Stewart:
No, I don’t. I think, at least here, I’m in the ballpark by saying it’s something less than 1%, so. Of those who are on the program, that is.

Dole:
I don’t deny that it’s probably been a football, so to speak, philosophical or political or whatever. But I– and I think we get into the whole question of welfare reform and how many Band-Aids we’re going to apply to the patient before it collapses. And I think there will be. President Carter’s indicated an interest in welfare reform and whether this fits into that category– but it’s another program that sometimes can be labeled as that. But since it is part of the general Farm Bill, I assume there’ll be less controversy this year. And it will attract some urban votes for the Farm Bill. And I don’t suggest it’s just a trade-off, but there will be something in the legislation that will appeal to most every member of Congress. I mean, well, want him to look at it, or her to look at it. Thank you very much.

Stewart:
Thank you, Senator.

Dole:
The final witness is Floyd Smith, Director, KSU [Kansas State University] Agricultural Experiment Station. And we’re just now 1 hour behind, which is all right. I think we’ve got a little flexibility in the schedule, but I need to go to Nebraska, I think, tonight, but there may be others here who want to submit statements or say something so you can proceed any way you wish, Doctor Smith, either summarize or put in the record or–

Smith:
I’ll try to save you a little time, Senator Dole. Thank you for this opportunity. Now we are painfully aware of all the problems confronting agriculture in much the fashion that’s already been outlined. I would point out, with the omnipresent challenges of drought, low temperature, and likelihood of severe wind erosion in this state, we feel that it is all the more urgent that a vigorous research and development effort be directed, especially to help out in the Great Plains area. And we were highly pleased by the attention paid to State Agricultural Experiment Station research support in the recent executive budget submitted on January 17th to the Congress of the United States for fiscal year 1978. Now, research funds, of course, would be provided via the Cooperative State Research Service, should the budget recommendations be approved by the Congress. I would want to note, especially, that the increase of about $7.85 million in support of the Hatch payments to the State Experiment Stations would be most welcome. This would help the Kansas Station and the other State Stations to cope with the increased costs of doing research, because this increase of $7.85 million would be the equivalent of about 8.3% increase in operating funds compared to last year. Now, we were disappointed to find that there was no increase recommended for the Cooperative Forestry Research Program, commonly known as the McIntire-Stennis Program. And while forestry is not so important in Kansas as it is in most of the States, increased support of Kansas forestry research efforts would aid materially in solving some critical state problems, especially as related to the alleviation of the energy crisis. We were also disappointed that public law 89-106 Special Grants, as administered by the Cooperative State Research Service, would not include funds for 2 research areas which we believe vitally important to the agriculture of Kansas. These 2 that are noticeable by their absence include beef and pork production research and forage pasture and range research. We would certainly strongly urge restoration of these to last year’s level, which was only $400,000 each. Now we would want to indicate our very high endorsement of those Special Grants Programs that are included, such things as would relate to food and agricultural policies, soybeans, pest management, transportation and storage, and genetic vulnerability, because each of these addresses 1 or more issues of great importance to the state’s number 1 industry. And we’re also very highly pleased to note that the executive budget for the USDA [United States Department of Agriculture] would include an entirely new Special Grants Program for basic research. This, as recommended in the budget, would entail some $27 million. Basic research directed towards production, crop production that is, to improve world food availability certainly has much to recommend it. We suggest, however, that animal agriculture, especially as it relates to converting various crops, especially the forage crops, the native grass pastures in Kansas and so on, into milk and meat products be given attention, because this too is not included in the recommendations submitted to the Congress. We find the specific areas that are included in this basic research program for the 1978 executive budget to be very attractive. We would note that research relating to photosynthetic efficiency, biological nitrogen fixation, genetic engineering of plants, and pest management all relate to problems important in Kansas. Furthermore, we would want to go on record as noting that here at Kansas State University, we are prepared by virtue of our expertise and interests and the structure of our Experiment Station to deal with any or all of these. Now one final comment, as relates to the agricultural budget, would be that as relates to the federal extension appropriations, only 1 increase was included and that would relate to pest management programs. We were somewhat disappointed that not more attention was given to the important extension component of our land grant philosophy. Again, I thank you for this opportunity to be with you.

Dole:
Well, thank you very much. There is a research title in the Talmadge-Dole Farm Bill. In addition, I’ve introduced the National Agricultural Research Policy Bill, which Doctor Miller has had a great deal of input. So, in addition to the things you mentioned, we may be asking for additional comments on some other programs and nutrition research and --

Smith:
Seems like there’s a new one every day.

Dole:
Right, I think– maybe, and we hope that their justification, that’s the point I make, is that it’s easy for somebody to say, ‘We ought to spend a few million dollars for research,’ but if there’s no justification for it, why, and we need your judgment and the judgment of others to substantiate the request.

Smith:
Well, we stand available despite that.

Dole:
Well, is there anyone else who would like to submit a statement? And I could announce, in other words, the hearing record will be open for another 5 days. If you would mail a copy of your statement to my office, just send it to office building room 4213, Washington, DC. It will be made a part of the record and let me repeat that once the testimony is reduced to writing, it will be submitted to the staff and those of us who have a direct interest and hopefully we can glean from that new ideas or support for certain provisions of the legislation. I appreciate very much all the witnesses appearing. We’ll be in Hutchinson, Kansas, tomorrow morning at 9:00 for another session, then we’ll go to Winfield, Kansas, tomorrow afternoon and Pittsburgh, Kansas, tomorrow evening. So we’re trying to get a fairly good cross-section of response and we thank you for coming. If there are no further witnesses or statements, the hearings will be adjourned. Thank you.; Unnamed man:
Here again, they say this loan isn’t charged against the legal lending limit of the bank. Two paragraphs down, they put a $275,000 gross receipt limit on this loan. Let me explain further. A man who runs a 2,000 head feed lot, he purchased the calves at $200 per head or $400,000 for the investment in the cattle. To liquidate the original investment, the original investment, at the same price that he bought them at, $400,000, he would be in violation of this loan. This statement has been verified by the SBA [Small Business Administration] office. And, in closing, I have some other things there that–

Dole:
Okay, go ahead.

Unnamed man:
–I have some other things here that I’ve summarized and I’ve got 10 of them and I hope I have time to give them all to you.

Dole:
Let me hear the other witnesses first. Then we’ll come back. Then we’re going to be running out of time. That’s going to be– Dale.

Unnamed man:
Okay, alright. Thank you.

Dale:
Senator Dole, I appreciate this opportunity. First, I am a farmer and a stockman from North Central Kansas, and anything we may say is an expression of concern facing the agricultural plan of the United States as we see it. One of the greatest problems that we are facing right now, and it is going to become much worse during the next 12 months, unless there is a drastic change in prices of farm commodities, is credit. We have already seen a few foreclosures in our area and if one can believe what our FmHA [Farmers Home Administration] supervisor tells us, there will be more farm sales in the next 12 months than we have seen in a long time. This supervisor told me recently that it was almost unbelievable what some of the situations are. One case, where in budgeting for a loan with a normal crop and good luck, the applicant would still lack nearly $700 in making his interest payment alone, not to mention anything else. Another of interest, though very serious, was when we asked the local implement dealer last fall what he was going to do this winter. He suggested that he would be busy trying to collect from machinery that farmers of the area bought right after harvest of 1976, when the price of wheat was still around $3.50 per bushel. They had just harvested an excellent crop, needed the machinery or thought they did, and had the machinery delivered. We don’t have to tell you this, machinery was not cheap. $50,000 tractors, 10 or $12,000 disc ploughs and so forth. Many banks and other lending institutions are loaned to the limit of the law of their assets. Also drive by the manufacturing plants and dealers lots now and see the tremendous inventories of machinery on hand. There is just no way the average farmer can purchase this machinery at present commodity prices. This is all going to be felt in the economy of the country sooner or later. After all, with the exception of few cities in Kansas, the health and wealth of our state depends on how agriculture is doing. I’m sure that you are aware that the livestock people are not faring so well. About 3 years ago when the livestock industry was in real serious trouble, the price of other farm commodities were good and we were able to absorb a lot of these losses. Today, with no enterprise on the farm making much headway profit-wise, the noose has really tightened, so to speak. For the past 10 years or so, we have been blessed with very satisfactory production crop-wise. We are long-overdue for some below-normal production. Right now, we are facing a real disaster in Kansas unless adequate moisture comes soon. A drought doesn’t just come upon us in 1 season, and neither will it end without affecting production for a time. Realize there is no easy solution to the credit situation, but there definitely needs to be some exploring done because we are facing a serious problem. I heard you, Senator Dole, being interviewed in Denver, Colorado just recently and you were asked what might be in the new farm program. I was interested. You mentioned the increased target levels and loan rates. I have noticed the proposed legislation called for about $2.91 as a target per week and the loan rate of possibly 75% of the target price. Personally, I don’t feel this is enough. I’m thinking about target price of around $3.20 to $3.25 per bushel with a loan rate of 75 to 80% of this target level. I am fully aware of the danger of getting either the target level or the loan rate too high, we do not want the government back in grain business. And we must do all within our power to move all commodities into market channels that we possibly can. It has been proved that this can be done under normal worldwide conditions and in our opinion, it’s the proper way to handle our surpluses. Something is surely out of bounds though, if we can’t justify the above prices in comparison to our costs of producing such commodities. I do believe we are going to have to reduce our findings for a time. In visiting with other farmers, most agree that the set-aside approach is the soundest. Most also agree that to be effective it will have to be mandatory. We believe that some type of reseal program on our CCC [Commodity Credit Corporation] loans would be advantageous to both the farmer and the CCC [Commodity Credit Corporation]. We also believe that a better farm storage facility loan program could be effective. A higher percentage of the cost of the structure and a lower interest rate. My suggestion of a fair percentage would be 85% of the cost, then an interest rate of 5 to 5.5%. This needs immediate attention for the simple reason that, should we, by some miracle, raise even a normal crop, we are going to be in real trouble storage-wise. Another concern that I have right now are the present regulations of our disaster program under the present Farm Act. There are inequities in this disaster program. One is the fact that you might exceed, as has already been mentioned, your assigned production by only a few bushels and be ineligible. Rather, if you are that close, you have really had a disaster. It seems that if one does exceed his eligibility by this small amount, there ought to be some way to give consideration to a percentage of disaster relief. In any new farm legislation, a better way to handle a disaster program might be approached through an all-risk crop insurance program. Thank you very much for the opportunity for presenting this information, I realize that we have shot all over the forest, but it seemed rather dark in the forest right now. Thank you.

Dole:
I might say that the bill that I sponsored with Senator [Henry] Bellmon, again, we haven’t fixed any target prices yet. We don’t know what the loan rate is going to be. But under that proposal, I think the target price is about $3.10 for wheat and the loan level is $2.25 plus handling costs. I’m not certain what he has in the handling cost that would make a difference, but we also extend the maturity of commodity loans from 1 to 5 years. So there’s some other–

Dale:
But, Senator, you were already proposing some of the things I’ve recommended or talked about here.

Dole:
Well, there’s some other things you’ve mentioned. So, Bob, maybe Laverne will have some– the thing we’re looking for is things we haven’t mentioned that are feasible. I think we get into the– the higher we go, the tougher it is. I mean, as far as target prices and loan rates. Laverne.

Laverne:
Thank you, Senator. I’d like to start off by complimenting your very capable staff. If they have any shortcomings, it has to be in the area that they have not learned to take a Dutchman for what he means, not what he says. [Dole laughs] When I called in to ask permission to appear on this program, I’m sure I gave them the impression I wanted to talk about wheat and feed grain programs. But all that time I was concerned about the financial needs. That’s what I was thinking, and they mistook me.

Dole:
We got you in the right spot now, though.

Laverne:
Upon arriving this noon, I saw where– what slot I was in, and I started to revamp my written script here. But your staff, upon learning of my dilemma, said, ‘No problem. We’ll just switch it and you’ll be in the proper category.’ By now, my script is in such a mess. Could we maybe talk about cotton or peanuts?
[laughter]

Dole:
I think if your script’s in a mess, it’ll be understood by the members of Congress.
[laughter]

Laverne:
Okay. I have one suggestion on financial help. Why wouldn’t it be possible to give the farmer an open unsecured loan, rather than first mortgage, second mortgage, red tape, and all kinds of strings attached? The country banks are in trouble. I know a lot of small country banks loaned up to 80-some%, and regardless how good your financial statement is as an individual or a farmer, they just don’t have the money. And correspondent banks are reluctant to go along with it. So why wouldn’t it be possible or feasible to give that farmer an open note, so to speak? A loan? To sign a note like we used to 2, 3 years ago when the banker was trying to shove that money to us as fast as he could. He would ask you, ‘How much? And how long?’ He didn’t ask, ‘Now, what do you want this for? And how do you intend to repay it?’ He’d ask ‘How much and for how long?’ Well, this has all changed. You may think this sounds a little ridiculous or farfetched, but if we use our imagination a little bit, what about 2, 3 years ago when let’s say Uncle Sam—rather than past President Ford or Henry Kissinger, George Meany, or Secretary [Earl] Butz—Uncle Sam asked us to plant fence to fence. And shoot the works. Maximum yield. All-out production. This was going to take huge sums of money. In essence, I think Uncle Sam told us, ‘You put up the money, you loan us the money. We promise to pay you back that money plus interest.’ Well, we all know what happened. Uncle Sam reneged. And this is why we’re in trouble. Now I’m asking, turnabout’s fair play? We didn’t even have Uncle Sam’s signature on that promissory note.
[laughter, then applause]

Laverne:
We’re willing to put our signature on a note, but not a lot of red tape. And second and third mortgages. That’s about it.

Dole:
I was just checking while you were testifying, Laverne, because there are some– a couple of bills. I’m not certain they go as far as yours would.
[laughter]

Dole:
You’d have to be a foreign country to get anything for nothing out of the government.
[laughter]

Laverne:
Well, Senator, I’m willing to negotiate, but I wanted to start as high as I could.
[laughter]

Dole:
Well, you’ve been a good negotiator since we were in high school together, so that’s– but the 2 I’m thinking of, and I think you may be familiar: one would increase the operating loan limit from 50 to 100,000, that’d still get into the secured part of it and the other was, of course, farm ownership loans will be increased from 100 to 200,000, but then Keith Sebelius has been taking a little different approach. His loan authority would allow Farmers Home [Administration] to make guaranteed farm ownership and operating loans of up to 350,000, with a repayment period of seven years. Interest rates would be negotiated between the borrower and the local bank, and Farmers Home [Administration] would guarantee 90% of the loan. That might -- and another part of it does just about what the other bill does. I notice we have a Farmers Home representative here, I don’t know whether he’s hiding or not, but we may want to call on Morgan Williams later to get some comments on that suggestion. But I think basically, I want to ask Mr. Laflin. I share your frustration. I just wonder, do you have anything we haven’t touched on that you think we should do, the Congress, should do?

Mr. Laflin:
Well, I think this, Bob, that I think that this is a suggestion to you. You know, the banks are very frustrated people at the present time. I’ve got a couple of letters here that I could show you that banks have appealed to F[m]HA [Farmers Home Administration] to help them out. They say it doesn’t– say $250,000 and it doesn’t go against their lending limit. Well, the comptroller’s office that governs National Bank says that it does. Now these are 2 government agencies that should get together and they should reach some kind of a decision that either is going to be for or against, one or the other. And this is– I think that banks should be– this is a suggestion for you. That I think that you should have some kind of a regional meeting, say take in 2 states, Nebraska and Kansas. Call in bankers that are grassroot bankers, not Kansas City, Omaha bankers that don’t have any idea what the guy that’s out here, that’s doing the slave work, and understands his problems. Call those people in and they could– I’ve spent time with bankers and they’d just love to come and spend time with you and giving you guidance and direction on how to set these loans just like your Federal Emergency Livestock Loan. They have a real hassle with getting those things through. Now just to show an example, and there’s no inference on the F[m]HA [Farmers Home Administration] people, the one banker that I told– talked to, he said you can never get a written commitment out of F[m]HA. To show you an example, they call the F[m]HA and they say, ‘All right, we want a commitment on 250,000.’ F[m]HA comes out and they work all the details out and they say, ‘That’s fine.’ They get back to their home office, either Omaha or Kansas City, wherever it is. And they’ll say, ‘When are we going to go?’ ‘Well, I didn’t have the authority to make that commitment.’ And I think these are problems that, if you would sit down and talk to bankers, like I say, country bankers like Ottawa and Salina, Abilene, Colby, bankers that are right down there and knowing what’s going on, not correspondent banks. They could sit here and they could give you a lot of food for thought. Things that are needed in this Emergency Livestock Loan. It’s a good loan. But it’s written wrong. It’s tough to get, it’s tough to process. I talked to one banker and he said he tried to process 3 and by the time he got 1 processed, he had to write another an amendment, rewrite the thing 3 times and finally just gave up. And these are things that I think that–

Dole:
I think you’re right. I think that’s something that, it’s not in any legislation, but there might be some things we could do to streamline the process. Because I think– I think I’m accurate, maybe it’s changed a bit, but there have only been about 170 livestock loans made under that provision. There’s authority in that law to loan– guarantee up to $1.5 billion. And it’s underutilized. I think it’s about 500 million now, about half a billion.

Mr. Laflin:
Bankers just pull their hair out when they’ve got to process those things, but they need them. People in the rural areas need them.

Dole:
I’d like to have, if you could do it, if those– the bankers don’t care, if I could have copies of the letters that we could put in the record.

Mr. Laflin:
Well, I’ve eliminated the names and the F[m]HA [Farmers Home Administration] officers that they’ve had problems with, but they’re genuine letters. And if you want to know where they came from, I’d be glad, off the record, to tell you where they are.

Dole:
You know, I met with a banker today in Salina, Mr. Jones from Canton, and that’s a grassroots area. And he gave me some of the problems he’s having. And we have his letter. Maybe these would be helpful too. We don’t need to know the names particularly, but– and I think the other suggestions that Mr. Schurtz has made, at least we’ve thought of some of those and you’re right on the disaster area. There’s some question whether we’re going to replace that with some expanded federal crop insurance, but we appreciate your testimony. If there’s anything else you think of while we hear other witnesses, we would be happy to have it for the record. Do you want to make any other comments? I don’t want to shut you off, but I would like copies of those letters, Bob.

Mr. Laflin:
I’ll make one comment. I like Senator Bellmon’s idea about grazing out the wheat. I think this will–

Dole:
Have you looked at that, Dale, here?

Dale:
No, I hadn’t seen that. I hadn’t. I just– I think that was in your report.

Dole:
Right. It’s a new proposal and it’s– I think it’s– but it’s about the way I stated it. I think he– but he needs to get early action on it. Won’t do you any good if it–

Dale:
This is off the subject of credit, but I also would like to encourage a strong ACP [?] program. And well-funded for it in this new Farm Bill because I think this is vital and it’s going to be forced upon us if we don’t do it one way or another anyway, I’m sure of that.

Dole:
Thank you. Our next category is irrigation. Is it Keintz? Keintz? Albert Keintz? Then following that, if anybody who might be interested, it’ll be livestock and dairy. Then food stamp legislation and agricultural research. There are a total of 9, 10 witnesses. And our hearings were to conclude at 4:00, which obviously is not going to happen, but, so if you can summarize, or in any way expedite, it would be appreciated. Otherwise, we’ll proceed any way you wish. Albert?

Albert Keintz:
Well, I happened to be attending the House and Senate subcommittees in Topeka, and I found out how easy it is to be misunderstood. I was sitting in on a subcommittee where they were discussing the land values and reassessment, and they looked like they were going to come up with the idea that, you were going to be taxed according to what the land produced. Well, as I sat there with an irrigated farm, I began to see my taxes going that way, and so I made some comments about what happened in our neighborhood. And we’re 2 farmers, pretty close, side-by-side, raised 120 bushel of corn by putting in the proper inputs and the other fellow with the same land adjoining them raised 12 bushel, so -- and it’s not cheap to irrigate or put on the inputs that are suggested to us nowadays, so -- but this same issue came up in the Senate committee about 3 days later and I was quoted as saying, instead of corn, ‘120 bushel soybeans to acre for yield.’ And we all know that’s not true. Even Campbell State College can’t do that good. But the water supply in the Kaw Valley, and I’m sure I’m going to keep this to Kaw Valley because I’m sure you heard the critical situation in the West. And I’m going to quote from a State Geological Survey as made in 1974 and we could use 4 times the water that we are using now, or used in 1966, with no adverse depletion of the water supply. This is the most fortunate of any place in Kansas. And energy is our most important concern. The need for more legislation to protect the farmers’ rights as we look at it in the future. Food is an important item, and down the road, many– may become more so. The gas in most places is not possible locally and its byproducts are in short supply. This leaves electricity as our best source of energy for irrigation and also the most convenient. The drawback is that irrigation demand peaks when everyone else is using air conditioning to cool their homes. Thus, increased costs to irrigation is probable. Many problems to be solved. The costs have doubled in 2 years and are expected to go higher. Many regulations are being suggested, both good and bad, for the irrigators. At the state irrigation meeting on December the 1st quite a bit of concern was made according to what they were hearing at that time about Kansas Power and Electric Plant and what the legislature might do about the water rights. This situation has been taken care of by a temporary plan drawn up by the chairman of the Water Resources Board. And this seems to be favorable to most all concerned. I feel that all of us in this area should be grateful for the efforts and foresight of Kansas Power and Light Company in the building of the large energy center. We are going to need it. I also think that from a federal standpoint, the Onega Dam needs timely research and federal money to build to help protect this plant’s water needs. I’m sure you’re acquainted with the Onega -- it’s been in the federal -- locally, I’ve heard about it for 20 years and nothing’s been done. Irrigation isn’t cheap, but it’s a good insurance when that 4-inch rain doesn’t come in July following a dry period in eastern Kansas.

Dole:
We had a number of witnesses in Goodland, I think it was. Well, both Goodland and Liberal. Liberal was an informal session talking about irrigation of course, and their primary concern now are natural gas costs and increases in cost. And I assume you’ve made references to.

Keintz:
Yes.

Dole:
Do you have any suggested solutions?

Keintz:
Well, in this area, I don’t think they’re hooking on irrigation, and this is true quite a bit of both the homes too because of the shortage and it’s quite a bit of electricity going into home use. I know what you’re talking about. Those fellows are quite disturbed out there over there. And this was brought up in the legislature, in the Kansas Legislature, and there was a lot of conflicting ideas brought forward about amount of gas there is out there that isn’t being touched and some of the rights have expired and because of their interstate relationship, they’re tied to the Federal Power Commission, and they’re fighting for some free rights there, at least for irrigation and land use in that area. They have not a lot of water problems, they have fuel problems. We’re quite fortunate in Kansas, the eastern part of Kansas, yes.

Dole:
Well, I appreciate very much your testimony and I thank you for coming.

Keintz:
Thank you. I usually get to your blank and never have time to fill it out and kind of don’t know how to fill it out and lay it aside.

Dole:
It’s hard to do. We tried a questionnaire last in December, and I think the return was around eight or 10 or 12%, but with the postage rates they are, that’s probably pretty good.
[laughter]

Unnamed man:
Some of them are still on the way, Bob.
[laughter]

Dole:
Now some of them are too hot. I haven’t opened them all, some are still burning. But we did. We called about 100 of those people who said we’d never read their questionnaire and I remember I said ‘this is Bob Dole’ to one guy and he said ‘he was Yogi Bear’, and I got all kinds of–
[laughter]

Dole:
So, I didn’t convince anyone with a phone call, and then one lady asked me for inaugural tickets, so I fixed her up, so --
[laughter]

Dole:
I didn’t need mine.
[laughter]

Dole:
The next category is livestock and dairy. Byron Brooks and Walter Leets and Ralph Phillips, Harold Bailey, Oren Holly and Dwayne Bergkamp. There are three dairy and three livestock, I think, or whatever.

Radio Host:
You’re listening to KSAC [Kansas State Agricultural College; call-sign of the Kansas State University Radio Network] Manhattan, Kansas State University, and this is a Senate fact-finding hearing by the Senate Agriculture Committee. It’s being presided over by Senator Bob Dole of Kansas, and this particular group coming on, as he mentioned, livestock and dairy farmers to have their turn at bat here, to have their say.

Dole:
I might just say for the benefit of this panel, you can proceed in any way you wish. If you will just go in the in the order the names were read. Mr. Brooks would be first. We are -- could have a time problem here, but you can either summarize or read your entire statement, or if you want to comment on anything that’s been said, you can do that. In any event, your statement will be made, will be in the record.

Byron Brooks:
I have cut down some on this statement. For the past 10 years, I was a member of the Agriculture and Livestock Committee in the House of Representatives in Topeka. I retired last year, and at present I’m here today representing the Riley County Livestock Association. These are just some random thoughts. I’ve tried to cut out some that I thought were duplications. Our government should require the same health and sanitary measures of imported food as we require of the food processing industries in operation in the United States. We must do away with the Free Lunch or Food Stamp programs for those not in real need. Our agriculture policy should be so designed to place food as a higher priority item than it is at the present time. Food is one of the essentials of life, and it should be paid for at a level which will allow a fair profit along the chain of production, processing, and distribution. Our foreign aid programs, like Law 480, should carry clauses that will insist recipient governments are placing a high priority on food and fiber for their people, and that this food, so provided, would be used in the most expedious [sic] manner to serve the people who actually need it. Our government should not provide food for starving people in nations who are not trying through their governmental policies and efforts to provide food and fiber for their people. If we furnish the food and they develop their industrial complexes and war machines at the expense of their people, we are making a mistake. The US [United States] Department of Agriculture should put more emphasis and inputs on livestock and meat research, as there is a dire need for more research funds in these areas in order to best combine crops and livestock to provide higher quality food for man. This is also true in underdeveloped nations. The livestock industries are not harnessed and developed along with the crop industry. Both livestock and crops should receive major emphasis because they complement each other and using our natural resources in a most effective way, which is environmentally acceptable. Soil and water conservation programs should be continued and widened. The cost of building ponds and terraces, waterways, and other land conservation practices should be shared by the government at an increased expense, as these programs leave the country in better condition for their generations to follow and the farmers shouldn’t bear the total cost, as he can’t reap the total advantage of these expensive practices in his own lifetime. Consumers outnumber producers. Therefore, if they are to become an important part of the US [United States] Department of Agriculture, unfair and unbalanced policies will result and a cheap food policy will continue. The consumers do need to be educated that labor is the largest cost involved with the prices they pay at the grocery store. Our food and agricultural exports should be used as a bargaining force for our energy needs from foreign countries. If there’s to be an effort at tax reform, we do not favor, as suggested, a $50 return to each taxpayer. After the tax has been sent to Washington, it would take thousands of hours of work by governmental workers and additional expense to mail a return to each taxpayer. We would favor a deduction of a like amount before the tax was paid. Agriculture is the most important segment of the economy of both Kansas and the nation. We feel the federal government should do everything in its power to keep it in a healthy condition. We do not feel that in the past with embargoes, strikes, and boycotts, the current government has given agriculture the consideration we have a right to expect. And last is an item not along the others, but the Riley County Livestock Association has, in the past and will continue to, oppose the establishment of a Prairie National Park in Kansas. Thank you, Senator.
[applause]

Dole:
Walter.

Walter Leets:
Thank you, Senator.

Dole:
Is it Leets?

Leets:
Leets, yes.

Dole:
Maybe you’ll have to pull the mic over just a bit there.

Leets:
My statement will be very brief. And I’m a dairy farmer from Paxico, Kansas. I’m about an average size farmer in Kansas. And I’d just like to give you some idea of how our cost of production has changed in the last 3 years. We milk about 55 cows and maintain a production of about 15,000 pounds per cow, which is a little better than state average. We raise all of our hay and forage and buy all of our grain and market milk to Mid-American Dairymen and we subscribe to Kansas Farm Management service of Kansas State University and our farm records are supervised and analyzed by this service. We receive a complete computer printout of our financial condition each year and I will use the results of these printouts as a basis for my statement. The current receipts of the sale of dairy products do not pay for current fees and overhead expenses. I have been able to reduce any short-term loans since 1971 and have reduced my long-term loans only by borrowing money short-term to make the payment. To meet living expenses, we must live on depreciation and short-term loans. As I studied in my year-end business and enterprise analysis from the farm management service, several things came to view. Number 1 was the milk receipts per $100 of feed fed. In 1973, I got $124.19. ’74, I got $114.21. And ’75, I got $106.74. The 1976 figures are not available yet, but I do know from my checkbook balance that it’s not as good as ‘75. Also, between ‘74 and ‘75, I increased efficiency of my cows by almost a ton of milk per cow and still my return fell. The farm cost of producing 100 pounds of milk, this is my farm. In 1973, I sold about 12,000 pounds of milk per cow, and it cost me $9.85 to produce it. I got $7.30 market.

Dole:
What, what? ’75?

Leets:
’73. In ’74, I produced 11,655. The cost of production was $11.70. And the receipts, $9.11, about $2.00 under what it cost me to produce it. In ’75, I produced 13,500 pounds per cow. The cost of milk was still $11.60 because I increased production by a ton of milk per cow. And the receipts were $9.27. And then I’ll go to another, the total cash farm operating expenses, using ’73 as a base year. In ’74, my expenses were up 18% over ’73. And my gross farm income, however, was up 15%, which wasn’t bad. In ’75, my total operating expenses were up 20% over ’74. While my gross farm income fell 3%. In 1976, once again I’m up 17% over ’75. And I don’t know what the gross farm income is because my records aren’t back yet, but since 1973, my total cash outlay to operate the farm business increased by a total of 52.25% while gross farm income increased only 11%. I do not know the results of 1976 as yet. The results of the price of milk not raising along with price of farm expenses affects me in several ways. Number 1, I cannot make equity payments on my investment. And I’ll summarize them and you’ll have it later for you. In summary, the present price of milk is not enough to keep my farm operating. This is the worst financial condition I’ve been through in 20 years in the dairy business. Farm operating expenses have increased at least 52%, and probably more, and to retain the same financial position of ’73, the price of milk should increase about 41% to about $13.07 a 100, and if you’d like, I could verify these with any of your staff sometime in Topeka.

Dole:
Right. Now, I think would be helpful to the committee to know how you figured your cost of production. Do you– what’s the–

Leets:
I took these off the computer printouts at Kansas State University. It puts out the -- I put all of my financial information into them. They figure it and send it back. And I think this includes all expenses plus a reasonable cost for labor.

Dole:
Let’s see. Ralph Phillips?

Ralph Phillips:
Yes, I am Ralph Phillips from Manhattan, Kansas. I didn’t go to punching on a typewriter to amount to anything. I -- looks like he did his homework a lot better than I did. But I am a dairyman. At the present time, we’re milking 75 cows. And I’ll back him up anywhere he wants to go on his figures because mine are very, very similar. Last year and the year before, I was averaging about 55 cows on test. And for the past 2 years, I’ve had a full-time man and his term is up tomorrow. It’s the financial situation. The bank just dictated the fact that I couldn’t justify a full-time man anymore, just simply because the income was not paying the expenses. And in ’74, the dairy imports really knocked the rockers out from under everything. I mean, early, January and February ‘74 when the imports were brought in, the milk price ended up dropping about $2.20 a 100, if I remember correctly, over about a 6-month period of time or such a matter. Well, and then the next year, well, the wheat got pulled out from under us and I raised about 300 acres of wheat, so-- and another comment I might make: the F[m]HA [Farmers Home Administration] Disaster Program in ’74 that was implemented to help people who had come to a disaster, it was no problem to qualify, but I might add that 2 more drought years haven’t made it very easy to repay. And something needs to be done in the line of finance to ease the burden. I’m not asking for any handouts, but something needs to be done to ease the burden to where a young man can go ahead and operate, because some of these days everybody’s going to be 65 if they keep going the way it is. Because a young man trying to operate now, it takes an investment anywhere from 3 to $500,000 to operate and you just multiply that times 7 or 8% on the interest, and most people have to pay 9. So, pretty well puts it in black and white, as far as what the situation is. I thank you.

Dole:
Now, of course, dairy is included in the legislation that we’re going to be considering. I assume there’ll be, you know, different groups representing dairy producers, milk producers, but that gets in the question of what the price support level ought to be and whether quarterly adjustments help or whether we have to find some new approach. I assume imports should be looked at again, just as we look at the meat imports, but-- that is, so if you have any specific things or recommendations, I think the information is good indicating no one’s– or, you’re not making any profit. It’s like just the other direction. Let’s see. Harold?

Harold Bailey:
Yes?

Dole:
That’s dairy, right?

Harold Bailey:
Right. Senator, I’d like to thank you for the opportunity to come before you today and I’m going to cut mine pretty short on account of some duplications of what they said. But I also am a member of Kansas Farm Management, and I’ve got the same type of records that Walter’s got that could be made available. And the thing that I’d like to talk on a little bit is imports. We did have 2 billion pounds of milk equivalent brought into this country this last year. And with no countervailing duties, and I think this is one thing that I’d like to see, countervailing duties paid on milk that comes into this country that has come from countries where subsidies are being paid to the farmers in those countries that produce this milk. And this really disturbs me. And another thing that bothers me, probably even worse than imports coming in, is the standards of the quality of the milk that comes in. I think that all milk marketed to United States consumers should meet the same health standards, the same standards in regulations, sanitary conditions, and the same quality control that our milk that is produced in this country. I think maybe we can come closer to competing with this milk if we’re competing on an even scale with this type of milk and this thing is one thing that I really would like to see some investigation done and possibly some changes made in it. And I’d also like to see the CCC [Commodity Credit Corporation] continue to buy their block cheese and their processed cheese, and I think they could go into buying more processed cheese because this is one cheese that can go back into the school lunch program and into welfare programs real easy. But I’d like to see them discontinue buying barrel cheese on account of, basically, because of the shelf life of barrel cheese. And I realize that there is about a 3 cents --

Dole:
What– What is the shelf life?

Bailey:
It’s pretty short. You get a lot of deterioration because you can’t get the air or the liquids pressed out of barrel cheese like they can block cheese and it’s got to come back onto the market pretty fast. I don’t know exactly what the shelf life is, but I know it’s really short when you compare it to block cheese. But that’s--

Dole:
On the import inspection, again it’s legislation and normally we have witnesses testify on imports and very often they testify, but very seldom is anything done. Senator Packwood there from Oregon has introduced a bill that I have co-sponsored, which would try to take care of some of the things you mentioned, but that in itself doesn’t get it through the Congress. It’s going to need some push from dairy groups and, of course, there are always people on the other side of that who allegedly represent consumers, as if farmers were not consumers, but– so, if you have any suggestions, I may be contacting you to send you a copy of the bill so we can get some comments on that.

Bailey:
Okay, that’d be fine. That’d be great. And just in closing, I’d like to see the Senate Ag. Committee to continue to back and support the Capper-Volstead Act. I think we need this as a viable part of a strong American agriculture. Anything that deteriorates this, I’d like to see moves made to keep it strong, keep it in as legislation. Thank you, Senator.

Dole:
Thank you. Oren?

Oren Holly:
Senator Dole. My name is Oren Holly. I’m a hog producer primarily in Marshall County, Kansas. I’m a member and an active leader in the National Farmers Organization. Officially, the organizational testimony was read into the record out at Goodland, as you’ll probably remember from the State President Paul Nauer. And he spent a good deal of time on cost of production. And as a hog producer, I’d like to inform you that I have here a summary sheet of cost of production. He may have provided you one up there as was done by NFO [National Farmers Organization] members at the Convention in Milwaukee, Wisconsin. I would encourage other farm groups to do the same, and I think they’ll find that while they’re talking about these wide variations in the actual cost figures from individual producers, that if they will guide them through a cost study as a group, that they will find them to be much closer than what they had anticipated originally. This is certainly something that we found as an organization. Of course, you get some ridiculous figures from people who don’t have the figures to back up what they’re saying. I’d like to refer to my prepared statement for just a minute, and I don’t think I need to spend a lot of time emphasizing the efficiency factor and so forth in the family farm structure. But regardless of what type of farm structure we have, the bottom line is profit. Now, without it, we’re out of business. Now that concept has to be learned and understood, first of all by the producers, so they can put themselves in a position to demand it. It must be learned and understood secondly by consumers, because they’ll starve to death without it. And it must be learned and understood thirdly, by officials of our democratic form of government, because they have the responsibility to create an economic atmosphere to protect it. And we must all work together to learn and understand it so we can be and remain in a position to defend it. Private enterprise is the basis of our great nation. Profit is the basis of private enterprise. It’s the premise upon which our forefathers ventured to come here. It’s the same basis for which they fought so it could be established here. It’s the same basis for which our young men have several times given their lives, so that it might remain here, and it’s the same basis that all of us need to be concerned about today and from here on so it will be permanent here. The basis of this private enterprise system is the ability for an individual to build from a basis of what he came into this world with, and that’s absolutely nothing, and to plan to work, to build, and develop and come up with something. Now, a nation, a society, must have this atmosphere of a fair return or cost plus a profit. This profit will allow him, first of all, to live. To provide the basic necessities of life: food, clothing, and shelter. Secondly, it provides him the opportunity to educate. That is, training his children, both academically and morally. And thirdly, to contribute to society, to play an active role in the nation of which he is a part. Without profit, he cannot do these things. Other than that, I have touched on a few things that others have already commented on. The time I’ll have remaining, I’ll reiterate, first of all, that we’re concerned about the move by Continental Bank of Chicago and Merrill Lynch Brokerage Firm has several specific instances of moving large quantities of funds into the field of agriculture. We’re concerned about that, as I’m sure all other organizations are. Some did not have time to comment on it here today. We’re also concerned about imports, the inspection standards, they must be the same as ours. And another thing that concerns us about imports is that, first of all, we have to have some price protection. In other words, a proper duty or tariff to see to it that they remain competitive with what we produce here as well as remain competitive in quality. Without it, there again, we’re going to see more of the bankruptcy levels that we have seen as producers. I’d like to comment on several other things, also, that have already been stated. Oversupply, for one thing, I believe if we’ll look at our long term commitments that this country has made on long term grain agreements and so forth, that when you subtract that from what is supposed to be a carryover of this year’s production, that we actually don’t have a lot left when it comes right down to it. In other words, saying that, if for the period of the next several years, we produce only what’s needed here, which would be considerably short of what we have produced the last several years, that really our surpluses would dwindle quite fastly, or the so-called surpluses at least. As far as allotments are concerned, I think we need to put it in the general category of saying that, first of all, we got a price. What will bear a fair price. Everything that’s needed here will bear a fair price. This country has the ability to pay and has the obligation to pay for that production. If, then, we have a surplus, let’s sell it at the surplus price. I would have a few other comments, but let’s finish the testimony first.

Dwayne Bergkamp:
I’m Dwayne Bergkamp from Sedgwick, Kansas. We’re a family corporation. My dad and my brother. Farm about 1,000 acres with 120 dairy cows. I have to agree with everything that’s been said here so far. I’m going to direct most of my comments towards the consumer. In late October, I had become associated with the Agriculture Council of America. They contacted me through AMPI [Associated Milk Producers Incorporated] about going back east to Memphis, Atlanta, and Jacksonville to do consumer education work. And some of the things that we, my wife and I, thought that we would be considered the ‘big bad wolf’ in food prices when we left to go on this trip. But by and large, it was during the Christmas season, so that may have some bearing on how people acted towards us. But 80% of them said farmers aren’t really to blame, you know, or they told us that we weren’t, that it was everybody involved. In the case of beef, it’s handled by about 7 different people, from the packer to the wholesaler to the cutter to the grocery store. By the time everybody gets their little profit added on, the price does get expensive. I’ll have to admit that. The people have never eaten cheaper in the United States than what they are right now. To verify this, in Jacksonville, Florida, the grocery store had 3 cases of tangelos there. Beautiful tangelos, about two-thirds the size of the oranges that we can buy here. He had them on the shelf at 19¢ a dozen. They’d been there 3 days, and he had sold 1 dozen in the 3 days’ time. He gave us 15 pounds to bring home with us and he said ‘The problem is, these people down here where the orchards are fence row to fence row, they see this nice plump orange hanging on the tree and they won’t buy these because they’re too small.’ Yet, in Japan today, that same orange costs them people $7.50 a dozen. Now I realize it costs something to ship it over there. And there’s the export duties and - or the import duties that Japan has, and I don’t know if we got export duties here to please the longshoremen or not. But for some unknown reason, there’s that price differential. Two years ago, 3 dairymen from Switzerland were at our farm looking for bulls. We got talking about grain price. We could receive $2.80 a bushel for corn in our elevator. Before they left home, they was paying $6.20 a bushel for American corn. There again, I realize it costs something to ship corn across the Atlantic. But does it cost $3.20 a bushel to get it there, compared to our price? They were buying that corn and making money on their milk. Due to the Swiss government funding of their costs. But, you know, the milk ain’t worth that much, but the Swiss government made it worth that much. As far as dairy production goes, AMPI [Associated Milk Producers Incorporated] had a good base plan and it was working in the late ‘60s and early ‘70s. Due to, I feel, some board actions that hurt it, especially the government actions, the antitrust actions that the Justice Department put on it wrecked it. Today, we’re way over-producing our milk and since about September, our price has gone down almost a $1 a 100. We’re in a definite loss situation on our milk. I don’t know, I think the national quota system would work real fine if it was run by the dairy co-ops themselves instead of coming from the Ag Department. Because, when I was back in Washington in March, it’s an awful big place and the government is huge, and for them to understand, like I’m sure you understand, what the situation is out here, it isn’t Congress that’s our problem, it’s the bureaucracy back there. The people that have law degrees and economics degrees that really don’t understand what milking the cow actually is. And there was 2 guys from the Agriculture Council of America that were out about a month ago to do a slide presentation on our farm and Wichita as a whole for consumer education. And they had absolutely no idea what milking a cow was, what feeding a cow was, what getting up at quarter till 5 in the morning was. They was used to working an 8:00 to 5:00 day, not a 5:00 to 8:00 day. And those are some, you know, just some of the little things that we’re facing that we need your help on and we’ve got to be understanding also. Farmers are slow to compliment you and our organizations when things are going good. But we’re also too late to complain and to raise our voice and say we need help. But not, like you said, in the way of a handout. Because we don’t want to be subsidized or a sophisticated welfare state because that’s not right for anybody, us or the consumers alike. I’ll close now and let somebody else have it.

Dole:
Well, I appreciate it. I think it’s been an excellent testimony and I think it’ll be very helpful. I think you’re probably right. I don’t really believe that there is an anti-producer feeling among consumers. I think it’s– but I also believe that in the Congress itself, there are more members who represent urban and suburban areas than represent rural areas. That’s not so true in the Senate, because every senator, whether he knows it or not, probably has some farmers in his state. And so we have, maybe, some more success with farm legislation on the Senate side. But, and I don’t say it critically of urban members of Congress, but I think they have other interests that have a higher priority. And sometimes, they may properly feel the best way to assert themselves is to vote against farm legislation, that they’re somehow protecting the consumer. And so many farm groups now when they come to visit Washington, don’t spend so much time with those of us from Kansas or Nebraska or wherever, they try to contact the city members of Congress, the men and women representing urban districts and they’ve had a lot of success. Part of the communications thing you mentioned, and I think perhaps we’ll have some consumer witnesses, I know, on the proposed farm legislation. And I don’t– I know they are concerned we want to increase the support price for dairy products. I don’t remember the formula offhand how much a 1 cent increase raises the– a 1% increase raises the cost of a quart of milk. But I think there are possibilities, as you suggest, to have better communication.

Bergkamp:
Sir, when we talked about the support price, like on milk. Right now, it’s something like $8.26 I believe. And our farm price is– we got paid $9.60 last month for our milk. $9.60 for us is 82¢ a gallon on the farm, but yet by the time it gets to the grocery store, it’s anywheres from $1.79 to $1.93. So, if we could get a $1 increase, or a $1.50, that would put us in a nice profit picture. And we’re not wanting to get rich out here, we just want to make ends meet plus a reasonable profit. But a $1.50 to us would mean a whole lot, but when you put that on a gallon basis to the store price, that’s about 12¢ at the most. But every time we’ve gotten a little increase, the stores doubled their increase. Back in ‘67, we was getting 51¢ for our milk. And the store price, I think, was around 92, and that’s when I started dairying. So, and even before we left on this trip, our price went down 2¢ a gallon and the store went up 2¢ a gallon. They blamed it on labor and fuel cost. But, yet, in the newspaper, it comes back, you know, the farmers get this increase, so prices go up.

Dole:
Well, I think there is some feeling that farmers, not all farmers, but a great many farmers have done quite well and there’s some who have a misconception that they’ve done quite well because of government payments. And if we get into the agricultural budget, about $11 billion, I think it is, and I think less than 10 or 12 or 13%, I don’t know the exact figure, is used for supporting any commodity programs. But we have the Food Stamp Program as part of the USDA [United States Department of Agriculture] budget. We have other nutrition programs and from a standpoint of strategy, it’s necessary to get a Farm Bill through Congress you need to attach something to it that attracts the attention of the urban members, so it’s– when somebody looks at the budget, they think the farmers got $11 billion. The farmers, not the farmer. Well, I guess I can conclude, and then we’ll have the information that you’re going to furnish.

Bergkamp:
Senator, can I make one comment? On this milk that comes in, for every billion pounds of milk equivalent, it costs the American dairy farmer 25¢ a 100. If we could sell that milk here rather than bring imported milk into this country. So basically, the American farmer lost to imports last year approximately $500 million that we could have generated income within our own country and kept it here. And another thing that is going to be a critical situation is energy. And this is in our drying plants where we have to process our milk, and it’s going to directly affect the farmer, because our cheese that we sell is through our co-ops and all has a locked in cost. But, yet, we have to shoulder the cost for fuel. I think these are something that’s going to have to be looked into.

Dole:
I think, too, we want to make certain we have someone as our trade negotiator in Geneva, who has a strong background in agriculture, otherwise, we always end up on the bottom. They negotiate every other sector and agriculture is somehow pushed on the back burner. We have, and I have made that suggestion to Secretary [of Agriculture Robert] Bergland and others who would have some input. I assume Mr. Yodder will be leaving, but I just hope they, and I’m certain they probably will, appoint someone with a strong farm background not to give agriculture any priority, but to give it equity. If anyone else has any other comments.

Unnamed man:
I was handed a sheet after I come in the hall tonight. It isn’t going to take long, but if you would care to answer it, it said, “McGovern, chairman of the Senate Select Committee on Nutrition and Human Needs, defended statements seen by Dole–”
[laughter]

Dole:
Now is that George McGovern or is that…?

Unnamed man:
This is made– this is just quotes from his speech at Salina. And it says, “‘We’ve got to start an educational process in this country working with our livestock and producers and livestock feeders to rely more on grass-fed beef and to reduce what the amount of corn-fed beef that we’re moving to market. The practice of keeping steers in the feed lot and stuffing them full of corn has to stop.’ The center conceded, ‘It isn’t likely wise to say that. Politically-wise, it’s what has got to happen. Otherwise, there’s no real hope in cutting back on heart attacks, strokes, and hypertension.’” The thing I was thinking about, this is– was a surplus of feed grains in Kansas and is, I don’t know if there’s any sure proof what beef does, eating it, I would say probably there’s about as many heart attacks caused from the price they got for their steers as from eating it.
[laughter and applause]

Dole:
It’s the last weekend. We are on the Nutrition Committee. We’ve been hearing a lot of testimony. I’ve sent a copy of what I said on Good Morning America to some of my cattle-producing friends so they would understand precisely what was said. But there’s a second school of thought, one I don’t share, that some members of Congress feel that with the hunger in the world that we shouldn’t be feeding livestock, we ought to be feeding people. And that’s the other side. The one is related to health, but I had the same comment in Goodland that the fellow, that his heart was weak, but not from eating it, but selling it.
[laughter]

Dole:
And I think he made a pretty good point. But we don’t suggest you stop eating meat. You know, we’re talking about stimulating the economy. Members of Congress stimulated their own first, and I assume the pay raise will go through, but we can talk about tax cuts and investment tax credits and public service jobs and public works programs. And it seems to many of us on the Ag Committee that we’re probably, as someone said earlier, I don’t remember which witness, that we’re on the threshold of a crisis in agriculture. And I’m not running for anything, so I’m just saying what we’ve picked up in the Congress. And if it doesn’t improve, then it’s really going to affect not just the farmer, it’s going to affect him directly, but it’s going to affect consumers and higher prices. And I think Senator Talmadge shares that view. I’ve discussed it with him. We belong to different parties, but we both have the same basic philosophy. And I do believe that in the areas that, particularly wheat and dairy, and other areas that we have a real interest in in the Midwest, we’re going to have pretty much freedom to write that legislation. Within reason, of course. So that’s why we think it’s important. I’ve never held– appealed hearings before. I thought perhaps they were a waste of time. They might be viewed by some as some political ploy, but I’m not seeking any office right now. And the Farm Bill is coming up, and so we hope to take what you said and maybe get some more of the figures you had on– you’re going to leave me your hog production?

Holly:
Yes, I certainly will. I’d like to make one additional comment. There’s been a number of references here today toward the general area of finance. Now, as farmers, of course, I’ve been talking about cost plus a profit. Now, first of all, we talked about government guaranteed loans or this type of thing. What business have we got to ask for more borrowed money from a government who really has none to loan? Let’s face it, if we’re going to put more money out here, they’re going to have to collect it from taxes first in order to have it or create a larger deficit on the other side of the picture. Secondly, what I need in my operation is not the ability to borrow more money, but to pay some of that off that I’ve already got borrowed. If I keep borrowing more and more money, my day of reckoning is coming. And it’s not very far away. Now, I would dare say that if most of the people here today line up their short-term assets, along with, that is, livestock and machinery, and the grain on hand, and take their short-term liabilities, that is, the operating capital that they have borrowed right now, they find themselves in a sad state of affairs and the bankers are telling them, ‘You can’t borrow any more money on farmland.’ Now, where are we going to go? Now, government guaranteed loans, great. But those have to be repaid too. Now, somewhere along the line we have got to have a profit so we can pay off the debt. Now–
[applause]

Holly:
This profit picture, or this guaranteeing of profit to the producer out here, costs the government absolutely nothing. Economic facts from the President’s own report of the economic conditions year after year, when you take the periods of prosperity in this nation, will indicate that during the years of time when we had a balance, when we had parity prices for agriculture, we didn’t have overproduction, the farmers were solvent, and we didn’t have a problem with the surpluses at that time very simply because we had generated the income with which this economy can buy what we produce. And when we started putting parity on a sliding scale, first 90% of 100% and then 90% and 90% and then 90% and 81%, pretty soon we got to 68% and the thing was all out of balance. And so consequently, we started a debt-fueled economy. Now it’s not as simple as all that right here, but that’s the basics of the thing. That’s the Wilken Theory of Economics. And until we get back to that, this country is still headed for disaster. It can’t go any other way. And we have got to have cost plus a profit. Now, if it takes the government to guarantee that because the farmers don’t have common sense enough to demand it themselves, then we’d better go that route and we’d better do it soon. Otherwise, it’s going to be too late. That’s our concern in this situation. My concern as an individual, our concern as an organization. It’s time we face those issues.

Dole:
Well, I think in addition to being helpful, if anybody has comments could submit them in writing on whether or not you’ve had any difficulty with the EPA [Environmental Protection Agency] water pollution regulations. If you haven’t had any difficulty, why, that would be unusual, but if you have and if you think there’s some legitimate complaint, then we’d - it’s not part of the Farm Bill - but something we’d like to address ourselves too because we have had some mail on it. Well, I --

Unnamed man:
[inaudible]

Holly:
At least in our area.

Dole:
I think OSHA [Occupational Safety and Health Administration] gets the prize, but–
[laughter]

Unnamed man:
Thank you for admitting it.

Dole:
Well, having heard the testimony, maybe you’d better stick around because the next witnesses are going to talk about food stamps.
[laughter]

Dole:
That’s why everybody’s waiting. Richard Burr and Dave Stewart.

Host:
Up to here, we point out, all of these witnesses have been talking about the farm side, the producer side, and now comes the consumer side, Richard Burr of the Director of Food Services, Kansas Department. He’s here and Dave Stewart, Campus Minister at Kansas State University, talking about strictly the consumer side of food, the Food Stamp legislation.

Dole:
I think we can, again I’ll -- for the information, the witnesses, you can proceed in any way you wish. Extension of the Food Stamp Program is a part of the overall legislation. Patterned much after the bill passed by the Senate last year, but which failed to pass in the House. I assume there’ll be changes made in the Food Stamp Program. You can, any way you wish to proceed is satisfactory, either summarize your statement or read your statement, but in any event, it will be made a part of the record.

Rick Burr:
Senator Dole, I’m Rick Burr. I’m the State Director of the Food Stamp Program. And I’ll try and keep it short. I want to bring to your attention some of the areas of concern in– for the Food Stamp Program. We have a number of eligibility criteria, which I’m sure you’re aware of as you’ve worked with the program last year, that we want to be assured is a part of the Food Stamp Reform Bill. We are recommending that a standard deduction for determining income be a piece of the criteria for establishing food stamp eligibility.

Dole:
I think that’s a better approach. I mean, it seems to me that it makes it easier to administer, and that’s one of the problems, the cost of administration.

Burr:
Well, as you’re aware of, we’ve got a very complex system right now for determining eligibility: verifying all income, we have to have rent receipts, utility receipts, medical receipts, any paid bills. And it’s an administrative nightmare for local staff to deal with it. If we have just a standard deduction for– just a flat standard deduction, or possibly a graduated standard deduction based on household size, this is going to be a lot easier to administer.

Dole:
Would you make any additional allowance for, say, persons over 65 or totally disabled or that…?

Burr:
I think almost all bills have included an additional $25 deduction per household, if there’s a person, I think, 60 or 65 years of age.

Dole:
60, yeah.

Burr:
And there are also, I think, in Senator Talmadge’s bill, a work incentive of another $25 if the family members are working. We have mixed emotions with that because you’re, all of a sudden, you’re going back to a complex system of computing income. We are hopeful of making this as simple as possible for local staff so that they can determine eligibility on a timely basis. The second area that I want to speak on was retrospective accounting. There have been several bills where what they call ‘retrospective accounting’ is, going back, for example, for 30 days or 60 days or 90 days to see what your past historical income was and then determine eligibility on that income. Talmadge’s bill now is for a 30-day retrospective period. And that means that for 30 days, even though you don’t have a dime or any income or resources, for 30 days, you automatically cannot be determined eligible, or cannot participate. You may be determined eligible, but not participate for 30 days. And this is basically a means of reducing participation in the program, which was, I think, the intent of most bills last year. The other area that I want to talk to you about is the area of eliminating the cash requirement, which you are also familiar with. At this time, now I’m speaking from the experience of the Kansas Food Stamp Program, and I know that national statistics are nearly the same and that is that participation has dropped considerably nationwide in the Stamp Program. It has dropped significantly in Kansas. Well, there are a lot of reasons for that, but–
[timer dings]

Burr:
By golly, already.

Dole:
That’s alright. We have time.

Burr:
Right now, households are experiencing terrific energy costs for heating, electricity, so on. We’ve noticed that our participation has dropped off this winter, one of the worst winters we’ve had, compared to last winter, and I think that it’s basically due to the fact that people do not have the money to pay for their food stamps because they’ve spent it on their heating and electric bills. And you know the pros and cons of this element. We would also like to --

Dole:
Well, I think we need to find some middle ground, there’s great opposition to eliminating the purchase requirement. But there may be– maybe somebody can think of some middle ground. I haven’t thought of any.

Burr:
Well, I think nationwide it’s about 50/50, there’s 50 for and 50 against, and I see the reasoning for both sides. One other, I’m just– I’m going to have to speed up here. One other area that we would like for you to push for, or your support, is to authorize USDA [United States Department of Agriculture] to establish pilot projects in the Program so that we can try some of these new ideas and see if they are successful or a boondoggle. You know, it– I’d rather do something on a small scale and see whether it’s right or wrong before we go nationwide with the policy.

Dole:
I think there is a pilot, or an authorization for one in the bill introduced, as far as purchase requirement is concerned.

Burr:
The last thing I want to mention is, to send back with you is, when we get a Food Stamp Bill on the floor and everything’s ready to go, I hope that it’s– will reflect simplicity and eligibility criteria for the– well, for the sake of local staff to implement and to determine eligibility on a timely basis. The other big thing that we have a problem on is local implementation problems on new policies, and the time in which we are allowed to do something about implementation. And I’ll submit further material in writing to you.

Dole:
I appreciate your comments, too, if we may have them in writing, there, on the assets controversy, whether there should be an assets test, and if so, how do you draw the–

Burr:
As far as–

Dole:
–where do you draw the line?

Burr:
We feel that the current assets test is fair and equitable. If we go to putting dollar values on homes, cars, household goods, it’s a tremendous administrative burden for the local agencies to deal with and one that we don’t feel that we can handle.

Dole:
Mr. Stewart? Reverend Stewart?

Dave Stewart:
Yes, Senator Dole. I am Dave Stewart of the American Baptist Campus Ministry here and have been involved in hunger programming and hunger activities of various sorts. I will submit a written statement but would like to simply highlight several things at this point. First of all, I have a deep concern that very often the Food Stamp Program becomes a ‘whipping boy’. And often people are very critical of it, either because they are unaware or else indifferent to some of the very basic human needs and the extent to which they exist in this nation. I happen to believe that the Food Stamp Program in the past has been serving to meet legitimate needs. It is my concern that it should be adjusted to meet still greater needs more effectively. I think presently it is meeting only about half of the need. That is to say, that only approximately one half of the people who do qualify for the program are receiving benefits. I also am very interested in the USDA [United States Department of Agriculture] study, which indicates that fraudulent use of Food Stamp Program stands at something like eight-tenths of 1% and I would suggest to you that’s hardly the haven for chiselers and rip-off artists as suggested by former Secretary Simon. I am concerned with respect to the standard deduction which is written in, at the point of whether or not this will allow recipients to, in any way, keep up with continued spiraling costs of living. I appreciate from the administrative standpoint the kind of detail that is involved with itemized deduction. On the other hand, I wonder if standard deduction will allow for people who are on the Food Stamp Program to keep pace with the cost of living. Presently, the $70-per-month shelter deduction can simply be consumed, or even beyond that figure, is often being spent for heating bills alone. It would seem to me that we might be guilty, at least by default, of providing some of the desperately poor with the choice of either freezing or starving to death, and so that that would be my concern related to the standard deduction. I would suggest that in the new Food Stamp Bill that we press hard for some of the following: 1) to make every effort to assist in the enlistment of those who do qualify for the Food Stamp Program; 2) to do everything that we can to educate for nutritional consumption. Perhaps present stipulations of purchases may need to be reassessed. For example, I understand that presently, the Food Stamp Program will disallow any purchase of soaps or other things which might be considered hygienic needs. And yet, on the other hand, it continues to allow for nutritionally indiscriminate purchases of food. And I would submit that we might need to look at that again. I would favor the elimination entirely of the purchase requirement of food stamps. The period between the time that a participant’s money is sent in and the time when that person receives the stamps is often a long period of time, I understand as much as 10 days, and those days are often days of going without food due to lack of additional funds. Obviously, if money or stamps are lost in the mail, this becomes disastrous. I would also suggest that we need to provide adequate childcare for the younger households. I understand that more than half of those who are involved in receiving food stamps do have dependent children, and I think that adequate childcare provisions would certainly encourage those persons to secure employment.
[timer dings]

Stewart:
I would also, finally, point out some of the positive effects which are involved in the Food Stamp Program, and again call on the USDA [Untied States Department of Agriculture] study, which showed that in the economy of the State of Texas in 1972, $63.9 million in food stamps generated $232 million in new business, over 5,000 new jobs, and over 16.5 million new tax revenues. And so, in spite of some of the public attitudes and even the political attitudes related to the food stamp program, I submit that it is both good government and good business. Thank you.

Dole:
Right. Well, I think there’s probably -- will be probably a widespread debate over the Food Stamp Program, and again, I think their general trust is to make certain that we extend it in the sense that we reach people who should be participating and, at the same time, where we can, eliminate those who should not. And that sounds the way it ought to work, but we have difficulty in trying to put it together. I think Puerto Rico, for example, what is it, you probably know because I haven’t seen it. 60-some percent of the people are eligible for food stamps. The cost is about a half billion dollars a year. And it is their economy. They have a food stamp economy. But I think it serves a good purpose and there are some who again think it’s all greened up by American farmers to unload commodities on the American people, it’s an outgrowth of the program we did have, where you had commodity distribution programs. Whenever people cite that ‘there are so many millions on food stamps,’ they conveniently forget that, what was it, 8 million receiving commodities, and they were phased out and they went on food stamps. So, it’s not really as bad as some would indicate. There probably are abuses. There was an ad that appeared in the paper. “You could have $18,000 a year,” whatever it was, “and still receive food stamps.” And they had an example of an airline pilot who received food stamps and had a salary of– rather, a good salary. But I think we’re– it will be continued. I think the question is how we can design it so it serves the purpose it should.

Stewart:
I think I would add that my own information has it that generally the stay on a Food Stamp Program is short term and is proportionate to the amount of unemployment which we have nationwide. And so, I don’t see: One, the great abuse that many people would suggest, at the same time, I would quite agree with you that where that abuse does exist, then certainly let’s eliminate it. But I think it is important to keep in perspective that this is a short-term thing for most individuals and I don’t think we can find too many people in this nation who really enjoy having to go on to the program and there’s evidence of that very clearly from the less than 50% of those who qualify are presently on the program.

Dole:
Right, I think there is a question of certification that we’ve tried to deal with and that you can look around in the recent coal crisis, where people are thrown out of work. Now, some, I assume in most of the cases, they had savings and assets and whatever it took to see them through the crisis, but there were some where it became a real crisis. And if you have to wait 30 days, the answer is that they can go to the welfare office. Now, is that the correct way to do it?

Stewart:
Yeah, they would just have to ask for public assistance. If there wasn’t– are you speaking of the 30-day retrospective accounting? All they could do is go to ask, you know, unless it was some of the larger cities that have downtown-type assisting facilities for emergencies such as some food and clothing.

Dole:
What about, Reverend Stewart, what about students? Do you have any position on student eligibility for food stamps?

Stewart:
My information is that there’s a very minimal percentage of students who are on the program and a high percentage of those who are on it, and again, I can’t quote specific figures here, but a very high percentage of those who are on food stamps are married students, and many of those are also veterans who are attending the University. So, again, I don’t see this as a student rip-off either.

Dole:
I just wondered if you see any widespread– you know, we had a lot of reported abuses on college campuses, too. And I don’t know what the rate of student participation is in Kansas. Or do you have it in percentages?

Stewart:
No, I don’t. I think, at least here, I’m in the ballpark by saying it’s something less than 1%, so. Of those who are on the program, that is.

Dole:
I don’t deny that it’s probably been a football, so to speak, philosophical or political or whatever. But I– and I think we get into the whole question of welfare reform and how many Band-Aids we’re going to apply to the patient before it collapses. And I think there will be. President Carter’s indicated an interest in welfare reform and whether this fits into that category– but it’s another program that sometimes can be labeled as that. But since it is part of the general Farm Bill, I assume there’ll be less controversy this year. And it will attract some urban votes for the Farm Bill. And I don’t suggest it’s just a trade-off, but there will be something in the legislation that will appeal to most every member of Congress. I mean, well, want him to look at it, or her to look at it. Thank you very much.

Stewart:
Thank you, Senator.

Dole:
The final witness is Floyd Smith, Director, KSU [Kansas State University] Agricultural Experiment Station. And we’re just now 1 hour behind, which is all right. I think we’ve got a little flexibility in the schedule, but I need to go to Nebraska, I think, tonight, but there may be others here who want to submit statements or say something so you can proceed any way you wish, Doctor Smith, either summarize or put in the record or–

Smith:
I’ll try to save you a little time, Senator Dole. Thank you for this opportunity. Now we are painfully aware of all the problems confronting agriculture in much the fashion that’s already been outlined. I would point out, with the omnipresent challenges of drought, low temperature, and likelihood of severe wind erosion in this state, we feel that it is all the more urgent that a vigorous research and development effort be directed, especially to help out in the Great Plains area. And we were highly pleased by the attention paid to State Agricultural Experiment Station research support in the recent executive budget submitted on January 17th to the Congress of the United States for fiscal year 1978. Now, research funds, of course, would be provided via the Cooperative State Research Service, should the budget recommendations be approved by the Congress. I would want to note, especially, that the increase of about $7.85 million in support of the Hatch payments to the State Experiment Stations would be most welcome. This would help the Kansas Station and the other State Stations to cope with the increased costs of doing research, because this increase of $7.85 million would be the equivalent of about 8.3% increase in operating funds compared to last year. Now, we were disappointed to find that there was no increase recommended for the Cooperative Forestry Research Program, commonly known as the McIntire-Stennis Program. And while forestry is not so important in Kansas as it is in most of the States, increased support of Kansas forestry research efforts would aid materially in solving some critical state problems, especially as related to the alleviation of the energy crisis. We were also disappointed that public law 89-106 Special Grants, as administered by the Cooperative State Research Service, would not include funds for 2 research areas which we believe vitally important to the agriculture of Kansas. These 2 that are noticeable by their absence include beef and pork production research and forage pasture and range research. We would certainly strongly urge restoration of these to last year’s level, which was only $400,000 each. Now we would want to indicate our very high endorsement of those Special Grants Programs that are included, such things as would relate to food and agricultural policies, soybeans, pest management, transportation and storage, and genetic vulnerability, because each of these addresses 1 or more issues of great importance to the state’s number 1 industry. And we’re also very highly pleased to note that the executive budget for the USDA [United States Department of Agriculture] would include an entirely new Special Grants Program for basic research. This, as recommended in the budget, would entail some $27 million. Basic research directed towards production, crop production that is, to improve world food availability certainly has much to recommend it. We suggest, however, that animal agriculture, especially as it relates to converting various crops, especially the forage crops, the native grass pastures in Kansas and so on, into milk and meat products be given attention, because this too is not included in the recommendations submitted to the Congress. We find the specific areas that are included in this basic research program for the 1978 executive budget to be very attractive. We would note that research relating to photosynthetic efficiency, biological nitrogen fixation, genetic engineering of plants, and pest management all relate to problems important in Kansas. Furthermore, we would want to go on record as noting that here at Kansas State University, we are prepared by virtue of our expertise and interests and the structure of our Experiment Station to deal with any or all of these. Now one final comment, as relates to the agricultural budget, would be that as relates to the federal extension appropriations, only 1 increase was included and that would relate to pest management programs. We were somewhat disappointed that not more attention was given to the important extension component of our land grant philosophy. Again, I thank you for this opportunity to be with you.

Dole:
Well, thank you very much. There is a research title in the Talmadge-Dole Farm Bill. In addition, I’ve introduced the National Agricultural Research Policy Bill, which Doctor Miller has had a great deal of input. So, in addition to the things you mentioned, we may be asking for additional comments on some other programs and nutrition research and --

Smith:
Seems like there’s a new one every day.

Dole:
Right, I think– maybe, and we hope that their justification, that’s the point I make, is that it’s easy for somebody to say, ‘We ought to spend a few million dollars for research,’ but if there’s no justification for it, why, and we need your judgment and the judgment of others to substantiate the request.

Smith:
Well, we stand available despite that.

Dole:
Well, is there anyone else who would like to submit a statement? And I could announce, in other words, the hearing record will be open for another 5 days. If you would mail a copy of your statement to my office, just send it to office building room 4213, Washington, DC. It will be made a part of the record and let me repeat that once the testimony is reduced to writing, it will be submitted to the staff and those of us who have a direct interest and hopefully we can glean from that new ideas or support for certain provisions of the legislation. I appreciate very much all the witnesses appearing. We’ll be in Hutchinson, Kansas, tomorrow morning at 9:00 for another session, then we’ll go to Winfield, Kansas, tomorrow afternoon and Pittsburgh, Kansas, tomorrow evening. So we’re trying to get a fairly good cross-section of response and we thank you for coming. If there are no further witnesses or statements, the hearings will be adjourned. Thank you.

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