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Show UTAH Page 4 The 1970's The Challenge... If farmers are to meet the challenges and changes of the seventies, they will need a farm policy that looks to the future and not to the past. Controls designed for the thirties do not work today. The economic climate has changed and agriculture has changed. We have fewer farms and a larger output. Farming has become more technical, more specialized and more dependent on nonfarm inputs such as commercial fertilizer, pesticides, weed killers, seed inoculants, antibiotics, and high cost farm machinery. takes a lot of money to operate a farm; profit margins are slim and farmers need to be free to make the best use of their resources. It Market demand for farm products has become more specific with regard to such factors as quality and uniformity. Farmers have become more dependent on export markets. The competition of man-mad- e substitutes for farm is increased and has products continuing to increase. All of these changes in the economy and agriculture have to be considered in the type of government farm policy that will be needed to serve the interests of farmers in the 1970's. The problems of low net farm income, shrinking markets and limited opportunities, which have characterized the sixties, will grow in the decade ahead unless a completely new approach is adopted. Here are some reasons why current farm programs have failed to meet the needs of farmers: Controls Do Not Work 1. Farm production controls do not work and result in inefficient operations. Most controls are in the form of acreage limitations and acreage is only one factor of production. Fertilizer and other "land substitutes" thwart acreage controls. Record crop outputs, year after year, show how controls have failed. Acreage restrictions also increase unit production costs by interfering with efficient use of land, labor and equipment on individual farms and by restricting shifts between farms and production areas. As a result, high cost producers are kept in business while low cost producers are penalized. Surpluses Set Ceilings stocks are bad for farmers a tend set to because they ceiling on market prices. Government-owne- Farm Bureau is for 3. Direct government payments make farmers de- For 2. May 1970 - Payments Are Not the Answer A Farm Policy . FARM BUREAU d net pendent on government appropriations for their income. Big payments to some individual farmers invite limitations based on welfare standards. With pressure on Congress to slash government spending farmers must worry from year to year on how much their payments and income will be cut. Direct payments also put the U.S. in a poor position to bargain for greater access to foreign markets. In effect, a payment program on an export crop is a disguised export subsidy, even though the payments are supposedly confined to the domestic portion of the crop. Foreign competitors recognize this as a form of export dumping. 4. Current farm programs do little to help the farmer who most needs help. Commodity payment programs cannot solve the problems of farmers who A gradual transition to a market-oriente- d program, during which payments would be made at a declining rate. . . . A permanent program of price support loans based on market prices in a recent period. . . . A government sales policy that will protect sales of govermarket prices against cut-ranment-owned surplus commodities. . . . The retirement of at least 50 million acres of . . . te year contracts, cropland under flve-to-tlimitations on and with grazing prohibited, the acreage that can be retired in any one en ... have little to sell. Agriculture At The Crossroads American agriculture is at the crossroads. Government farm programs for cotton, feed grains and wheat expire with the 1970 crops, and a future course must be determined. A decision must be made on whether producers farm of these commodities will have a market-base- d e long-rangneeds and profits or program geared to stopgap measures that merely postpone the day of reckoning. Will farmers have to go year after year with hat in hand, along with relief clients, to beg an Congress for money to stay in business, or will they assume their rightful place as an important operating segment of the American economic system? will be saddled with community. A special transitional program, including training and adjustment assistance for farmers. re- low-inco- me 1971, 60 percent in 1972, 40 percent in 1973, 20 percent in 1 974 and zero in 1 975. Wheat sales have declined in part because of the wheat certificate cost processors have to pay, and the inverse subsidy or export tax, which ran as high as 46 cents per bushel before the international Wheat Trade Convention broke down. short-ter- urban-dominat- ed Cropland Adjustment 5. Effective with the 1975 crops of feed grains, cotton and wheat, all acreage allotments, base acreages, marketing quotas, and direct payments would be discontinued! Farmers would be paid for taking land out of procontracts. duction under 5 and 1 Need Positive Program 0-ye-ar The direction of farm policy cannot be changed overnight, and farmers should not have to bear the burden of changeover. Substantial payments must be made for a transition period to cushion the effects of needed adjustments in farm operations. Price support loans related to market prices must be a permanent part of future long-rang- e farm policy, and markets must be protected against cut-rat- e government sales of surplus commodities. Positive, realistic farm program legislation, based on these objectives with an overall goal of improved net farm income, has been introduced in Congress by Republican and Democrat members of the U.S. Senate and House. current cropland adjustment program would be modified to require emphasis on the retirement of whole farms and the use of competitive bids to determine the land to be retired. 6. The The Secretary of Agriculture would be directed to retire at least 10 million acres per year for five years, under this program. 1971-197- 5, Grazing would be prohibited on retired acres to protect livestock producers, and the Secretary of Agriculture would be authorized to limit the total acreage that may be retired in any county or local community to avoid adverse effects on local economies. contrast to the present programs of diverting a portion of the cropland on a maximum number of individual farms from specific crops on an annual basis, the proposed expansion of the Cropland Adjustment Program, with emphasis on whole farms, would be more effective in achieving needed adjustments. In The legislation is aimed at giving farmers a chance to manage their own farms in a competitive system with less government interference. AAA of 1969 The legislation is known as the Agricultural Adjustment Act of 1969 and has these major provisions: Beginning with the 1971 crops, loan rates for wheat, cotton, feed grains and soybeans would be set at not more than 85 percent of the previous three-yemarket average price. Such commodity loans would be made a permanent part of the program. Producers thus would have a price floor; money would be available at harvesttime; and orderly marketing would be encouraged. 1. ar 2. Beginning in 1971, direct government payments would be phased out by reducing the total amount used for this purpose for 1 969 crops of feed grains, cotton and wheat, 20 percent per year for five years. the land now being diverted under the Much of current one-ye- retirement programs is not top qualland. Also, present programs that divert acreage ity a on part-farbasis encourage the heavy use of fertilizer and other "land substitutes" and thus guarantee increased per-acr- e yields. ar m Aid To Low Income Farmers 7. The legislation provides for a special program of grants, loans and retraining assistance for small, farmers during the 1971-7- 5 transitional period. low-inco- This program would be open to any farmer who has had average gross annual sales of farm products of not more than $5,000 and off-farincome of not more than $2,000 per year for husband and wife for the immediately preceding three years. m Current programs for feed grains, wheat and cotton are not serving the interests of farmers - . . . Acreage controls are costly, inefficient and ineffective. e . . . The sale of government stocks at prices depresses the prices farmers get for cut-rat- current production. . . . Payments make farm income dependent on Congressional appropriations. . . . Payments indirectly subsidize exports and this makes it difficult for the U.S. to bargain effectively for greater access to foreign markets. . . . Continuation of the payment approach will lead to limitations based on welfare Ban Government Dumping 3. Effective in 1971, the government would be prohibited from selling its stocks of feed grains, cot- ton, wheat and soybeans at less than 150 percent of the current loan rate plus carrying charges. For example, under current conditions if loan rates averwere set at 85 percent of the latest three-yea- r could market not be prices, government holdings age less sold at than $1.82 per bushel for wheat; $1.43 bushel for corn; $3.27 per bushel for soybeans; per and 29 cents for cotton. This would protect the market against government dumping and permit market prices to rise above the support level. Price support loan rates would not become ceilings as they do now. 4. The cost of wheat certificates to processors would be reduced to 80 percent of the 1 969 level in Such farmers would be eligible to receive one or more of the following: A. Compensation for acreage allotments and base acreages surrendered to the Secretary of Agriculture for permanent cancellation. This would apply to all commodities having acreage allotments or base acreages. B. Retraining grants of not to exceed $1,000. C. Adjustment assistance of not to exceed $2,500 per year for two years. under existing credit programs to further facilitate the transition of eligible farmers to more gainful employment. D. Loans The proposed' legislation represents a progressive program built to operate in a growth economy as contrasted to the restrictive, backward looking current program which is based on the philosophy of the depression thirties. |