speculators and investors and today the farmer is forced to rent this land back at high cash rent prices.

Today, these young men, which agriculture so desperately needs, along with hundreds of other older farmers and ranchers, are faced with financial disaster. Also affected will be the small businesses in these small rural communities-and this is one thing that hasn't been touched a lot on today, but it is a great concern.

I just visited the local Ben Franklin dealer yesterday before I came down. He cut his Christmas orders this year by one-half. There have been a lot of people in the Hendricks community and throughout the county, good working people, that have been laid off, because there is no way when your business drops to half or less, that you can continue to hire these people. These people will then be gobbled up by the three M's-the Pittsburgh Plate Glass, Marshall, Brookings, what have you. And when the time comes they need to be replaced, there isn't going to be a good work force to replace them with-and it is a great concern.

America cannot afford to let this happen. Immediate action must be taken to prevent this. Adequate funds must be set aside to provide loans and an interest rate low enough so that the interest does not become burdensome.

Many people are asking, why is this necessary when farming has been good for the past 3 years? And here again, if you didn't get a crop the past 2 or 3 years-I don't care where prices were-it didn't do you a lot of good. But they also forget how bad it was for 20 years before that. For 20 years capital improvements that were so badly needed were not made, and machinery that was being depreciated out was not being replaced. In the past 3 years, the farmer has used his spendable income, after taxes, to replace his wornout machinery or to replace and repair buildings that he had not been able to do in the past.

Everyone in this country has profited directly or indirectly because of this.

Probably of the greatest concern is the livestock producer. The livestock producer has looked at declining prices and high feed costs for the past 2 years. Many of these people have lost all of their equity and their bank couldn't sell them out if they wanted to. I have brought with me a small sampling of the feed condition in Lincoln County, which I will share with you now. And we run off some of these; I am not going to take the time to go through any examples on this. The names are there and their addresses. If there is any question as to the credibility of these conditions, they can be checked out. These are actual conditions; they are not estimates; they are there. * Senator HUDDLESTON. We will be happy to receive that: Mr. GILBERTSON. I believe you do have copies of it. Senator HUDDLESTON. Very good.

Mr. GILBERTSON. There are not many farmers in our area that have more than a third of the hay they will need. The hay and feed program as it now stands is almost unworkable. It is making liars. out of some people, and the average hardworking, honest farmer is not eligible under the present guidelines.

*See p. 99.

No farmer should have to be almost broke before he qualifies for emergency feed. No dairy or beef farmer would think of letting his hay supply get to a 30-day level. With Minnesota and Dakota winters such as they are, no good operator would dare let his supply get to a 30-day level. We must realize that any good operator should plan from year to year, not from day to day.

I would suggest that the Federal Government set down some very broad guidelines and then trust each county's local elected officials to administer this feed program. Surely no one individual can know the situation better than a local level government. I feel equally strong that very strict precautions should be taken to prevent unneeded abuses of these programs.

I have touched only briefly on just a few of the problems facing us today, and I would be happy to attempt to answer any questions you have on these matters.

I only hope that the Federal Government that has poured billions of dollars into foreign aid programs, into military spending, has seen fit to bail out the Penn Centrals, the Boeings, the Lockheeds, and many, many more, will appropriate the necessary funds to help these stricken areas to attain economic stability once again.

Agriculture is the backbone of this great Nation and every possible precaution should be made to preserve the family farm and improve the family farm concept.

And I would strongly, after listening to the testimony this morning by the Department of Agriculture, urge this committee to take immediate action, because, to be real honest, after listening to this testimony they seemed to voice very little concern. To be real honest, the Department of Agriculture has lost much of its credibility because of things like this. I think it is important that this committee make the decision. Actually, for the farmer in rural America, he is much more apt to pick up the paper and rather than to read about farm concerns by the Department of Agriculture, he is more apt to pick up and read a press release that is saying, great news, consumers, we have got more than enough food, food prices are going to go down! And to the farmer this would be about like the Department of Labor saying, great news, America, we have got more than an adequate work force, I think we are going to be able to lower wages. It just won't happen.

Senator HUDDLESTON. We don't expect to see that happen.
Mr. GILBERTSON. Thank you.

Senator HUDDLESTON. Thank you, Mr. Gilbertson. And I think we need to emphasize these side effects of this kind of a disaster. Certainly the economic condition of the areas involved for a period of time should be considered.

Mr. GILBERTSON. I have got one little side point there. In Hendricks, over half of the businessmen in Hendricks, Minn., where I am from, are under 40 years of age, that entered business in the last 10 years, because of the changing economic picture in rural America. And these people, just like these young farmers, don't have the equity where they can stand some of the losses that they are faced with right

now.

Senator HUDDLESTON. Should we go ahead with the other witnesses, Senator, and then we will ask whatever questions we have.

Senator HUMPHREY. I am just going to remain. I have a luncheon that I must chair today, but I want to say to my associates from Minnesota, I made arrangements for luncheon for you in the Senate Dining Room, and I want you to be my guests. I can't take all these South Dakota fellows-I think Senator McGovern took care of them. Mr. GILBERTSON. Thank you.

Mr. GRABA. Thank you.

Senator HUMPHREY. Thank you, go ahead.

Senator HUDDLESTON. All right, go ahead, Mr. Graba.

STATEMENT OF JERRY GRABA, SMALL FARM ADVISORY
COMMITTEE, SEBEKA, MINN.

Mr. GRABA. I am Jerry Graba from Wadena County, Minnesota. I am representing sort of a unique committee. It is known as the Small Farm Advisory Committee. It is a group of people that got themselves together to try to do something about the problems of small farmers. We are made up of small farmers, businessmen, implement dealers, agency people, REA, bankers-they are all concerned about the small farmer.

And last week, on very short notice, they got together and raised $500 to help support our trip down here to testify. I sat here and watched the clock this morning, and I thought that being the last person on the agenda would mean that you wanted to save the best for last. But then I got to wondering if maybe this was the normal ranking of agriculture and the farmer, and I was a little confused.

But I am very happy to be able to testify here this morning.

I am also chairman of our local ASC committee. And in the prepared statement* that I think was submitted for the record-I think Senator Mondale made an honest mistake and said I was a member of the State ASC committee, which I am not. I don't think that I could possibly be appointed to that position with my political affiliation.

But at this time I have got a fellow farmer here that would like to briefly state some of the conditions, and we will try to be brief with this, due to the time period.

Bill Higgs?

STATEMENT OF WILLIAM HIGGS, CHAIRMAN, SMALL FARM

ADVISORY COMMITTEE, WADENA COUNTY, MINNESOTA

Mr. HIGGS. I am William Higgs and my address is Wadena. I am the chairman of the Small Farm Advisory group. These farmers saw fit-I say "farmers," but it was also the businessmen-saw fit to send us down here to testify, because they thought this was a program that really needed to be pushed. We have, in my own case-I harvested 50 acres of alfalfa; I got 400 bales. This is a little over one-tenth normal production. Normally, I would need about 110 tons to get my herd through the winter. And the first cutting I have got about 25 tons, which will see me through the 30-day period of these other bills.

*See p. 100 for the prepared statement of the Small Farmer Advisory Committee in West Central Minnesota.

74-979-76– -5

The cost of the hay on a normal year, for me to produce it, is about $20 a ton. This is without any labor-it's with the gas, oil, and things like that. This cost is the same for me regardless whether I get 30 ton off this field or whether I get 90 ton off this field. This hay is now costing me upward toward $60 to $70 a ton.

You are talking here this morning about taking cautions that this feed bill is not abused. Well, there is not a farmer alive that can afford to buy this hay and stockpile it and abuse this, because nobody has got that kind of money to do so.

Senator HUDDLESTON. Are you getting any payments for the deficiency of your production? Are you eligible to

Mr. HIGGS. I am eligible for this oats feed grain program. And I am getting that I have for the last several months. But being as how I am eligible for that, as soon as I get this first hay crop, that will be out, too, because I will have a 30-day supply.

Senator HUDDLESTON. Right, so you will be precluded, then, from the hay

Mr. HIGGS. Right. The way the system works, we are penalizing the good farmers, we are penalizing the farmers that are out there scratching, trying to keep a herd. Since spring started, when this dry weather started, I have culled out 20 percent of my herd, which is normally around 45 head of milk cows.

This fall I intend to cull down another 10 percent. Hopefully, in that way, I can keep the best cattle, the high producing cattle and they aren't producing that high quality production that they normally

do.

Senator HUDDLESTON. Is this beef cattle or dairy?

Mr. HIGGS. No; this is dairy.

Senator HUDDLESTON. And the production is down?

Mr. HIGGS. Oh, it is drastically down. I would say at least 25 percent.

But if I can hang on to that cattle, and if I can hang on to the young stock, because any farmer that sells the young stock is hurting himself 1, 2, and 3 years on down the line. If I can do this, and if the farmers down there I am not unique, my case is just one of hundreds down there if I can do this, I can hold on, and hopefully next year will be a better year, then we will go on again.

This is why the 30-day is nothing, because I can't hold those cows and have a 30-day supply of hay and say, well, I am going to keep them because maybe we will get another chance at it.

Every time I keep those cows for that extra 30 days, the price on the market is going down. It normally goes down in the fall, and this year it is not going to be any exception-and with the feed supply, it is going to be worse.

I could go on for a long time, but I would rather answer questions, if you have any.

Mr. GRABA. I have got a couple of additional comments that I would like to finish up with.

Senator HUDDLESTON. All right.

Mr. GRABA. This bill that is proposed by Senator Mondale, I think, is very important on a short-range basis, but I agree with some of the testimony that was made here this morning that we need long-range legislation on a permanent basis, possibly with the next farm bill, to

give the livestock farmers a little more security in protection against disasters of this nature, without having to frantically scurry around for emergency legislation.

In this legislation, I would certainly like to see more specifics drawn into the legislation with less authority granted to the Secretary. From past experience, secretarial authority could mean secretarial restrictions, and I don't think that a bill on the statutes is any good if it is not used to its utmost.

Senator Abourezk referred to the possibility of ASCS being in the purchasing program. I know that in 1952 ASCS was involved in a hay-purchasing program. And you had ASCS personnel, farmer-elected committeemen, that were purchasing that hay, and it was being disbursed by ASCS farmer-elected committeemen in the counties where it was needed. So there is precedent for this type of program. They have offices in every agricultural county in the Nation; they have the computer system that would be capable of taking a hay inventory; and I think when it came to purchasing quality hay, farmers would assure, farmers that were buying it, that it would be quality hay.

And the fact that the payment would be made by a local ASCS office would eliminate the fear of the selling farmer that the check may not be any good. And this is a strong possibility if farmers have to go into the surplus area, locate the hay, and write personal checks. Even hay buyers would fall into this category.

So I think the proper vehicle to run the hay program is through the ASCS local county offices. I think also, along with this, making the hay available, the quality of the hay has got to be assured as good quality. We hear many stories of the type of roughages that the farmers were forced to buy in the thirties-corn stalks and cattails. And they are scared of a Government-run hay program for fear that it will be the same thing as this, as that was.

So I think the quality is going to have to be assured.

Another thing that I think should be considered is hay prices should be available or hay should be available at prices that are at least break even for farmers. We have extension economists on the Department of Agriculture payroll that are telling us that $1% a bale is the most you can pay for hay, and it would seem ridiculous if you transported hay in and made it available for farmers above those prices.

So if hay isn't available at a profitable price, it seems logical that the Department should also subsidize the price. I don't see how we can have one arm, the economists, saying you can't afford to pay over this price, but we make it available for that price.

So I believe that should be considered.

I think that in view of the 30-day restriction or 30-day supply-I used to be a cigarette smoker, a chain smoker. And I think of that 30-day supply as being like my having one cigarette after breakfast to last all day. I was out. And I think a 30-day supply of hay represents being out.

Thank you.

Senator HUDDLESTON. Thank you. Senator Humphrey?

Senator HUMPHREY. Just a very brief comment, because it is very late. I want to call the witnesses' attention to the second bill that we have introduced. The first bill, which Senator Mondale presented, and I cosponsored with him, has been followed by a second bill which I