NFO-120 (AV10620): Root of Our Problems

[music] welcome to us farm report a public information program brought to you in the interest of agriculture rural business and the well-being of our nation by members of the national farmers organization in this local area the national farmers organization takes pride in inventing a marketing system to meet the needs of the 20th century Collective Bargaining for agriculture NFO represents new thinking in a new generation of farmers us farm report now presents a look at agriculture and its effect on the economy with some of our nation's outstanding leaders now here is Minnesota businessman Arnold Paulson this is a great pleasure for me today to have this opportunity to moderate this panel today we're going to discuss some of the most vital and complex problems confronting our American economy these problems deal with American agriculture the tight money situation the effect that agriculture has under national economy and so forth and to start out I'd like to make a few brief remarks today the American people seem quite concerned about the money situation in the United States and we hear many people complaining about tight money just what do we mean by tight money the American people have been able to purchase almost anything they desire with no down payment and almost forever to pay if money was any looser they'd have to pay the people to charge and yet last week we noticed on the front cover of one of the nation's leading magazine that the federal government this year will be spending approximately one hundred and seventy eight billion dollars I wonder if the American people realize how much a hundred and seventy eight billion dollars actually amounts to as we divide this by the 55 million American people in the United States it means that the government this year will be spending over three thousand dollars per family to run our federal government now these are some of the problems we're going to discuss today and yet the experts in government seem to tell us that we shouldn't be concerned about the debt we shouldn't be concerned about the interest that we're paying on the federal debt and so forth well I'd like to draw a very simple illustration for the audience today let's just imagine that back at the- in the days of Christ that we deposited one penny in a bank at 6% compounded interest do you know how much in an amount to today you'd have a ball of gold larger than the earth and yet the politicians and the experts in Washington say that we shouldn't be concerned about this fantastic debt fueled economy that we're living in if we the American people don't wake up now immediately we're heading for disaster if we don't solve this as I might call it insane economic system that we're living under today our national economy is going through the wringer and today I have some distinguished panelists with me who have appeared at a seminar here in Sioux City Iowa this past week it's a great pleasure for me to have them with me and to introduce them and to discuss this problem with us but before doing so I'd like to read a recent article that appeared in the Kansas City paper on February 6th a Kansas City bank based holding company CKCVK Industries Incorporated announced plans last week to phase out of its manufacturing and distributing operations and to shift into farming primarily the production of feed grains principal holdings of the company now our businesses engaged in the manufacture and the distribution of women's apparels and foreign films asphalt and printing a five-year a five-year program was announced by the president he says it provides for the gradual acquisition of lease and purchase of a minimum of 80,000 acres of farmland primarily in the Corn Belt area now listen to this they say that the management believes there is a new era emerging in agriculture and that a corporate entry into this field is most timely said the president well now we have with us today Mr. Homer Jackson manager of the Production Credit Association from Rifle Colorado and at this time it gives me great pleasure to introduce him to you people and I'd like to ask Mr. Jackson to comment on the statement that I just read Mr. Jackson welcome to the program Thank You Arnold well what you've just read Arnold uh we see taking place out in Colorado not in farming but in the feedlot operations 15 years ago 90% or 95% of wall of cattle fed and the lambs fed in the state of Colorado were fed by farm family feedlot operations and today seven feedlots feed 70% of the livestock that's fed in the state of Colorado the large corporate commercial feed lots are crowding out the family-owned feedlot operation well what it's going to mean to thousands of rural communities as the corporate structure moves in the end of it is in sight it seems to me now our farm people there that we're in the feedlot business in the beginning thought that well if we're crowded out of the feeding business we can still sell feed to these feedlot but now they find that the feedlots control all of the feed and they're setting the price on this feed to the place where they're crowding the mouths of producing feed and it it simply means that our farm families are going out of the picture now young folks can't get into the farming and they can't into the livestock business today on the basis of owning their farms or ranches we're not we're not getting the cost of production out of the livestock that we produce there in the state of Colorado we ran a study on that in our Production Credit Association we find that and of course these are average figures Arnold but we took typical ranch operations and we took operations with a continuous record with us for a period of eight years now and briefly stated it's costing us a hundred and fifteen dollars a head to run a breeding cow there in western Colorado and we get an 86% calf crop from that cow we have a five percent death loss and our calves the steer and heifer calf weights average 382 pounds well to figure that out it which I have here it costs us one hundred and forty two dollars a head to produce a calf and our calves weighing three hundred and eighty-two pounds the average steer and heifer calf price this year has amounted to twenty seven dollars and fifty cents which means a hundred and five dollar price for the calves we've sold so actually we're selling our calves today for thirty seven dollars a head less than the cost of production and the thing that people don't realize is that we've been doing that to varying degrees for the past eight years our ranch people are building up their loans continuously the size of our loans have doubled in the past five years we've had to use real estate to to make up for this lack of farm income and our real estate now you mentioned tight money in your opening statement high interest rates and the tight money have made it almost impossible to sell land prospective buyers can't find financing and they they can't afford these high long-term interest rates it's getting almost impossible for the young generation to get into agriculture isn't it it is impossible Arnold and I think people are aware surely that we're losing farm people today at the highest rate ever in the history of this nation there's more than a hundred thousand farm families going out of business each year in this nation it certainly isn't because the farm young farm boys don't like agriculture but there's just no future in it for them and they have no choice to me it seems like the farmers are working for everybody else but with the exception of themselves today well the farm people must- must get after this because no one's going to give us anything either we have to protect what we have or we're going to lose it and we're losing it just as fast as we can the most disheartening thing to me I operate the Production Credit Association I have operated it there for the past twenty four years we encourage these boys and girls and 4H club work and future farmer organizations bring them up to the point to where when they graduate from school they want to get married and settle down they find out that they've been led on in a business that's impossible for them to continue in they just simply can't own their operating units today well in your estimation what what do you actually think that's causing this low farm price and low farm income well I don't think there's any question about it they've been and investigations made the national food marketing commission here last 18 months made a very thorough investigation of our nation's marketing methods in agriculture we have the greatest demand for meat especially that we ever had and particularly for beef our per capita consumption of beef has more than doubled in the past quarter of a century people are paying the highest retail prices in history for our rate of consumption today is so rapid that we're consuming meat today within four days after slaughter in other words if slaughter were decreased today America would have less than a four day supply of meat on hand now in the in the face of this increasing demand during 1966 there's not one of us in their lifetime ever knew of the demand for meat being any greater than it's been this past year and still the price of fat cattle is $3 below what it was this time a year ago the price of hogs is eight dollars below eight dollars a hundred I'm talking about and the price of lambs from six to seven dollars a hundred less than it was now that simply means this that the retail end of the food industry has the monopolistic control over the market in other words they're setting the prices they're setting a price that we in agriculture just can't continue under we can't produce at that price well I've noticed this that as you listen to the market reports in the early morning 7:30 to 8 o'clock in the morning you're already getting the market and the market doesn't open till 9 o'clock this proves that the prices have already been set before the market opens so what chance does a farmer have under this but Mr. Jackson I'd like to ask Mr. Wilken just one question getting back to the grains you've done some research on the production of grains food grains and feed grains in this country have we been over producing that we created surpluses according to your survey well according to the a present economic report published in January the record proves that 1942 to 1965 we produced less- products that is the increase was less per year then it was from 29 to 42 all right facts are that we haven't had any surplus farm production since 1910 of course now the farmers have been told that the reason they can't get a price is because they've over produced and then of course when we talk about increased production they say that the farmers are more efficient they're producing more than they did and this is why they shouldn't have a price how does farm production compare with consumption and the increase in population well the farm production from 42 to 66 has not kept up with the increase in population in other words we're going backwards that's great in your estimation is the food situation in the United States at this time critical well it's very critical at the present moment because we're completely bare of reserves and if we should have a drought like we had in 34 we would have chaos we would have to liquidate about half of our livestock population because we wouldn't have the feed that they come and you can't feed that animals on bank credit well we don't have to worry about a drought here in the United States but what if we had a drought in the countries where we're receiving all our imports they couldn't possibly send us anything because they're starving now well thank you all coming back to you in the morning I would like to comment a little bit on this corporation farming all right go ahead it has been going on for a long time and I just want to warn the American people that if you permit it to happen that he will duplicate what happened in Russia well actually there isn't much difference between corporate farming and what they do have in Russia not in operation but I would like to point up the difference of approach in Russia when they set up communism they liquidated their farmers either they shot him or send him off to Siberia now we've had a great deal more finesse in the United States by underpaying him we have liquidated 2 million farmers since 47 and the intentions are that we can liquidate the number down to a million now if this happens the American people are going to go hungry because these corporations from the record their own record as I pointed out to the seminar aren't capable operating agriculture for the simple reason that they haven't proved to be capable of operating our corporations well that's right one one comment I would like to inject at this time in relationship to corporation farming is this and I want to address this to the non farmers to the housewives and to the clergy and the educators to the people living in the metropolitan areas and in the rural communities do you realize that you've got a greater stake on the family farm than the farmer himself let's just analyze corporation farming once and see what it means first of all the corporations have to pay from 48 to 52 percent corporation tax on their income and secondly they have to hire all of the labor and the management the corporations must pay dividends to the stockholders from four to five or six percent in addition to this they have to have profits in reserve for capital expansion and the American people if they permit the corporation structure to take over agriculture in the United States you'll find that you'll pay approximately 50 cents out of your total income dollar just for food the American people could have the highest price food in the world and this is the stake that the people living in town have in the family farm but I would like to turn now to another guest and with us again today we have father Dismas Treder of the Franciscan fathers from Pulaski Wisconsin and it's a real pleasure to have him with us because here's a reverend who is very much concerned about the condition of agriculture about the conditional of our national economy our monetary system and so forth and I'd like to call on you at this time father to just make whatever statements that you feel free to do the national wealth number five I think I just say it's number of times well let's put it this way a lot of people as we were flying up here for this seminar today we were looking out the windows of the plane and all you see is land farmland grazing land pasture land cattle and farm homes and then every once in a while we see at trinkling here there of a city or a village agriculture is the largest industry in the world and it represents the investment in agriculture represents approximately sixty percent of the total investment of every business and corporation in the United States and approximately seventy percent of all of the resources that we consume during a given year are the food and fiber products that come from the land the figure I was waiting were the seventy, seventy percent of the national wealth comes directly from the soil and we know from Psalm 23 I believe it is the statement that the earth and its bounty are the Lord's man is merely a steward it doesn't belong to absolutely and it certainly has to be God's desire that this land be distributed as widely as possible not just in a few hands because there were too few people control it then they can set a price too high in order to set the price the farmers handle and now they are organized and get it just price but they certainly have a right to that so man is a steward of the soil and it's desirable that the land be distributed as widely part of the possession of it we know that in the past at the Second World War I know man from Pulaski and another one from shelter Wisconsin who were sent one to Poland get up to German respectively to help set up agriculture on his feet and to break up large estates we know that's where the big evils of South America and they're too big well let's do our policy down there is to put the people back on the land yes but what we're doing here we're building it up we're doing the opposite we're building it up by putting the farmer into that first of all and then we create more debt more cost by breaking up after they've already found out in Russia that is no good so why should we now set it up here and and complicate or repeat their mistakes to me it doesn't make sense it looks like we're the type of people that always put the stop signs up after it's too late close the bound right there I have to hold it the horses are gone Mr. Wilken and I'd like to thank you very much father Mr. milk and I'd like to return to you for just a moment and you presented a very interesting analysis of the seminar this weekend actually proving that every gross farm dollar of national income creates or generates $7 of national income and that every dollar that we underpay the American farmer that we lose $7 of national income and it's there that's due to the underpayment of Agriculture for the past 15 years that has caused this fantastic debt-fueled economy were living in and I have with me now the five tables that you had prepared proving it five different ways I wonder if you'd like to elaborate on this well they say seven times turn is proven by the record it was specifically proven in the period from 43 to 52 in this ten-year period we had the answer to our economic problems in operation with a 90% price support in this seven and this 12 year period and you will have to look in President Kennedy's economic report to Congress in 1962 because since that time the records have been changed now in this 10-year period the price of farm products at wholesale the price of all products at wholesale and the consumer price when a balance of approximately 100 percent as an average and in that 10 year period for every dollar a farm production that entered that economic cycle of ours we generated 6 dollars and 97 cents of national income now what more proof do we need than that well you've certainly convinced a lot of people at this seminar Mr. Wilken but now here's another thing that- another myth that I think should be exposed and this is the the law of supply and demand throughout the world today we understand we have approximately- we have approximately two thirds of the world population earning less than a hundred dollars a year people are starving and they're going hungry is that because they don't like to eat no it's because they haven't got any money why don't they have any money because society over the generations hasn't been willing to pay for the production of farm products it's nothing new and through underpayment have prevented the development of their agriculture and the income with which to buy tools of production to increase their production now to the other stream the conflict and in theories for example we're going down to South America and we're advising them to put the farmers on the lot- people on the land ok but in the meantime through our manipulation of our own farm prices which in turn is pushed world prices down they can't afford to operate those farmers but after giving them advice we turn around and liquidate 2 million farmers in the United States by under paying them will make that end up well now what are we trying to do of course we're gonna solve this Carl free trade now we can get the common market to lower their tariffs now the latest proposition it's on the drawing boards it hasn't been brought out in the open but this year the American farmers are being asked to produce 20 to 25 percent more corn, feed grain, wheat, and soybeans [unclear] well the Department of Agriculture has already announced that they expect the net farm income to be 5 to 7 percent less next year than this year for producing more 15 million acres more of goods and services but here's the point I want to make sure these experts in Washington they haven't got the slightest idea nor do our farmers over how much we're going to produce next year because we have no one that can tell us whether we're going to have the rain to produce it with and in spite of the expansion that they want in this production we might end up in 1967 with less production we had in 66 don't you think if we ever get behind again then we could never catch up well we've been behind for 15 years and the so-called surplus was nothing more than under consumption for example in the balance sheet that I presented to the seminar covering the 15 years following 48-50 as 100 the record proves that we lost 627 billion dollars of income entirely now think of the under-consumption wrapped up in 627 billion of income in 15 years in my opinion if we were to restore the balance between agriculture rural America and industrial America we would have to increase our farm production 15% above the level well we wouldn't have enough to go around we're not only liquidating or eliminating our farmers but we're also running short of food and on top of it as a result of the loss of national income we're gonna head ourselves right into a depression on top of it we couldn't be in much more serious condition could we well if this program takes place and you try to liquidate enough farmers to bring it down to a million they're going to liq- liquidate small business you're gonna liquidate all the small corporations and you're gonna liquidate the large corporations and you miss all the small bankers too now one of my reasons for being against the corporate management see is that our corporate leaders have proved beyond question that they are not good managers for example in the seminar with the balance sheet covering 51 to 65 I pointed out that the corporations mind you supposedly with the business brands in the United States like 222 billion dollars of profits after taxes through balanced with wages interest now what did they do to upset that they had it three hundred and sixty five billion dollars to the gross corporate debt now is that kind of a management going to be good for agriculture and the supply of food to keep the people from starving my opinion no well I see that we're once again running out of time and Mr. Jackson I wonder if you'd like to make a closing statement on this and then I'd like to have you close out the program father Well I, I think that all of us tonight will see the time soon when we will be rationed for food I think this theory of overproduction is wrong forever I read a recent statement where we had seventy- an increase of seventy million people in the world this year and no additional food was raised to feed them but within the next four years just four years the world population will increase by 300 million now that's a million more people than we have in the United States today and when you think of putting you might say a complete new nation of people in the world in four years time 100 million bigger than we are in the United States where will the food come feed us the people I think we're worried about I think we're facing food rationing right you like to close it all considering the forces combined against the partner I think it's evident to everybody that time is running out fast and I think the time to save the farm if ever is now I think that's a good closing statement and it's certainly been a pleasure to have you gentlemen with us today to participate on this seminar and I hope that we have extended a challenge to the American people to wake up and to pull your heads out of the sand and to analyze the conditions that the American people are confronted with because if we don't wake up now as the father said it's going to be too late time is our greatest enemy thank you it's been a pleasure to be with you today [music] u.s. was presented a look at agriculture and its effect on the economy with some of the nation's outstanding leaders members of the National Farmers Organization invites you to tune in again next week at this time for more facts on Agriculture and rural America which is the gear wheel in our economy that produces the majority of our nation's new wealth the farm income pattern sets the nation's prosperity and the national farmers organization represents new thinking in a new generation of farmers [music]