NFO-185 (AV10685): Contracts for Agriculture

you as 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 area and others interested in having American agriculture received cost of production plus a reasonable profit the American farmers and ranchers are building a brighter future for agriculture through the national farmers organization the organization that awoke America and represents the leadership of Agriculture u.s. farm report presents with today's special guest or unleased a li president of the national farmers organization i want to visit with you today about the progress the nfo has been making I want to visit with you also about the power structures in America that directly affect our way of life in rural America and the importance of nfo in achieving its goal in order to maintain and to make rural America a better place to live and one with equal opportunity as far as the economic life of this nation is concerned the nfo has been making very rapid progress this progress has come about because of several reasons first a better understanding among farmers as to why they should join the nfo and what nfo is accomplishing also the fact that we are now signing contracts and not only signing contracts but contracts that we have signed recently and in the past few months that have now been voted upon and approved and are activated by the members of the NF o the NF o-- has fought two major battles within a period of over 12 months we had a milk holding action then we followed with a meat holding action many people do not understand why the holding actions they do not understand what the power structures in this nation really are so I want to discuss these issues with you to try to bring to you from our experience a better understanding of what we're really battling for the nfo the last few days and weeks have had the members vote for activation of contracts with meat packers in the following marketing areas north st. Paul Minnesota Trenton New Jersey Pittsburgh Pennsylvania Waterloo Iowa Flint Michigan Syracuse New York Sioux Falls South Dakota Ottumwa Iowa the eastern part of Omaha Nebraska Wausau Wisconsin in the northwest part of Northwest st. Louis Missouri Marketing areas now in each of these marketing areas there's some 25 to 40 counties that are involved in these marketing areas now have contracts were the members of nfor delivering under contract now this is a vital importance because first when we started talking about collective bargaining a few years ago and started organizing for the purpose of bargaining collectively very few people thought it would work today almost everyone says it's a necessity then there were those that said processes would never even visit with farmers about pricing about supply and now they're not only visiting about it they're signing contracts now these contracts are not all that we must achieve but they are a fundamental start a historic breakthrough in collective bargaining for American agriculture these contracts are supply contracts with a given number of livestock to be delivered each day over a pier of time and these contracts also have incorporated in them a pricing formula this pricing formula recognizes that with farmers moving a volume of production together that they are able then to perform services for processes that could not have been performed as individual farmers its historic because of the fact that never before have farmers voted whether or not they wanted to ratify a contract and the market under that contract as a group of farmers they've never had the opportunity because the large companies have fought the principal our contractual arrangements with a group of funders sure they would like to deal with individual farmers on a contract basis because they're the individual farmer cannot influence the type of contracts that are going to be written or the type of contracts that are going to be agreed to so it means that this is a historic breakthrough now we have fought these two major battles in a period of a little over 12 months let's look at the results if it had not been for the nfo milk holding action probably very few people in this nation would have realized how low the farm prices were the nfo members then focused the attention of the nation on the fact that the farmers had a problem and that was low prices not only that we have had definite results from that milk holding action first the price has gone up several times since they wouldn't have even thought about raising the price if it had not been for the action of the nfo members of the milk holding action no one would have been saying anything only as individuals about the problems therefore the prices would have gone on just as they had been and probably even lower but today the great a milk producers are receiving considerably more as a result of that milk holding action not only that the price supports a manufactured milk have been raised than 90% of parody level nothing else has happened like this and any of the other commodities so it shows that with these factors involved that with the strength that the nfo has been able to muster and focus the attention on the problem that we not only have accomplished raising the price forcing the politicians to raise price supports but also groups have come together uniting more strength in the dairy industry Dairy important restrictions have been imposed very quietly but done in a fairly effective manner because the pressure was there farmers were unhappy and they were expressing that unhappiness together you know if farmers just set there as individuals and don't do anything about their problems then no one even knows a problem exists in F I was leading the fight in F I was waging the fight with all the strength that can wait that battle with and it's sort of like the old saying on the farm and the wheel that squeaks a lot of skits the grease and if you are not together making the effort then no one even knows is a problem now as far as a meat holding action is concerned we have been able to out of that action get contract signed and of course we signed contracts during the meat holding action now what does this mean it means first that this is the historic breakthrough that I spoke up because it sets the pattern of contractual arrangement between farmers as a group and large processors and it means that if you're going to improve contracts first you have to have contracts to improve now we have we've been able to bring this strength together and muster the strength for the purpose of making games now under the contracts or arrangement with the processes we have to commit a certain supply each day each week over a period of time now in the very near future we will have activated contracts in the corner of three states for example there will be at the rate of about six hundred and sixty seven thousand and a hogs a year now this is a large portion of the nation's total supply now we're continuing to activate the contracts more meetings are being held but this all depends upon farmers working together and cooperating together and meeting their problems together it's very evident to everyone that we have to keep working on grain the very disastrously low prices on grain are a result of several factors first we had to get over more area to be effective in green that meant to be organized in more areas because you have to work on all the grain commodities just as you have to Nall bargaining efforts be able to work industry-wide on all the commodities you can't bargain successfully just in one area or on one commodity you have to be working on all them making gains on all now of course the lack of the use of PL 480 has stymied our gain somewhat instead of exporting the grain that could have been exported or should have been exported through the use of PL 480 the grain was not exported therefore used to kill the price here in this country therefore we have to be able to unite our strength more sell that grain production that we can get a price for in its historical commodity and you can lose the loan the government loan you can use the resale programs and you can store grain of course for a long period of time this means we have to keep working on these points but it takes strength it takes understanding it takes determination our farmers because farmers are the only ones that can do it the reason that I say that only farmers can do it is because of the power structures in this nation now what am I talking about I think this is the first thing that people in rural America have to understand if you're going to understand why it's necessary for nfo to achieve its and the goals that it's working for when we look through the rest of the economy we find that every other segment as what you could term power structures industry has a power structure whatever commodity that their manufacturing product simply means that they have the power to put their price tag on that product they use their various methods in doing it and then we have seen labor that is develop power structures to protect their rights and to make gains recently we saw for example the steel workers that use their power as a group of workers to force their contracts that would give them better working conditions better pay over a period of three years time and then we saw the government take steps to keep the steel companies from using their power structures to even add more than was justified as far as price on steel products now I would hesitate well really not hesitate though because I think it will certainly happen to predict that the steel companies through their power structures over a period of weeks or months will be able to gradually add to the price on this steel product and on another until they have put their price at the level that they think they should have now these are examples of power structures but these type of power structures operate throughout the economy and they operate in a manner that are used to buy farm products at low prices from individual farmers the large retail outlets of chain stores have their volume buying power this is a power structure so consequently they say what price they're going to pay for hams for a side of beef for example and this is the price they pay processors have large volume buying interests and this is a power structure so how do you as an individual think that you can compete with such tremendous power you can't if you remain unorganized you get any weaker any weaker position and this is the reason that in today's economy you must be organized and you must be able to operate from a power structure you're really building economic power to counteract the economic power that is already built now anyone that thinks the price of steel or price of anything else that farmers have to buy is going to get cheaper then it better take a second thought because these people are going to use their power structures to maintain a price level either on the product or wages that they feel is necessary so consequently it's a economic battle between power structures now where does rural America stand in all this and the reason I say rural America is because we in rural America are really in agribusiness community an agribusiness community that involves both the farmers and the rural businesspeople the small towns which in turn have an effect on the larger cities so unless the farmers do something about getting their price a fair price for their products then it means that the small businessman is not going to have the bills paid up as rapidly as they should be he gets any more and more precarious position as far as danger of losing large segments of these accounts receivable and so all these points put together me then what we're talking about in nfo is building economic strength that individual farmers cannot use as just individuals so that we can get a fair price for our product which means a better living standard and a fair opportunity for people in the rural now it's serious at this point as far as we're concerned I think the handwriting is on the wall all you have to do is to read that handwriting farm prices at 73 74 percent of parenting they vary a little month-to-month but in that range this is the lowest parity ratio farmers have received since the depression dates this means that farmers cannot continue to have a prosperous agriculture unless they can do something about correcting their main problem and that is low price and with the power structures in this nation you cannot do anything about it as individual so the handwriting that's on the wall I want to read it for you see if you don't agree you can take almost any township and find that there are 8 or less farmers under 40 years of age you know that the average age of farmers is 57 years there was a distorted analysis a few days ago that was published that I think is might be well to comment on someone was trying to defend this fact by saying that in agriculture the farmers were no older than the management people in industry and this is as distorted analysis as can possibly be made because in agriculture the farmers are both management and labor and so if you had the average age of workers and management at 57 years of age I'm certain that any industry would realize that the handwriting was on the wall for that industry and so consequently you've seen almost a million people year leave the rural areas to go into the cities and this has added to the problems in the ghettos I recently visited with a gentleman that is a a man that does nothing but study the problems of the ghettos and he said what has happened it was simply this that they had tried to develop jobs for the people in the ghettos but the migration the people leaving the rural areas to the cities those people were better adaptable to jobs than the people in the ghettos therefore they got the jobs that were developed and left the people in the ghettos so what we're talking about then is not only meaning the problems of rural America we're talking about helping meet the problems of this nation so this is the handwriting that's on the wall if you look a little farther if I were a businessman in a rural community I'd sit down and realize and analyze because of the fact that my customers are farmers that the rural community and its economic opportunity is dependent entirely upon farm income and therefore taking a look at my customers and their age at 57 years of age if I was a businessman there was any younger than that I would certainly be concerned were my future customers we're going to come from because it means that the atmosphere is there as far as corporation farms moving in we've brought together and merged farms until the investment is almost so high that individuals cannot even take the operations over with low farm prices the age of farmers moving up it means that the only source of capital that can take over the present operations have been put together in many areas is the corporate structure this means outside capital it means outside capital that were the investor does not even know many times where his money is invested in corporations never really died they just changed ownership of stock so this means that as these corporations move in where the investor does not even know many cases where his money has been invested you have destroyed private ownership you destroyed initiative because the people then are employed managers and employed laborers and they don't buy their products that they need to use in the production of agriculture commodities from the local businessmen so everyone in rural America should be deeply concerned about low farm income it doesn't make any difference when you look at the picture how much you wished it could change it just will not change unless the farmers unite their strengths that they bargain collectively to put a price tag on their products and this is something that nfo was giving farmers the opportunity to do this is the reason that nfo members and leaders are working so hard not just to help themselves but to help all farmers and to help rural America as a whole it's a job that has to be done and a job that we're continuing to work out but it takes the support and understanding of everybody the nfo is making definite progress the cause of a hard work and the efforts that so many farmers have put into the NFL in a period of 12 months our organization is spread from a 29 state area to 41 States it's impressive to look where the organization really was 12 months ago but then to look at the way the organization is spread in the past 12 months means that farmers everywhere are realizing that nfo does offer them their only hope there's a few things that I would like to comment on however and that is the attitude of farmers in general why do I say that many people have said farmers would never organize no one ever questioned the strength of farmers if they did organize but the question was would farmers organize everyone had always said no they were not organized into a tight-knit group in fos proving that this is wrong now how fast we reach our goals is dependent upon farmers and I'd like to use a conversation that I had reported to me the other day and that was a very well-qualified observer of the farm problem was trying to remain neutral as far as the solutions to the farm problems were concerned and as far as organizations were concerned so he was asked questions step-by-step by naming various groups small and large farm groups and other avenues and the question each time was asked if every farmer supported that organization or that effort would there be any changes made in agriculture and his answer was no until the final question if every farmer joined the nfo would there be any changes and he's answered yes there would be many changes now what I'm trying to say here is that the only thing that is holding up the nfo and reaching its goals our farmers themselves they are the ones that have to make the individual decisions they have to decide whether they want to do something about their own business nfo offers them the opportunity it's only a tool its farmers best Hardman for a small fee per year with a very nominal fee besides to help carry out the bargaining efforts the nfo can be used by farmers even our members have to understand each and every time that they sell their milk sell their livestock hogs or cattle even one vehicle outside of the nfo collective bargaining program or they move at bushel of grain outside then they have not used their production to add to the bargaining strength of the NFL because production is what counts and as we use our production through the fulfillment of contracts it simply means that every contract that is activated and that production then goes under that contract it simply means that there's that much less production for the remaining processors to buy this has an effect of stabilizing markets but it also has an effect of improving your bargaining position farmers bargaining position by blocking their production together through contracts and improving their bargaining position with the processes that are not getting production from farmers as a group and of course all farmers then move together in this manner then they'll get their price they can work out surplus disposal programs you can maybe keep back 10% of the green supply if necessary to either sell at whatever price you can get in world trade in some instances to develop new markets or to maintain markets that you have but this all adds up to unity and agriculture the determination to bring about changes to meet the problems today and so it all boils down to a few fundamental facts what is collective bargaining in agriculture means farmers bargaining together and sewing together but first step is they must organize you don't solve your problems and then organize you must organize to solve your problems so what really amuses me sometimes is that the nfo leaders and members that are working so hard in the township or a county sometimes they looked upon as other farmers is trying to achieve something just for themselves this is impossible to do they're really working for all agriculture and they're really working for all of rural America but they need your help they need your cooperation they need your understanding and your participation secondly you must bargain industry-wide you can't just bargain in one area and you have to thirdly bargain on all commodities you were just successful in one it'll be short-lived fourth you have to use holding actions when necessary so that you use your economic strengths as part of a power structure to compete with the existing power structures this is economic battles that you're talking about and then contracts are ultimate goals and these we are achieving these are being activated and collective bargaining means farmers bargaining together and selling together but if someone said suppose every farmer joined the nfo tomorrow morning if they went ahead and did the same thing they've been doing all you would have done is wasted approximately three million pieces of paper when you join the nfo you have to join for the purpose of bringing about changes changes that make it possible for farmers to put a price tag on their products instead of asking what will you give me in fo is leading the fight and without nfo leading this fight were would any fight be be made for farmers therefore n fo does deserve the support and the participation of farmers and the understanding of all of rural America today's program has featured a special guest or Unley Staley president of the national farmers organization members of the National Farmers Organization invite you to tune in again next week at the same time for more facts on Agriculture and Rural America which is a 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 and a new generation of agricultural producers