NFO-121 (AV10621): Agriculture’s Impact on Society

NFO-121 (AV10621): Agriculture’s Impact on Society


[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 my name is Arnold Paulson
a businessman from Granite Falls Minnesota and I’m very grateful for
having this opportunity to moderate this panel for you folks today we have just
completed a blue-ribbon conference in Sioux City Iowa this conference
represented businessmen civic leaders educators economists and research
analysts from 12 central Midwestern states the key States to the of the
agricultural league economy for the United States it’s my privilege today to
have the opportunity to interview some of the panelists and also a gentleman
who was an observer and a participant at this conference I’d like to introduce
our guests at this time on my right is Walter Bowers retired economist from
Washington DC who served in government from 1929 through 1944 he worked for the
Department of Commerce the Department of Agriculture the Treasury Department the
War Department and he also has I believe degrees as a lawyer as an economist he’s
also a geologist and he’s now a Rasher and an abstract and runs an abstract
office in Yates Center Kansas and it’s our privilege to have you with us today
Mr. Bowers sitting next to Mr. Bowers is correlates Wilken research analysts from
Washington DC who was one of the featured speakers at the seminar
my extreme left is Mr. Harry Rash a banker from Thayer Kansas and also a
member of the agricultural committee of the independent Bankers Association of
America and were also with us today is Ray
Dykeman who was an income tax consultant and an independent insurance agent from
Gregory South Dakota at this time I would like to turn our attention to Mr.
Bowers Mr. Bowers also participated on the seminar he’s been an acquaintance of
mine now for the past two years and he brought out something at our conference
that I think should be brought to the attention of almost every American and
Mr. Bowers I wonder if you’d tell the folks at this time about their red
school houses and the little white churches well at this conference someone
brought up the point that no one had ever made a study any research study of
the importance of the single family unit on a small farm to the economy of
America talking about dropping the small family unit off of farms going to big
farms now what was the value of this small family unit well I say that there
has been a research project in progress in this particular agricultural area for
the last 100 years we had a group of people start moving into this rich
Mississippi Valley a hundred years ago and all it distinguished these people
from any other people on earth was the fact that they were bringing with them
little white churches and little red school houses a million of them settled
in Nebraska before 1900 two million are settled in Kansas and half a million in
North Dakota and half a million in South Dakota and Iowa and Missouri
and Minnesota and the other states of this rich Mississippi Valley and they
all had distinguished them from people of other parts of the earth was that
they had a certain devotion symbolized by little white churches and little red
school houses to the principles of the freedom that we have in our private
enterprise system in the United States that has not followed anywhere else on
earth and what happened we had an explosion in this Mississippi Valley
that are just as astounding as an explosion of an atom bomb in a hundred
years in this Mississippi Valley we have built the greatest breadbasket of all
history the greatest corn belt the greatest wheat belt the greatest cattle
belt the greatest cotton belt of the entire earth right here in this
Mississippi Valley and not only on top of that we have produced some of the most
brilliant scientists of the entire earth there are more Nobel Prize winners great
scientists have compliments agricultural States any other single spot on earth
from the little red school houses little red school houses and little
white churches they started from that background in other words that’s been in
your estimation the key to the fantastic growth of the American society in our
economy it is demonstrated to the world what individual human personalities can
do with a proper individual education and with the proper spiritual values in
their hearts and minds well thank you I’m sure we’ll be back to you before the
program is over at this time I’d like to turn to the other end of the table an
interview Mr. Harry Rash who has been very much concerned for a number of
years in agriculture and also the economy of estate in Kansas and the
nation as well Mr. Rash you’ve spent considerable time
and research you’ve also worked with the agricultural committee for the
independent bankers I’d like to have you briefly tell about your research and
make whatever statement or observations on our conference at this time well first I’d like to make a statement
regarding the economy of Kansas in 1965 the farm production in Kansas had a
value of a billion and a half dollars which was the third greatest on record
still they realize cash net income was a decrease from the previous year the
realized net cash income the proposition of trying to make people realize the
dependence of the welfare of the entire economy of the state and the nation on
the price and production of agricultural products seems to be one of the hardest
tasks that I ever ever saw kind accomplished at this conference it was
brought out the relationship of the agricultural production and price to the
national economy in Kansas for jobs out of ten are dependent upon agriculture I come from southeast Kansas a little
town of fair where I’ve lived all my life Neosho County I’m at present a
member of the southeast Kansas Regional Planning Commission appointed by
governor of Kansas to make forecast for the future of our area I happen to be on
the Agricultural Commission because of my interest the forecasts of population
trends the records on the population in Kansas show that we’ve had a greater as
great an out migration as we have of the new births in Kansas the a the age of
the farm population has- is over the 50 mark the rest of the nation I believe they
say the average age is 25 Harry can ask one question most industries the
strength from the growth of most industries is based on the number of
young people that enter this specific business or industry and as a banker now
what’s the future of young people entering agriculture with the present
price structure from your observation they required investment is such that
the young person cannot enter agriculture that is a sad part
the farmers are actually telling their own sons that you shouldn’t be entering
agriculture that you have no future that you will be underpaid and overworked do
you think that the trends that were drifting towards is going to be the
answer the solution to agriculture in America a large type farm of the
corporate type form the the large type farm the corporate farm
cannot answer the problem we have a need for more agricultural production in this
country than we actually are producing the day of the so called surplus that’s
a myth and a fantasy we are dependent upon meat imports now to sustain our
need for meat well Harry I’ll get back to you again in
a minute at this time I’d like to call on a good friend from South Dakota Ray
Dykeman you’ve attended our conference here as an observer and you’ve also had
an opportunity to participate I’d like to have you make whatever general
statements you have on mind and relationship to agriculture in South
Dakota and where South Dakota is headed unless we restore farm prices to balance
with wages and interest well I became interested in the agricultural program
and the decline of rural America while I was attending the University of South
Dakota in college in 1958 and since that time I have been trying to discover what
are some of the answers to the farm problem why did we not have enough farm
income to support the level of farming that they had when I was a boy because
in the area that I grew up in south central South Dakota near Gregory South
Dakota there were a lot more farms when I was a boy than there are today so I
was trying to discover what the answers to this problem are and by attending
this conference I got a lot of the answers to why we’ve had this decline in
rural America and what it will really mean if it continues take the period of
1946 to 1950 70% of South Dakota’s earned income- income came from agriculture
so to the fact that underpayment of agriculture between 1951 the difference
between 1951 and 1965 South Dakota lost one-nearly 1 billion dollars of earned
income and this is what I’m concerned about the amount of earned income South
Dakota is losing because agriculture is being underpaid today well now you had
an opportunity to associate yourself with many of the other people who
attended this conference from your observation what was their reaction to
the discussion that took place and tracing out of the balance sheet and the
loss of income for the various states and also the condition of our national
economy what what did the other people think what was their observations in
your estimation the people that were in attendance at that seminar yes I think
we can just about say that there was 100% agreement that they all agreed that
agriculture was being grossly underpaid and due to this underpayment we were not
only undermining agriculture but we are undermining the whole economic system in
the United States did it shock many of them to learn the
condition of our not only the state economy of their own state economy but
the national economy yes it did there was a much concern written on many of
the faces of the people there they knew there was a problem but they didn’t know
it was as bad as it is today well now one of the things that we did during
this seminar is we had the representatives of each state figure out
the actual loss of total- total personal income in 1965 and you mentioned that
South Dakota lost approximately 1 billion dollars some of the other states
Minnesota for instance lost two billion two hundred and seventy five million
Kansas I believe Harry was short approximately three billion was that
right a little over three billion it was under that it was not a million three
yeah about a billion three hundred and seventy five million Iowa’s lost was roughly four billion
dollars and the reason that the people in all these states were unaware of this
loss of personal income is because they’ve never prepared a balance sheet
on their own state economy so they don’t know where they’ve been
where they’re headed or whether at and at this time I’d like to turn our
attention to Mr. Carl Wilken research analysts from Washington DC we call the
father of the balance sheet because he’s been keeping these records on the
national economy for for many years and Mr. Wilken when did you first meet just
one minute be sure to make this point that this loss that we’re talking about
was just for the year 1966 one year the loss in South Dakota was one nearly 1
billion dollars for the year 1965 the 1965 I think we better drive that one
home thank you for reminding me Carl when did you first when did you prepare
your first balance sheet and what induced you to make such a study and
what’s going to happen if the American people don’t wake up and analyze the
records of our economy well briefly in 1929 I was operating a farm about 80
miles southeast of Sioux City and The Economist said we were never going to
have a another depression 1932 I was selling corn for 10 cents a bushel
well they triple-a program didn’t correct it so I was one of three men who
signed the Articles of Incorporation setting up the raw materials National
Council and the that originated here in Sioux City correct and it’s still
incorporated right in Sioux City and when Barry County in 1941 I prepared my
first balance sheet and as a result the city is the birthplace as we push the
balance sheet this is ever prepared and I’ve kept a balance sheet ever since
that time and as you know what the seminar I presented
that balance sheet 48-50 as a base and the 15 years which followed funded out
the audience how they could compute it and haven’t checked well now I know that
when the group worked out the lots of income for private enterprise for
agriculture for the corporations and so forth yesterday they were stunned from
memory could you could you call it the the loss of national income and the loss
to corporations and private enterprise during the past which ever period you’d
care to select well briefly in the 15 years following 48-50 we underpaid
agriculture in terms of gross realized farm income three hundred and seventy
and a half billion dollars now we have a trade turn of seven times the initial
dollar farm income so what happened we lost seven times this ended payment or
newly earn dollars to operate our economy rough set be lost
we added eight hundred and eighty four billion dollars to the gross debt from
state local and private but in spite of this injection of 884 billion dollars in
the fifteen year period we were still short six hundred and twenty seven
billion dollars of national income over forty billion a year the balance with
wages interest now then the question is who lost it well they down the chief
proves it a private enterprise terms of net farm small business brought the
profits after taxes I’m sorry I didn’t 97 billion the vet shortage of income
they a principal to 0 farm operator who were short two hundred and twenty two
billion the next principle losses are corporate profits was short 221
211 billion after taxes comply me the small businessman was short 162 billion
and I would like to point out that a large part of this loss that is a
greater proportional of it took place in our rural communities because the business
small businessman in our urban areas they had the benefit of the terrific
increase in the payrolls that took place Carl I hope I have time to come back to
you but I’d like to ask Mr. Bowers another question
I read your balance sheet on agriculture but yours is from a different aspect
you’ve written or prepared a balance sheet on production and I’d like to have
you comment on that what’s your attitude about the large type commercial farms
and so forth and is in your opinion is that going to work well agriculture has
a better balance sheet and we’ll say the Iowa Public Service Company has for
better balance sheet and the Missouri Pacific or the Illinois Central or
Northwestern railroads the the farmer has less debts and more assets than any
other segment of our whole economic system but that isn’t true on his
operating statement his income and expense statement the farmer is not
kidding as large return on his investment as the Interstate Commerce
Commission allows the railroads and allows the utility power and light
companies and so forth and as a result the farmer is working in the red so to
speak and the only way he shows in the black is the government subsidies that
he’s getting from Washington the farmer before the average farm in America
before his salary and before his taxes and before his new equipment and before
his paying his debts is only averaging three hundred and fifty dollars a month
and the average farmer probably has an investment of $100,000 four or five
times that of a service station manager and he should be earning six thousand a
year minimum after taxes well the farmers got the best balance
sheet of the four basic segments of private enterprise the poorest the
operating statement the poorest operating statement and I wasn’t making
enough money to hold on he’s not making enough to support his family he’s really
in a depressed area so far this personal income the scripts right well now here
is a bankers viewpoint you’ve heard Mr. Bowers say that agriculture has got the
the best balance sheet of any segment of our economy but would you agree that
even so that the only way that agriculture can liquidate its depth is
by liquidating itself for selling out that’s what has been happening that is
been done now we talks about we haven’t had many farmers go bankrupt because
they see the handwriting on the wall and they’ve taken the step of voluntary
liquidation to make the change but now this is a condition of agriculture and
they’ve got the best balance sheet better than the corporations or the
small business and so forth as a banker what’s your observation of the rest of
the economy then well of course we’ve been encouraged in deficit financing
we’ve been told that that is the way they get customers we’ve had the
Keynesian theory that we increase our debts thereby we do more business
and so we as we owe this debt to ourself it doesn’t matter and we become
prosperous it doesn’t disappear does it no the debt doesn’t disappear in other
words and the farmer has been staying in business by increasing his that though
he’s been has been this inflation which has caused a markup in the real estate
values which has enabled him to borrow more money on the basis of that
so-called increase in real estate value and as a result of this this is what’s
been keeping our rural communities alive been keeping ’em going
has been this increasing bit Mr. Paulson in other words what were the point we’re
getting at here that agriculture has a better balance but actually small
business in rural America is in worse shape than agriculture
absolutely absolutely that’s the point I wanted to bring out and Carl you heard
Mr Bowers make the statement on the balance sheet of agriculture and I think
we’ll agree that they’ve got a better financial statement than the
corporations and small business why don’t you point out the seriousness of-
the seriousness of this well the simple facts are that agriculture in terms of
gross farm income is receiving a 49 percent of what they call parity of
income but on the net basis and that farm income is only thirty three percent
of a very uncommon for the farmer now the farmer if he didn’t work long hours
and work his family just couldn’t stay on the farm he’d have to get up that’s
how one of the things that has made it possible for him to stay there well that
we credited much of the efficiency in agriculture to the fact that they have
that they’ve been producing for half the income they should what do you mean by that
well in other words they say that the reason that agriculture doesn’t deserve
a price anymore like they did back in the 30s is because they’ve become much
more efficient and they’ve increased their production through technology well
that’s that’s why they don’t need the price
well that is what’s been told to the American people but here’s the fact in
1946 they had a net income of fifteen billion dollars in 1966 it was sixteen
billion what in 1966 their operating costs were three billion dollars more
than all their income in 1946 Mr. Bowers in your estimation what is the biggest
problem in agriculture today well the biggest problem today is how to get farm
income to the same level on a parody was what
the farmer has to pay in consumer prices he’s a buyer as well as a seller and
while how does he restore his parity of income with a parity of income with
other segments of the economy and my feeling is my little town it has a sales
volume of 5 million a year should have a sales volume of 10 million a year if
they could restore the income of the farmer to a parity of the people who
produce the goods that he buys what’s going to happen if we don’t restore the
parity income of it well our little towns gonna disappear and that’s why I
came to this conference I want to know how what we’re gonna have to do to keep
our in town from going out of the existence well what effect is this going to have
on the national economy if we don’t restore well it means there’ll be vast
open areas of agricultural country in this United States that will not be any
longer operated by this small individual family unit well thank you very much Mr.
Bowers I see we’re running short on time would you agree Carl with what Mr. Bowers
said what’s the number one problem in agriculture today one of the number one
problem the only problem there’s been in the history of United States and that’s
price so what’s the answer you should demand that Congress immediately restore
the 90% price support with an accurate clarity formula based on the consumer
price level and the record proves from 43 that 52 that this program works
effectively and efficiently and the source of this information can be found
in the 1962 economic report to Congress by President John F. Kennedy I want to
make a point that that needs to be based on the consumer price level that’s the
governing factor that tells the story of like preparing why don’t you repeat he
statement once more Mr. Rash that we need 90 percent support prices based on
a parity price level governed by the consumer price level under the 1960
under the 1960 report the president’s 1960 economic report would you agree
with these other two gentlemen that the biggest problem in agriculture today are
the only problem is price yes sir how about you
Ray well I certainly agree with this to Arnold
because when farmers are being only paid half what they should get their only
spending half of what they could spend in rural America and this is why my town
if things aren’t changed it’s going to go down the drain just like Mr. Bowers’
town in well thank you gentlemen this is what we’ve been discussing at the
Blue-Ribbon conference in Sioux City Iowa this past weekend and it was the
unanimous agreement of all those that attended that the only problem that we
have in agriculture today is the price structure and that all of rural America
is completely dependent on the gross income of Agriculture and if the farmers
don’t get their proper share of the national income it’s going to starve the
rural communities and one way that we could restore prices to agriculture is
through legislation such as Mr. Wilken and Mr. Bowers and the rest of the panel
agreed however we’ve been trying this now for 15 years and it seems like
Congress has lost sight of Agriculture and so this is what the National Farmers
Organization is attempting to do merely one thing to restore the proper price
level to agriculture through collective bargaining thank you [music] us farm report has 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 and
a new generation of farmers [music]

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