Dwight D. Eisenhower photo

Special Message to the Congress on Agriculture.

January 09, 1956

To the Congress of the United States:

In this Session no problem before the Congress demands more urgent attention than the paradox facing our farm families. Although agriculture is our basic industry, they find their prices and incomes depressed amid the nation's greatest prosperity. For five years, their economy has declined. Unless corrected, these economic reversals are a direct threat to the well-being of all our people.

But more than prices and incomes are involved. In America, agriculture is more than an industry; it is a way of life. Throughout our history, the family farm has given strength and vitality to our entire social order. We must keep it healthy and vigorous.

Efforts toward this goal have been unremitting. Many new foundations of permanent value to all farm families have been laid in the past three years. Two years ago a new farm law was enacted, designed to gear agricultural production incentives to potential markets, thereby giving promise to our farm people of a stable and dependable future once the wartime inheritance of surpluses is removed from the farm economy. Loan programs have been substantially improved, enabling many more farmers to acquire family-sized farms and to improve their farms and homes. The benefits of Social Security protection have been extended to farm families. The return of the Farm Credit Administration to farmer control; expansion of soil conservation assistance and rural electrification and telephone programs; increased funds for research and extension work; initiation of new programs to aid low income farm families; adoption of tax provisions of benefit to farm people; increased storage facilities; upstream soil conservation programs; greatly expanded disposal activities for surplus farm products; strengthening our Department of Agriculture representation overseas in the interest of expanded markets--these and other advances have permanently reinforced the foundations of all agriculture.

Yet, beneficial though these advances are, persistent and critical farm problems require prompt Congressional action in this Session.

Remedies for these problems demand a clear understanding of their principal causes. These are:

First--production and market distortions, the result of wartime production incentives too long continued;

Second--current record livestock production and near-record crop harvests piled on top of previously accumulated carryovers;

Third--rising costs and high capital requirements.

In short, we have an over-supply of commodities which drives down prices as mounting costs force up from below. Thus is generated a severe price-cost squeeze from which our farm people, with the help of government, must be relieved.

We must free the farm economy from distortions rooted in wartime needs and thus enable our people in agriculture to achieve prosperity; in so doing they will help carry the nation's prosperity to still greater heights. The Administration and the Congress must move together to achieve this goal.

The requirements are clear. New means are needed to reduce surpluses and to widen markets. Costs must be cut and production must be better balanced with prospective needs.

THE MAIN PROBLEM--THE SURPLUS

Of the many difficulties that aggravate the farm problem, mountainous surpluses overshadow everything else. Today's surpluses consist of commodities produced in a volume imperatively needed in wartime but unmarketable in peacetime at the same prices and in the same quantity.

The plain fact is that wartime production incentives were too long continued.

During the past three years, there has been no lack of effort to get rid of surplus stocks. Disposal efforts have been diligent and vigorous. Vast quantities have been moved--much of them given away. In the past three years we have found outlets for commodities in a value of more than four billion dollars--far more than in any comparable period in recent history.

But these disposal efforts have not been able to keep pace with the problem. For each bushel-equivalent sold, one and a half have replaced it in the stockpiles. Farmers, the intended beneficiaries of the support program, today find themselves in evergrowing danger from the mounting accumulations. Were it not for the government's bulging stocks, farmers would be getting far more for their products today.

Other consequences of past farm programs have been no less damaging. Both at home and abroad, markets have been lost. Foreign farm production has been increased. American exports have declined. Foreign products have been attracted to our shores.

Steadily this chain of events has lengthened. Our farmers have had to submit to drastic acreage controls that hamper efficient farm management. Even these controls have been self- defeating, because acres diverted from price-supported crops have been planted to other crops. These crops have been thrown into surplus and their prices have declined. Today, almost without regard to the livestock or crop he produces, nearly every farmer is adversely affected by our surpluses. The whole process, for instance, has contributed to the present plight of hog producers.

When three years ago this Administration assumed its responsibility in agriculture, work was begun immediately on what became the Agricultural Act of 1954. That Act was developed and passed with bipartisan support, as all our agricultural legislation should be.

The 1954 law brought realism into the use of the essential tool of price supports. It applied the principle of price flexibility to help keep commodity supplies in balance with markets. That principle is sound and essential to a well-rounded farm program. For two reasons, the 1954 law has not yet been able to make its potential contribution to solving our farm troubles. First, the law began to take hold only with the harvests of 1955; it has not yet had the opportunity to be effective. Second, the operation of the new law is smothered under surpluses amassed by the old program.

The attack on the surplus must go forward in full recognition of the fact that farm products are not actually marketed when delivered to and held by the government. A government warehouse is not a market. Even the most storable commodities cannot be added forever to government granaries, nor can they be indefinitely held. Ultimately the stockpiles must be used.

It is unthinkable to destroy food. Instead, we must move these stocks into domestic consumption or dispose of them abroad. Neither route under present conditions offers the results often expected. Surpluses moved domestically almost always compete directly with crops farmers are trying to sell. Moved abroad in quantities large enough to remedy present difficulties, they would shatter world prices and trade, injure our friends and undermine domestic prices as well.

To be sure, outlets for some of the surplus exist both at home and abroad. But experience has amply proved that neither the home nor foreign market can, under present conditions, readily absorb the tremendous stocks now depressing our agriculture.

Clearly new action is imperative. We must stop encouraging the production of surpluses. We must stop shifting acres from one crop to another, when such shifts result in new surpluses. Nor can crop problems be converted into millstones weighing down upon the producers of livestock.

Remedies are needed now, and it is up to the Administration and the Congress to provide them swiftly. As we seek to go forward, we must not go back to old programs that have failed utterly to protect farm families.

I recommend, therefore, the following nine-point program. I urge the Congress to pass this program with maximum speed, for delay can only aggravate and multiply the difficulties already sorely harassing millions of our rural people.

1. THE SOIL BANK

Our most pressing need today is to work off our surpluses so that our basic program of 1954 can succeed in gearing production to prospective markets at fair prices.. A three-pronged attack is needed.

First, future production of crops in greatest surplus must be adjusted both to the accumulated stocks and to the potential markets.

Second, producers of other crops and of livestock must be relieved of excessive production from acreage diverted from surplus crops.

Third, lands poorly suited to tillage, now producing unneeded crops and subject to excessive wind and water erosion, must be retired from cultivation.

These essential adjustments can all be hastened through a Soil Bank Program. I recommend a Soil Bank of two parts.

The first is designed to meet the immediate need to reduce the crops in greatest over-supply. It may be called the Acreage Reserve Program.

The second part is a long-range attack to achieve better land use and protect farmers and ranchers from the effects of production on acres already diverted. It may be called the Conservation Reserve Program.

A. The Acreage Reserve Program

I recommend that the Congress consider a voluntary additional reduction in the acreage of certain crops which today are in serious surplus--wheat, cotton, corn and rice.

In considering the application of this program to each of these crops, the Congress will wish to accord special attention to their distinctive problems--notably in the case of corn--as set forth later in this Message.

I do not propose this program as a device to empty government warehouses so they may be filled again. There is, therefore, a basic corollary to the Acreage Reserve Program: in future years we must avoid, as a plague, farm programs that would encourage the building-up of new price-depressing surpluses.

What I here propose is essentially a deferred-production plan. As a necessary part of the voluntary acreage reduction, it is essential to protect the farmer's income. It would be grossly unfair to require farmers to bear the full burdens of this readjustment. Just as other readjustments from war were shouldered in considerable part by the nation as a whole, so should this.

In the case of wheat and cotton, for example, I look to a voluntary reduction equivalent to possibly one-fifth of the acreage otherwise permitted by allotments--perhaps 12 million acres of wheat and 3 million of cotton. It should be practical to include wheat already seeded if it is incorporated with the soil, as green manure, or by other accepted practices. This would make it possible for more farmers to enter the program immediately and thereby start at once to work down the surplus.

Administrative discretion is needed to assure that the rates of reduction in different areas are related to the supply and demand conditions for different grades and classes. The farmer's cooperation in this temporary program must not impair his historic acreage allotments. Rights of tenant farmers must be protected. I should expect the reduction in wheat and cotton plantings to continue for some 3 or 4 years, during which time these huge crop carry-overs should decline to normal levels.

In return for their voluntary participation in the Acreage Reserve Program cooperating farmers will be allocated certificates for commodities whose value will be based on the normal yields of the acres withheld in this Reserve. I recommend that these certificates be made available to cooperating farmers through their County Agricultural Stabilization Committees at normal harvest time for each crop. The certificates will be negotiable so farmers can convert them to cash. They will be redeemable by the Commodity Credit Corporation in cash, or in kind at specified rates.

I further recommend that the legislation provide that each participating farmer contract to refrain from cropping or grazing any land he puts in the Acreage Reserve.

By so reducing crop production, commodities now in government ownership can be used to supply market needs up to a proportionate amount. Thus the bulging Commodity Credit Corporation stocks can be correspondingly worked down without depressing current market prices.

The program will operate in this way: A farmer, with an allotment of 100 acres of wheat, for example, may choose to plant only 130 acres and put the remaining 20 in the Acreage Reserve. His acreage allotment will not be affected. He will agree not to graze or harvest any crop from the 20 acres put into the reserve.

In return for this cooperation in the temporary acreage reduction program, he will receive a cashable certificate. The certificate will be equal to a percentage of the value of the crop he would have normally harvested from the 20 acres. This percentage will be set at an incentive level sufficiently high to assure success of the program.

This deferred production plan uses the surplus to reduce the surplus.

It will be financed with commodities already owned and paid for by the government. Time and shrinkage, storage and other costs are eroding away the present value of these stocks. Consequently, the real net cost to the government--taking these and other facts into consideration--will be substantially less than the apparent cost in payments made on certificates.

I emphasize that this program is specifically intended to provide an income to farmers while the essential adjustment in stocks is being accomplished.

There are many virtues in the plan.

It will help remove the crushing burden of surpluses, the essential precondition for the successful operation of a sound farm program.

It will reduce the massive and unproductive storage costs on government holdings--costs that are running about a million dollars a day.

It will provide an element of insurance since farmers are assured income from the reserve acres even in a year of crop failure.

It will ease apprehension among our friends abroad over our surplus-disposal program.

It will harmonize agricultural production with peacetime markets.

B. The Conservation Reserve

The second part of the Soil Bank--the Conservation Reserve Program--affects both today's surpluses and tomorrow's needs of our growing population.

Under the pressures of war and the production incentives continued in postwar years, large areas have come into cultivation which wise land use and sound conservation would have reserved to forage and trees.

In greater or lesser degree this problem exists throughout the nation. Continued cropping of these lands results, on the one hand, in wastage of soil and water resources, and on the other, in production of commodities now in surplus.

Today the nation does not need these acres in harvested crops.

We cannot accurately predict our country's food needs in the years ahead, except that they will steadily increase. We do know, however, that the sound course both for today and tomorrow is wisely to safeguard our precious heritage of foodproducing resources so we may hand on an enriched legacy to future generations. The Conservation Reserve Program will contribute materially to that end.

Further, production from the acres today diverted from surplus crops is now seriously affecting other segments of our agriculture. The acreage of feed grains, notably oats, barley and grain sorghums, has been increased. The end product of this diversion has been greatly enlarged supplies of and lower prices for hogs, cattle, and dairy and poultry products. Producers of fruit, vegetables, and other crops have been adversely affected. The proposed Conservation Reserve can also make a major contribution to solving this problem of diverted acres.

I propose that farmers be asked to contract voluntarily with the government to shift into forage, trees and water storage cultivated lands most needing conservation measures. Any farmer would be eligible to participate in this program regardless of the crop he produces or the area where his farm is located. I would hope that some 25 million acres would be brought into the Conservation Reserve.

Forest lands under good management are a constant and a renewable resource. One-third of our forest area is in farm woodlands. From this source can come a large share of the lumber, pulpwood and other forest products to meet the growing needs of our expanding economy. The Conservation Reserve can mean productive and protective tree cover for less productive lands now used for cultivated crops.

The government itself must encourage this transfer in order to achieve the advantages to the general welfare that will follow from improved resource use. I propose, therefore, that the government pay a fair share of the costs of establishing the conservation use, up to a specified per acre maximum that will vary by regions. The government's share will be sufficiently high to encourage broad participation and thus assure the success of the program. Further, as the farmer reorganizes his farm along these soil-conserving lines, I recommend that the government provide certain annual payments for a period of years related to the length of time needed to establish the new use of the land. The Congress will need to develop the basis and procedures for determining the amount of the payments. Here, as in the Acreage Reserve Program, I would not let the farmer's cooperation impair his historic acreage allotments.

The farmer, in turn, will agree that the acres put into this Conservation Reserve will be in addition to any land that he may put into the Acreage Reserve, and will represent a reduction in cropland cultivated. He will agree to carry out sound soil and water conservation on these acres, and to refrain from returning them to crop production and from grazing them for a specified period.

I urge the Congress to approve this program with the least possible delay so that a significant part of the desired 25 million acres can come into the program in 1956.

My estimate is that if the Congress acts in time, some 350 million dollars will be invested in the Conservation Reserve during the calendar year 1956, and a total of about a billion dollars over the next 3 years. Sums expended under this program will be in addition to the 550 million dollars provided for the Agricultural Conservation Program for the coming fiscal year.

In return the Conservation Reserve Program will bring these large rewards:

It will result in improved use of soil and water resources for the benefit of this and future generations.

It will increase our supply of much-needed farm-grown forest products.

It will help hold rain and snow where they fall and make possible more ponds and reservoirs on the farm.

It will reduce the undue stimulus to livestock production, and consequent low livestock prices, induced by feed-grain production on diverted acres.

It will similarly provide protection for producers of the many small-acreage crops whose markets are threatened by even a few diverted acres.

In combination with the Acreage Reserve Program for crops in surplus, the Conservation Reserve Program will help during the next several years to reduce the total volume of farm production and improve the balance among different farm commodities, both of which are important to a general improvement in farm prices.

2. SURPLUS DISPOSAL

Production adjustments effected by the Soil Bank are needed to halt current additions to surpluses and to reduce stocks on hand. But additional relief must be obtained from the pricedepressing influence of these huge carry-overs. In Public. Law 480 the Congress has provided basic legislation for this purpose. The problem still exists, but not for lack of vigorous efforts to deal with it.

Surplus disposals have permitted substantial reductions in Commodity Credit Corporation stocks of butter, dried milk, cottonseed oil and meal, flaxseed and linseed oil and seeds. Surplus disposals by the Commodity Credit Corporation have risen from just over half a billion dollars in fiscal 1953 to more than 1.4 billion dollars in fiscal 1954, and to more than 2.1 billion dollars in fiscal 1955.

In the last fiscal year sales of government-owned price-supported commodities into the domestic market reached 403 million dollars. These were made with due care for the adverse effect they might have on prices received by farmers for current sales. Domestic donations to supply food for needy persons totaled an additional 196 million dollars. Overseas disposals, through barter and donations for constructive purposes, totaled 1.1 billion dollars. In spite of these vigorous efforts, the Commodity Credit Corporation investment in price-supported commodities increased by about one billion dollars during the fiscal year.

Because the problem continues to be so serious and stubborn, the Secretary of Agriculture is appointing an Agricultural Surplus Disposal Administrator who will report directly to the Secretary. The duties of the Administrator will relate to all activities of the Department associated with the utilization of Commodity Credit Corporation stocks and of our current abundant production.

Expanded opportunities will be sought to barter agricultural products, which deteriorate and are costly to store, for increased quantities of nonperishable strategic materials. Additional legislation may be needed in this field.

The bulk of price-supported commodities held by the government cannot now by law be sold into the domestic market except at prices equal to at least 105 percent of the support price plus carrying charges. This restriction has worked to the disadvantage of both farmers and the government by blocking sales that would clearly have been advantageous to both. I recommend legislation to permit, under proper safeguards, sales at not less than support levels plus carrying charges.

Present provisions of surplus disposal legislation permit export dispositions of government stocks to friendly nations only. Opportunities clearly to our interest may develop in the future to sell to countries excluded by this legislation. To enable us to realize on such opportunities I recommend repeal of section 304 of Public Law 480.

3. STRENGTHENING COMMODITY PROGRAMS

Our frontal attack on the problems of surpluses, diverted acres, unbalanced production and unwise land use is carried in major part by the Soil Bank through the Acreage Reserve and the Conservation Reserve Programs.

These proposals are wholly in keeping with the fundamental principles of sound farm policy set forth in my special agricultural message of two years ago. In keeping with these principles the Administration:

(a) Whenever possible will continue to case or eliminate controls over farmers; and

(b) For commodities on which price supports are discretionary, will continue to support these prices at the highest levels possible without accumulating new price-depressing surpluses.

In keeping with this latter principle, I am advised by the Secretary of Agriculture that, as a direct result of operation of various parts of our present farm program, the supply and demand conditions for soybeans and flaxseed are now such as to warrant an increase in the price support levels for these crops in 1956. The higher support levels will be announced shortly.

In respect to other commodity programs I submit the following specific suggestions.

A. Corn

In recent years many farmers have chosen not to observe acreage allotments on corn. Considerably less than half of the 1955 crop was raised within acreage allotment limitations and thus eligible for price support. It is apparent that price supports alone, even at levels closely approaching the legal maximum, are an insufficient inducement for participation in a corn acreage allotment program.

I recommend therefore that the Congress give serious consideration to adapting the Acreage Reserve Program to corn. One grave difficulty must be overcome. Unlike wheat and cotton, most of the corn crop is fed on the farms where it is produced. For this reason, marketing quotas such as are used on wheat and cotton are not feasible.

Thus, broad and effective participation by corn producers in an acreage allotment program is imperative for the Acreage Reserve Program to achieve its objective of reducing the corn surplus. With broad and effective participation, in both programs, the Acreage Reserve Program for corn would:

(a) Reduce the carryover stocks which currently depress the market,

(b) Make possible a higher level of price support than would otherwise prevail for the 1956 crop, and

(c) Reduce the incentive to farmers to produce excessive supplies of hogs and fed cattle.

If the Congress should choose not to authorize the Acreage Reserve Program for corn, the Congress may wish to consider an alternative: to eliminate acreage allotments for corn and put price supports for corn on a discretionary basis comparable with the other feed grains. With no acreage allotments and with discretionary supports, all corn producers would be eligible for price supports at a level substantially above the market price which prevailed during the 1955 harvest.

B. Wheat

The problems of wheat are difficult and complex. The proposed Soil Bank, with its Acreage Reserve Program, will make a major contribution toward their solution. This program is particularly well-suited to wheat since this crop is grown in large acreage and is now burdened under an accumulated carry-over in excess of a full year's needs. The Conservation Reserve Program and the Great Plains Program, described later, will also help. Other changes are necessary also, both for current adjustments and for long-term balance between production and consumption.

(a) Legislation already has passed the Senate and is pending in the House of Representatives which would exempt from marketing quotas those producers who use for feed, food, or seed on their own farms all the wheat they raise. Because of the failure to pass this legislation last year, the Department of Agriculture has been compelled by law to hail before the courts farmers whose only offense was to raise and feed wheat outside their quotas. Again the Administration urges prompt enactment of this legislation. Correction of this problem should be delayed no longer.

(b) Historically a significant proportion of the annual wheat crop has been used for livestock feed. The quantity fed in pre-World War II years ranged from 100 to 150 million bushels a year, about twice the quantity fed in more recent years. This reduced consumption has aggravated the surplus burden.

I recommend that the Congress give consideration to authorizing the annual sale for feeding purposes, at the discretion of the Secretary of Agriculture, of limited quantities of Commodity Credit Corporation wheat of less desirable milling quality. The authorized sale price should reflect the feeding value of the wheat, precautions being exercised as to the effect of such sales on prices of other feed grains. There are opportunities to use more wheat for feed in feed-deficit areas distant from the Corn Belt.

(c) I recommend legislation to expand the non-commercial wheat area beyond the 12 States now so designated. This action would eliminate acreage and marketing controls for many farmers who characteristically feed on their own farms most of the wheat they raise, and who contribute little to commercial supplies or surplus stocks.

(d) I recommend extension for one year of legislation which exempts durum wheat from acreage and marketing controls. This type of wheat is in short supply and production should not be restricted.

We are participating in negotiations for possible renewal of the International Wheat Agreement, which will terminate July 1, 1956, unless it is renewed.

C. Cotton

As in the case of wheat, the Acreage Reserve Program is especially well-suited to cotton. This crop as well is burdened by an accumulated carry-over in excess of a full year's requirements. Other legislative changes for cotton, in addition to the Soil Bank Program, that require consideration are these:

(a) For all crops except cotton, price support legislation requires that parity prices shall be computed on the basis of the average grade and quality of the crop. For cotton a special provision of law designates Middling 7/8-inch cotton as the standard grade for parity calculations and price support. Currently less than 5 percent of cotton production is of this grade or lower.

I urge an amendment to provide for cotton, as for other crops, that the average grade and quality of the crop be utilized for parity-price computations. This recommendation is, in general terms, in keeping with the intent of legislation already pending before the Senate.

(b) The shortcomings of acreage allotments as a means of controlling production on cotton are evident. In 1955, on an acreage allotment calculated to yield 10 million bales of cotton, nearly 15 million were harvested. Rapidly advancing technology is resulting in production far outrunning expectations based on acreage alone. This is especially true when prices are supported at wartime production incentive levels.

When production controls must be applied as a result of supply and market conditions, it is imperative to have controls that are effective. As surpluses are reduced through the proposed Acreage Reserve Program of the Soil Bank and through other means, new accumulations of surplus must definitely be avoided.

For these reasons the Congress should consider replacing acreage allotments on cotton with quantity allotments beginning with the crop of 1957. The Congress could well consider similar action for other crops under marketing quotas.

D. Rice

Under the law, accumulated supplies of rice have required a 40 percent reduction in acreage for 1956 compared with 1954, and a decline in the support level to 75 percent of parity.

Rice production in this country is the most efficient in the world. However, our rice is rapidly being priced out of world markets and is being diverted into government warehouses and even into the feed markets.

There are two alternative courses of action to which the Congress should give consideration:

1. Inclusion of rice in the Acreage Reserve Program. This will require continuation of production controls and marketing quotas.

2. Elimination of existing production and marketing controls on rice. Prices could then be supported on a discretionary basis at levels which would permit rice producers to improve their competitive market position.

If the Congress considers the latter course to serve the longterm best interest of rice producers, it may wish to consider use of the Acreage Reserve Program to make the transition.

E. Peanuts

The peanut price-stabilization program has experienced serious difficulties stemming in part from a fixed national minimum peanut acreage. With improving technology this minimum acreage will normally produce more peanuts than the market will absorb at the support price. Consequently, I recommend elimination of provisions for the minimum national acreage allotment.

F. Sugar

The legislation to renew the Sugar Act of 1948, as amended, should promptly be completed. The Congress is aware of the need to give producers, as well as foreign suppliers and the entire sugar industry, as much advance notice as possible in planning their operations.

G. Special School Milk Program

The Special School Milk Program provided for in the Agricultural Act of 1954 has met with gratifying success. Approximately nine million children had the health benefits of this program last year, including children in some 7,000 schools in which milk was not previously served. Consumption was increased by over 450 million half pints of milk. This is a good example of constructive use of a surplus product to meet a present need. We thus contribute to better health habits and at the same time promote an enlarged market for the future. Several thousand additional schools are participating in the program in the current school year.

I have been advised that, in some States, Milk Program funds are nearing depletion. We must see to it that the program is carried forward intact through this fiscal year.

I recommend that the program be extended for two years beyond June 30, 1956, with authorization to use Commodity Credit Corporation funds increased from 50 million dollars a year to 75 million dollars.

H. Livestock

For livestock producers, many parts of the program I have already discussed have special significance.

Establishment of the Soil Bank will alleviate the undue stimulus to livestock production and the resulting downward pressure on livestock prices which arise from using for feed-grain production much of the acreage already diverted from wheat and cotton. Restrictions against grazing the Soil Bank acres will safeguard the interests of beef producers and dairymen.

Periodically livestock markets become glutted and prices disrupted. In such periods where assistance will be constructive, timely and vigorous government purchase and diversion programs are essential to bolster prices and help producers adjust to market demands. Such programs have been undertaken by this Administration. The pork purchase program now in progress will shortly be stepped up to supply new and expanded outlets now being developed. Sales promotion and the development of better merchandising methods cooperatively with the livestock trade are part of this effort to meet the impact of heavy marketing.

Special programs of an emergency nature will be provided to help livestock producers as needed. For example, emergency credit and low-cost feed in the event of drought will be available whenever disaster strikes.

Increased research on nutrition, disease control, better breeding, more profitable use of by-products and improved marketing will help lower production costs and facilitate the smooth flow of livestock products into consumption.

4. DOLLAR LIMIT ON PRICE SUPPORTS

The average size of farms in American agriculture, as measured by capital or by acres, has rapidly increased. To the degree that this trend is associated with the development of more economic and more efficient farm units it is in the interest of farm. families and of the nation. To the degree, however, that it has resulted in the removal of risk for large farm businesses by reason of price supports, it is much less wholesome and constitutes a threat to the traditional family farm.

Under the price support machinery as it has been functioning, price support loans of tremendous size have occasionally occurred. It is not sound government policy to underwrite at public expense such formidable competition with family operated farms, which are the bulwark of our agriculture.

I ask the Congress to consider placing a dollar limit on the size of price support loans to any one individual or farming unit. The limit should be sufficiently high to give full protection to efficiently operated family farms.

5. RURAL DEVELOPMENT PROGRAM

In my message of January 11, 1954, I pointed out that the chief beneficiaries of our farm programs have been the 2 million larger, more productive farm units. Production on nearly 3 million other farms is so limited that the families thereon benefit only in small degree from the types of programs that heretofore have dominated our activities.

On April 26, 1955, I transmitted to the Congress recommendations of the Secretary of Agriculture for attacking the problems of low-income farm families. The Congress has met only in part these recommendations for legislation and appropriations. Despite the resultant handicaps, the interest in this program has been so great that pilot work is already under way in well over 30 counties widely spread throughout the United States. There is activity now in more than one-half of the States.

Four Departments of the Federal Government--Commerce, Labor, Health, Education and Welfare, and Agriculture--are actively at work on this program with State and local leadership to aid low income farm families.

Not only the welfare of these families but also of the people as a whole require that this program go forward. Once again, therefore, I urge the Congress to enact the full program recommended in my message of April 26, 1955.

6. THE GREAT PLAINS PROGRAM

Between the prairies of the Central West and the Rocky Mountains is a vast area embracing all or part of I o States, in which erratic climate, wind and water erosion, and special problems of land use constitute a continuing hazard. For more than a year intensive new studies of conditions and problems peculiar to this Great Plains region have been in progress. The work has been carried on cooperatively between the leadership of the I o States involved, the Department of Agriculture and the Great Plains Council which includes technical people from the States of the region. This study will help to define the respective responsibilities of individuals and local, State, and Federal agencies.

The proposed Soil Bank, with its Acreage Reserve Program to reduce promptly production of crops in surplus and with its Conservation Reserve Program to take less productive lands out of crops, will meet in part some of the conditions especially serious in the Great Plains. Other desirable modifications of existing legislation include:

1. Provision for long-time cost-sharing commitments under the Agricultural Conservation Program, and

2. Relaxation of planting requirements to maintain base acreage for wheat allotments.

Shortly I will transmit to the Congress a report containing certain recommendations for providing a more stable agriculture in this important region.

7. RESEARCH

Scientific research has been the means of fundamentally important developments both in agriculture and industry. It has resulted in improved quality, new and better techniques, new products, new markets, new high levels of material well-being for our people, and new horizons for our future. Most individual farmers are not in a position to carry on scientific investigations. Government has special responsibility in this area--and particularly is this the case since the benefits of research related to agriculture are widely shared by all the people.

Not only can research provide for the material needs of future generations, but it also can contribute in many ways to the fuller utilization of our present abundance.

We must look for new uses of agricultural products that can contribute to human welfare, such as livestock by-products for medicinal purposes or such as coarse fibers for construction materials already have contributed.

We must find new markets, as we have for tallow in industry or as have followed upon the development of frozen and powdered juice concentrates.

We must find new crops offering such new opportunities and benefits as are exemplified by soybeans and sorghums.

We must further improve our marketing mechanism, as already has been done through refrigeration and new processing techniques, so that the benefits of our abundance may be still more widely distributed. Marketing margins have continued to increase, even while farm prices have been declining. Thus the farmer's share of the retail food dollar has shrunk appreciably. Retail prices have changed little, thereby impeding desired increases in consumption. We must find ways to lower costs of food distribution. Research is an effective way to help attain that important goal. The Secretary of Agriculture is actively engaged in an expanded inquiry directed toward reducing the costs of distribution.

Our basic scientific knowledge from which all practical applications of science are made is vitally important and must be expanded. This knowledge is essential also to continue the attack on the ravages of plant and animal pests and diseases. We cannot use or reap benefits from what we do not know. A major frontier of agriculture lies in our laboratories and experimental fields.

In the budget message, I will request the maximum increase in agricultural research funds that can be effectively used next year with the technical manpower and facilities available. This will be an increase of one-fourth, to a total of 103 million dollars.

8. CREDIT

In making the transition from war to peace, and similarly in making the investment adjustments associated with a dynamic agriculture, farmers are experiencing increased need for credit. This is especially true for young men, particularly veterans, who have started farming in recent years.

Private financial institutions, individuals, and government agencies are furnishing credit for agriculture. Administrative, budgetary, and legislative changes now being developed in government all point toward assuring adequate and sympathetic coverage of agricultural credit requirements, which cannot be met by private financial institutions.

Loans made by the Farmers Home Administration have increased gradually during the past four years from 212 million dollars to well over 300 million dollars, and can increase further as the new provisions for insured loans become more widely used.

The Farm Credit Administration has been reorganized to give farmers a greater voice in its operation. Further legislation will be proposed to combine the Production Credit Corporations and the Federal Intermediate Credit Banks. Federal Land Bank loans made by the Farm Credit Administration have increased from 237 million dollars four years ago to more than 400 million dollars last year.

The Administration is determined to see to it that an adequate supply of credit remains readily available to our farmers at all times.

9. GASOLINE TAX

One of the farmer's operating costs is the Federal tax on gasoline. About one-half of the gasoline bought by farmers is used on the farm. I recommend that legislation be passed to relieve the farmer of the Federal tax on purchases of gasoline so used.

Historically agricultural policy in this country has sought to foster family-sized owner-operated farms. This has been a sound and wise policy--not only in the development of an efficient agriculture which has become the envy of the world, but also in fostering a sturdy, resourceful, self-reliant citizenry.

Farm organization and farming operations are undergoing profound change as science and technology rapidly alter the structure of agriculture. Great care must be exercised that these changes do not result in huge corporation farms on the one hand or in unrewarding subsistence units on the other. The time proven commercial family farm must continue as the basic social and economic unit of agriculture. Accordingly farm policy must encourage such farms, sufficiently large and productive to provide satisfactions in farm living equal to those enjoyed by other Americans.

Insofar as the problems of agriculture can best be solved by government action, government should accept the responsibility.

The proper role of government, however, is that of partner with the farmer--never his master. By every possible means we must develop and promote that partnership--to the end that agriculture may continue to be a sound, enduring foundation for our economy and that farm living may be a profitable and satisfying experience.

Assisted by experienced farm people both in and out of government, I have been earnestly studying this problem for many months. I believe that the nine-point program, set forth in this message, building on our present program, meets the urgent needs of our farmers today and does so in a way consistent with our basic traditions. It offers no nostrums or panaceas. Our farm folk expect better of us than to deal in that kind of specious practice.

Farmers expect programs that are forward-looking, economically sound and fair.

This program offers a workable approach to reducing the surpluses, bringing production and markets into balance at fair prices, and so raising the income and advancing the security of our farm families.

Should this program be enacted, its degree of success will be dependent upon the degree of farmer participation and upon a common determination to work together in ridding ourselves of burdensome surpluses. With such a spirit, this program will speed the transition to a stable, prosperous and free peacetime agriculture with a bright future.

Again I urge upon the Congress the need for swift legislative action on these recommendations, in the interest of our farm people, in the interest of every American citizen.

DWIGHT D. EISENHOWER

Dwight D. Eisenhower, Special Message to the Congress on Agriculture. Online by Gerhard Peters and John T. Woolley, The American Presidency Project https://www.presidency.ucsb.edu/node/233046

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