Remarks to Members of the American Agricultural Editors' Association.

Ladies and gentlemen:

I know you have already had a very full day with a breakfast meeting with Members of Congress and also other meetings during the morning; luncheon, where Earl Butz, the real expert in this field, and other officials in our Administration addressed you; and you are going to have quite a full afternoon with some of our experts who deal with some of the problems which you are interested in as agricultural editors and ones who, I think, can carry this message back across the country to those who are interested in the problems of agriculture. You will have the opportunity to hear from them, Mr. Simon and others.

I think perhaps of greatest value to you as far as any presentation by me is concerned would be an overview, an overview as to where we have been, where we are, and what the prospects are for the future.

Projecting the future, of course, is always rather hazardous, but I think we have some rather sound bases for making a very positive estimate of what the future holds, not only for the American economy generally but for American agriculture.

I go back 5 years, of course, to the time when I came into office, and you may recall that at that time, there was a sense of a very strong economy; unemployment was low. However, it was an economy that had some very healthy aspects, but also some very unhealthy ones--the unhealthy one being the fact that it was highly inflated by war production, a cost in many ways which we all understand, but which is particularly understood when we realize that at that time, we were suffering casualties of about 300 a week in Vietnam.

In those past 5 years, we have seen changes on the international front. Peace has come, and consequently, we can look at our economy in terms of what the prospects are in peacetime, rather than in wartime.

Insofar as agriculture is concerned, while the rest of the economy in January of 1969 appeared to be strong, while unemployment was low, while industry was producing at high levels, we find that as far as agriculture is concerned, agriculture was not getting its fair share of the national income. I said that during the campaign of 1968, and when I came into office, I found that what I had said in the campaign was true.

I found, for example, that the figures were rather startling and very depressing insofar as anybody who was speaking to a group of people representing the farmers of America. Farm income was at $14 billion. It sounds like a lot of money in one sense, but when we consider its relationship to the balance of the national income, it is very low, because at that time, farmer income was only 73 percent of what nonfarm income was.

I think, projecting that in more simple terms, the per capita income for an individual in agriculture was only 73 percent of what the national per capita income was. That meant that the farmer was not getting his fair share of America's production or of its prosperity, whichever way you want to call it.

Now, I would not like to suggest that everything that has happened since then in terms of changing that ratio is due to the policies of this Administration. However, what we have done has had some effect, and beneficial effect, because one of the goals we set at the outset was to see that agriculture got a bigger share, a more fair share, of the total income of this Nation's prosperity.

You know the numbers better than I do. That $14 billion figure has now gone to $26 billion. Even taking out inflation, it is a very substantial increase in net income for our Nation's farmers. I think the important number, however, is that the per capita income for an individual who is in agriculture, his share has risen from 73 percent to 93 percent.

That still isn't equal to what an individual who happens to go into some vocation other than agriculture, but it is a lot better than it was, and it is the way, of course, it should be because of the great contribution that agriculture and the Nation's farmers do make to the welfare of all of the people of this country.

Another area that we have seen a rather drastic improvement in is in the field, as you know, of our exports. In the year 1968, and 1969, as far as our foreign markets were concerned, leaving out what production was exported for purposes of war, we found that those markets were not nearly as high as they ought to be, and comparatively speaking, what we have seen, of course, is an opening up of markets abroad that we never had before.

Here is where we have a situation where our foreign policy has a direct effect on our agricultural policy and on the welfare of our Nation's farmers. The opening to China, the new relationship with the Soviet Union, some hard bargaining on the part of our negotiators with regard to trade has resulted in the fact that farm exports now, exports particularly in the area of feed grains, have reached a very, very high level.

And they will continue to be high, incidentally, a point that I will elaborate on toward the conclusion of my remarks.

So much for the overview, looking at what it was 5 years ago and what it is today. There are some weak spots, weak spots that you gentlemen are perhaps far more familiar with than I am, but there are weak spots that we have been working on. Many of them, incidentally, I would have to say were energy-related.

First, for example, we hear of the problem of fertilizer, and as you know, we have taken some action to deal with that problem. We have asked the Nation's railroads to provide more cars for the purpose of transporting phosphate, for example, from Florida so that we can get more fertilizer.

We have asked those who produce fertilizer to put a bigger portion of their effort into the production of fertilizer, rather than into other areas. This, of course, is only jawboning, because we cannot control them, we cannot direct it. The market is what will eventually determine what they do in this particular area.

In that field, however, I would like to point up another area where there is a cross-fertilization, so to speak, of policies. You have often heard me call upon the Congress to act on the proposal to deregulate natural gas. Now, that would seem to be only something that would affect the heating of homes in New England and other parts of the country.

On the other hand, if natural gas is deregulated, it means that gas that now is not being produced and is not being shipped interstate because of a price level that is too low will be produced and will be shipped, and that means, of course, more production in all areas which have to do with the energy problem and particularly in the fertilizer area.

I don't think of any one single thing that the Congress could do in this particular area that would be more helpful than the deregulation of natural gas. It will take some time before it will have its effect, but there is no question that the answer in this field is more production.

The deregulation of natural gas, producing, for example, more, as we should, in some of our Federal preserves like Elk Hills, which again requires some action by the Congress, and our general program of making the United States self-sufficient in energy by the year 1980--all of these factors can contribute to helping on a problem like fertilizer and also on the general problem of energy for the farm. Mr. Simon will comment upon that.

As you know, I have stated once the embargo was lifted by the oil-producing countries of the Mideast that this meant that American agriculture should get 100 percent of its needs insofar as energy was concerned. This, of course, means oil, gas, propane, and all of the other areas.

Mr. Simon, I am sure, will assure you, as he has me, that they can meet this goal. We have the resources to do so. There will be some spot problems, but those problems will be dealt with, and he is prepared to deal with them whenever they arise. But the farmers, looking to the future, can be assured that they are going to have the energy that they need in terms of oil and gas and these other elements that I have spoken of, the energy that they need to produce at a maximum amount the food and the fiber that we need, and that, of course, is of such great importance to them, to their income, and to their welfare as well as the Nation's welfare.

Another problem, of course, that we are keenly aware of is one which we believe-and I think you would agree--is a temporary one, and that is the problem that the cattlemen face.

Having bought when prices were high and held on perhaps a bit too long, they are now in a situation where they would have to sell when prices are lower. What we can do in a situation like this is limited to an extent, but at least, as Secretary Butz, I think, has already reported to you, we have moved at a time when prices are lower--assuming that this may be a better time to buy than later in the year--we have moved with Government purchases in a rather substantial amount.

This is not going to solve the problem of the cattlemen, immediately or totally, but at least it is a move in the direction which they, of course, want achieved. And I would say that the prospects for the cattlemen generally have to be good, because when we see the record production or at least the record predictions of production of feed grains, which will, of course, become available in the summer and in the fall and throughout the next year, this can only mean that the cattlemen and hog producers, other feeders and so forth, are going to benefit from that increase in production.

Another troublesome spot is one that I have addressed on many occasions to audiences of this type and for many, many years, going back perhaps over 27 years of public life, and that is, there is still too much of a spread between what the farmer gets at the farm and what the consumer pays at the market, supermarket, grocery store, or what have you.

I do not say this in a sense of trying to demagog about the retail trade people, the supermarkets, et cetera, et cetera, but I do say that at this particular time as we look at beef prices, that spread is one which most experts would agree is too great, and it is one where I would hope that those who are in the retail business, those who are in the middle, will recognize that they have a responsibility to reflect the lower prices that the farmer is receiving in the prices that eventually the consumer has to pay.

Turning now to what the prospects can be for the future, I think there are several factors that will be of interest to you. You recall right after the oil embargo was applied by the Arab countries, there was a time, oh, running from November through December, even into January, when many economists predicted that there was going to be a world recession and that, because of the world recession, that would inevitably have its effect on the United States and that we would have one as well.

Those predictions now appear to have been premature. They not only appear to have been premature, looking at the situation as we see it from now, I can, I think, rather safely predict that the demand for farm products, a demand which is worldwide and which has been going up because people are living a little better all over the world, because the United States is selling to more nations--the People's Republic of China, the Soviet Union, others to whom we never sold before-the world demand is going to increase. And as that demand goes up, it means that we can continue on our policy, which is, I think, one that all farmers will support, and that is instead of having a policy of scarcity and managing a scarcity, we should have a policy of full production and attempting to develop the markets abroad as well as at home so that the farmer in the United States can produce to his maximum and know that markets are going to be available for his production.

A word about some of our policies that may affect the welfare of farmers in the future: First, with regard to trade generally, as I have pointed out recently in meetings in Chicago and then again in Houston, it is very important for us to realize that in our relationships with our friends--and they are our friends, our European friends and our friends in Asia, like Japan, the great industrial countries we are having, as we have had in the past and will have in the future, trade negotiations, and I am insisting that our trade negotiators see to it that American agriculture gets its fair share and its fair treatment whenever these negotiations take place.

It doesn't make sense for us to buy from other nations abroad and then to have our agriculture products shut out from markets abroad, whether they are in Europe or whether they are in Japan.

This involves some diplomatic difficulties. It involves some very hard bargaining. As a matter of fact, when one looks at the problems of the new Europe, "The Nine," agriculture is probably the most vigorously discussed and vigorously debated of all, even among "The Nine." But again looking at the United States and its relationship to the rest of the free world, not to mention the Communist world, it is essential that in our trade relations that American agriculture be strongly represented at the bargaining table. And Mr. Eberle¹ and others who have responsibility in this field have the signal, and they will carry out those instructions.

¹William D. Eberle was Special Representative for Trade Negotiations.

That should be, in the long run, good news for America's farmers, good news because it will mean, in addition to the feed grains, of course, for which there is an enormous demand already, that in certain other areas as well--citrus, for example-that we can open up markets that have not hitherto been available to us.

Another item that I think we have to have in mind is the problem of controls. We have gone through some experiment in this respect. We tried a ceiling, as you recall, on beef prices. It did not work. All it did, of course, was to cut back on the production, and eventually when the ceiling was removed, it had the effect of seeing that prices were even higher as far as the consumer was concerned, because the farmer, of course, like any businessman, had every incentive not to produce at a time that he was confronted with a ceiling.

It is now the policy of this Administration--and will continue to be--that we will not again go down the road to controls.

I should also, however, make this point: When we speak of farm income, we have to remember that consumers have an enormous interest in what they pay for products when they go to the market. And while other items--clothing, for example, prices that are paid for automobiles and so forth, other items are all part of the family budget, and a much bigger part of the family budget, the most sensitive part of the family budget, is food, because that is the one that the housewife has responsibility for, that is the one that she becomes most concerned about. And consequently in this whole area, what we have to be concerned about is to continue to emphasize higher production and not simply higher prices, higher production because if we continue down a road or should go down a road in which the consumers again get the feeling--as they had at the time the ceilings on beef were imposed, and at the time price controls were imposed, on two different occasions if they get the idea that that is the only answer, then that will be detrimental certainly to the Nation's farmers where controls have never worked--they will not work now--it is also detrimental to the economy generally.

So, I can tell you with assurance today that with the assistance, we trust, of the Congress in this area, we are going to avoid going down that road, because the way to lower prices--and the way is not through controls--the way to lower prices is through greater production.

We have a similar example, for example, in the case of fuel. You recall that it was necessary for me to veto an energy bill. The energy bill had a very attractive provision in it. It provided for a rollback of gasoline prices. Now, there is nothing that anybody in public office would like to do better than to roll back prices. Maybe gasoline should be 20 cents a gallon, which it was when I used to work at a service station many, many years ago. Everybody would like it. But if it were 20 cents a gallon, there would be no gasoline. We would have to have rationing. We would also have to have even longer lines than we have passed through in the past.

And so in the field of energy, as in the field of agriculture, it is our policy to go forward with a program of increasing production, increasing production, of avoiding controls, and through that increased production, to provide the incentives that will see that all Americans will share in what we believe will be an increasing prosperity for the American people, and of course, that means the American farmer will share in it as well.

I should point out one other factor that I think would be of interest to this group, and that is, that when we talk to consumer groups, it is important to make the point that Earl Butz has often made--and I have made it in speeches that food, despite the fact that when we go to the supermarket it appears to be very highly priced, that food is still the best bargain in America of any country in the world.

The American housewife, budget keeper, pays a lower percentage of her income, for the family income, of the family budget for food than of any housewife or budget keeper in the world. This speaks well for the Nation's farmers, and it also speaks well, certainly, for the type of policy that has resulted in the fact that with even fewer farmers than we have ever had, they are producing more, and as a result, that we are the best fed, best clothed people in the world. And as far as our food is concerned, it takes a lower percentage of the consumer's income than in any country in the world, poor or rich, and I think that particular statement can be backed up by statistical facts, in case anyone would question it, and I doubt if anybody in this particular audience would question it.

That, of course, is small comfort, I can tell you, if you are talking to a group of consumers, because as you well know, it is a question of how much does a hamburger cost today, what is the price of bread, what about the price of vegetables when they come in. And if those prices are up, that has an enormous effect, impact on that consumer, and always there is an attempt to find an easy way out, and the easy way usually in the past has been to say, "Why not control it?"

We have tried that way. It does not work, and certainly as far as this Administration is concerned, we do not intend to try it again.

One final point I would make, I think has been often made before farm audiences, but it should be made so that all of the American people would be aware of it, and that is what an enormous asset America's tremendous productivity on the farm is to us in helping to build a world of peace.

Whenever there is a famine any place in the world, what nation is the most generous--the United States of America. Not just because we are the richest but because we produce more on the farm. We have more. We find that in terms of our foreign policy, for example, that the fact that the United States is able to produce not only enough for itself but enough to export as well, gives us an enormous bargaining leverage which has effect on all other elements of our foreign policy. And so, it can truly be said that the American farmer, as he produces more and as he produces more efficiently, not only contributes to his own welfare, not only does he contribute to the welfare of the American people but he contributes to a cause which he is dedicated to and which we, as all Americans, are dedicated to, of building a more peaceful and eventually, we trust, a more prosperous world.

Another point which I think should be made to this audience that I have often made in my appearances in many of the States which you represent or write for, is that our agricultural community, the great, what we call, heartland of America, makes another contribution that cannot be measured in dollars and income or anything else, but one that is absolutely essential, and I am referring to the fact that from this heartland of America comes strength for America's backbone, comes the character that America needs in this period when only America's leadership, and I repeat, only America's leadership, can save the cause of peace and freedom for all the world.

I make that point simply because I have had considerable experience, as you are quite aware, in not only going through the great difficulties of ending America's longest war but also in attempting to go beyond that and to build a world of peace in meeting with our adversaries, those who might become our enemies if we did not talk to them now, of attempting to reduce the burden of nuclear arms and other arms upon all the peoples of the world and particularly upon ourselves. And in order for America to meet this need for our leadership, in order for us to meet it, it is going to take strength, it is going to take character, it is going to take great dedication, and it is going to take a long view of the historical destiny of this country.

I feel strongly about America's destiny at this point, because as I look back over this century, I see that before World War I, we could look back and say, well, there were the French and there were the British and there were others who could stop the tide, then, of Nazi totalitarianism, and then in World War II, even then we waited, even after the defeat of France and Britain, and Churchill stood almost alone against those forces at that time.

I should have said, in World War I it was not Nazi totalitarianism; it was a different kind of aggression. World War II, of course, we were speaking about the Nazi totalitarianism.

But at the present time, as we look around the world, as a result of what happened in World War I, as a result of what happened in World War II, there is no other nation in the free world that has the military strength, that has the wealth, that has the productivity to lead the free world and to provide the kind of statesmanship in world affairs which is essential if we are to build a peace that will last, not only between the super powers but a peace that will perhaps come to the troubled area of the Mideast for the first time in many, many years, and which will avoid those conflicts which have plagued us four times in this century, that have cost us so much, not only in money but, even more importantly and more tragically, in the lives of our young men.

We are now in a period when we no longer, for the first time in 25 years, are drafting young men for the armed services. That is, of course, good news for all Americans. It is good news, of course, to those who live in America's heartland. But I should point out that in order for us not just to end a war but to build a lasting peace, America must continue to lead. We must be strong militarily, we must be strong economically. I think we will do both of those.

But we also must have the determination, we must have the character not to bug out insofar as world leadership is concerned simply because the burden has been so great, because if we do take that road, there is no other free nation that can take up that burden, and the result for all the world and for us, eventually, would be tragic indeed.

And so I conclude simply by saying that as I look at American agriculture today and those that represent it, I see it as one of the strongest elements of our great free society. It is essential to our program for building a lasting peace.

But I say, also, that those who work in agriculture--and it isn't just those few, and they are very few compared to the whole population who work on our farms, but those who are working in the related industries that also serve the farm--that those who are in that area, that they make an enormous contribution in terms of providing the character, in terms of providing basically the courage which this Nation needs and which the world needs if America is to meet its responsibilities in the world.

My projection about the future then is, I think we are entering an era in which we may for the first time see a generation grow up without a war. I think we are also entering an era in which there will be expanded trade among all nations of the world, in which the standard of living for all nations in the world will gradually rise and for the United States as well; and I think, too, looking at the United States itself, while we have passed through and are passing through, still, problems in our economy, primarily energy-related, that the prospect for the future is good.

I think 1974 will be a good year for this economy, and that means a good year for America's farmers. I think '75 will be an even better year. And when we come to our 200th anniversary in 1976, I know it will be the best year in all America's history.

Thank you.