Statement by Senator John F. Kennedy: "Agricultural Policy for the New Frontier"

FOREWORD

It is my purpose in issuing this statement to set forth what I believe to be desirable courses of action, or policy guidelines, for agriculture. I do not, in this statement, spell out the mechanics of various programs; this I expect the Secretary of Agriculture, working with farmers' representatives, to do after we win.

This statement is consistent with the strong farm plank in the Democratic platform. It makes more explicit my own personal approach to the achievement of the goals set forth in that document. It charts our policy course in agriculture.

BASIC GOALS OF FOOD AND AGRICULTURE

There are, it seems to me, two basic goals for food and agriculture. These are not my goals, nor the goals of any particular individual or group; they are the generally accepted goals of society - goals on which there is general agreement in our country.

(1) We must assure, for the present and the future, an abundant production of food and fiber products, sufficient (a) to meet the needs of all Americans, and (b) to implement a positive foreign policy which will combat famine, contribute to the economic development of the underdeveloped world, and lay the foundations of world peace.

(2) We must assure to the American family farm, which produces this abundance, an economic climate in which farmers can earn a fair income - an income which yields farmers a return to their labor, management, and capital equal to that earned by similar resources in nonfarm employments.

These are admittedly broad goals. For example, the assurance of an abundance for the future, as well as the present, requires conservation programs that will maintain and enhance the fertility of the soil, and will encourage the wise utilization of land resources - whether it be to produce field crops, forests, or a better natural habitat for game and fish.

The achievement of a high standard of consumption of food and fiber for all Americans will require effective programs to raise nutritional standards where they are now less than desirable through expanded school lunch programs, increased provision of food for the ill and handicapped, and a suitable method of increasing food consumption among low-income people.

Likewise the assurance of a fair return to farmers must include a recognition of the importance of the family farm as an efficient unit of agricultural production, as an indispensable social unit of American rural life, and as the economic base for towns and cities in rural areas.

POLICIES FOR ACHIEVING THE BASIC GOALS OF FOOD AND AGRICULTURE

I. A Positive Food and Nutrition Policy for the United States

Food policy and agricultural policy are inextricably intertwined in our country. In part they are in conflict, in part they complement one another. It is our goal to develop a food policy which is strong and valuable in itself and which supports and integrates with farm policy. The points in such a food and nutrition policy are:

(1) There should be an expansion and liberalization of our present school lunch and milk programs, not as a means of disposing of the so-called surplus, but as permanent measures valuable to consumers for dietary purposes, and valuable to producers for maintaining the demand for farm products.

(2) There should be an immediate initiation of the food stamp plan and an expansion and liberalization of the direct distribution programs to provide adequately for the food and nutrition needs of low-income consumers, the unemployed, the aged, and the handicapped. This, too should be a permanent program geared to supplying nutritional needs and strengthening consumer demand rather than to the disposal of what happens to be called surplus at the moment.

(3) The educational, informational, and research work on foods and nutrition should be continued and expanded as a means of helping every family and person select and consume a nutritious diet. The regulatory work on foods and drugs must also be conducted at a safe level and in a responsible manner.

(4) Provision should be made for the establishment and maintenance of a national security reserve of food and fiber sufficient to insure against the hazards of nature (for example, drought) and of modern war.

These measures all serve to maintain and expand the domestic demand for food. They are also important to the health, welfare security and economic well-being of the people of the United States. Food and fiber used for the purpose of these programs should be provided by the Federal Government - not as a part of a program of assistance to agriculture - but as a program as essential to the welfare of our people as the building of roads, the provision of education and other functions now carried out in the interest of the general welfare.

II. A Dynamic Foreign Food and Fiber Policy

American agriculture is highly dependent upon a large and developing export market. We have experienced difficulty in maintaining and expanding this export market gince the end of World War I. A successful export program for agricultural commodities must be creative and bold. The essential features of such a program are:

(1) Private commercial trading should be encouraged and developed wherever possible. In this connection, market development work in foreign countries and trade barrier reduction and elimination have important roles to play. We should further explore the possibility of developing multilateral international commodity agreements, wherever practicable, to expand the competitive dollar sales of our agricultural commodities in an orderly way that will not disrupt world markets.

(2) We must recognize that America's great agricultural productive capability, and our large reserve supplies of farm commodities, are one of the most vital bastions of positive and defensive strength for the entire free world. This places an exceptional responsibility upon this country in handling its food and agriculture policies - a responsibility that is intimately and profoundly related to the preservation and success of the free world's way of life.

We must recognize that much of the world is poor and hungry - the very parts of the world that are most in need of our food abundance are least able to pay for it. To provide leadership in this difficult field the President of the United States should, in my opinion, indicate to Congress each year the extent of the total food and nutrition deficiency in the world and recommend to the Congress the amount and share of that total deficiency that can be met from the United States supplies. The President should further submit a plan of operation for carrying out the above recommendation. This course of action should be in harmony with the following criteria:

(a) be conceived and administered on a long-term basis to facilitate the effective use of supplies in the recipient countries, and to moderate the extent of production adjustments within the United States.

(b) be consistent with the international security objectives of the United States.

(c) be administered so as to maximize the economic development in the recipient countries and not to interfere with the commercial activities of friendly exporting countries.

(3) I further believe that there is need for a second International Conference on Food and Agriculture, similar to the one held at Hot Springs, Va., in 1942 under the leadership of President Roosevelt, to deal on a constructive multilateral basis with the food needs of the world. This conference should, of course, be held under the sponsorship, or in cooperation with, the United Nations Organization. This conference should have as its specific goal the organization of an agency to undertake the transfer of surplus food and fiber stocks from nations with surpluses to those nations in desperate need of such supplies to combat hunger and to promote economic development.

The effectiveness of our foreign surplus-disposal program to date has been materially diminished because of its temporary nature, and because it has been used and publicized as a program to get rid of those surpluses that burden our economy, rather than as an instrument of foreign policy to raise consumption standards and to assist in the economic development of underdeveloped nations.

This must be changed. Working in cooperation with the other free nations, we should put our food abundance to work in the building of a more productive and more peaceful world. Food and fiber products from the surplus-producing countries should be used to feed and clothe workers in underdeveloped countries as they build roads and canals, dig wells and build schools, and learn new trades and skills. In this way, our surplus, our abundance, is used to form capital, increase productivity and increase real incomes.

III. Policy of Supply Management

We must build a bridge between our great producing capacity and the food needs of the underdeveloped world. But once we have built that bridge and made our maximum contribution abroad in terms of food and fiber shipments, we must then find effective means for bringing supplies into balance with total demand (domestic and foreign) - we must learn to manage our supplies. In short, we must find ways to bring the great productive capacity of American agriculture into balance with total needs (domestic and foreign) at prices that will yield farmers a fair return for their labor, investment, and management. This is our great goal for agriculture.

(1) As a practical matter, we must adjust supplies to demand in each commodity so that the total supply of the commodity involved moves through the market at a parity income price, after we have taken into account the additional food and fiber demands generated under the domestic and foreign food and fiber programs outlined above. We define a parity income price for a commodity as that price which, on the average, will yield producers a return on their capital, labor, and management equal to that earned by comparable resources in nonfarm employments.

(2) The program of supply management in each commodity will vary with the physical characteristics of that commodity, and the production and marketing organization and structure of that commodity. Thus, depending upon the commodity involved, supply management measures could take the form of marketing or sales quotas, land withdrawal and retirement, commodity purchases and loans, compensatory payments, marketing orders and agreements, and other workable methods.

(3) Such programs of supply management would be worked out in cooperation with the farm producer groups involved, and would rely to an important degree on farmer administration. Supply control can operate effectively only where the overwhelming majority of farmers want it. Thus, the achievement of good and stable prices and incomes through the management of supplies ultimately rests on farmer understanding and acceptance of such measures. This means that any supply management program to be successful must have the approval of two-thirds of the farmer-producers involved.

(4) In the operation of such programs:

(a) The U.S. Department of Agriculture working under the directions and definitions established by Congress would compute the parity income prices for each commodity.

(b) The Secretary of Agriculture would initiate auxiliary programs authorized by Congress (for example, a purchase-storage program, the transfer of individual marketing quotas) essential to the effective administration of particular commodity supply management programs.

In this supply management phase of our total program we are not pursuing scarcity economics, or the will-of-the-wisp. We are following a commonsense approach. After we have produced sufficient food and fiber products to meet all our legitimate requirements at home and abroad, we are not going to let excess productive capacity destroy farm prices and incomes. We believe that an understanding Secretary of Agriculture working with representative farm leaders can develop supply management measures that will eliminate the small but chronic surplus in agriculture now depressing prices and incomes. And we are prepared to work with farmers to achieve this commonsense goal - a goal now widely accepted and realized in "big business."

IV. A Policy of Adjusment and Development for Low-Production Farmers

Nearly 2 million families live on farms with productive resources so inadequate that the annual gross income of each of those farms falls below $2,500 per year. Past price and income support programs have helped these people, but such programs alone cannot solve their problems. These farmers have too little to sell. Theirs is a poverty problem growing out of poorly organized, inadequate-sized farm units. The breaking of the vicious circle of poverty involving poor education, poor health, and inadequate resources is never easy.

To break this circle of poverty for some 2 million farm families, we must develop a comprehensive set of programs that cuts to the heart of the problem ana has the capacity to deal with the great magnitude of the problem. Such a comprehensive approach would, I believe, include at least the following lines of action:

(1) The use of vastly increased amounts of supervised credit to speed farm reorganization and to help achieve more efficient sized and better organized farm units.

(2) The establishment of an adequately staffed farm and home management service to assist farm families in carrying out individual farm reorganization plans.

(3) The making of special grants and loans, for adult vocational training and other assistance, to those families that desire to leave agriculture and seek nonfarm employment.

(4) The extension of the United States Employment Service to rural areas and the provision of vocational counseling service to people living in rural areas.

(5) The vigorous stimulation of industrial development in rural areas, including the provision of the necessary credit to small business, technical assistance in plant location and business development, and a positive policy of incentives for locating new industries in rural areas.

V. Policies for Strengthening the Family Farm Structure of Agriculture

One of the great issues confronting agriculture and the Nation is the economic survival of the faniily farm pattern of agriculture. The owner-operated family farm, where managerial skills, capital investment and labor are combined in the productive enterprise, is at stake. The problem is not one of efficiency; the family farm is an efficient, productive unit. The problem is one of the acquisition of sufficient capital and the necessary management skills by enterprising young families to successfully enter farming, where the average farm is becoming bigger and bigger in terms of land and capital, and more and more complex in terms of organizational structure. We are reaching that point in farm size where an enterprising family can operate a modern farm efficiently, but it cannot buy one. Nonfarm capital is taking over the managerial function in agriculture, reducing the members of independent farm families to the status of laborers.

Further, family farmers need the technical and bargaining help in the sale of their products and the purchase of their production supplies that a successful cooperative association can provide. With such assistance they can remain independent decision units - free of the control of the processor, the feed dealer, and the local buyer.

The family farm should remain the backbone of American agriculture. We must take positive action to promote and strengthen this form of farm enterprise. This I believe with all my heart, we should do. Thus, I recommend the following lines of action.

(1) Review the credit needs of the family farm type of agriculture with the aim of strengthening the farm credit institutions to meet the financing needs of commercial family farmers:

for housing

for production

for farm acquisition

(2) Provide in legislation a second Magna Carta for cooperatives to protect them against punitive taxation, and governmental administrative actions that would prevent farmers from expanding and increasing the effectiveness of their cooperative associations in the marketing of their products and purchase of supplies.

(3) Review the credit needs of cooperative marketing and purchasing associations with the goal of strengthening the credit institutions to meet the needs of growing cooperatives in the modern commercial world.

(4) Review the entire educational and informational effort in agriculture (adult, college, and secondary) as a means of appraising the efficiency of present efforts and methods relative to the needs of modern commercial farmers.

(5) Review the total research and development effort in agriculture (public and private) to appraise the contribution of such efforts to the well-being of farmers and consumers, and recommend changes in the emphasis of the ongoing research and development effort. For example, research and development work on new and industrial uses for agricultural commodities might be increased and research on production techniques decreased.

(6) Review the progress made in soil and water conservation on farms in the past 8 years, develop a plan of action to make up for the lost opportunities of the past 8 years, and finally, launch once again a hard driving soil, water, and wildlife conservation program for agriculture.

THE RESULTS OF THESE POLICIES

Certain consequences flow directly from the policy actions outlined above. The diets of many Americans would be improved in quality and quantity - the goal of nutritionally adequate diets would become a reality for all Americans. Shipments of food and fiber products to underdeveloped countries to combat hunger and support economic development would be increased. Farm prices and incomes would be raised and stabilized. The economic development of depressed rural areas in the United States would be accelerated. The family farm structure of American agriculture would be reaffirmed and strengthened. These are direct and important results that are in the best interest of all Americans.

Certain other consequences of the policy actions outlined above are more subtle and complex and need to be explored in more detail. First, there is the question of program costs. Some critics of the Democratic farm plank, thus by implication of this policy statement, have stated that Federal Government costs would increase by billions, if the programs in the plank were activated. This is patently false. The great expenditures in the present farm budget - some $3 to $4 billion annually - go into price and income stabilization. These great expenditures have been necessary because Republican leadership did not, and could not, cope with the surplus production capacity of American agriculture. We believe, on the other hand, that a sympathetic and creative Secretary of Agriculture, working with farmers, can develop supply management measures which limit supplies to what the market will take at parity income prices.

In this policy view, farmers will achieve parity income prices in the market, not by wishing, or transcendental thinking, or hocus-pocus, but by their own supply management efforts. This is what we do in tobacco and fluid milk and what we can do in wheat, the feed grains, manufactured dairy products, and other farm commodities. And by such policies government expenditures on farm price and income stabilization will be greatly reduced - certainly be cut by one-half and perhaps by as much as two-thirds.

On the other hand, expenditures in some areas would be increased under the lines of action suggested above. Program expenditures to increase food consumption in the United States, to increase the shipment of development supplies abroad and to break the vicious circle of poverty in depressed rural areas, would, without question, increase above their present levels. But we do not believe that these increases would be anywhere near as large as the expected decreases for price and income stabilization. It is my conclusion then, that total governmental expenditures for agriculture could be reduced by at least one billion per year at the same time as we achieve lasting solutions to several farm and farm related problems. And, of course, if the costs of food and nutrition programs at home and abroad were not charged to agriculture, the total agricultural budget would be decreased still further - perhaps by as much as two billion dollars per year.

Second, we need to consider the impact of our farm policies on inflation. Some people argue that they would be inflationary because farmers would receive higher prices in the marketplace. No useful purpose is served by saying that farm prices would not increase under our policies; the very purpose of supply management is to raise farm prices and incomes. But raise farm prices to where? Farm prices would be raised to parity income levels - that is, to levels where returns to the farmer's labor, management and capital were equal to returns earned by comparable resources in nonfarm employments. Should farmers receive less? Should farmers receive low prices to off-set inflationary pressures in other sectors of the economy? My answer is "No." Inflation is something for all of us to combat. It is not fair for one economic group to bear the cost alone for the benefit of others.

Third, what about the freedom of farmers to farm - is that freedom jeopardized by the farm policies I recommend? Certainly not. Every time a regulation is promulgated, a custom is accepted, or an agreement is reached, the complete freedom that exists under a state of anarchy is circumscribed to some degree. But this is a fundamental aspect of civilization. Men agree among themselves to limit their unrestricted "freedom" in some field in order to achieve some other goal that is highly valued. Thus, we impose traffic regulations over the behavior of automobile drivers to help realize the goal of staying alive, and we impose educational regulations on families and children because we believe that literacy is essential to the functioning of modern society.

Now the point of our supply management policies is this - if farm people are desirous of achieving good and stable incomes, then they must agree upon, and abide by, certain regulations concerning the production and marketing of their products. To give up freedom of action for nothing is nonsense. But to circumscribe to some degree complete freedom to act in one field, to achieve a highly prized and generally accepted goal is, I repeat, the act of rational and civilized men. Similarly in agriculture, if farmers generally are willing to work together to manage the flow of their supplies to market, to achieve the valued goal of good and stable incomes, their action will be in the tradition of Western, democratic man. Hence, we propose to work with farmers to develop measures to manage their commodity supplies effectively as the means of achieving their goal of parity incomes; we do not, however, propose to impose control measures on farmers that are not generally acceptable to them.

Fourth, there is the great question of the implications of our farm policies for world peace. We Democrats recognize that we have a potent instrument of foreign policy in our exportable surplus of agricultural commodities. If we are reckless and irresponsible in our use of this surplus abroad, we can destroy world prices for our friends and competitors, and retard the economic development of the new and aspiring nations of Asia and Africa. On the other hand, this food abundance, if used wisely, can make a tremendous contribution to world development and world peace.

There is great need for our surplus food production in the world-hunger and undernourishment are the lot of a very large proportion of the people of the world. Our problem is to help these people meet their food needs without wrecking the commercial markets of such friendly competing nations as Canada, Argentina and Denmark, and without retarding agricultural development in the underdeveloped countries.

We are learning to do this through the use of various international agencies and institutions - the welfare agencies such as UNICEF and CARE, our own Public Law 480, and the International Commodity Agreements. But we need to learn faster; do more, and achieve greater results in the underdeveloped countries. And this we can do, if we will only look upon our surplus as a blessing rather than a curse. The know-how for using our food and fiber surplus abroad in a constructive manner is developing rapidly. We Democrats propose to use that know-how to turn food and fiber into productive capital in the new, aspiring nations - and thereby use our agricultural abundance to build for world peace.