tunity to make substantial progress in helping farm people to better their housing conditions. I hope that the Congress will take speedy action in making the General Housing Act of 1948 the law of the land. Farmers who are in need of assistance with their housing problems might be divided into four principal groups. Senate 866 would enable the Department of Agriculture to be of some assistance to each of these groups. The groups are as follows: Group I: Adequate farms whose operators have cash or a basis for conventional types of credit adequate to finance acceptable housing. Group II: Adequate farms whose operators have neither cash nor a basis for conventional credit adequate to finance acceptable housing but who could finance acceptable housing through a more liberal type of credit. Group III: Inadequate farms, whose operators have neither the cash nor a basis for conventional credit adequate to finance acceptable housing but which could be made into adequate farms so that their operators could finance acceptable housing through the liberal type of credit. Group IV: Inadequate farms, whose operators have neither the cash nor a basis for any kind of credit adequate to finance acceptable housing, and for which there appears no prospect in the foreseeable future for farm enlargement or improvement to the point where their operators could finance acceptable housing through liberal credit. The farmers in all these groups would be benefited by the provisions of the act that provide for technical services and research. Section 705, among other things, would authorize the Secretary [reading]: to furnish to all persons, without charge or at such charges as the Secretary may determine, technical services such as building plans, specifications, construction supervision and inspection, and advice and information regarding rural dwellngs and other farm buildings. This is an important part of title VII because millions of farmers would benefit by its terms. As you know, the Department of Agriculture, working in cooperation with the land-grant colleges, already carries on a limited educational program with farmers in the use of plans for barns and other service buildings, and assists in the preparation and distribution of standard plans for farm homes. Section 705 would permit the Department to go further than it has in the past. Suppose a farmer wants to remodel his house or build a new one. He would probably have tentative plans in mind. But under the act, there would be competent architects and engineers available to assist the farmer in planning his house and to give him some guidance as he proceeded. Farmers could thus be far more efficient in self-help than ever before, and hundreds of thousands of farmhouses might be built or remodeled in accordance with better conceived plans than heretofore. All over the country farm houses will be made more livable. Section 705 also provides that [reading]: the Secretary and the Housing and Home Finance Administrator are authorized to cooperate in research and technical studies in the rural housing field. The limited amount of research of this nature now being done will be given a new impetus by this section of the act. Of course, the Department of Agriculture and the Housing and Home Finance Agency already are cooperating to a limited degree in such technical studies. Just recently, for example, a technical bulletin was published by the Housing and Home Finance Agency that described results of studies of materials for use in prefabrication made by the Forest Products Laboratory of the Forest Service of the Department of Agriculture. Engineering studies of materials and building methods suitable for farm houses and other farm buildings should pave the way for a reduction in the cost of farm construction. Moreover, economic studies designed to point the way toward lower costs in distributing building materials and toward better adaptation of private facilities for financing and remodeling and construction of farmhouses and other farm building are neded. Additional facts also are needed about the relation of farm housing to farm income, family, type of farming, population trends, and many other factors. The importance of reducing the cost of farm construction may be seen in the act that farmers are spending a billion dollars a year for repairs, remodeling, and new construction activity. This is almost twice what they spent for fertilizer and lime and about four times the amount spent on farm-mortgage interest. In our opinion expenditures for research on farmhouses would pay big dividends. In addition to the housing assistance by means of technical services and research, which will be of special help to the farmers in group I described above, the bill authorizes the Secretary to extend housing credit and other types of financial assistance. Farmers in the other three groups would be benefited by the provision of sections 702, 703, and 704 of title VII. A farmer entitled to the benefits of these sections must be the owner of a farm in need of decent, safe, and sanitary housing for his use if he is also the occupant, and for the use of necessary resident farm labor, or for the use of the tenant, lessee, or sharecropper. The owner must also show that he is without sufficient resources to provide necessary housing on his own account, and that he is unable to secure the needed credit elsewhere for housing upon reasonable terms and conditions. In order to further assure the use of cooperative and other private credit sources to the extent practicable and reasonable in light of the borrower's circumstances, it is provided that the instruments under which loans are made shall [reading] contain the agreement of the borrower that he will, at the request of the Secretary, proceed with diligence to refinance the balance of the indebtedness through cooperative or other responsible private credit sources whenever the Secretary determines, in the light of the borrower's circumstances, including his earning capacity and the income from the farm, that he is able to do so upon reasonable terms and conditions. For adequate farms: In the second group of farmers mentioned above are a substantial number of farmers who cannot improve their housing facilities if they are required to secure the needed credit assistance on the usual cooperative or private credit terms prevailing in the area. The farms in this group would generally be found ade quate in size and productive capacity to provide a farm family with minimum living conditions under average economic conditions, but, for example, are already subject to a lien for their full mortgagable value according to cooperative or private credit standards. For this group, we endorse the type of assistance suggested by the present language of the bill; namely, credit for a long period of time but not longer than 33 years, with interest at 4 percent and with other terms comparable to the Bankhead-Jones farm-tenant credit pattern. For potentially adequate farms. There then remain among the bona fide farmers of the Nation a substantial number, those in groups III and IV described above, who from combined farm and nonfarm income are incapable of producing enough to support the family and pay for improvements to the farm. For these farmers some assistance over and above the long-term low-interest credit described in the bill is necessary in order to put them into a position to acquire and maintain acceptable housing and related facilities. The owners of farms in group III would not produce enough annual income to pay for the necessary dwelling and related improvements but are so situated that the farm income could be sufficiently increased to do so by enlarging the productive acreage, or by land treatment, such as leveling or clearing, or by a change of type of operation, such as conversion from cash crops to livestock farming, or by providing irrigation or drainage. The Department now possesses many of the facilities and authorities for assisting farmers to accomplish these purposes. The enactment of the Farmers Home Administration Act of 1946 has provided much of the needed authority. As a condition to providing housing for this group of farm occupants, the Department should require the necessary adjustment or conversion of the farm enterprise. If the applicant for housing assistance develops an adequate farm enlargement or improvement plan, either with or without special assistance from the Department, title VII, provides that annual contributions for the improvement of his housing may be made available to him during the temporary period of time that the redevelopment of his farm enterprise is being effected. These contributions will be made in the form of credits against the installment of principal and interest due for any annual installment period. They would be limited to a sum not greater than the annual installment of interest plus onehalf of the annual installment of principal. A period of 10 years is allowed within which the redevelopment of the farm should be completed and after the expiration of this period of time no further annual contributions or subsidy to the housing would need to be made because the farm enterprise would thereafter be capable of paying for the annual principal and interest cost of the dwelling and related improvements. For inadequate farms: There remain the farmers in group IV who do not possess adequate family-type farms and for whom there is no apparent means of providing an adequate farm by a process of enlargement or redevelopment within 10 years. The Department does not intend to abandon these farmers, but, on the contrary, considers them to be a segment of the farm population for which it has a special re 75674-48-20 sponsibility. I do not feel, however, that this responsibility will be properly discharged by providing them with permanent dwellings, the cost of which they cannot reasonably be expected to repay in any substantial degree. In fact, to establish permanent dwellings for farmers under these circumstances would have the tendency to perpetuate the present unsatisfactory situation. Therefore, the Department endorses the provisions of section 704 which would authorize aid to these farmers through special loans and grants for temporary improvements, such as roof repairs, a sanitary water supply, and other facilities designed to protect their health and the health of their neighbors, and to so improve their living conditions that their situation is not a threat to the public health. Let me make it clear that we do not feel the Department's responsibilities to these farmers have been fully discharged when this group has been provided with only these minimum living requirements. We are constantly endeavoring to improve their conditions by every device at our command. Moreover, if we can maintain full employment conditions in the entire economy, many of these farmers may be able to improve their living conditions by obtaining jobs off the farm. It is anticipated that these minimum improvements could be achieved with the use of not to exceed $1,000 per family unit, not over $500 of which would be a grant or a contribution, and the balance of which would be repayable on reasonable terms within the useful life of the improvements. I am sure that the committee recognizes that to initiate and carry on a Nation-wide rural housing program is a complex task. There are a great many farmers throughout the Nation who do not get their entire living from working the land upon which they are situated. Many of them have off-farm employment at particular seasons of the year. Yet, because they are in possession of an appreciable proportion of the Nation's total agricultural plant and are dependent upon that property for a part of their income, we must deal with them as farmers. Approximately 32 percent of the Nation's farms are tenant occupied and operated. The bill proposes to improve the tenant's housing situation through the landowner. One of the problems encountered in the planning of Nation-wide program for housing arises from the fact that the dwelling on the farm is an integral part of the farm and, as a general rule, must be supported entirely by the income from the farm. It is not feasible, in our opinion, to seperate, or to make possible the future separation of the dwelling from the farm. Much of our agricultural production comes from, and many of our agricultural people live on, land which does not provide the full annual income and support of the family. Such farms in suburban areas pose a problem of whether the dwelling on the farm is more a matter of concern in agriculture or a problem overflowing from the adiacent communities. Those of us who have been interested in housing from the national picture have agreed that housing on farms is so affected by the problems of agricultural production that it should be closely correlated with the other activities of the Department of Agriculture. Just where to draw the line between what is farm housing and what is nonfarm housing is some what debatable. We believe, however, that the proposal in the bill constitutes a satisfactory dividing line. Section 701 (b) defines a farm as that land operated as a single unit customarily producing agricultural commodities for sale and for home use of a gross value of not less than $400. The monetary amount could, of course, be higher or lower without destroying the usefulness of the definition. For the past 2 years or more the Comittees of Congress, representatives of the Department of Agriculture and of the housing agencies of the Government, and organizations and individuals interested in improving the rural housing situation have explored the means which would be most effective to deal with the farm-housing problems, as a part of the Nation's over-all effort to make it possible for all of its people to have adequate housing. The provisions of the Senate bill relating to rural housing reflect the combined thinking of those who have worked on this problem. We recommend that it be enacted into law. In brief, it will provide the necessary implementation to private initiative in the construction of farm dwellings by means or research and technical services, and will supplement private credit only to the extent which private credit cannot furnish assistance because the farm does not constitute an adequate base for conventional credit. It will remove some of the dangers to rural public health and safety by means of temporary repair assistance to dwellings on farms which cannot be made self-sustaining. Title VII of the bill contains the means by which the families of the Nation living on farms can begin to bring the quality of their dwellings to a par with the dwellings in urban communities. The dependency of the Nation on its agricultural population, not only for food and fiber, but for human beings who find their way into the industrial and commercial enterprises of the country requires that we begin without further delay to remedy presently inadequate housing on farms which constitutes a real threat to the continued efficiency and productivity of our national farm human and agricultural resources. American farmers should not be required to wait until the peace has been won to have decent, safe, and sanitary places to live. Without the stimulus of a national program designed especially to meet the rural housing situation, farm housing is likely to remain inadequate. The people who live under such circumstances cannot be expected to maintain their maximum contribution to obtain and securing the peace of the world. Mr. SMITH. Are there questions of Mr. Brannan? Mr. TALLE. Mr. Chairman. Mr. SMITH. Mr. Talle. Mr. TALLE. Will you outline briefly the operations of the Farmers Home Administration? Mr. BRANNAN. In brief the operations of the Farmers Home Administration revolve around the extension of credit to farmers who are unable to get credit from the usual conventional sources. The extension of the credit is combined with guidance and assistancetechnical assistance-such as might be deemed necessary to make it possible for the borrower to repay the loan, and after the repayment of the loan, to go forward on a reasonably sound economic farm |