FARMWORKERS IN RURAL AMERICA, 1971-1972

(Who Owns the Land?)

FRIDAY, NOVEMBER 5, 1971

U.S. SENATE,

SUBCOMMITTEE ON MIGRATORY LABOR

OF THE COMMITTEE ON LABOR AND PUBLIC WELFARE,

Washington, D.C.

The subcommittee met at 10 a.m., pursuant to notice, in room 4232, New Senate Office Building, Senator Adlai E. Stevenson III (chairman of the subcommittee) presiding.

Present: Senators Stevenson and Hughes.

Staff members present: Boren Chertkov, subcommittee counsel; and Eugene Mittelman, minority counsel.

Senator STEVENSON. The subcommittee will come to order.

This morning we continue our hearings on landownership and patterns of landownership in the country.

Both Senator Hughes and I have statements that we would like to make for the record, but in the interest of saving the time of our first witness we will defer those statements until a later time.

We are very honored to have as our first witness this morning our colleague who has probably worked more on the issues that concern us today than any other American, the Honorable Gaylord Nelson of Wisconsin. He is a member of the Senate Labor and Public Welfare Committee. He has served on this subcommittee, the Migratory Labor Subcommittee, and he therefore has a firsthand knowledge of the Nation's farm labor problems.

Most significant, perhaps, is his unwavering commitment to the preservation of our environment, the air, the water, and our land. He was probably the first in the U.S. Senate to clearly perceive how crucial landownership and use is, and has conducted his own hearings on the implications of corporate farming.

Next week he is beginning a study, as chairman of the Monopoly Subcommittee of the Small Business Committee, into corporate

secrecy.

One of the reasons we must ask who owns the land is that we simply don't know, and we don't know in part because of corporate secrecy. Senator Nelson, we are very grateful to you for appearing here this morning.

(299)

STATEMENT OF HON. GAYLORD NELSON, A U.S. SENATOR FROM THE STATE OF WISCONSIN, ACCOMPANIED BY RAYMOND D. WATTS, COUNSEL, SENATE SMALL BUSINESS COMMITTEE

Senator NELSON. Thank you, Mr. Chairman.

I do have a Finance Committee executive session which is meeting on the President's tax proposals and I have some amendments pending. That is why I asked if I could proceed right away.

Mr. Chairman, not long ago the proud products of rural America were good food and fiber, free men and women, and healthy children with happy futures. There were, of course, exceptions. The picture had some ugly blemishes. Still, the ideal and in large measure the attainment were there to raise all those products on the American land; the food, the fiber, and the strong, free people.

Tragic changes have occurred, and are occurring. Today, from the vantage point of many big city mayors, the most consequential shipment from rural to urban America is poor people for the welfare rolls. From the vantage point of smalltown mayors, the same shipments. mean that once prosperous communities face decay and despair.

There are many and complex causes for this American tragedy, which is still building and even accelerating. But the largest cause, I think, is the development policies that have equated goodness with bigness, quality with size. These policies have led to the emergence of giant corporations as the dominant force in manufacturing, and a significant and dominant force in the political and social structure of this country. Unless the policies are dramatically reevaluated and changed, they will lead to like dominance of agriculture.

It is something that should not be permitted.

As the percentage of everything that is owned by giant corporations goes up, the share that is left over for everyone else has no place to go but down.

The figures on the shifts of asset ownership in manufacturing are available and familiar. The 200 largest corporations in the last 20 years have increased their share of all manufacturing company assets from under 50 percent to about 60 percent. That means the share of everyone else in that sector has gone down from well over 50 percent to not much over 40 percent.

Now the giant corporations are moving into agriculture and gobbling up the land. There is no way, of course, to make the total supply of land grow, and the ways that are being used to expand the use of lands for agriculture involve ecological and social costs not yet sufficiently calculated and understood. Indeed, the evidence is growing that economic growth itself is more a problem than a solution.

I return to my first thought: our land should be used to cultivate not just food and fiber, but a good culture and a happy, healthy populace. To do that, we must find ways to keep people productively and happily on the land, and reverse the forces that are driving them off. One of those forces is the movement of giant corporations into farming,

The Senate Small Business Subcommittee on Monopoly, which it is my privilege to chair, has been concerned with corporation farming for several years. At least some of the causes for this alarming development were suggested by an interim report, Senate Report 91-628, is

sued by the Senate Small Business Committee, following 1968 field hearings by the subcommittee. I shall mention a few.

The Federal tax structure is a cause. Giant corporations are permitted to enter agriculture as a sideline. The objectives of the sideline may well be more to make low-taxed capital gains in land speculation, and to reduce income taxes on profits earned in other lines, than to make a profit in farming.

The policies and the value system of the Agriculture Department are a cause. Agricultural research financed with taxpayer dollars is too often aimed at ways to make farms bigger, rather than ways to make small farms sustain families in dignity and reasonable standards. Nick Kotz, in his recent fine articles in the Washington Post, has reemphasized this point. He tells us that the Department would apparently rather finance development of a new, tough strawberry that can be harvested by machine than a strawberry that tastes better or is more nutritious. This is the same Department, Kotz tells us, that has given little or no comfort and aid to a small, new cooperative organized by former migrant laborers to get into the strawberry cultivation business themselves.

Lax administration or total ignoring-of laws passed by Congress to help small farmers is a cause. The total abdication of the statutory limitation on irrigated acreage that may be in one's ownershipalthough Congress has never repealed the law-is an outstanding example. Failure of the Government to make bold and imaginative use of the antitrust laws is another.

The lack of Federal legislation in areas where it is obviously needed is a cause. Strong evidence at the Monopoly Subcommittee's 1968 hearings suggested the need for laws to limit the use of underground water for irrigation to the amounts normally restored to these aquifers by natural recharge. That would stop the practice of "mining" of the aquifers by the corporation farms.

I might point out that this is, I think, a critical problem. Out in Central Valley, Calif., I conducted hearings a few years ago on the Central Valley reclamation project. Some 20 years ago, or thereabouts, the water level was 60 feet. Small farmers who farmed there could pump water for irrigation efficiently. Several huge corporations owning 50,000, 75,000 to 100,000 acres in the Central Valley started irrigating heavily and pulled the water table down some 600 feetI will correct the figure for the record, I think it is 600 feet*-until they ran into what was called a corcoran clay.

Finally, they got down to 1,200 feet and were drawing brackish water. Of course they had increased the cost for all small farmers to irrigate. They had mined one of the great aquifers in the country and they came to Congress and asked for a reclamation project for irrigation. And Congress has authorized and is appropriating the money for a $500 million reclamation project to produce water for irrigation, one of the purposes of which is to allow the seepage of that water to raise the water table from that 1,200-foot level on up higher.

The same thing is happening to that great aquifer, the Ogallala Basin, an underground reservoir underlying parts of Nebraska, Colo

*The figures have been checked and are correct. (Note supplied by Senator Nelson.)

rado, Kansas, Oklahoma, and Texas. Much of that area is being heavily irrigated now. In Texas, water table levels have been lowered by irrigation several hundred feet.

This is a natural resource, a national asset, that ought to be controlled by the Government, and nobody should be permitted to reduce an aquifer below the level to which it will be naturally recharged by the infusion of water.

Now, another big cause of our rural troubles is that public and congressional knowledge of developments is not keeping up with the pace of developments. That problem is one the giant corporations don't want solved. Indeed, they are helping to perpetuate it because they benefit from it. The Monopoly Subcommittee for many years has been concerned with the problem of corporate secrecy, not alone in agriculture but in all economic sectors. Our attack on the problem, begun in 1968, will be renewed next week, when we reopen hearings on the role of giant corporations in the economy, with corporate secrecy the express focus. On November 23 our exploration of the impacts of corporate giantism and corporate secrecy in agriculture will

resume.

Sixteen questions about seven different types of corporate secrecy will be studied by the subcommittee during these hearings. The 16 questions and the seven types were listed in the Congressional Record of October 15, 1971, at page S16313.

For purposes of the hearings, the term "corporate secrecy" is defined as the conscious, deliberate withholding from the public of valuable information possessed by corporate management. Of the seven main types of information so withheld, the first two have particular importance to studies of corporation farming. They are: (1) financial information about the separate organizational, industrial, and geographical segments of the business, and the interrelationships of the segments; and (2) information on industrial and natural resources ownership and control.

An example of the first type of information would be the profits or losses realized, State by State, in the tractor business, the feed business and the farming business of a giant conglomerate engaged in all those businesses, plus oil and others.

An example of the second type of information would be the land ownership and control, State by State and county by county, of a giant corporation engaged in various kinds of agricultural, mining and other uses of land.

It is interesting but hardly surprising that this subcommittee, starting out from a base of concern for migrant labor, has ended up on the same doorstep as the Monopoly Subcommittee, which started out from a base of concern about small business. It is, of course, the doorstep of the giant corporations. In this country, it seems that many of the large problems lead there. But here our two subcommittees are up against the same question: secrecy of giant corporations about their ownership of land.

Given present budget and staff limitations, it is probable that any single Senate subcommittee-and perhaps the whole Senate-will encounter difficulty, to say the least, in getting helpful answers from the corporate giants. Consequently, it is with pleasure that I note that the Monopoly Subcommittee's efforts to bring down the veils of secrecy

surrounding all areas of corporate power will be supplemented by this subcommittee's efforts to add to the public's knowledge about land ownership by the agribusiness conglomerates.

It is entirely predictable that the corporate giants will wrap themselves in the mantles of free enterprise and business privacy when we ask them for even the broadest kinds of land ownership and segmental financial information-say at the three-digit levels of the Standard Industrial Classification (SIC) system. But I predict that, before the Monopoly Subcommittee's hearings are over, we shall have demonstrated that the public is entitled to disclosure at the seven-digit level and even below, from some of the largest corporations at least, if this country is to restore a competitive market system in certain industries where it has long been dead or dying.

It is often repeated that knowledge is power. Less often recalled, perhaps, are some words of Daniel Webster about power.

"Power naturally and necessarily follows property," the great statesman and orator told the Massachusetts Convention in 1820. And he went on, a little later in the same speech to observe: "In the nature of things, those who have no property and see their neighbors possess much more than they think them to need, cannot be favorable to laws made for the protection of property."

It seems that today too many of the laws are for the protection of the property of the largest economic factors, and increasingly less protective of the smaller. I am glad that our two subcommittees will be working along complementary lines to increase our store of information, now sadly lacking, on corporate land ownership. Together we can perhaps do more than twice as much as we could each do separately, and it is surely true that we both need all the help we can get.

Mr. Chairman, that concludes my statement, and I thank you for the opportunity of presenting it. If you like, I will submit my subcommittee's "16 questions" and a working paper discussing the first three of those 16 questions for inclusion in the record.

(The information referred to follows):