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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 re-emphasized 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abdication of the statutory limitation on irrigated acreage that may be in one ownership--although Congress has never repealed the law--is an outstanding example.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.

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 p. S 16313.)

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.

(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 country by country, 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: giant corporations about their ownership of land.

secrecy of

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 threedigit 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.

"In

"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: 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. Since they have already appeared in the Congressional Record, you may prefer simply to incorporate them by reference.

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Senator HUGHES. Before he leaves, might I inquire, would it be possible to get some of the things you researched in your previous hearings and incorporate them in our files?

Senator NELSON. I will be glad to have Mr. Watts meet with your staff and whatever is appropriate and will contribute to your record we will be glad to furnish.

Senator STEVENSON. We will keep the record open to receive that information.

(Senator Nelson. subsequently furnished the following document:)

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THE EFFECTS OF CORPORATION FARMING ON SMALL
BUSINESS BASED ON HEARINGS BEFORE THE SUB-
COMMITTEE ON MONOPOLY, MAY 20, 21, AND JULY 22,

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SELECT COMMITTEE ON SMALL BUSINESS-1968 [Created pursuant to S. Res. 58, 81st Cong.]

GEORGE A. SMATHERS, Florida, Chairman

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CONTENTS

Page

I. Introduction_.

A. Scope of investigation_
B. Field hearings held..

C. Lack of data___

II. Impact on soil and water resources.
III. Impact on local services and business...
IV. Impact on land prices and availability.
V. Social and moral implications...
VI. Impact on market structure..
VII. Impact of Federal tax policies-

VIII. Surplus land sales as a factor

IX. Summary of remedial proposals.

Individual views of Senator Peter H. Dominick re corporate farming__. Individual views of Senators Robert Dole and Marlow W. Cook re corporate farming

Statement of Senators Thomas J. McIntyre and Mike Gravel re corporate farming-

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Statement of Senator Ted Stevens re corporate farming

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