We have 90-cent corn in the corn belt as you know and many other commodities are priced accordingly. The farmers are not going to be able to make it in these family farming size units in this current economic battle. If it continues on into the future, something will have to give.

I might be able to comment for a moment and be helpful on the question that you raised with Professor Gates a moment ago about the availability of data. I have undertaken recently to see what we could gather that would adequately portray the position of corporate farming in this country today. In the reports of the agricultural census people-and they are very cooperative, fine people to work with you find that their data are broken down largely by categories dealing with those corporate setups of 10 share holders or less and those corporate outfits with a larger number of share holders. Now this is understandable that they can publish only limited data I presume.

When I go to the IRS I find that publications of corporate farm data are lumped in with a category commonly called agriculture, fisheries, and forestry. A few years ago in the Department of Agriculture we felt the need for data along the lines we are talking about. We went out to the ASCS County offices, undertaking to utilize the know how and the acquaintance of those county committees and their staffs with farming in each community; we were able to gather some rough data that has since been analyzed by the economic research service (USDA) and published. This would be available to you.

But in all these cases it has not been possible, at least up until this time, to get data that separates the family farm corporation that has been formed as a matter of protection tax-wise and in passing land on from one generation to another, from the data pertaining to the large corporate structures whose income is primarily from some other source but who are incidentally in farming.

I think it is in this field of data in which you are interested; the other witnesses have spoken of it. If there is one thing that I believe you could well deal with it would be to open this up and in some way get better data for all of us to work with.

Senator STEVENSON. Mr. Frazier, I have heard some complaints about activities of the Commodity Credit Corporation, the complaint in general being that at times its sales of surplus commodities tend to benefit the large purchasers of Federal grains at the expense of the small purchasers. The small farmer might not have quite the same opportunity to buy corn, for example, than large corporations might have.

Can you comment on that? Is there any validity to those complaints?

Mr. FRAZIER. Yes, sir. From my previous experience I believe I can do so without being particularly critical. There are two types of sales that are made by the ASCS in the management of CCC stocks. One type of sale that is most nearly beneficial to farm operators and livestock feeders at the local level is the sale that is made from Government-owned bin sites locally. In this case, the farmer does have an opportunity to bid on the grain-he can obtain this grain. The sales are restricted to those areas in which they have some corn stored. The Department in recent years has released not only some of that grain but they have also sold a number of those structures and reduced the size

of the bin site operation. So this opportunity for local feeders to buy in the future will be restricted somewhat.

The other type of sale completely bypasses the local market and the opportunity of the feeder. It is a large volume sale, generally made by the managers of CCC stocks. The grain is already stored in the terminal warehouse type of facilities and in that case the sales are always made to the very large grain companies. There is no opportunity for feeders to bid for that type of stocks.

Senator STEVENSON. Senator Hughes had to leave us. He has asked me to ask you a question for him. He is interested in the difference in attitudes and positions between the American Farm Bureau and NFU and NFO on certain questions.

He said the American Farm Bureau states that "there is no clear evidence that large corporations controlled by nonfarm interests are taking over agriculture." Can you explain the apparently differing attitudes between the farm organizations on that question?

Mr. FRAZIER. Mr. Chairman, it is only fair to acknowledge that I cannot explain their attitude. I would comment for a moment on the attitude of President Staley and all the leadership in the National Farm Organization.

We are very deeply concerned with the inroads of the corporate structures in agriculture. We have become, if you please, rather accustomed to the fact that they are in almost a monopoly position on citrus and many types of truck crops or vegetable crop production.

It is fair to say that our major concern now is the possibility of their movement into the livestock field and the production of major grain crops that are, after all, the real basis of our major food supply in this country.

And the last stronghold, incidentally, of the family size farming unit that we all know so well and are so proud of. So, we are quite concerned. We believe that the speed with which the well-financed large corporate structure may move in the economy today poses a threat that should well be examined in the Congress.

Senator STEVENSON. You are not just concerned about the direction in which they may move. You are concerned about the direction in which they have moved, aren't you?

Mr. FRAZIER. Yes, sir. They are heavily involved today in truck and vegetable crops, fruit crops, broilers, egg production, turkey production-a substantial proportion of our food supply today.

Senator STEVENSON. Can you give us some comments about contract farming, how this affects the little farmer as a form of corporate farming?

Mr. FRAZIER. Yes, sir, I will be glad to comment on it. I think perhaps there are some types of contracting that are quite respectable and acceptable when those contracts are made by the processors or companies with producers who are either large enough individually or organized in some bargaining group so that there is truly a contract between two parties having equal opportunity of agreement or disagreement.

This contrasts rather sharply with the unfair type of contracting that you have when one of these major feed manufacturers may go out to relatively small people, encourage them to incur capital obligations to build broiler houses or similar facilities. They are first tied up

with a contract encouraging them to make certain capital commitments, after which they have a debt to carry, and they have no hope of being able to bargain for any change in prices. They are in effect, forced to revert to a type of serfdom or something of that sort, if you please, that we supposedly left in Europe when we migrated to this country in earlier generations.

I think this is best illustrated by the many broiler houses that exist today over here in the Delmarva Peninsula. Many of those families who first built them and undertook to operate under contracts for the production of broilers are no longer there.

Those broiler houses stand there as monuments to the failure of the whole business. That is only one example of course, but it is one that comes easily to mind.

Senator STEVENSON. Finally, Mr. Frazier, we have asked our other witnesses to comment on the activities of land-grant colleges and whom those activities benefited in agriculture. What is your organization's opinion about the land-grant college system?

Mr. FRAZIER. Yes, sir. I will be happy to. I graduated from one about 35 years ago in the State of Missouri and have had an opportunity to be in touch with them throughout the course of my career. It seems to me, Mr. Chairman, that your question points rather clearly to a balance of the resources and the use of the talents that are gathered around the land-grant colleges and this is what I have in mind.

Some of us have long been concerned with the very heavy consideration given to the production side of agriculture. I presume it is only natural but the financial resources, the talents, the know-how, the capabilities of our research people throughout the agricultural field for a number of years have been highly commendable in that they have been able to develop new varieties, new methods, new chemicals, new machinery.

They have worked closely with the manufacturers and other industry people and of course this is what makes it possible for our farmers to produce at the rate of efficiency that they can accomplish today. It is through this increased efficiency that they have been able to survive at all at the current prices of our farm products.

But in contrast with this fine effort on the production side we are greatly concerned in our organization that we have not had a similar gain or a similar devotion to duty, if you please, in the matter of marketing farm products.

True, we have some research, some interest in cooperatives, some interest in the methods of how people go about measuring the size of grapefruit and counting how many it will take to fill a box and ship it most easily from Florida to a chainstore in New York City.

But there is a great dearth of real talent and effort to assist the American farmer in collective bargaining and similar activity that would enable him to get a decent price for his product once he has produced it.

This is the void in our opinion and this has occurred over a period of time. In my own personal opinion it is this shortcoming that may have contributed substantially to the imbalance we have today between our production capability and our ability to sell commodities or consume them at good prices.

Senator STEVENSON. Thank you, Mr. Frazier, for appearing this morning and contributing to our hearings.

Mr. FRAZIER. Thank you, sir.

Senator STEVENSON. Our next witness was to be Mr. Raymond Watson, representing the National Farmers Union. I understand he is getting his corn in today..

STATEMENT OF DR. WELDON BARTON, ASSISTANT DIRECTOR OF LEGISLATIVE SERVICE, NATIONAL FARMERS UNION, WASHINGTON, D.C.

Mr. BARTON. That is right, Mr. Chairman. He unfortunately was not able to make it. He expresses his sincere regrets to you for that. He called us yesterday; he said he was in the middle of his corn harvest and he could not pull himself away to come up today.

Senator STEVENSON. I am very glad you could appear, Dr. Barton, as the legislative representative of the National Farmers Union.

Mr. BARTON. I am Weldon Barton, assistant director of legislative service of the National Farmers Union. Mr. Chairman, I have a sixor seven-page statement. We also focus on the problem of the corporate invasion of agriculture. I cover some of the same ground that Senator Nelson covered.

I would like to ask if you would publish my full statement in the record, so that I might summarize and hit some of the high points at this time.

Senator STEVENSON. That is fine. We will enter your full statement in the record.

Mr. BARTON. Thank you very much, Mr. Chairman.

If you look at the situation in terms of the antitrust law, the two basic ways that you have corporate concentration are through horizontal integration and through vertical integration.

The vertically integrated operation is, we think, the most serious threat now facing family agriculture in America. The reason is that it destroys the market system and, as also has been covered this morning on a number of occasions, it is the vertically integrated operation that has made most of the inroad into agriculture at this point.

The most conspicuous example of vertical integration is in poultry. A few years ago, broiler feeding in this Nation was in the hands of independent family farmers. These family farmers were efficient, but as a result of the integration of the industry—that is, the combined ownership of factories, feed mills, processing plants, and in some cases retail outlets—there are no more independent broiler feeders. It is entirely, at this point, a corporate operation.

About 20 large corporations, including of course Ralston Purina, which has been discussed already, now control poultry production. The small farmers in this operation, in poultry and broilers, are used essentially as contract laborers by the corporations.

Mr. Chairman, we have additional information on pages 3 and 4 of our statement. We talk about the inroads that corporations have made in the cattle feed lot operations. In the South, textile mills are moving toward control of cotton farms. Corporations control citrus farming. They are moving into the hog business.

This is an alarming development. It must be halted or it will destroy the family farm pattern of agriculture in this country.

Mr. Chairman, this identification with family agriculture does not arise from some kind of nostalgic appeal of the family farm as a way of life. We do not think that family farming should be retained simply because it has been with us since the beginning of the Nation and it has been looked upon as a way of life.

We are convinced instead that the family farm pattern is a real, viable alternative to corporate agriculture. You have such people as Ralph Nader and John Kenneth Galbraith and others who have been critical of corporations in America and their operations. But at the same time, these people have said that, given our emphasis on efficiency and progress in industry in the United States, we would probably have had to invent the corporate pattern if it had not evolved.

It is said, for example, that corporate organization is necessary in order to accumulate capital and labor and in order to operate efficiently and progressively. But Galbraith and others have acknowledged that agriculture is different.

I think it is an accident of history to a large extent that we have looked upon agriculture as a way of life and have held off the corporate invasion to some extent. We can still to some degree today consider the issue and look upon whether we ought not, in this sector at least, stop the corporate invasion and consider some other kind of viable economic operation.

In agriculture, the family farm unit has proven that it can operate with maximum efficiency. Family farmers can secure capital through their own farm credit system and other sources. Farmers union is vitally interested in strengthening the farm credit system, through which independent farmers can get the capital they need to compete with corporations.

They can accumulate labor through the family unit and with auxiliary personnel during harvest and other peak periods of need.

Family farming, in short, is the foundation of a progressive, dynamic agricultural sector.

Now I am going over to page 6 of my statement where we discuss three areas in which maintenance of family agriculture and keeping corporate agriculture in check serves the national interest as well as the interest of small farmers and farm labor.

First, in terms of rural development:

This has been talked about this morning. Senator Nelson emphasized it. We would emphasize that if we are really going to accomplish rural development in this country, and we hear a lot about rural development today, we have to place family agriculture at the center of it. That is, family farm agriculture is the No. 1 business in rural America. It is also, as a number of others have indicated, the No. 1 generator of activity in our small towns, in our medium-size communities in rural areas.

Senator STEVENSON. I understand that on the average every time six family farms go out of business, one community business closes its doors.

Mr. BARTON. Exactly, Mr. Chairman. This is something that we think the leaders, the Chambers of Commerce and so on in the small towns, ought to be looking at. They ought to be looking at the idea of