on farmers unable to pay up, is not to be confused with the directive that came to the FDIC examiners.

Just a small carryover on a sound agriculture loan brings about tremendous pressures on a bank and sometimes even fines. Banks respond to this pressure by foreclosure. Some leniency in this area would be a big help to agriculture.

Last week I was forced to cancel all the insurance I have on my business and my farm except vehicle liability. Being exposed, as I am now, is terrifying. But I had no choice.

The first of the year I gave notice to three long-time employees that they would have to go or take cuts in salaries. I now have three employees at below cost of living salaries. I am not proud of this and the total blame lies in the low prices of farm commodities.

In the area I live, Lindsay Manufacturing Co., a producer of center pivot irrigation systems, has announced a plant shutdown. The firm had just completed an additional building at a cost of $1 million. When asked the reason for the shutdown, the manager blamed low commodity prices and increased fuel costs. Some 200 employees were laid off. The firm had poured $2 million in the Amarillo area, excluding salaries. Salaries of these 200 people ranged around $3 million yearly.

This, gentlemen, was a result of our present administration's policy of providing cheap food and fiber. My plea to you is to be concerned about the future of our Nation and to do something now. Without parity prices this is my last year as a self-employed farmer and businessman. I have already passed the point of stopping in time to pay off my losses out of a wage. Thank you.

Senator CLARK. Thank you. A very concise and detailed statement and you did it in 5 minutes.

Let us go ahead now with Jerome Friemel.

STATEMENT OF JEROME FRIEMEL, HEREFORD, TEX.

Mr. FRIEMEL. I am Jerome Friemel, a businessman and farmer from Hereford, Tex. I have been in the agricultural business in the Hereford area for 20 years.

Gentlemen, the situation is more serious than you realize. The front cover of a recent U.S. News and World Report says: "Can the dollar be saved?" It is not possible to discuss agricultural parity without dealing with the value of the dollar.

Full parity returns 40 percent more dollars from agricultural exports in terms of payment balance. Full parity delivers more profit to the businessman, hence, more tax revenues. Full parity allows an economy to operate without undue debt expansion. Why then do some people fight parity? It is possible that the morality of this opposition is such that they believe that all gain is not really earned, but rather achieved at the expense of others. And it is therefore believed that in denying parity to agriculture, greater gain will be achieved in other sectors? Something to think about.

In Hereford, Tex., we have a sugar factory owned by Holly Sugar Corp. It was built in 1964. The mill cost over $20 million of which the farmers contributed about $5 million through a checkoff of $1 per ton. Recently, this mill was refining raw sugar from Brazil that had been imported into this country and into our market at a small fraction of our cost of production.

Our local farmers cannot afford to grow sugar beets as long as such a deplorable condition exists. It only takes an import tariff based on parity prices to correct this grave injustice. Why cannot Americans be allowed to grow sugar for this country, using American-made equipment? If America is not for Americans, well then, who is it for?

In beef we have USDA figures that indicate we are importing around 1 million head of cattle per year live. In addition, we import 2 billion pounds of boned, boxed, and frozen beef. If you figure this out into pounds per head, this would be the equivalent of 5 million head of cattle we import into our country. Can someone explain to me why we should import this many cattle into our marketplace when our producers go bankrupt because of a so-called surplus? It looks to me like we are importing the surplus.

At Vega, Tex., we have a greenhouse producing tomatoes. This enterprise is unable to show a profit now because we import through Nogales, Ariz., alone as many as 5 million pounds of tomatoes per day. A tariff of only 12 cents to 210 cents per pound is levied on these imports. This is only a small fraction of what should be levied in order to correct for the difference between the living standard of our employees in America and those in other countries.

Why, gentlemen, do you prefer to have foreigners produce tomatoes for the tables of the United States of America when we have Americans who are willing to produce them, Americans who pay income tax, social security tax, property tax and can be consumers for all of American industry, the same people who helped defend this Nation in time of war. If America is not for Americans, then who is it for? It only takes an import tariff based on parity prices to correct this deplorable injustice which has been wrought upon the American producers.

The third act of the First Congress was a tariff law to prevent cheap foreign goods from undermining the value of American money. The main item of export from our Nation is grain. We export around 50 percent of all grain going into the world market, shipping several times more than the next country in line. OPEC is likewise the largest exporter of oil for the world market and they have proven to everyone that you can price production into the world market at parity or above. We could do the same thing with grain.

Because of the apparent cheap food and fiber policy of our Government, we get back about one-half as many dollars from world trade as we should be, thereby causing a huge trade deficit.

Senator CLARK. I am going to have to stop you at that point. But your entire statement will be put in the record. I thought you made a good point with regard to beef imports and other kinds of meat imports.

As you know, we think this year we are going to deal effectively with that problem in terms of getting a counter-cyclical system where when our prices are down that we get fewer imports in. And that has not been the case since the law was passed, I think, in 1964; and particularly, to try to include live cattle and processed meat, so that we get a more realistic kind of situation.

One question-really two quick questions: The only problem, it seems to me and I happen to favor that legislation; I testified for it and so forth-but I am not sure to what degree we can build tariff

walls around to protect everything within the country. As much of a temptation as that would be when we are dependent upon on our exports.

In other words, we have to have some kind of system where we allow some foreign goods in, in return for selling our products. In our State one out of every 3 acres goes to foreign export. What is your feeling about that?

Mr. FRIEMEL. Well, I agree. We must have the exports because that is where a large portion-particularly the grain production and cotton as well must finally go.

Yet at the same time, you know, can we bankrupt our entire country over these things and also why could we not put a tariff on some imports as other countries do? They seem to have trade going too. I do not mean to take an extreme position, but at least take some position and move partially toward that direction to help us a little.

Senator CLARK. My second question is: We are going to be acting on this committee on Monday as a result of these hearings. We are going to finish them-in fact, these are the last witnesses today.

What do you think we ought to do? I heard your statement, Mr. Christ. I think you said you would like to see the Dole bill, Flexible Parity, adopted. But what is your opinion?

Mr. FRIEMEL. My thinking is that the Flexible Parity Act, as it has been introduced, is the very best means we can take the very best thing we can do right now to resolve this thing on a temporary basis. However, we will need to move toward a more permanent-type legislation. But I would certainly favor the variable parity.

Senator CLARK. Thank you, Senator Dole?

Senator DOLE. I just wanted Mr. Crist to know that Senator Young, Senator Melcher, Senator Curtis, and Senator Hodges have been meeting since 8, I guess, trying to figure out some farm bill and they are having the same problems we are having. I do not want you to think that people are not paying attention. They are. And we are very concerned. We just do not know what we are going to be able to do.

Some want to increase the loan rates; some support Flexible Parity; some support land retirement, but the $64,000 question is what can we get through the Congress on an emergency basis hopefully in the next 2 or 3 weeks? Unless it goes out of this committee with almost unanimous support, we are really going to have problems when we get to the full Senate. It is going to be a tough struggle.

Mr. CRIST. If that was a question, I think the answer to that is to stick with your guns on the bill and stay with it. I think this is the bill.

Senator DOLE. I want to stay with it. When I start to go down the third time, I may want to grab for something else.

Mr. FRIEMEL. Is it not true that nearly all farm organizations are supporting the Flexible Parity Act at this time?

Senator DOLE. I think there is a great deal of support for it among most farmers. I cannot speak for any farm organization. I know certain State Farm Bureaus have endorsed it. We have had a good response from Farmers Union. I am not certain about NFO. I think wheat growers support it strongly and if Dick Clark is supporting it, we will be home free.

Senator CLARK. Thank you. We will next hear from Victor Marek, Bartlett, Tex., and Dick Elbert, Spearman, Tex.

You have 5 minutes and you may proceed in any way you like. Your statements will be inserted in full in the record.*

STATEMENT OF VICTOR MAREK, MAREK BROS., SCHWERTNER, TEX.

Mr. MAREK. Thank you. I am Victor Marek from Schwertner, Tex. The story has been told. It has not been a pretty story. It is one of shame and disgrace to the United States. It tells of how good people get penalized for becoming better at their profession. It tells of ruin, financial losses, disasters, hardships for the very finest, the most efficient of American and world people, the American farmer.

It is even exemplified by President Carter who said there are better times ahead for those who can survive. Now who does Mr. Carter want to survive? Corporate farms, who possibly farm for tax loss writeoffs, or who could control farm prices to 200 or 300 percent of parity; or family farms who try to farm for a living and want to guarantee not over 115 percent of parity for consumers?

Mr. Carter knows very well there are disastrous problems, and many farmers will not survive, but he is doing very little to open the way for immediate change. He also at this time has in the Senate a bill which exempts the inalienable human rights of ownership of private property.

Now you, the Senators, knew these problems for some time. You attempted to alleviate the situation this fall by trying to raise support levels. You heard our cries this past fall. You knew there were problems then. But Carter reneged on campaign promises and threatened veto. You reluctantly gave in to a dead agriculture policy by President Carter and Secretary Bergland.

But now you have a chance to realign the situation. You have support here and very recent and impressive polls and survey show that there are 76 to 80 percent consumer support for 100 percent parity to back your policies to save America. O'Beautiful for spacious skies for amber waves of grain, but those amber waves of grain are not beautiful to farmers when every bushel represents a loss. They are sorrowful memories of a lifetime of savings washed out by extreme forces of which USDA and Carter's policies head the list.

Gentlemen, my brother and I and our families own and operate several farms. We raise grain, cotton and cattle. We own and have interest in two grain elevators and manage a cotton gin, and still our wives and children had to become employed in other jobs this past year to meet living expenses.

Our goal is 100 percent parity through the marketplace; let me reemphasize, through the marketplace. You have several bills before the Senate, one which escalates target price to parity as temporary relief now. But let us not lose the sight of 100 percent parity, and I again emphasize through the marketplace. Parity is similar to the minimum

*See p. 478 for the prepared statement of Mr. Marek, and p. 479 for the prepared statement of Mr. Elbert.

wage law which does not insure a person of making a profit or getting rich, but assures one from getting victimized.

Let me assure you that we need action immediately. We do not have any more time or credit left. Different farmers tell me every day that this is their last crop if things do not get better soon. They not only owe lending institutions for this crop year but also for losses last year and possibly the year before.

Their hopes and future are now possibly here in Washington. You must approve legislation to be effective now as farmers cannot wait for planting time is here, this minute, in my area. And if you choose to ignore 100 percent parity, farmers are organizing so well that we may decide to enforce 200 or 300 percent of parity as the oil sheiks have done.

We are no longer going to be tramped on. We expect to keep our place at the bargaining table.

Enclosed and following you will find an example of a 500-acre family farm at work. Carter's and Bergland's present policy insures a $30,000 loss. Parity gives a chance for at least a living. There seem to be a few who disagree on just what or how to achieve these goals, but you are our representatives and lawmakers. You should with our testimony be able to come up with favorable legislation to help clear the way for 100 percent parity. Thank you.

Senator CLARK. Thank you for a concise statement. We are going to hear now from Dick Elbert of Spearman, Tex.

STATEMENT OF DICK ELBERT, PRESIDENT, NORTH PLAINS INTERNATIONAL, INC., SPEARMAN, TEX.

Mr. ELBERT. Mr. Chairman, my name is Dick Elbert and I am president and manager of North Plains International, Inc., in Spearman, Tex. This is an International Harvester farm equipment dealership and the intent of my testimony this morning is to try to verify the economic impact of this farming situation on small businesses, primarily in agricultural oriented areas.

I think it is accepted that all businesses related to agriculture have had reduced gross sales and, of course, smaller profit margins. And there are many reasons why which I am sure you all recognize. I think it is important that you understand that pricing policies of most of the major farm equipment industries pass on any increases that they have directly down to the wholesale or the retail level, this being in the form of wage increases, labor union increases, steel increases, et cetera.

I think it is a shame that our customers that I sell to cannot purchase new equipment because they do not have the same privilege to receive a proportionate share of the increase in their commodities as their cost of production increases. We have reached a saturation point where the customers or myself, as a dealer, can absorb these atrocious price increases.

As a result of decreased sales, our operating expenses have escalated beyond control. This follows the form of trying to keep pace with the cost of living for our employees and one of the most drastic effects has been on the inventory related expenses. As our sales decline, our financing costs of inventories increased drastically. I know of no re