I am president of the Federal Land Bank Association of Searcy, Ark., and serve on two other bank boards; I am chairman of the State board of education in Arkansas and chairman of the Jackson County ASC Committee, am serving as a member of the Board of Farmers Electric Cooperative, Newport, Ark., and on the board of five additional agri-business operations.

The people in my little town in the area I represent asked me to come to Washington, D.C., and represent as effectively as I could their dissatisfaction with the 1977 farm bill program. It simply is the wrong kind of program, offers the wrong sort of solutions to the very deep problems that face American agriculture and Arkansas agriculture.

I would like particularly to direct my remarks to two crops. Although I raise cotton, rice, soybeans, beef cattle, and small grains, I would like to direct my remarks to rice and soybeans because of the shortness of time.

I have two statements that I assume will be entered into the record of this committee from processors of rice and/or soybeans who contend that the present farm program, the 1977 farm bill is adequate and the best for producers.

Senator HODGES. That was the Riceland statement you have reference to?

Mr. DUPREE. Also the Rice Millers' Association, a statement from Mr. J. Stephen Gabbert, executive vice president of that organization. Senator HODGES. You are responding to those?

Mr. DUPREE. I am, sir. It is ironic to me that these sort of statements would come from processor organizations, rather than the grassroot farmers. I am a grassroots farmer. Yesterday morning I had grease under my fingernails and diesel on my britches. And I tell you that the farmers I talked with in my section simply say that the measures called for in the 1977 farm bill and the price targets talked about there as target prices and loan prices are simply inadequate. They do not represent anything like the cost of production.

You heard testimony from four other Arkansas farmers this morning about the cost of producing rice in Arkansas and $3.75, the projected target price for the year 1978 is simply not adequate to cover that, sir, if everything is given as a return to land, a return to management, and the other incidental expenses in rice production. Sure it is ironic to me that processors are well satisfied with the situation and come before the Congress and this committee and say everything is just fine, just don't rock the boat, and I am saying, sir, they do not represent farmers that I know and that I have talked to when they make that sort of statement, and I stand before you, sir, and refute those statements as being untrue in the area I represent.

Senator HODGES. I know, because we are friends and have known each other for years, that you have worked on Senate bill 2626. Have you talked with farmers from States other than Arkansas?

First let's talk about Arkansas, and what sort of response have you gotten from them to the bill.

Mr. DUPREE. Friday afternoon I spoke to 300 farmers representing 10 counties in northeast Arkansas. I explained the provisions of the bill

2626 and they unanimously approved the provisions incorporated therein.

Senator HODGES. Have you talked to other States? Indiana has just been mentioned. Have you talked to and dealt with farmers in Indiana? Mr. DUPREE. As a matter of fact Indiana corn farmers had input and directly helped out on this bill.

Senator HODGES. What about other States? Have other States participated?

Mr. DUPREE. It begun as a bill, for want of a better name, called Arkansas-Utah plan, but had input from the States of Florida, Georgia, Alabama, Mississippi, Tennessee, Indiana, Ohio, Illinois, Missouri, Utah, and Idaho. Farmers, grassroots farmers, from these areas had input into this bill. It is a broadbased bill, sir.

Senator HODGES. Is part of the problem-well, I will make a statement. I think time and again farmers have come up and they have, as someone put it in an earlier hearing, a bone has been tossed out and they have taken a bone and gone home.

This time the farmer wants ham on the bone, as they put it. What are your feelings about settling for some short-term solution and going

home?

Mr. DUPREE. It would be extremely shortsighted. Our problems are profound and they are deep and if we take the bone and go home, in 2 years we will have to come back up here. We need a bill tied to something that floats or gives us adjustments from year to year as conditions change.

Senator HODGES. Thank you very much. Do you have anything else you would like to add?

Mr. DUPREE. Thank you, sir. My appreciation for having this opportunity to appear.

Senator HODGES. Thank you for your testimony.

Billy Davis, Laurel, Miss., and Tom Slough, Jackson, Miss.

Mr. Davis, would you state for the record your name and address and something of your background and what you farm so the record will reflect the perspective from which you speak?

STATEMENT OF BILLY M. DAVIS, LAUREL, MISS.

Mr. DAVIS. I have a prepared statement and I have submitted it. I will briefly give you a capsule.*

I am Billy Davis, from Laurel, Miss. I and my family of five operate approximately 620 acres of diversified family farming. We run a small herd of registered polled Herefords and have been polled Hereford breeders for over 25 years. We double-crop all our row cropland with soybeans, milo, cowpeas, rye, oats, and rye grass, most of which are produced for the commercial seed market. However, today I shall cover our third major enterprise.

I am told that I am in quite a unique position in that I am the first of my type character to testify before a committee on the Hill. I am a contract grower. I would like to state very briefly what we do. We are poultry growers, particularly in the broiler production. We furnish the land, the buildings, equipment, labor, and special management.

See p. 300 for the prepared statement of Mr. Davis.

The company which we contract with furnishes the chicks, feed, medication, field assistance, processing, and marketing, all of which are taken into account by the company in setting their wholesale price which they ask for their product.

In recent weeks the Chicago Board of Trade quotations closed at 40.58, and in the case of the producer, which in my estimation is a misnomer-they are processors-they received approximately 16.18 cents of this as net. If you analyze their cost, which is 39.87 above their stated cost of production, the grower in my case received only 5.66 percent. However, the investment that I have in particular, with four production units producing about 72,000 birds, is in excess of $200,000. total investment, of which you will note in my attached cost of production figures, from the grower's standpoint, reflects each time that I raise a grow out of 72,000 chick, I lose $6,702.10.

The cost of production figures I have given you are based upon a schematic furnished me by another producer and I simply eliminated those parts that did not apply to my operation.

The return to investment, the return to management, all of these figures were taken percentagewise from the so-called producers.

Now so far as the balance of my statement, if the grower received an 88.6 percent increase in his contract-this is nationwide-he would survive, he would break even on the cost of production basis. I realize this is a drastic move. However, it would only represent 3 cents a pound on the retail market, which is a fair price to pay for the survival of the poultry grower.

Now so far as the balance of my statement, if the grower received earlier this morning by Mr. George Watts, director of government relations, National Broiler Council. I respect the gentleman for speaking what he believes to be the position of the producers, which I shall call processors. However, I will, so long as I live, I will disagree with what he says, that the poultry industry needs to be left alone.

This is a misnomer. We are tired of seeing retailers use our birds as loss leaders habitually. The paper loss corporate structure of conglomerates, as most of our poultry producers are, the result of a conglomerate structure and is causing an intentional overproduction simply to keep a loss picture in the pattern, and I have not found but a very few independent producers who will disagree, further by and large, the major corporations that are involved will not disagree with the figures I have submitted in my record, and in fact most of the comparative figures came from one of these companies. But to say that the cost of the retail price of a chicken represents the cost of production for the producer, this is absolutely correct, but it does not reflect the cost of the grassroots farmer that is out there having to live with those birds 71/2 to 8 weeks. I myself the night before last wound up cleaning out two of those houses, with some help of some neighbors, because of my absence from home. I will say that much, that gentleman, in my opinion, has never had to suffer through what we have suffered through with the investment we have got and the lack of return. I, myself in the past 5 years, and I have my 1040 forms here to prove it if you would like to privately look at them, had over $260,000

loss over that period of time, and I cannot stand it any longer. I would trge sincere consideration of Senate bill 2626, but I would also urge that in that piece of legislation that any time a so-called producer is presenting cost of production figures that any subcontractor or contract grower therein be fully considered before the acceptance of that final cost of production figure.

Thank you, sir.

Senator HODGES. We will put the balance of your statement in the record.

Mr. DAVIS. Thank you very much.

Senator HODGES. I have had very limited experience with raising broilers. My son last summer, who is 10 years old, decided that since I raised them when I was growing up he wanted to raise them. I had 55 baby chicks given to me. I charged nothing for my high-powered legal help to him in getting started or working with him. We sold them at exactly what broilers were selling for, 39 cents a pound. Only one died, but he broke even on this, and the only thing we charged off against it was the feed-nothing for labor, nothing for overhead, nothing for the electricity, nothing at all except for the food.

That might not translate into large numbers of birds. This was 55, and, of course, 1 died, and I told him if we had had a loss, we would be better off if they all died and we wouldn't have lost as much. He simply and only paid for the feed at 39 cents a pound. It was rather amazing. It is a good lesson for him, incidentally. He is working harder in school now and wants to be a lawyer instead of a farmer.

Mr. DAVIS. I think this points out one thing. You more than likely bought a comercially prepared ration for the birds; is that not correct? Senator HODGES. Yes.

Mr. DAVIS. In our particular case the pressure from the wholesale industry has caused depletion of quality feed. There are no additives, no medications that these birds must have to survive, and again properly from the standpoint of a highly hybridized bird. They are breeding these birds at such a rate and they are trying to build in growth rate for a 7 week bird to weigh 4 pounds, and yet the feed is so basic and so inadequate to help this bird fight off diseases and his hybridized condition can no longer ward off even ordinary diseases which a yard chicken could, so we have at various times hauled out as many as 200 or 300 birds out of a house, each house, because of diseases that could have been controlled a year ago by simple medication that has been removed from the market.

Senator HODGES. To add to the woes of the broiler producers in south Arkansas, many of them this winter had the snow destroy their producing houses and they discovered it is not covered by insurance. So if Job thought he had problems in the old testament, he needs to get in the broiler business in south Arkansas.

Thank you very much for your statement.

Do you have any questions of this witness, Senator?

Senator LUGAR. I have no questions. Thank you.

Senator HODGES. We will call at this time Jim Billington and Mr. Schieber.

Mr. SCHIEBER. Mr. Lyman Knapp is also with us.

STATEMENT OF JIM R. BILLINGTON, PRESIDENT, OKLAHOMA WHEAT GROWERS ASSOCIATION, ALTUS, OKLA.

Mr. BILLINGTON. Mr. Chairman and members of the committee and friends, I want to express my appreciation to this committee in the difficult task you have before you in alleviating many of the problems now facing agriculture in this Nation. I also want to express my appreciation to your committee in passing the Food and Agriculture Act of 1977. I know it wasn't what we wanted, but I think it was probably as best you could do at that time.

My name is Jim R. Billington and I farm about 1,000 acres in southwest Oklahoma, about half of it irrigated. I grow cotton, milo, wheat and I run stocker cattle on my farm. I am president of the Oklahoma Wheat Growers Association and a member of the Oklahoma Wheat Commission. My hometown is Altus, Okla.

My objective today is to seek your assistance for immediate relief, as authorized by legislation in the Food and Agriculture Act of 1977. I know the process of enacting and implementing new legislation is costly, time consuming, and disruptive. We have the tools now in legislation, so let's get on with it.

First, and as background, we have the problem of the coldest winter on record in the southern Great Plains Oklahoma area. Temperatures are 7 degrees below average at Dallas, Oklahoma City, and Amarillo. This was reported last week, as of March 1. Land was prepared and wheat seeded in the fall of 1977 without knowledge of the law and ensuing regulations. Much of the southern Great Plains suitable for wheat production is seeded, has adequate moisture, has experienced little wind damage, and remains dormant much longer than normal. The production of pasturage has been minimal due to slowdown and covered with snow most of the winter. Cattle grain from wheat pastures has been little to none and supplemental feeding has been full feeding to maintain weight and health. Wheat growing should not be providing all of the nutrients for these cattle, but the day I left, Sunday, my cattle were consuming 12 pounds of high-priced roughage per day due to lack of growth on the wheat, and this wheat is producing very little for storage.

The Secretary of Agriculture has authority under the present act to allow hay and grazing set-aside acres. They have agreed to grazing, but seriously restricted its value by requiring, by regulation, that we must remove the cattle and set-aside the same day. The Secretary has stated that the State ASCS committees are to determine this date in Oklahoma, Kansas, and Texas. The date was set by the ASCS-State committee, by Mr. Ray Fitzgerald's staff, and by Mr. Weldon Denning, Deputy Administrator. The regulation is much too restrictive and needs to be changed back to the date set by the ASCS committee.

In my case here is what it means. I miss 15 days for grazing, with at least 30 pounds per acre for grain and as it now stands it amounts to about $15 per acre income off my required set-aside, without 1 cent cost to the U.S. Treasury. This is not additional income; this is income to minimize losses on the cost of seeding, land preparation, fertiliza