lion. Now we can see what is really the biggest industry in Americadebt, with a gross annual income more than double that of agriculture. Why is it that a country that the Lord blessed with more of every good thing than any other, has a skim of more than $260 billion right off the top of its economy?

How did we get into this mess-the dollar at an all-time low, balance-of-payments deficits an all-time high, Government budget deficits growing each year, and the possible bankruptcy of the entire Nation? Since 1953, when the United States decided to replace parity agriculture with massive credit expansion, we have created the greatest debtinfested economy the world has ever known.

We started down this damnable path of our own self-destruction when we decided to replace earned income with debt expansion. When we adopted the philosophy of John Maynard Keynes that we could borrow our way to prosperity. Has it worked?

Well, we have almost reached the point where the earned income we do have won't make the interest payments, let alone reduce the principal. When we reach that point, the whole system comes down like a house of cards.

How do we reverse the trend and generate the earned income to keep the economy solvent and begin to repay the debt? We have to understand that any nation's wealth comes from the soil in the form of raw materials. When we price those raw materials at a fair priceparity-we generate the earned income to buy them back and the earned dollars to keep the system solvent. Agriculture is most important because in the United States it represents 70 percent of all the raw material production. It is also the only one that replenishes itself every year. Agriculture at 100 percent of parity is the only way we will ever get out of the mess we have created. The multiplier effect of the farm dollar as it turns through the economy is somewhere between 1:5 and 1:7. If it only generates at a ratio of 1:5, for every $1 paid agriculture we can generate $5 of earned national income. Conversely, every dollar that agriculture is shortchanged, the Nation's economy is shorted $5 of earned income. Agriculture was shortchanged approximately $80 billion last year, the Nation $100 billion.

Agriculture's problem has not been overproduction, but underconsumption because with low prices we failed to generate the income into the system to buy back what we produced. Low prices cause surpluses, not high prices; check the record.

Let me project where I believe this country could be 2 years down the road with agriculture at 100 percent of parity by law, not by supports or subsidies. The difference between what farmers received last year and what they would receive at parity is approximately $80 billion. If you multiply this $80 billion by the multiplier of 5, we have created $400 billion of new earned income into the economy. Now, this is earned income; unlike credit dollars, it doesn't have to be repaid and no interest to pay-but it is taxable. Now, if we tax this new income at, say, an average of 20 percent, we have $80 billion in new tax dollars. In fact, the Government gets $1 for every dollar of farm income when agriculture is at parity.

Recently, the President's new proposed budget showed a deficit of $60 billion. At 100 percent of parity, we could cover the deficit and

have a $20 billion surplus. With the surplus we could start reducing national debt, take care of any new Government programs and/or give the taxpayers an honest tax cut. What happens if we give the taxpayers a cut? They have more disposable income which creates more new tax dollars because of their increased buying power.

Agriculture at parity is more than a new farm bill; it is a national economic stability act that will provide: Full employment, maximum economic growth, elimination of inflation, balance of payment in trade, and balanced Federal budgets.

It will also assure the Nation's consumers an abundant supply of food and fiber at equitable prices-both for the consumer and the producers.

I understand that there are some projection models available that show parity will not work. If this is true, I have to conclude that these projections have completely overlooked the increased buying power of agriculture and the multiplier effect of the farm dollar.

We have the 10-year record, from 1942 to 1952, showing that it is not only possible to keep prices in balance-parity-but that it can be done without any cost. Why don't we go back to it? Why don't we use something that we know works? Instead, we are doing these fool things like mortgaging the future to the hilt each year.

Many farmers could live on less than 100 percent of parity. A lot of farmers could get by with 80 percent of parity, particularly if they had their land paid for and some other investments, but the Nation cannot. It is imperative that they have 100 percent of parity for all of rural America and the Nation to survive.

A part-time solution will drive both farmers and the country into deeper straits in 1 year or 2. We are the victims of the economists and politicians that follow the dictates of the supermoney barons that thrive off the interest they collect on worthless money issued into circulation as debt. Economic theory has been responsible for the crisis our Nation is experiencing. Congress buys and adopts these unworkable theories and plans as if they come from heaven. It is time for a commonsense approach to return this Nation to the course intended by its founders.

Tens of thousands of farmers have their backs to the wall. Many of these people are desperate. They are losing their farms and their homes; they have nothing else to lose. For them it's do or die--one way or another. Only those that are unaware of the situation could really blame them. You have the power and authority to prevent this from happening. If you fail to act with a sense of urgency, then you must assume the responsibility for whatever happens.

In conclusion, I ask: Will you support the best interests of the American people or the best interests of the multinational corporations and international bankers? It's in your hands. I pray you have the courage to make the right decision.

Thank you.

The CHAIRMAN. Thank you, Mr. Meyer, for a very fine statement. Senator Helms?

Senator HELMS. Mr. Chairman, it occurs to me that some of the most profound observations that I have heard since I have been in Washington have come during the past several days in these hearings. An excellent statement.

Mr. MEYER. Thank you.

Senator HELMS. You have a good grounding in economics, and certainly you understand what has happened to the economy in this country. So few people apparently do.

But I personally appreciate your comment.

Mr. MEYER. Thank you. They don't preach that kind of economics in college any more.

Senator HELMS. They certainly don't. [Laughter.]

The CHAIRMAN. The next witness is Mr. Johnny Goodnight of Immokalee, Fla.

Mr. Goodnight, you may insert your full statement in the record and summarize it, please, in not over 10 minutes.*

STATEMENT OF JOHNNY GOODNIGHT, SOUTHWEST FLORIDA WINTER VEGETABLE GROWERS ASSOCIATION, PALM BEACHBROWARD COUNTY FARMERS COMMITTEE FOR LEGISLATIVE ACTION, AND THE SOUTH FLORIDA TOMATO AND VEGETABLE GROWERS ASSOCIATION, IMMOKALEE, FLA.

Mr. GOODNIGHT. Mr. Chairman and distinguished members of the committee. I can't say that it is a pleasure to be here-the weather is too cold, the prices are too high, and I should be back in Florida working on my pepper farm, now in the midst of our winter harvest. But I feel it important that I be here to inform you, our elected officials, of the problems of the winter vegetable growers and the bleak future we face. The groups I represent also feel the necessity to express their collective views to you-and therein lies a most interesting development which I see of great significance.

As you can see from the caption of my testimony, I am appearing today on behalf of the Southwest Florida Winter Vegetable Growers Association, the Palm Beach-Broward County Farmers Committee for Legislative Action, and the South Florida Tomato and Vegetable Growers Association, groups dealing mainly in peppers, eggplants, cucumbers, squash, beans, and tomatoes. Our three groups have been formed in the last 2 months to address the major issues facing our industry and to pursue appropriate remedies. We represent almost 99 percent of all winter vegetable production in Florida.

It is an understatement to say that it is unusual for farmers to get together on anything. It is even more unusual for farmers of different products in the same area to unite in a course of action. And it is downright incredible for competitors from different areas to view a problem as so monumental that years of differences are put aside.

Only the specter of complete annihilation of our industry could serve as a catalyst for bringing such diverse groups of farmers together.

I do know one thing. Although it's hard to get farmers together, once they are together, it's twice as hard to pull them apart. You see the news reports of farmers in jail protesting imports at the Mexican border. You see farmers jamming your streets with tractors and

*See p. 342 for the prepared statement of Mr. Goodnight.

roaming your halls to have their voices heard. We've started from way back as far as politics are concerned but we are determined to see the political process to get our story across and obtain relief.

You have no doubt heard days of testimony about increased cost of production. We all face it. Some of the increases are truly extraordinary.

The increase in the minimum wage, social security taxes, and new unemployment coverage upped our total cost of production on January 1 of this year by 15 percent. And increases by suppliers due to their increased labor costs means another 5 percent passed on to us.

A tractor which cost $18,000 4 years ago now costs $32,000. Propane has gone from 16 cents to 45 cents. Per-acre cost of production has about doubled in the last 5 years. Many other examples could be cited.

The simple fact is that we are ready and willing to live with such increased costs as long as we can receive a fair rate for our produce in a truly competitive market-the kind of market which used to exist until recently. We are not asking for subsidies. Nor are we asking for 100 percent of parity. We are asking to compete in the good old American way.

But we are not being allowed to compete because we are being undercut in the markets by Mexican produce, apparently being subsidized and dumped in our markets, at times below the cost of production and even, at times, below the cost of transportation. This is not competition; this is an attempt to monopolize our industry by undercutting a competitor, no matter what the cost, so as to drive him out of the market. After this is accomplished, the Mexicans can raise prices to whatever the traffic will bear since they will be the only game in town. The Mexicans did it to us in strawberries and, I warn you, the same story is about to be repeated in vegetables.

Mexican produce is flooding our traditional markets on consignment, going at any price. We find more and more rejections from our traditional purchasers and we are being forced to go to consignment— the distress market-ourselves.

The result is devastating. For example, I am approaching the midway point in my pepper harvest and I doubt if I will be able to recover one-half of my growing costs. Many cucumber farmers could not recover any of their growing costs and the crops went unharvested. The same thing happened with regard to eggplants: It didn't pay to harvest them so they were cut and left on the ground.

Gentlemen, I wish I could equate in your everyday lives an experience equivalent to looking out over a field of unharvested and dying produce which you helped create with your own sweat and blood.

Farming is my life. We want to pass this heritage on to our children. But the way it looks now, it won't be there for them to receive. Maybe they'll get smart and become commodity traders.

We want to continue to work the land; we don't want to see it converted to motels, hotels, housing projects, golf courses, and amusement parks. And we don't think the country should have the amount and price of its winter vegetable supply dictated by a foreign country. We want a fair and truly competitive market. We are the most efficient farmers in the world. And the fresh vegetable growers don't have the so-called middleman layering in excessive costs which are reflected

in the final price to the consumer. But even under these conditions, we are being forced out of markets by competitors, who, even with cheap labor, could not beat us if they play the game fairly.

And the impact goes beyond me and my fellow farmers. Last Wednesday I took 15 people to the field to thin peppers. When I got there, 57 other people were there waiting for work, the situation is that desperate for my workers. I gave them all a couple of hours of work, a job that would have been a full day's work for the 15 people I took there. The irony of it is that in the end we will all be paying for it through food stamps, unemployment benefits, and other Federal subsidies.

A friend of mine tells of his great American success story. He immigrated here from Cuba. He started out with 67 cents in his pocket and now owes over $1 million. Yet he will live with that risk. So will I. And so will all of the fresh vegetable farmers down in south Florida. We knew it was a risky business to begin with. But we are used to dealing with the traditional risks of weather, consumer demand, price fluctuations, and cost variations. We are not used to dealing with artificial risks created by a cohesive group of foreign producers which are apparently being ignored to pacify a foreign government for a variety of political reasons.

This is what the Government should address. We adhere to quality standards, to wage standards, to pesticide and insecticide standards, to OSHA standards, and to many other standards. It is time for the Government to serve its constituent farmers and eliminate marketingpractices engaged in by foreign producers which, if carried out by American farmers, would be illegal.

In closing, let me say that our groups are not fly-by-night operators. We intend to pursue our rights and remedies in every conceivable form until we see a return to a true, competitive market.

But some remedies may take many months or years. And a large number of our farmers cannot survive this long-time span under the present conditions. Accordingly, we ask for your immediate and forceful help. Return us to a fair market, and we'll be happy to take the risks of our free enterprise system.

Thank you, gentlemen.

The CHAIRMAN. Thank you, Mr. Goodnight, for a very fine statement. You heard the testimony of the Florida vegetable producers, tomatoes primarily, earlier in the day. I take it from your testimony that what is happening in tomatoes with reference to Florida producers is also happening to other vegetable producers, such as cucumbers, peppers, eggplants, and squash, and so on; is that correct? Mr. GOODNIGHT. Yes, sir, that's correct.

The CHAIRMAN. Do we have adequate laws on the statute books now to protect the American producers?

Mr. GOODNIGHT. Yes, sir, I believe that the laws that are on the books now are adequate.

The CHAIRMAN. The problem is enforcement.

Mr. GOODNIGHT. Enforcement of the laws. Unfortunately, some people in this Government feel that agriculture should be traded offor vegetables should be traded off.

The CHAIRMAN. Senator Stone has been very active in trying to look after your interests, and pointed out to some of the earlier tomato pro