July 29, 1971
Page 28022
Mr. MUSKIE. Mr. President, if we are going to use the power of the Federal Government to mitigate the economic consequences of the business difficulties of large corporations, I feel we should do the same for small businesses and farmers. Although the economic consequences of failure of these smaller enterprises are not as great nationally or regionally as the failure of a company as large as Lockheed, their impact upon the individual employees or owners and upon the town or city in which they are located can be just as great.
For example, in today's New York Times, there is an article about the suffering caused in northern Maine due to the failure of potato farming in Aroostook County. The article clearly shows that the effect upon farmers, their families, and the towns of northern Maine is just as severe as the effect of a failure of Lockheed would be upon families and communities in southern California or Georgia. That is why Ralph Smith, a potato farmer who gave up farming after 32 years asks:
Wouldn't it be better if they let me keep my equipment and keep farming – at least I could feed my family. It seems if the government can vote money to help Lockheed, if they can bail out the Penn Central Railroad, they could let me go on farming.
I think Ralph Smith has a point. I ask unanimous consent that the article from the New York Times be reprinted in full in the CONGRESSIONAL RECORD at the conclusion of my remarks.
The PRESIDING OFFICER. Without abjection, it is so ordered.
(See exhibit 1.)
Mr. MUSKIE. If we help protect those working for the big corporations from the consequences of business failure caused by temporary difficulties, we should help those involved with smaller enterprises.
I have reservations about the present form of the McGovern amendment. The additional authorization of $2 billion may not be a reasonable amount for its purpose. Perhaps the original $2 billion guarantee limitation is enough for both purposes. And the requirement that the amendment adds to section 8 of the bill – that loans to small businessmen and farmers be equal in any given calendar year to loans to large corporations – seems too rigid.
But I feel, when all these considerations are weighed, that if the National Government is going to use its power to mitigate the consequences of business failure, it should use that power evenhandedly. Therefore, I shall vote for the McGovern amendment so that small and large businesses and the employees that work for both are aided by this legislation.
The article follows:
Exhibit 1
ONCE BOOMING POTATO FARMS DIE IN MAINE
(By Bill Kovach)
PRESQUE ISLE, ME.– The road to Ralph Smith's farm cuts across rolling hills that his great-grandfather cleared for farming after the Civil War.
At each bend in the gravel road there is some mark of the four generations of Smiths who have farmed the red loam of Aroostook County: "There's where great-grampy built the first frame house around here." "Grampy built that pond there using rocks culled from the fields."
At the end the road makes a little fishhook into the yard in front of Ralph Smith's comfortable frame house. Behind the house there are 150 acres of weeds.
"One day," he says quietly waving toward the weed-choked fields, "there comes a spring when you can't go any further. You wake up and you're not a farmer any more."
That spring came this year for Ralph Smith, after 32 years of growing Katahdins, Russet Burbanks and Kennebecs, the Maine potatoes that once dominated the American potato market.
Five straight years of bad weather, poor yields and low prices have left him and many others here smothered in debt.
EQUIPMENT SOLD AT AUCTION
When he was unable to make the minimum payments required on Government mortgages, Mr. Smith's equipment was taken by the Farmers' Home Administration and sold at public auction. When taxes and insurance come due on his house in the fall, he says, he will leave that too.
In the same way all across Aroostook County, Maine's largest and northernmost, families who have dug potatoes from the earth for generations are being squeezed out by changing economic patterns in agriculture. So far this year there have been five major auctions representing the end of an estimated 200 farming families.
Aroostook County, never wealthy except in the days when self-contained farms were the dream of young families, has plunged deep into a depression in the last decade.
The county has lost almost 2,500 farm units over 30 years. Most experts agree that many of the remaining 1,300 will not remain long on the land. There are 17,000 people – 20 per cent of the total population – receiving surplus food. Unemployment is set at 12 per cent and the young are leaving the county rapidly.
Aroostook's story is one of a traditional single-product economy being swept away by an ever- changing national economy. Aroostook, which produces 95 per cent of the Maine potatoes, is now only one small piece in that section of agriculture it once dominated.
"WE GET THE BLAME"
"We get the blame for all this, but that just isn't right," complains Cluny McPherson, a local official of the F.H.A. Mr. McPherson approaches discussions of potato farmers' troubles with the caution of a man building houses of cards. As failures mount and F.H.A. foreclosures generate frequent auctions, the confused and frustrated anger of the farmers focuses more and more on Federal programs.
"We get the blame," says Mr. McPherson again, "but the problem is basically one of supply and demand. Prices are down because reclaimed land in the West is going more and more into potatoes. A farmer needs a good year every year and they've had a terrible run of luck here for the past five years."
To bad weather and prices, other students of the economic blight of the Maine potato farmer add several other factors: the land has been worn out and production has dropped from 150 barrels per acre to 135; Idaho, which now overwhelms the market, has a better growing season and a more aggressive sales and promotion program. Then, there is marketing.
A study by the Northern Maine Regional Planning Commission has pinpointed as a major problem the domination of the field by large chain stores that ended the old system of sales directly between farmers and retailers and established a layer of dealers between the farmer and his outlet.
"Buyers know," says the report, "they can play dealers against each other and dealers in turn pit farmers against each other to the point of reducing prices on the grower end of the marketing cycle."
There may be dozens of other factors, but they all move toward the same result, one manifested by Ralph Smith.
Mr. Smith began growing potatoes in high school as part of a Future Farmers of America project. In 1946, discharge from the Army in hand, he settled with his bride on 150 acres of the Smith homeplace and began raising potatoes and a family.
"It was 1965 that I had my last good year," he recalled recently. "Then everything began to fall apart."
With the reluctance of an independent man who, late in life, has begun to question his own ability and worth, Mr. Smith traces his plunge toward failure this way:
In 1966 prices were so low he held his crop until January hoping for a better price. The gamble failed and he lost money. For the first time in his life he had to borrow money from the Government to plant a crop in 1967.
Nineteen-sixty-seven "was a bitch from the start." Rain during the fall harvest season kept machinery and hourly paid labor idle for three crucial days and he sold his crop under an emergency Federal program for a price that did not even cover the harvest.
Nineteen-sixty-eight, 1969 and 1970 were much the same – borrowing to put out a crop and losing money at each harvest. By the end he was essentially sharecropping his land under a "crop and chattel mortgage" that put everything he once owned up against the chance of success.
"I've worked 16 to 18 hours a day on this farm since 1946," Mr. Smith concluded. "And now I'm 52. I've had three heart attacks. I've still got two children at home and two in college and I'm finished. I'm going to lose it all."
CONFUSION AND BITTERNESS
There is confusion in his voice and no little bitterness as he looks around the weed-grown field of his farm and asks: "Wouldn't it be better if they let me keep my equipment and keep farming – at least I could feed my family. It seems if the Government can vote money to help Lockheed, if they can bail out the Penn Central Railroad, they could let me go on farming."
At the auction the next day, Ralph Smith was joined by other farmers who have been forced out in recent years. In each case the story was the same – years of independence ended suddenly by changes they only vaguely understood.
"Look there," Mr. Smith called to a neighbor, "they just sold that truck for $1,200. The body alone would cost more than that." Then they fell to talking about what is going on – about auctions to sell their equipment at less than its worth just to "change some figures on a piece of paper" and to force them off the farms and into an uncertain and glutted labor market.
"It just seems like it would be better if they let me keep farming," Mr. Smith said to no one in particular. "It just doesn't make any sense."