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STATEMENT OF CLARENCE WELANDER, FULLERTON, N. DAK. Mr. Chairman, members of the Subcommittee : My name is Clarence Welander. I am a grain farmer in Dickey County, North Dakota, and president of the North Dakota Association of Rural Electric Cooperatives, a service organization which represents some 63,000 rural electric consumer-owners in my state. In addition, I am a director of James Valley Electric Cooperative at Edgeley, and a director of Basi Electric Power Cooperative, a large generating and transmission cooperative.

Mr. Chairman, on behalf of the rural people I represent, I want to express my appreciation at this opportunity to make some comments about the important legislation you are considering. I have some specific references to Federal programs and their operation in North Dakota, and then some more general comments to make.

I believe one of the most successfully operated Federal programs in a rural area is the various aspects of rural community facilities, housing, credit, recreation and other activities administered through the Farmers Home Administration.

Just since January 1, 1966, for example, FHA, through the Aiken-Poage Community Water Facilities Act of 1965, has committed loans and grants to 23 North Dakota small communities for water and/or sewer facilities. These grants have totaled $848,870. Loans committed totaled $2,789,250 to these 23 communities.

Besides those already assisted, another 33 applications are on hand and are being processed for water-sewer facilities improvement.

FHA has provided outstanding financial assistance to a number of low-income families who qualified for loans on existing homes under its rural housing program. This kind of help has gone to people in small, rural towns, and has improved their way of life immeasurably. For many, this help has provided a new hope.

Six other loans, totaling $188,000, have been made for recreation projects in rural areas. These went for four golf courses and two swimming pools.

Still another FHA project in our state enabled formation of a grazing association through a loan of $576,000. Other loans have been made to small cooperatives for various purposes.

And FHA has committed grants totalling $63,520 to 12 counties in North Dakota to help them finance a county-wide water-sewer plan, which is a necessity prior to qualifying for the actual project assistance.

These outstanding programs, of course, are in addition to the familiar and fundamental rural credit set-up of FHA, which has helped many thousands of our farmers to stay in farming and on the land. I cannot over-emphasize the importance of this program.

I am tempted, too, to speak of the REA loan program in this testimony, since I am most familiar with it.

The improved economy, the increased food and fibre production, the upgraded standard of living that has resulted through the rural electrification program has been unmatched, I believe, and speaks well for Federal partnerships with rural people.

We are finally, out in North Dakota, beginning to utilize our huge lignite coal reserves, through REA-financed generating plants. Two of these are completed, and a third is under construction.

Among other Federal programs which must be considered effective in our state is the Bureau of Outdoor Recreation, which has very successfully completed a number of projects. Our communities are responsive to this kind of help, they accept it and projects have been approved and completed with a minimum of delay.

Some agencies which have not been so successfully operated, based upon my admittedly limited research, are the Small Business Administration and the Economic Development Agency of the Department of Commerce.

While the Small Business Administration is a very worthy agency, with a big job to do, it has not been very effective in North Dakota. When people know how to take advantage of SBA's programs, it seems to work very well, but all too many business people are not aware of what is available. A more specific criticism of SBA is that its field staff, while competent, is too small. Also, its state office is located at the extreme eastern edge of the state, not nearly accessible enough to many of those who need its counseling. A more central location, or a branch office, with staff, would be helpful.

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The Economic Development Agency of the Department of Commerce has not been effective so far, mainly because of its rather rigid requirements to establish eligibility for county participation. Counties are reluctant to be placed in a “poverty" class, because of the stigma attached to such nonmenclature. And when being considered for EDA involvement, I am told that the agency uses 1960 statistics, which, of course, are far outdated and obsolete for what the real economic picture may be in 1967. This program's success has been very limited.

Mr. Chairman, this is not meant to be an all-inclusive critique of Federal programs available in North Dakota. The agencies I have mentioned are the one with which I have had some personal experience, or have been able to garner some information on, for the purpose of inclusion in this testimony.

There is a crying need, in my judgment, for an overall Rural Areas Develop ment department with cabinet-level prestige and workability. That, I hope, is what your subcommittee is striving to create.

Mr. Chairman and members of the Subcommittee, I thank you again for your consideration of this statement. I know you are all very concerned about the rural areas and our problems.

Mr. RESNICK. Mr. Zwach?

Mr. Zwach. Mr. Chairman, I think the Rural Electric people should be commended for their efforts in rural development.

I would like to ask Mr. Rustad, I am pretty close to North Dakota, from western Minnesota. Would it be your observation that the real cause of rural poverty is excessively low and unfair prices for farm production ?

Mr. Rustad. I might say it would be a combination of things. We have had poverty in that area for a considerable period of time. We have had pockets of poverty in the late twenties, certainly in the thirties.

In my home area in northwestern North Dakota, we lost over half the people in our county due to low prices. This has continued through the years.

Certainly, I would agree that low farm prices are one of the causes. But I would say there is more than just low farm prices. It probably hits it harder there because you have a one-crop economy. This is agriculture, and there has to be something other than this.

Mr. ZWACH. I agree fully. But it would be my observation, and I think our people would basically agree, that the most discouraging thing, year after year, are prices that do not adequately pay for labor and investment in skill and ability.

Mr. Rustad. Yes, sir; I would agree with that.

Mr. Bryan. Mr. Congressman, a word to that, if you have time. One of the problems we have with rural people is in the marketing and it is in the education of marketing. Now, we have taught our farmer to bring his product in and say, "Well, what is corn worth today, and here is

my load of corn; what are you going to give me for it?” So the farmer says, “Oh, it is $1.252-I mean the buyer says, “It is $1.25." And he says, "Go dump it out there in that bin."

So that farmer decides that the roughest he can bring in his corn, if he can throw a few rocks in the bottom, or in his carton, he is getting along pretty good. So we have trained him in that fashion. We do not have an orderly marketing situation and a lot of these farmers do not know how to market their products. They may raise a good product, but they bring in the roughest they can get. Instead of quality farming, they are raising this volume farming or trying to.

Nr. Zwach. They have no strength in the market.

Mr. Bryan. There is no way a farmer can control his own market. He has no control whatever over it. And he does not know when to sell, when not to sell. He sells when it is ready for it.

So you have that problem, education. I would say education and market value have a great effect.

Mr. KILEY. I would like to add one word, something we have not brought up. I have seen this in the Dakotas, particularly. Many, many of the farms, because of mechanization, have become uneconomic because of the size of the farms. The large business-type farm is succeeding, which means that the small farmer has less and less of a chance to compete. This becomes a very serious problem. Unless that man or that family has an alternative source of income, he will not be able to remain on his land. This, we feel, is one of the ways that he can remain on the land, by having another source of income-job in the community, other opportunities for staying there.

And this is part of the rural development program.

Mr. RESNICK. Thank you. I think it is pretty well established that the larger farmer is not doing too badly. It is the small and marginal farmer who is in deep trouble.

I think you were not here, Mr. Zwach, when we were debating the cotton bill in 1965. The cotton farmers from California felt they did not need any support, subsidies, or anything else. They could make money at 24 cents a pound, whereas the small farmer from Mississippi, from the Southeastern States, could not do it. He needed 30 cents a pound to make money.

I think this is the problem. A large, efficient farmer can make out today at today's admittedly low prices. The small farmer cannot.

Again I want to thank you.
Mr. KILEY. Thank you, sir.

Mr. RESNICK. At this time I would like to call Miss Marion Wright, NAACP legal defense and education department, from Jackson, Miss.

STATEMENT OF MISS MARION WRIGHT, NAACP LEGAL DEFENSE

AND EDUCATION DEPARTMENT, JACKSON, MISS. Miss WRIGHT. I apologize to the committee. I do not have a prepared statement, since I was not initially prepared to speak this morning.

I would like to say that I am speaking here as an individual and not on behalf of any organization.

Third, before I begin my talk, I would just to say very, very clearly, that I am not here to cast any disparagement on any State. I am here to see if we cannot all together work out solutions to the problems as I see them every day.

Now, essentially where are we in Mississippi? After two civil rights acts and a poverty bill, I tell you the Negro population is perhaps in far worse shape today than it has been for a long time. This is as a result of the growing dislocation of the Negro, a result of the cutback in the cotton allotment, a result of the mechanization of the cotton industry, an effect of the minimum wage bill.

As a result of these things, the growing mechanization of plantations in the delta, particularly, in Mississippi, the employment security commission in Mississippi estimates that approximately 54,000 people have been dislocated. Dr. Calvin Veale of the U.S. Department of Agriculture estimates that in 1967, approximately 100,000 people in the State of Mississippi will be unemployed.

Mr. RESNICK. Would you stop there? In other words, 54,000 people have already been dislocated.

Miss WRIGHT. This is unclear. They estimate that as a result of mechanization, approximately 54,000 people will be thrown off the land. I am unclear from the report whether that has been or will be during the course of 1967.

Mr. RESNICK. And 100,000 will be unemployed ?

Miss Wright. That is the opinion of Dr. Calvin Veale of the Department of Agriculture.

The average education level of Negroes in Mississippi is less than 7 years. According to an editorial of the Delta Times in Greenville, Miss., it was estimated that more than 75 percent of the citizens, Negro and white, fell below the poverty level, $3,000 in income. One out of every four Mississippians were on some kind of Federal food surplus program last year.

With the dislocation of people from farms in large numbers, with the total number of people that were dependent on two things-cotton chopping, which is now done better by chemicals, and cotton picking, which is now done better by machine—this will present a tremendous problem. These people are untrainable, they have no jobs, they have no housing.

Mr. RESNICK. When you say they are untrainable, are you saying that they can never be trained ?

Miss Wrigut. Let me correct that. Most of them are untrained and many of them are nearly illiterate, if not completely illiterate. Many of them are untrainable by certain standards, and since they are old and have gotten so little in the way of background education, the input into training they are capable of would not be sufficient to be of any help to them. I think this is perhaps a minority, and I would have to adhere to the fact that most people are trainable if given the opportunity and sustained treatment.

We are faced with a crisis. The one out of four who did not have adequate food and are on surplus commodities, with the dislocation which occurred last year, and with the changeover in many counties from surplus food commodities to food stamps, while there has been complaints about the quality and inadequacy of the food, many people. at least, were eating. With the changeover from surplus food commodities to food stamps, which have more stringent requirements for eligibility, we are finding great quantities of complaints from many people who have no income and who therefore are not eligible for food stamps. I think the State figures substantiate the fact that there are many people who have no income. We are finding that the minimum standards of $2 for one person to $12 for a family, depending on the number of people and the income there, the people are unable to meet this.

As a result of their being unable to meet it, and therefore their inability to participate in the food stamp. program, we are faced with a hunger problem in the State of Mississippi.

This is a terrible thing to have happen. We have requested of the Department of Agriculture that they lower the food stamp requirements for people who have inadequate income to meet the requirements, and we have asked for people who have no income that free food stamps be issued, and issued immediately.

Mr. RESNICK. Stop there for just a moment. Now, the basic thought behind the food stamp program is to improve the diet and to bring the diet of these people up to an adequate minimum level. The feeling was that people who do not earn enough money to buy food stamps would get adequate welfare payments so they could purchase the food stamps. Now, this welfare program is a Federal program of matching grants with the States.

The problem, as you have stated it is, that there are people in Mississippi who are not getting enough welfare payments to enable them to purchase enough stamps to be fed.

Miss Wright. Let me see, Mr. Chairman, if I can just talk a little bit about the welfare programs, because that is one of the things I was going to get to.

Five out of every 6 cents spent in Mississippi on welfare is furnished by the Federal Government. What we are finding on the one hand, I think, is that because of the inability or the unwillingness of the State to put up matching funds, we are losing millions of dollars in Federal money that we need very badly for additional and supplemental welfare programs.

Secondly, the welfare program is very limited, not only in Mississippi. It is limited to four categories -aid to dependent children, wherein the Mississippi law, under that law the State of Mississippi makes a determination of need and says, “We will give you 31 percent of that." Even assuming that Mississippi says that a man needs $250 to live on decently, it says, “We will only give you 31 percent of that."

It is my understanding from HEW in the last few months that we are going back down in Mississippi to the original 26 percent, which was enforced last year. One-fourth of what one State determines is needed for decent existence is inadequate at best.

You have inadequate categories. You have aid to dependent children. Under Mississippi law, the maximum a mother can get is $90 a month. The average payment for children is $9 per child per month. For a mother with a family of 13 children, $90 a month, assuming there is no man in the house or no father-and we have no program in Mississippi where an unemployed father can live in the home and yet benefits

Mr. RESNICK. So we have laid that myth to rest.

Miss WRIGHT. So the majority of families who have a man in the house, or a father who is a sharecropper and temporarily unemployed, they are not eligible for welfare. If there were men in the family, where there is a father in the family, welfare has no program for them. The only time you can get welfare is if you are on old age assistance, over 65; if you are a mother on aid to dependent children without a father in the home; if you are permanently or totally disabled. These are the only instances in which you can get, or are eligible for welfare in Mississippi.

So the welfare program is not beginning to meet the problem of these dislocated farm workers where there is a man who is untrained or presently without a job.

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