the following 12 months, and in terms of ongoing programs where the emphasis and direction was being reshaped. I wanted then to set down the goals for RAD as part of the basic policy of the administration in rural America. You will recall that I outlined then the organizational structure for this nationwide drive.

A year ago there was more hope than accomplishment, more plans than results, more problems than solutions. This year, I want to describe for you some of the progress we have achieved through rural areas development and to restate our objectives more precisely. There are real accomplishments, there are results, and there are the beginnings of solutions for some of the hard problems in rural America.

But I wish to emphasize that the cases and situations which I will cite are little more than guides and signposts. The work which has gone on in the communities and counties of rural America through RAD has produced exceptional examples of what local leadership and local people can do with meaningful technical and financial assistance. The resources which the Department has been able to direct into rural areas development are limited-limited in terms of the needand limited in terms of the size of the programs.

I believe that the results of the various programs administered under this effort to develop rural America indicate that the funds which were provided for rural areas development were well invested. The requests for this program in the coming fiscal year are also modest, particularly in view of the increasing public acceptance of RAD. Some people who have wanted to move ahead have been discouraged when the support they were promised was not yet available. However, there are still new approaches to be tested. We will move forward vigorously on these new approaches-only when experience has clearly proven what we do is workable and successful.

Let me emphasize that this whole effort is underway. We have begun the task we should have been about long ago. An immediate target is rural poverty. We must stamp it out. But in the process we seek an even broader goal-a higher standard of living for all of rural America. We believe it can be reached by developing the latest resources of rural America to provide the goods and services an increasingly urban America needs beyond the basic requirements of food, clothing, and shelter. Thus, any program which is successful will serve the needs of country and city alike.

Next year when I appear before this committee, I hope the requests for RAD funds will be more nearly comparable to the need for jobs and for alternative means of increasing incomes in rural areas.

OBJECTIVES OF RAD PROGRAM

The report I make to you today is built of case histories-the stories of problems and of how people, with the assistance and support of their Government, were able to solve them. Generally these case histories illustrate nine overall objectives of rural areas development. Some of the examples may demonstrate two or more objectives, but each emphasizes one particular objective. Those nine goals areTo preserve and improve the family farm.

To increase the incomes of people living in rural America and to eliminate the causes of rural underemployment.

To expand job opportunities faster by stimulating investments in rural areas in all enterprises and services that contribute to a modern economy-industry, commerce, recreation, crafts and services of all kinds, and the facilities that encourage both professional and technically trained persons.

To develop rapidly, but in an orderly manner, a wide range of outdoor recreation opportunities on public and private lands to serve the needs of a growing population in city, suburban, and rural communities.

To secure new uses for cropland now producing crops in surplus to establish a balance so that each acre is used for the purpose it is best adapted in relation to national need.

To strengthen and expand farm and rural cooperatives.

To protect, develop, and manage our soil, water, forest, fish and wildlife, and open spaces.

To create the conditions of living in rural areas which are more comparable to those in city and urban areas. The rural resident must be assured of pure water, the best schools, the streets and roads and hospitals and all such services necessary for a modern community.

To make continuous and systematic efforts to eliminate the many and complex causes of rural poverty.

In short, RAD is an action program for rural people. It is their program. At their request, the Department of Agriculture helps organize a broadly representative RAD committee of local citizens. From then on, the people serving on the RAD committee decide what will be done, when, and how. Today there are at least 75,000 local people serving on nearly 2,300 RAD committees. When they need technical aid or financial help, the USDA Technical Action Panel is there ready to assist them to obtain help from whatever source it may be available-from private or government sources, from USDA or other Federal agencies.

The Cabinet level Rural Development Committee established by President Kennedy last year will help make this coordination task

easier.

Before going further, I want to emphasize that RAD is one arm of a twin offensive to combat the special problems of agricultural and the rural community. The other arm of that offensive is the commodity program-the series of commodity programs which for 30 years have been the major source of protection for the family farm system of agriculture. Without a strong and healthy agriculture, the rural community could never develop its full potential. The farm-the family farm-at the center of a dynamic agricultural economy is also the backbone of the economy of rural America.

Thus, I do not want to ignore commodity programs, nor do I intend to. They are essential as a means to strengthen farm income and the family farm. A series of studies in recent years on the effect of commodity programs on farm income all point to the same conclusion: Without these programs, commodity prices would decline by about 20 percent while net farm income would decline 40 to 45 percent.

The most recent study was made by the Center for Agricultural and Economic Development at Iowa State University. It concludes that if the programs for wheat and feed grains alone were eliminated, net

farm income by 1967 would decline almost $5 billion, or about 40 percent. Bear in mind that this result assumes that other commodity programs would continue, and that our wheat export programs would

continue.

Few things could do greater damage to the rural community or accelerate the negative trends in the rural economy than a decline in farm income of this proportion. Few things could be more threatening to the national economic well-being. The farmer, after all, is the No. 1 consumer.

COMMODITY PROGRAMS AND THE FAMILY FARM

Commodity programs strengthen the family farm, although in recent years it seems to be fashionable to say that the benefit of these programs goes only to the very largest farmer. It is hard to understand this contention when over 40 percent of the commodity loans in the major crops are less than $1,500 in value, and the adequate sized family farm must gross $10,000 or more. To the farmer in Idaho or Texas or Alabama or Maine who can put his crop under loan at harvest, when market prices are low and redeem his loan when prices. become higher, commodity programs are very important.

Thus, commodity programs meant a 33-cent-per-bushel difference in price for a wheat farmer in Canyon County, Idaho. The price at harvest was $1.59 a bushel. The loan price was $1.68, and the farmer repaid the loan 5 months later when the market price rose to $1.92.

Mr. Chairman, if it wouldn't unduly burden the record because this contention is made, I have before me some instances of exactly this in modest sized operations for wheat in Oregon, Idaho, Pennsylvania; for corn in Virginia, Nebraska, and other States; soybeans in a number of States around the Nation that are specific instances and if they

Mr. WHITTEN. Mr. Secretary, I believe it would be well to include those in the record as exhibits following your testimony, so as not to break the continuity here.

Secretary FREEMAN. Very good.

(The information referred to appears on p. 16.)

Mr. WHITTEN. If you wish to discuss them, you can do so at this time.

Secretary FREEMAN. I would like to touch on it, because it gets down to cases which I have tried to do instead of generalities.

Oregon is close to home to Congressman Horan. This one was Johnny Campbell, Route 1, Madras, Oreg., Jefferson County; 777 bushels of wheat, loan rate was $1.86. The local price at the time the loan was made was $1.83. It was held for some months and was sold at $2.10, for the difference of 27 cents a bushel and difference to this farmer of $209.79.

This fellow's name is Carl Guthrie, Miami, Mo.; loan rate $1.22; local price on corn at the time of the loan was $1.06. At the time the loan was repaid, it sold at $1.27. It made a difference of $559, being able to hold it for a few months in that instance.

I have a number of soybean cases. Here is one down in South Carolina, Walter Walling, Fort Motte, S.C.; 479 bushels of soybeans, loan rate $2.21. Local price at the time, $2.45. Loan repaid when the price of $2.66. It made a difference of $100.59.

I think these are somewhat typical. I won't burden you with more, but at a time when it has become very fashionable to say these programs only help the big farmer, I think it well to point out how they assist the small farmer.

Mr. WHITTEN. Mr. Secretary, with regard to that, you have cited these illustrations which show the individuals' profit by reason of price supports or the loan program being available. This is actual profit. What doesn't show is that if you had not had the loan, and all of this had gone on the market at the same time, the producer might have taken practically nothing in the first instance, which is over and above the benefits that followed in these specific instances.

Secretary FREEMAN. The point is very, very well made and, of course, that is absolutely true.

The limitations of commodity programs are not that they cannot help the family farm or strengthen agriculture. Their limitations are that they cannot directly help the 9 out of 10 farm youth today who must look outside agriculture if they are to find a satisfying and rewarding occupation.

Commodity programs cannot directly combat the effect of the changes now occurring in agriculture changes that mean fewer people will be required to operate our family farm agriculture. The rural community must provide alternative opportunities both for those who will farm part time and for those who seek nonfarm jobs. This is a gap we must fill.

This is a gap which RAD seeks to fill, not only for the farm youth, but also for the young people growing up in cities and towns throughout rural America, for the farmer who seeks a job off the farm to supplement his income, and for the nearly 19 percent of those in rural areas who now are unemployed or underemployed.

With this by way of introduction, let me now turn to the case histories which illustrate the specific goals under RAD, and the kind of progress that is possible through this effort.

STRENGTHENING THE FAMILY FARM

Many programs-including conservation, credit, research, and education-contribute with the commodity programs to strengthening the family farm.

In Georgia, a young farm couple has, through a supervised farm credit program under the Farmers Home Administration, nearly doubled the farm in size and financial position. FHA credit has enabled the family to buy better equipment, pay operating costs, and to finance land purchases.

In Montana, a farmer discouraged by the expense of trying to grow wheat on 460 acres of rocky, sloping ground, turned to grass and grazing. Through the Great Plains conservation program, designed to help family farmers in this region of low rainfall and high climatic hazard, he was able to seed his cropland to grass and alfalfa, build the necessary fencing, and construct watering wells.

In Colorado, 40 family farmers formed a cooperative livestock association and, with the help of a Farmers Home Administration loan, purchased 12,300 acres of land and assumed leases on an additional 2,640 acres. Some 1,440 acres of these lands were in crops, and were

shifted to grass. Acquiring access to this land enabled these farmers, some with incomes as low as $1,500 to $2,000, to add a livestock enterprise to their irrigated crop farming system, and add an estimated $2,500 yearly to each family's income-a total of around $100,000 a year to the community.

What we are doing here through various techniques of credit and technical assistance is to overcome the growing barrier which many young people are finding as they attempt to enter farming. In 5 years, we expect that about half of today's farmers will be over 55. With an average investment in a farm now estimated at over $51,000, the young family which hopes to replace these farmers will need assistance unless they hope to inherit a farm. We must come to grips with this problem, for it will determine whether families or financial power dominate agriculture in the future.

INCREASING FARM INCOME

The major methods for strengthening farm income are through better farm prices, reducing production costs, and expanding the domestic and oversea markets for what the farmer produces. Commodity programs, trade development, food stamps, utilization research, food for peace *** all of these are the means for directly raising farm income. Over the past 3 years, gross farm income * * largely as a result of the programs enacted by the Congress and of administrative actions *** has been $8 billion higher than if 1960 income levels had prevailed. Total net farm income has averaged almost $1 billion higher per year and per farm income increased 16 percent to an average $3,430 per farm.

We are helping farmers to discover new sources of income. There are RAD programs, particularly those designed to encourage the development of new and more efficient uses for farm resources, which help to increase farm income directly. Other major contributions, however, to increased income for the farm family through RAD will be through the techniques and programs which follow.

CREATING NEW JOBS

Utilization research not only creates new uses for farm products, but also new jobs to produce the new products developed by research. The most recent example of this situation is the development of a commercial process for sweet potato flakes. Plants to make this new product are being built in Mississippi, Louisiana, and North Carolina, and will provide hundreds of new jobs *** as well as new markets for farmers.

Research results, however, do not come as fast as the need for new jobs is growing in rural America. Thus, we seek to encourage new and expanded industries of all types together with the various service enterprises that provide employment to locate or expand in the rural areas, especially in low-income areas. Last year, the rural electric and telephone organizations, which are borrowers from REA, helped to launch at least 535 industrial and business enterprises in rural areas.