Senator ANDERSON. But if he has to have livestock and has to have lambs that he can keep there for a while, sometime he has to have some money to start.

Mr. VASS. Yes.

Senator ANDERSON. Otherwise he never gets off the ground, does he? Mr. Vass. Mr. Dominy mentioned the amount they must have. Then I think as Senator Barrett mentioned the fact that maybe they did have too modern houses and spent too much for houses is another thing. You notice in this report it gives the amount of money they had in houses and the amount of money in machinery.

It is all right to have $10,000 in machinery if you have efficient use for it. For the small units, it is impossible to make efficient use of the modern tractor. You cannot get in hiring labor that you can do with machinery. You have to have an acreage that will give you that setup.

If this land is worth developing, I think it is worth financing.

Senator ANDERSON. I am not arguing whether it is worth financing. I wonder where you go to get it. I had 700 or 800 acres of good irrigated land on which I had 400 dairy animals. I thought it was a good piece of property.

I applied to the proper agency for a loan and found I could not come close to getting any. It just happened that I had another place where I could get it, and I merely wrote a check on another account. I just wanted to see what I could get.

I just wonder where this poor fellow who did not have another pocket to go into would get his $42,000.

Mr. VASS. I would refer him to the Federal Government.

I had a dairy a little like yourself and I had some irrigated land. I sold it to the university. That is a pretty good way to dispose of it, or the Federal Government.

Senator ANDERSON. I sold mine.

Mr. DOMINY. If I might intercede, Dr. Vass, I think the reference to the $40,000 capital investment is under full development and under normal operation. We recognize that in homesteading the man has to have the desire and willingness to go through a fairly lengthy period of privation in building toward that ultimate goal of a good operating farm under optimum conditions.

Senator ANDERSON. I was very much interested many years ago in what a bank in Wisconsin did. It did it as a community enterprise and many of the people joined in. They took young married couples and said, "The average pattern of married life in a Wisconsin farm is this: The boy buys so much land, he and his wife, both of them working in the fields, after a while get enough to buy a couple of dairy farms and by the time they are 60 years old they have it up to a good paying proposition.

Why not start this boy off with 40 dairy cows and see what he can do? They never lost a dollar on a single loan. That is one thing I was asking about, his loan, because you cannot possibly go to any Government agency and get enough money to make the venture selfsustaining.

You have to start off or take it by outside employment in some factory. If there is no factory nearby, it is too bad. I think there might be a better answer to the agricultural problem than that.

Mr. VASS. I think, Senator, in the first place, all of these fellows are not going to be successful. You know that.

Senator ANDERSON. I do.

Mr. VASS. That is not true of any business. People are failing all the time. It will take a few years to determine which one of these fellows are worth that big loan you are talking about.

Senator ANDERON. I just thought these figures were pretty high. Go ahead.

Mr. Vass. They are high, but do you know of anything that is not?

On this table 3, I have gone into the wage proposition. Table 3 gives the operator's wage and the total labor costs in each of the four types of farms. It shows the percent that the operator's labor represents of the total labor and the percent that all labor represents of the total cost.

The first column gives the total labor cost per farm. The second column is the operator wage, and we allow him $4,200. That increase has taken place since the farm wage in December based on the Department of Agriculture wage index going back to 1910-39 as the base period.

I think it is a rather fair wage for the farm. It is important what you take there because it is on that that I am going to determine what needs to be the gross income of this farm.

The percent that the operator's wage represents of the total labor cost is given in the third column. The fourth column gives a farm income which represents the gross farm income minus the livestock and Federal purchases; that is, where he purchased feeder steers or lambs. I do not figure that is an income to the farm. I subtract that from the gross sales.

The last column in table 3 shows the percent that the wage of the operator represents of the farm income. For example, a farm on which lamb feeding is combined with potatoes and alfalfa seed, the operator's wage should be about 21 percent of the income from the farm.

When a fair wage for the operator is $4,200, as I would place it today, the gross income from the farm should be about $19,905.

I have used the gross farm income as a measure in determining the number of acres for the economic farm unit. When farm costs, other than those allowed the operator for his management and labor, are 80 percent of all costs on the well-managed farm, it means that the gross income should be about $20,000 per farm in order for the farmer to receive an annual wage of $4,000.

The receipts and expenses on the farm where lamb feeding is the major livestock enterprise is given in table 4. The lambs are purchased from the nearby sheep ranches in the fall of the year.

As a rule, I say that is one of the things easiest to finance, the purchase of livestock for feeders, because the farmer is putting in his feed and they are growing and gaining and they will almost invariably sell for as much as he paid for them. It is easy to borrow that money. The farm also has a small farm flock for summer pasture. If he is going to feed lambs, he would have a small farm flock to run the year around to make use of the class 4 land and make use of the waste products you will always have on these farms.

Potatoes and alfalfa seed are the cash crops. Lamb feeding gives an excellent market for the alfalfa hay and feed grain crops as well as giving productive winter employment for the operator.

An equally favorable livestock enterprise for the irrigated farm in this area is steer feeding, long yearling or 2-year-old feeder steers purchased from the nearby ranches in the fall when the crop work is over and feed 4 to 6 months.

This type of livestock gives the fellow something to work on in the winter. If he is not employed in the winter he has no income. The operation of such a steer farm is shown in table 5. The approximate receipts and expenses are listed.

A small herd of beef cows are run in connection with this. If you are going to feed steers, I think probably to be consistent, you might run beef animals and round out with those to use that class 4 land and waste products.

Dairying also goes well on the irrigated farms in the cooler farm areas where there is a market within a reasonable distance. Dairying is something, Senator, on which it is probably easier to borrow money than most anything else.

Banks have a good rule for buying dairy cows, because they have a check and the man has an income to meet the payments when due. Table 6 gives the approximate expenses of a well-organized dairy. Table 7 is the one that gives the receipts and expenses on a farm on winter lambs. These young lambs are kicked out on the winter range of the Red Desert, and it is pretty hard on them and they do not develop well. We are finding this a rather satisfactory proposition.

In summary I might say present-day farming with its mechanization has brought about drastic changes. No longer will a strong back make up for poor organization and management. No longer is it just a home where the operator produces most of the food for the family living. It is no longer a self-sufficient industry, but it is one where products are produced for sale on distant markets and exchanged for the goods of the processor and manufacturer.

While the population has continued to increase in other branches of our economy, the percent of the population required to produce the food and fiber has rapidly decreased due to mechanization and more efficient farm organization and management.

Every speaker at this hearing has emphasized the extent of the decrease in farm population and the mechanization. How could anyone question this acreage of a farm. If you take the State of Wyoming, our farm acreage from 1920 to 1950 increased from 100 percent to 400 percent. For the United States, I think it is more than double.

I think the Senator from Illinois would find that the size of the farm unit in Illinois had increased maybe double from 1920 to 1950. How can we expect these homestead regulations also of 160 acres to fit in with our changing conditions is difficult to understand.

The average gross income per farm rather than the fixed acreage of the horse and walking plow days should be used in determining the size of the unit. The gross farm income in the general farming areas like the Green River Basin should be 4 to 5 times the amount of a fair farm wage for the operator.

As prices go up, wages should go up. If prices went down, then you would adjust the wage down. It would not vary as prices went up and down. Under present conditions, 1957, an annual wage of

$4,200 for the operator and a gross income from the farm of from $16,000 to $21,000, depending on the type of farming, would constitute a sound economic unit, and contribute to the successful development of our irrigation projects.

Under such a formula, the acreage is not influenced as farm prices and farm wages rise and fall, for as the farm price index rises and falls so would a management and wage index on farmers.

Senator ANDERSON. Thank you, Doctor. I think that testimony is valuable because many of us have contended that there should be a relationship between the size of a place and the possibility of a man making a living from it.

Mr. VASS. Thank you, sir.

(The report mentioned by Mr. Vass during his testimony is ast follows:)

STATEMENT PRESENTED BY A. F. VASS BEFORE THE HOUSE INTERIOR AND INSULAR AFFAIRS SUBCOMMITTEE ON IRRIGATION AND RECLAMATION, APRIL 20, 1953 One of the most serious agricultural problems of the West is to make it reasonably possible for the settlers on newly developed irrigated units to make a success of their farm operations. They are mostly GI's with limited capital as well as limited experience on how to develop new lands under irrigation. The problems that they have to face would be plenty difficult for our older and more experienced irrigation farmers.

Even with efficient management it takes a few years to get these new lands on a satisfactory crop-producing and paying basis. It requires skill and knowledge to farm successfully in the humid region where the farmer has nothing whatsoever to say about the amount and time the water will be applied, which is one of the most important factors influencing plant growth, and a factor that must be properly managed by the irrigation farmer. It requires far greater skill to successfully manage an irrigated farm than one on which you rely on nature to take care of the time and amount of water to apply.

We may spend too much time and consideration on just what agency or bureau is going to do the first development work of supplying water to the land, and not give sufficient consideration to (1) size or acreage of grade I and grade II lands per unit; (2) efficient use of water when applied to the land; and (3) the welfare of the settlers who, after all, are the ones who must do the real development work if the project is to be a success.

Supplying the water to the farmer's headgate is a mere beginning. The real development work begins when the settler undertakes to combine that water with the soil in a manner that will yield sufficient crop production to enable him to earn a satisfactory standard of living, while at the same time paying back to the Federal Government, during his lifetime, the expenditures made for dams and canals.

The success of a nation depends very largely on the successful development and use of its natural resources. The success of an irrigation project depends on the efficient combination of its water resources, soils, and manpower in a way that will give the farmer a good return for his management and labor, and at the same time contribute most to the general welfare.

Western lands recently brought under irrigation and those being proposed for irrigation are, as a rule, high in mineral plant foods but low in organic matter. They have not been subjected to the millions of years of leaching that has removed so much of the soluble plant food from the soils in the humid region. On the other hand, the arid soils have not had sufficient moisture to grow the vegetation that results in a satisfactory supply of organic matter, and as a result are low in both humus and nitrogen.

In order to supply the organic matter and nitrogen needed for successful crop yields, the farm organization should include legumes, feed crops, and livestock in combination with cash crops. This calls for a sufficient acreage of cropland that will permit the above rotation and farm organization.

In an attempt to find a solution to some of these perplexing problems, the department of agronomy and agricultural economics of the University of Wyo

ming,' in cooperation with the Bureau of Reclamation, made a detailed study and financial analysis of the progress that was being made by the settlers on the Riverton and Heart Mountain projects, in order to determine what factors were influencing profits and losses and how crop yields and returns could be improved. Complete production and financial records for the 1950 year's business on the farms were taken by field men who were familiar with the areas, and who spent the necessary time with each of the settlers to secure the information needed for the study.

The records taken of each farm included the financial investments in land, improvements, machinery and equipment, livestock, and feed supplies; crop and livestock production, acreage and yields of the different crops; receipts and expenses; the methods of operation; and the gross and net returns.

In order to determine the progress of development over a period of 4 years, farm records were taken from units that had been farmed for 4 years, 3 years, and 1 year.

Included in this detailed study of 146 farms were 41 farms on the first unit of the Heart Mountain that was in its fourth crop year; 20 farms on the second Heart Mountain opening on its third year; 41 farms on the third Heart Mountain opening on its first year; 16 farms on the first Riverton opening on its third year; and 28 farms on the second Riverton opening on its first year.

It is on the findings of this detailed study, combined with many years of similar research on the factors that influence profits and losses on farms and ranches in the State, that I base my recommendations as to size of unit, rotation practices, and livestock enterprises.

Tables I to VI, inclusive, deal with the studies made of the 146 farms on the Riverton and Heart Mountain projects.

Table I shows the average investment per farm and its distribution, average value of resources used per farm in 1950, and the average value of resources used per $1,000 farm income. The average total investment per unit ranged from $22,334 on the first Riverton opening to $16,868 on the second Riverton opening.

The farm income ranged from $847 on the second Riverton opening to $8,078 on the first Riverton opening. The farm income on the third Heart Mountain was also low, due to the fact that it takes a year or so to get the farms on a profitable basis. The most profitable farm incomes were on the first Riverton opening, due primarily to the fact that there were excellent seed crops on a few of the farms.

Table II shows the use of cropland in 1950. One of the most significant things in this table is the relatively small crop acres per farm. There was not the 160 acres of irrigated cropland that we hear so much about, but rather an average of only 87 acres of land in irrigated crops, and 36 acres per farm of owned dryland pasture with a value of about $2 per acre. This, in most cases, was wasteland or dryland above the ditch.

It is interesting to note the large number of different crops and the small acreage of each being grown on the earlier openings and the small number on the new openings. The first Heart Mountain opening showed the greatest diversity with 17.84 acres of intensive row crops, 21.44 acres of hay and forage, 19.56 acres of legume and grass seed crops, and 31 acres of small grains.

Table III shows the average crop yields on the different units, which as a rule, were somewhat below those that should be secured under good irrigation practices. Alfalfa seed yields on the first Riverton opening were an exception. The high receipts from alfalfa seed were sufficient in 1950 to account for the $11,324.80 total receipts per farm on the first Riverton area. The average acreage of alfalfa for seed per farm was 35.4 acres and the yield was 378 pounds per

acre.

The best yields of barley, 49.6 bushels, were secured on the second Heart Mountain and the best oat yields of 41.4 bushels on the first Heart Mountain. The best yields of red clover and sweet clover seed were obtained from the second Heart Mountain. The alfalfa hay yields per ton were 2.26 on the first Heart Mountain, 2.5 on the second Heart Mountain, and 2.18 on the first Riverton unit.

1 Field records were taken and the analyses of the 146 farms shown in tables I-VI were made by J. R. Tompkin, assistant professor, and Guy Brock, graduate assistant, department of agronomy and agricultural economics, University of Wyoming, and Paul Petzoldt, veterans' instructor, Riverton project.