With this brief opening statement, I shall confine the remainder of my testimony to a discussion of S. 1425. Last year an amendment. was offered to the Small Projects bill which would have applied the excess land limitation provisions of reclamation law to the pending measure. The amendment was defeated at that time with the understanding that it could be brought up again at a later date. Part of the hearing today, I understand, is to be devoted to a discussion of that proposed amendment. I would first like to call to your attention the primary purpose of the reclamation program: to develop and improve the public lands of the semiarid West by constructing extensive irrigation works and supplying necessary water to the lands. Such programs created new farms, new homes, new wealth from the virgin soil. Since those early days, much of the land economically susceptible of irrigation have been developed either with Government aid or by private enterprise. A substantial part of the reclamation program today contemplates the reclamation and improvement of existing irrigation systems. Little or no public land is involved, most of the acreage involved being in private ownership. Such as the almost universal condition of the small reclamation project. Its primary purpose is not to develop new lands but to reclaim and improve existing systems, oftentimes providing supplemental storage water to tide the farmer's crops over periods of deficient natural river flows. To insert that these long-established farm units be torn asunder arbitrarily to conform to the inflexible land limitation rule is neither practical, nor is it necessary in assuring the development of the family-size farm. The size of the farm unit has already been established and the pattern of agriculture fixed by long and sometimes bitter years of experience. The home and the farm are an integral unit. Who now dares say that the arbitrary limit established 50 years ago defines the economic farm size better than the farmer who has spent his lifetime making that determination? This is not to say that there should be no curb, no limit on the amount of interest-free moneys expended for the benefit of a single farm unit within a reclamation project. This problem has received a great deal of serious thought and consideration by reclamationists and by the Congress itself during the past years while small project legislation has been under consideration. The formula which was finally adopted, and one which I feel is eminently equitable, calls for the payment by the individual farmer of both principal and interest on all irrigated lands defined as excess by reclamation law, the interest rate to be essentially the same as the long-term cost of money to the Federal Government. It may be argued that such interest charge is much smaller than the usual interest rates available to the farmer and that the excess-land owner under this formula will still enjoy, therefore, a substantial Federal subsidy. When we realize, however, that the costs of reclamation projects today are such that every farmers is assessed at a rate which approximates his full ability to repay his share of project costs without interest, we may well question whether there is any real inequity in allowing the excess-land owner to pay both principal and interest and retain his excess irrigation holdings. Such a farmer is 26144-58- -6 much more likely to dispose of a part of his excess lands than he is to buy up extensive new holdings for speculative purposes. Those who oppose any change in the 160-acre provision should consider well its consequences over the years. Although the Bureau of Reclamation has ruled that 160-acre holdings for both man and wife are acceptable in a community-property State, is such ruling fair to the water user in a State which has not adopted the community-property law; is it fair to the head of a household who may have no spouse, but who is just as capable and who has just as many family obligations as the man and wife? The lack of flexibility and the inequities in the 160-acre rule has, over the years, invited evasion of its provisions, not because of any desire to violate the law but because the law itself is incapable of meeting the legitimate requirements of the water users. It would be much better and more equitable if the limitation were modified to recognize a realistic family farm size tailored to the climate and location of the area to which is to be applied, such farm size to be applied and enforced strictly and impartially throughout the project. Or, if the project were for rehabilitation and betterment of an existing irrigation system where the farm size has been established by long experience, any water user who might own or wish to acquire additional irrigated lands could do so, but only if he paid all capital costs assessed against such land, with interest. Mr. Chairman, I want to take this opportunity to express my thanks to the committee for the opportunity of appearing before it. I sincerely hope that the committee will be able to reach a realistic and equitable solution of this difficult problem. Mr. Chairman, I know this is a tremendously complicated problem, and I wish your committee every success in solving it. Senator ANDERSON. Thank you, Mr. Bliss. We are trying to get the small projects bill operating and we appreciate the attention you have given it, and the aid you have given us. Senator Barrett, do you have any questions on this? Senator BARRETT. No; I want to commend Mr. Bliss on a very fine statement. Senator ANDERSON. Mr. Andrews. STATEMENT OF MARK ANDREWS, MEMBER OF THE LAND LIMITATIONS COMMITTEE OF THE NATIONAL RECLAMATION ASSOCIATION Mr. ANDREWS. My name is Mark Andrews. I am a farmer and a member of the land limitations committee of the National Reclamation Association. My address is Mapleton, N. Dak., and I am the third generation of our family to operate the farm my grandfather established some 7 years before North Dakota became a State. I appear in behalf of Senate bill 2541 which has the endorsement of the National Reclamation Association. It is my understanding that the excess land laws were set up originally back in 1902 to insure that Government money, in financing irrigation development in the West, could not be used to benefit large-scale land speculators but rather to develop economical family farm units large enough to provide a decent living for the farmer and his family. This principle is as correct today as it was in 1902 when it was first proposed by Theodore Roosevelt, then President, Senator Henry C. Hansbrough, of North Dakota, and Representative Francis G. Newlands, of Nevada. While I would be the last person to testify against such a principle, I fail to see how anyone can sincerely say that the optimum size family farm of 1902 is now, after 56 years of fantastic changes in agriculture, still the optimum size family farm of 1958. I agree completely with Senator Morse's statement during debate on the amendment of the Small Reclamation Projects Act in 1957 when he said: I am not wedded to this 160-acre limitation. What I do not go along with is the other extreme-if the 160 acre limitation is an extreme position-of no limitation whatsoever. It seems to me that the figure of 160 acres could be modified so the shackles would be removed from our irrigation farmers and at the same time still exclude the land speculator. While I certainly do not pose as an expert on western water law, I feel I know something about some of the problems the farmer faces from year to year in his operation. A farmer has the same needs and desires as any other citizen. He wants to be able to make a comfortable living, educate his children, and be able to set something aside for his ultimate retirement. You have heard much about the present cost-price squeeze the farmer is caught in. The same size tractor I bought in 1947 for $1,400 costs $3,300 today. The barley I sold in 1947 for $2 a bushel brings 90 cents today. The only choice any farmer facing this type situation has is to lower his cost per unit of production or go broke. Since no one has yet explained how to lower the price of machinery, about the only way to lower this cost of production is to spread the use of this high cost machinery over more acres. Let me take a case in point. Since sugar beets are a major crop grown under irrigation, I would like to spend a moment on the changes taking place in the growing of this crop. During the past 10 years, the harvest has changed from one of hand labor to a completely mechanized operation. I do not think any of us will disagree with the benefits of going to mechanization. If you have seen the farmers digging beets on a farm in the fall you will know it was not fun. However, the smallest sized beet harvester put out by one of our familiar farm machinery concerns costs $3,600. It must then be mounted on a special tractor costing about $3,400, making a total investment of $7,000 in machinery to harvest this crop of sugar beets. The minimum acreage harvested to justify such a machine is at least 80 acres. As a beet raiser, I can say that the farm size necessary with 80 acres of beets in a 4-year rotation would be 320 acres. While under many types of intensive irrigation farming the present acreage limitation is no hindrance, there are increasing changes in farm operation which make obsolete the rigid acreage figure imposed more than 50 years ago. America has been known and admired the world over as a land of unlimited opportunity. Acreage ceilings set at the turn of the century certainly limit the opportunity of progressive irrigation farmers. I feel that Senate bill 2541 is a step in the direction of modernizing an outdated and discriminating statute. Thank you for the opportunity of appearing. Senator BARRETT. Mr. Chairman, I want to commend Mr. Andrews for his very fine statement. I notice you started farming in 1947. Mr. ANDREWS. Yes, sir; I took over the family-farm operation when I was discharged from the service. Senator BARRETT. How long has your family been engaged in farming operations on that place? Mr. ANDREWS. Since 1882. Senator BARRETT. It has been in the family ever since? Mr. ANDREWS. It has been in the family ever since. It has been the same size ever since. We get 100 percent of our income from farming and sometimes it is real good and sometimes it is real poor. It is a good way of living. It is one that my son is beginning to enjoy more and more as he grows up and I certainly hope he will have an opportunity of farming in a free economy so he can make his own way. Senator BARRETT. I was very interested in the quotation that you included in your statement of Senator Morse. Mr. ANDREWS. Yes, sir. Senator BARRETT. I remember that statement Senator Morse made when he had the Small Projects Act on the floor of the Senate. The chairman of this committee and myself introduced that bill and we worked on it for a long time. I note that Senator Morse said at that time: I am not wedded to this 160-acre limitation. What I do not go along with is the other extreme-if the 160-acre limitation is an extreme position-of no limitation whatsoever. I go along with that also. My bill provides for a method whereby the Secretary of the Interior, after he is requested to do so by the governor, will make a study of the situation and come up with the answer of what acreage is needed to support an average size family farm. The question I want to ask you is this: Supposing that an amendment would be provided here that after the Secretary gets through he reports to the Congress that, on project A, 240 acres is needed. Would that meet with your approval? Mr. ANDREWS. Certainly, sir, if he made a complete study. Of course, there comes a question of what is an adequate income for a farmer. In my mind, of course I am prejudiced; a farmer should be able to live just as comfortably as a lawyer or a doctor or anyone else if he has the ability and the knowledge and the desire to work. This business of putting ceilings over him and saying arbitrarily that because he happens to be an irrigation farmer he shall not make more than $5,400 a year, and that is a real wonderful income, I think is not exactly correct either. He should have the opportunity to go up if he possibly can. A farmer does not want to make all the money in the world. He can only spend so much. He can only keep so much. Senator BARRETT. I call your attention to the fact that we have provisions in a good many laws whereby the Secretary reports back to this committee and the Interior Committee in the House and tells what decision he has arrived at on a certain matter and that decision becomes final after 60 days, let us say, unless the committee, by committee resolution, says, "We want to look into this." Or the committee itself could take affirmative action immediately and say, “That meets with our approval.' If that is an additional safeguard that is needed in this bill, I do not see that we would have any great objection to that. That would not tie up the action of the Secretary at all. I assume that perhaps it might be some little additional safeguard and some protection for the Secretary, too. On the whole, I think we have complied with the requirements that Senator Morse laid down where he wants some restrictions on the size of the farm that will be authorized. I appreciate your statement and I think it is very well made. Senator ANDERSON. The final statement is by Mr. Smith. STATEMENT OF BERT L. SMITH, MEMBER, WATER POLICY COMMITTEE OF THE NATIONAL RECLAMATION ASSOCIATION Mr. SMITH. Mr. Chairman, I will follow your suggestion and read very briefly from this prepared statement and comment as I go along. For the benefit of the folks here who do not have a copy of the statement, I am Bert L. Smith, secretary of the water economics committee of the Irrigation Districts Association of California and editor of the Western Water News. I am a member of the water policy committee of the National Reclamation Association, and am alternate director of the NRA from California. I am interested in the production of olives and olive oil in Butte County and the owner and operator of a walnut orchard in Contra Costa County Water District. I will not repeat the statement of approbation for your bill, Senator Barrett, and certainly your conscientious effort to solve this particular problem, nor will I repeat the sentiments expressed in Senator Douglas' bill. I would go directly to that portion of my statement in which I say application of the rigid limitation of acreage to privately developed lands already irrigated and where only supplemental water is to be supplied by a project is not workable. That is the contention in California. I think it is worthwhile for the committee to look at the acreage limitation, workability, or unworkability. I am sorry that Senator Douglas is not here because I included some comments that to me are part of the answer to some of the questions he raised about California agriculture. I say: Examples exist in California which prove that the natural processes which have operated in the State under the water development program carried on under State statutes (and without any arbitrary limitation of acreage), have resulted in the reduction of the size of farms and the eventual transportation of the area from one of tremendous Spanish grants to the small size farms of today. Even a casual observation of the agricultural economy in the Modesto, Turlock, Merced, Fresno, Alta, or Consolidated Irrigation Districts |