 they said maybe they like maybe step up there and get a good look here so they besides here and try and look at the six-way well they just put them up here so these are the pregnant cows they're ready to camp yeah down here no right there you drop your elbow a little bit alright you hit get that calf over there I've seen fair all these cows and no bulls 25 cams a year one nice camp easy and that nice one now that's number one Nancy four and six box morning pretty little thing yeah I think that's right there she's a little excited she's over there yes sir you ever milk with calm as the president these cows are all dry cows here so without let's see my I said do you ever milk a cow yes way back cows wouldn't know anything by that hand but I said any more anyway they wouldn't what do you apply to them all mechanized I'm working on the day ladies and gentlemen this is once where I could really open by asking who's tend in the farm you know I'm delighted to be here and I'm not going to take too much time on on a monologue you recognize the course I'm sure in addition to our fine host here Jack Block the Secretary of Agriculture I brought him along for the tough questions but you know I have said many times in public addresses that in all of this recession time but in all of these past years of growing inflation there's no part of our economy that's been caught harder in the cost-price squeeze than agriculture and I even have a personal example of that but a ranch of my own and now the tax people call it a hobby ranch because since I'm doing what I'm doing living in public housing and Washington I can't I can't do much farming but I do I've got a tractor out there that I bought second hand it's a it's a 1953 tractor and I bought it not too much later than 1953 for $1,200 and one night is one night at a dinner Nancy happened to be sitting beside fellow who was the head of a tractor company and she was telling him how I kind of moaned a little bit now about keeping this thing running and the fact that it I wish it had a skip loader on the front which it doesn't we got a lot of rocks on our farm and he said why he ought to have he says I'll send a man up that'll make him a real good offer and he can have the kind of tractor he wants and that's when I learned about firsthand the cost-price squeeze the fella did make a very good offer he offered me and this is just I'm talking about a year or so ago he offered me $4,000 for that $1,200 second hand tractor that goes back to 1953 and then all I had to do is give him 13,000 more and I but listen seriously I just would like to take a minute to talk about something in Washington and to you as Americans because it fits any one of us in whatever line of activity in this country there are any number of industries and and kinds of work that have been affected by the problem that confronts us today when our administration began interest rates were 21 and a half percent inflation was 12.4 unemployment had been increasing and had been going on increasing since 1979 today we know it's that has continued to increase and that is the one part of a recession that is the last and the slowest in turning up but interest rates we brought down some but not enough they're down about 20 percent down to 16 16 and a half and inflation however has come down from that 12.4 to where as you know last month for the first time in 17 years it broke zero and was actually prices were going down instead of just increasing at a lower rate but the actual rate for the last six months has been 3.2 percent or inflation now if you look at the gap between inflation and where the interest rates are you come down to the problem that I think is your biggest problem and is the biggest problem for the recovery of the economy I have been meeting in these last few days with leaders from every type of business and industry and of the financial world in the and the bankers and so forth on this interest question and one answer keeps coming from every one of them it is pessimism based on past experience that over the years we've had seven to eight recessions since World War two and every time the government has gone for the quick fix artificial stimulant of the money supply artificial government spending stimulates supposedly programs that will stimulate the economy and the result has been that up goes inflation it does have a temporary effect on helping unemployment but it's it's like trying to treat a fever by eating the thermometer and the result is about two years later we're into another recession and if you look at the chart back over the years every recession is getting bigger worse and this one is the worst one of all every one of these people that I have met with said the same thing that I feel myself they're pessimistic those who lend money they fear that even with that low recession rate that the government will follow the old pattern and up will go inflation again well it's not going to follow the old pattern we're battling to prevent that and to see that it doesn't happen but all of them said if the Congress will vote this budget that you want with again the continued cut in spending interest rates will come down well we're going to hold firm on that we're supporting the bill that has come out of the Senate has some tax increase there but it's not going to interfere with the tax relief program that we put into effect last year that's going to continue but the main thing is when we took office the cost of government was increasing 17 percent a year we have that down now to less than 7 percent a year in view of next year's budget and we believe that the answer the main answer to your problems to the automobile industries to steal to the construction industry is the reduction of the interest rates when you stop to think that the deficit that is built up over the years that a hundred billion dollars or more of our annual budget that's enough to wipe out the deficits completely is just interest on the national debt our goal is to bring government down to the balanced budget it can't be done overnight they didn't get this way overnight and when we do that then to work out a plan no matter how small it is but to begin making some installments on that national debt so our kids will know that we don't intend to believe that as their inheritance of America now now we'll get back to your business and to the questions I told Jack Block here I warned him a little bit about the job he's got I told him about Ezra Tach Benson some years ago went out and there were some problems then and in one particular gathering there was a fellow that was really giving him a bad time and Ezra kind of turned to one of his aides and looked at some figures and things and turned back and he said well you didn't have it so bad he said now listen last year you had 29 inches of rain and the fellas said yes I remember the night it happened so so let's have that dialogue say I see so a lot of friends over here from your state but I'm sure you've already met them before we arrived here yes I have a question bill more local dairy farmer as you know farmers need a lot of credit bar billions of dollars collectively over the over this country we're concerned with the with the national projected deficit how we're going to be able to continue to get this supply of money that we need and at reasonable interest rates and a good question is something I should have touched on when I was talking about the budget the budget that has come through the Senate budget committee and the one that we have approved will reduce the projected deficits over the next three years by four hundred and sixteen thousand dollars thousand billion I was still talking like a civilian there for a minute four hundred and sixteen billion dollars the projected deficits if we do nothing and let me be honest with you and tell you that I am one who some I question the ability of even the best of economists to project more than a few months ahead but even so there is enough agreement that it would look like a deficit of 182 billion dollars for next year that goes up to 216 billion and 84 233 billion in 85 the program that we're talking about would bring those down to a hundred about a hundred and six sixty nine and thirty nine which shows you that we're coming down and you only have to go at that point a couple of years further and you see that we reach the balanced budget but as I say even these bankers and these men from the finance firms and the investment firms and all said that interest rates will start coming down again when that budget is passed and they know that the Congress is not going to obstruct our efforts to deal with those deficits Jack may I just add on this particular issue of credit for agriculture the a lot of people talk well what are you doing for agriculture agriculture isn't getting any help but I'll tell you the truth the facts are that there is some five billion dollars more money going into agriculture this year from commodity credit loans which are part of our program and the farmers are taking advantage of that to tide the farmers through these tough times five billion dollars more commodity credit loans we have some increases in the farmers home operating loans and just a little additional note that money that is so badly needed and provide so much help in commodity credit loans is available only to the participants in the farm acreage reduction program and next year those that do not participate that have been used to farm commodity credit loans they're not going to qualify if they choose not to participate because that's those are the rules of the game side there's there's ample credit the credits there as a president points out it's just too expensive for us in agriculture we can't make ends meet at these prices but we're looking for it to come down what will the interest rate be on that commodity credit loans they're about 14 percent now they change every month so that means you know if you get a loan on your corn it and we hope they're coming down and it looks like they are Mr. President I have a question here I'm hard Hershey Chester County dairy farmer what what can the government leaders and the dairy farmers do to work together to solve this surplus problem I'm here at the front door sir well we're trying very hard with that and as a matter of fact we recognize that that problem was created by government not by the farmers it is costing us about two billion dollars a year but what we're seeking is legislation that will allow the secretary of agriculture at his discretion to set the support the support level and to work with you and the dairy farmers on this particular problem in getting rid of the the present surplus now is there more that you'd like to add there also we are we are looking at the situation of foreign exports to the United States our imports of casing that is subsidized by other governments which again is something that is unfair and that we wanted we want to do something about now we really think that the program we're offering is a program that is sound once again there are some quick fixes floating around for the dairy problem and you've seen them and read about them but I'll tell you something they are not in the long-range best interest of the dairy industry they are Mickey Mouse plans of two price systems higher price for domestic than we have for export and they are ridiculous and they're going to distract hacking and solving this problem you know we never look back maybe someone in the choir has a question I like to know what is being done to help cut down the the barriers for foreign trade especially in Japan now they send all their products over here and we do not put any restrictions on their products and yet they put the restrictions on our products and I feel that your administration which I know is doing a lot but I feel there should be a lot more doubt this gentleman is talking about cattle farming and the restrictions that are put on our export of cattle for example to Japan and yet the unlimited way in which they can come in here he says he knows we're doing something but not sure that it's enough well maybe one of the reasons is because we believe in in what I've called quiet diplomacy instead of putting some fellow on the other side on the spot and holding them up to public view we have been working very hard and both here in their visits to us and there with the prime minister and with others in the in his cabinet to change some of these and to tell them that the only alternative is start to go down the road of protectionism which we don't want to do but I think if you've got anything to add Jack about that because we have I think been making some progress let me point out that in the last 10 days last week undersecretary Celia Lodwick for international affairs and commodity programs was in Geneva with the with Ambassador McDonald of our US trade office met with the Japanese met with officials in Geneva and we're hammering away we gave them a shopping list of what we're looking towards to open up that market and it's only reasonable to think that it should be open this idea that that it's an advantage to have high beef prices in Japan for melons to cost thirty dollars a piece for apples to cost to four dollars and beef thirty dollars it's it doesn't make any sense the Japanese people can profit and certainly it helps our producers and we need to work towards freer trade that's the president's policy open up these trade channels all the countries of the world can profit if the countries do what they do best and you know something we're best at farming in this United States of America right now things are getting better when we were there in seventy one the melons were forty dollars we'd better not talk that way or maybe some of these people will start leaving us and farming in Japan four dollar apples yes I am and I'm also aware that Jack block is getting into this and having some meetings about this very problem with the import of mushrooms thank you touch it I'm not oh go ahead excuse me no go ahead the United States farmer can produce their product at a lower price than any other nation but yet we're not competitive in the world market is there a reason why and I also understand what we have an agreement with some nations that we cannot sell them dried milk and dairy products is this true what was the first party a question we couldn't hear the United States farmer can produce their product at a lower price than most other nations but yet we don't seem to be competitive on the world market here again this is something that we promised in the campaign that we're trying to do and that is to the government's help instead of trying to run your farms for you as they've done some years in the past is to try and stimulate and open up the export market because we're one of the few countries in the world that really is not only able to feed more people per farmer than anyone else in the world but we have a surplus that can be sold and help a hungry world are you talking about the surplus or talking about selling the other commodities right off the farm so in our as far as exports we don't see to be competitive in the world market we are let me address that it is true it it bothers me I am troubled to realize that the United States of America can produce grain and forage and everything else virtually everything competitive with any country in the world but in dairy we've got some problems in terms of exports we're losing domestic market and we're losing export market and we have like I said the best of grains to feed the cows the finest facilities the best of management in the dairy industry that you can buy the finest cows in the world people all over the world buying our cows but we cannot compete with other countries and one of the biggest problems is in my opinion is a rigidity of the government program I think it is put the dairy industry into a hole the way it has been handled and managed in the past few years we have a agreement with other nations that we cannot export dairy products to them at this time we can export any dairy products we choose to if they are exported at domestic prices now if we are to talk about exporting the surplus dairy products that the government has bought up we can export those at world prices or at our domestic prices which are even higher than world prices but we cannot undercut the world market by selling them at a discount we have done that some but we have to be very careful in doing it because we are breaking international trading rules when we sell when we subsidize the exports of our dairy products into the world market we've been trying to use a lot of that as you know however where it wouldn't be competitive with the market but in feeding the hungry both here and abroad now I'm going to interrupt for a second so that you won't then I'll get to you so that you won't think that I'm using notes here and I wouldn't be able to see them that close funny how your arms get shorter no I thought and I did an injustice I just assumed that our visitors here had probably been on and been introduced before we arrived and I think you'd like to know that your Governor Thornburg is here your Senators John Heinz and Arlen Specter and your own congressman from this district Dick Schultz and his wife Nancy say you're gonna have to name that new cap Nancy Nancy and congressman Bob Walker congressman Larry Coughlin and we also have two members of our other members of our cabinet here the secretaries of transportation and health and human services drew Lewis and Dick Schweiker did I miss anybody Mr. President could I invite people made this possible today my family I'd like to make my introduce my family well for heaven's sake yes Charles and Tom they're the ones made this possible and my wife right between two sons Lewis and Larry they have farms Mr. Hersey for our State Legislature Mr. Gerald Baker and Bob Thompson well but Burton I'm sorry another now we've got a question back there it seems like year after year it seems that the mushroom groves are disparity breaking even something the government is trying to do for that I'm a mushroom goer ah well again as I say we recognize this this is a literally the mushroom capital we also recognize that there is the great import problem and I'm gonna Jack is is inviting the leadership here in that sector of agriculture for meetings and going to take up this problem of what we can do about this threat from imports we want these young fellows to be able to stay in business yep yes I'm very concerned about the fourth program and the retention of the sport program itself this has been a very helpful tool over the years I don't think was really out of hand even in the 79 thing for relatively under control we had a increase in parity to 80% and seems like everything we're going along so the stage has been set for increased production and we just can't turn the spick it off I mean our heifers you have a lot of heifers out in big polar herds we've got plenty of heifers out here come on we're affected for the next 18 months at least I mean just can't stop you just can't turn anything back within that period of time now I don't like to see that bomb so-called pulled right out from under because it happened over a long period of time you don't have to take plenty of time I mean I'm well for you I wish you were in office back in 76 because I wouldn't be in the whole of the day if you weren't anything to happen too fast here I'd like to see the retention of the support system and if the support on milk were down to $12 I think we might be able to survive but we have no if the bomb is full completely out on it they're going to wonder and I'll tell you it doesn't take long to wonder we can go under a young one committee we've made commitment I mean we've had to deal with the 70s I had to deal with buying a farm in the 70s I've had to deal with the cost production in the 70s now all of a sudden we're just in the past couple of years we ran into what's called difficult situation yes I hope that you can see this and go ahead and give us something some type of security that we know if we're going to be able to survive because I'm trying to build a future for my son and all I mean I'm not really trying to get right I'm trying to guarantee some types of guarantees and I don't want these guarantees for that money because I feel we have a respectful system and I am committed to trying to feed people and trying to get along so I hope maybe you can get along with us yes all right I think you all hear that let me just say that the I think the quarrel with the system the way it is is that the government system is too rigid but no one we all recognize the problem you can't take a system that has been going on whatever it may be and that people have geared themselves and their activities to and then pull the rug out all at once first of all nothing is going to be done before January 1st but this is why we want the Secretary of Agriculture to have the flexibility instead of this rigid system that is set by legislation and that will be taken into into account that you can't as I say pull the rug out all at once and that you're going to have to have a more realistic and less rigid system that will take care of just what you're talking about part of the concern was how low it would go part of the concern was are we going to lose the whole program how low is the support going to go we don't intend to destroy the program fact we're trying to keep it basically as it is and I do not foresee going below $12 I hope we don't have to lower the support at all we're going to have time between now January 1 to see some more adjustment take place the crowd here today needs to know this dairy situation was talked about in two cabinet councils of food and agriculture the president is a chairman I'm chairman pro tem of that cabinet council most all the other cabinet officers were in there drew Lewis was there and a dick swiker was there and all the rest some of them heard more about dairy than they want to than they ever want to hear about it's true but the president said just what this young man said it's almost verbatim the president said well we've been getting into this situation for a long time we don't want to pull a rug out overnight we want to give some time for adjustment I'll tell you there's the man that that is listening and hearing from you and he appreciates your concerns doing a great job here in Pennsylvania advertisement and all is our good secretaries Penrose Hall well and I'd like to say I didn't have your name on the car we'll be working together I know that we're running out he says one more question and there's one more question those young couples that are struggling over in Adams County and we do it because we love the farm we think we're turning out a quality product but I get a little discouraged listening today about tied over tied over like that gentleman back there my bank notes come regular regardless of being tied over our concern was do you think on the the dairy price supports that by raising the minimum standards on the fluid product on the market that we could dry up some of this surplus product and at the same time provide a better product to the consumer and we talked about that in the cabinet council yeah go ahead we talked about it in the cabinet council meeting it was adopted as part of the package I talked to secretary swiker about it now we don't pretend to think that we can order all the states to do this but we do think that it would be very useful to encourage it the milk tastes better when it's that way in my opinion so we will be doing this and part of the package of straightening out the dairy program and just as important as the part of adjusting supply and demand is the disposal of the surplus and I assure you will be working in every way we can to do just that and and dispose it in such a way that it isn't going to be counter to the to the present production into what you're you're doing well I guess we've run out of time I'd like to get back to one thing and it's you've mentioned it again on those notes at the bank there is only one way to get that interest down and that way is to continue on this program we think that I'm so tired of hearing from some of our opponents they said that the program that they passed last summer they said it's failed it hadn't started yet first the first part of it didn't go into effect until October 1st and that was the smallest part but the the continued tax cuts July when that money begins to hit the market but again it isn't just the fact that July 1st you're now paying a lower tax there has to be time for that money to begin to come into your pocket for it to then begin to have an effect but even with that little tiny cut in October we saw an increase in savings the rate of savings would it interest you to know that Americans here in this great lush country of ours have been saving at a lower percentage than any of the other industrial nations and this means there isn't that capital pool that is needed for borrowing an investment in modernizing plant and equipment and so forth and research and development other things have begun to happen now that I'm not going to tell you that we're now we recover I am going to say that as they describe a recession of this kind there is a trough and a bottoming out and then you begin to rise and there is every indication that that begin to rise is going to come in the latter half of this year and the the signs the beginning signs are there in some instances we know that there's there has been an increase already in the hog market we know that grain prices are have shown the evidence that they're not continuing to do this now that they're they're at that trough and maybe at the beginning of it coming up cattle are showing the first sustainable profit since 1970 79 and even even if you this morning business news or yesterday morning's business news shows that even the automobile market is improving some and for the last three months there has been a steady increase now in home construction and all of these point to this fact but again you don't have to write to your congressman they've been here to to hear but if you know any others in any other states lean on them too or have your friends and neighbors lean on them and that is to get this budget passed and get it passed quickly and now one more thing about that you've heard all the horror stories that you can't look at the screen without seeing them of that supposedly we're cutting the bottom out of all the help to the needy and the and the handicapped in our country we have not cut a budget yet we have only cut the proposed increase that the big spenders in Washington have set their eyes on each budget including the one for next year is bigger than the budget before and of necessity but it is not as much bigger as it was and I'll give you one figure that involves Dick Schweikers department health and human services this is the department that deals with all those programs that help the people who have to have our help as neighbors in 1980 in the last year of the previous administration the budget for health and human services was about 195 billion dollars we have proposed for next year 274 billion dollars in that program the percentage of the budget in 1980 for HHS was 33 percent it's going to be more than 36 percent when we get this 83 budget passed and the budget for defense which those same big spenders that's the only thing they ever seem to want to cut well that is only 29 percent of the total budget in the Kennedy years it was 46 percent so we think that we've got a well-balanced budget but we also think that we are meeting the humane needs of those people who have to have help and the figures reveal it as a matter of fact Dick's budget is bigger than the total national budget of every other country in the world except the Soviet Union and the United States so we think that we're we're keeping the safety net for those people who have need and that's why I was so angry at Mr. Moyer show the other night was because it wasn't true I can't take any more questions that times up Mr. Thornberg and I