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Mr. HUGHES. Yes.
Mr. BREEDING. Could you explain further to me about these two propositions, which do the wheatgrowers like and what are the benefits from it?
Mr. HUGHES. Number one is the freeze of the allotment at the 1958 level, which would merely freeze it at where it is for next year, as far as allowing any more shift away, it would not occur, that would have an advantage over what we had talked about, of just removing the diverted acreage credit and leaving everyone on their allotments, it would be an improvement over that because if you did that you would still continue to have some shifts away from the commercial area because of using the 10-year history.
Freezing would establish that, but it does have the disadvantage that it would also prevent any shifting back into areas that have lost and it would further have the disadvantage in freezing these noncommercial wheat States so they would still be noncommercial no matter how much they increased the acreage, so something can be done by legislation.
We do feel that the latter proposal has much more merit because it will still permit this shift back in the areas where they comply with the allotment provided the noncompliers, principally the men who continue to plant 15 acres, continue to do so, then they will lose the allotment and it will tend to shift back into areas where they comply or to farms within the States or counties that comply with their allotments.
Mr. BREEDING. That is the substance of both suggestions of Mr. Manwaring?
Mr. HUGHES. Yes.
This takes care of 1958 too, it takes care of these folks who overseeded, now, they will operate exactly as the law was previously to the change last summer, they will not have any more penalty than they had previous to the enactment of last years' law and they will get their base acreage as history instead of the allotment, they will not get any gain but they will not lose any.
Mr. BREEDING. In other words, the same as a year ago except they will not gain any allotment from overseeding?
Mr. Hughes. That is right.
Mr. HUGHES. There would be no need for that if this proposal were done because you would have a double penalty if he tried to sell it.
Mr. BREEDING. That is principally what my bill aimed at, to do that. Mr. HUGHES. Yes, I think this practically does what you want done. Mr. BREEDING. Yes. Mr. Hughes. With one addition, it does permit the farmer in this high-risk area to overseed if he does not want price support and will store the excess wheat, he can still do that without losing allotment, but if he sells any he loses the allotment as well as paying the penalty.
I think it will completely eliminate paying cash penalties.
Mr. ALBERT. To see that I understand correctly, of the two suggestions made by the Department or you may call them propositions, I understand that you favor the second one. Is that correct !
Mr. HUGHES. Yes.
Mr. Hughes. I would not say oppose it exactly. We think even it would be better than the situation as it is now, but we think it is advisable to use the second one.
Mr. ALBERT. Any further questions?
Mr. Jones. This freeze, then, the allotment you speak of, could a person maintain his allotment over any number of years without actually planting that allotment?
Mr. HUGHES. That is taken care of as long as soil bank is in existence. But after the 1959 crop, if I am correct, the Department people may want to correct me, but after the 1959 crop, it may take further legislation to protect the man's history if he does not plant up to his allotment.
Mr. Jones. Is there a reason for the allotment to be protected if he does not plant it?
Mr. HUGHES. That is a good question. Unless it is due to abnormal weather conditions or some good reason such as that, I do not think we should.
Mr. Jones. If I understand the situation, at the last meeting there were some farmers who had been in the habit of letting half of their land lie out 1 year and then just planting on alternate years, but on some where they planted the whole thing to build up the history, you would not want to maintain the history of that person, you would want to revert back to what is normal and good practice, would you not?
Mr. HUGHES. No, as long as he plants his allotment there is not any way you can take that credit away from him.
Mr. Jones. I go along with you, as long as he plants his allotment. Then I would say, let us protect him, but I doubt if we would be justified in protecting an allotment that is not planted, just like some other crops, we might have a fellow who would want to plant 1 year and then lie out. We have had that in cotton, in our cotton area, where a fellow would try to preserve his history, planting 1 year out of 3, that is not a general practice, but he could plant that way.
Now, to maintain that man I do not think would be good practice. Mr. Hughes. It does not indicate that he is a really serious grower.
Mr. Jones. I think that we would want to protect what we would call the legitimate producer.
Mr. Hughes. That is right.
Mr. Jones. But we are not trying to help the fellow who is obviously speculating in trying to take advantage of the law rather than operate in normal good practice. That is all, thank you.
Mr. SMITH. Mr. Chairman.
Mr. Suru. I think there is something else that is involved here, and that is crop rotation, and if a farmer has a regular rotation of that kind and you come and tell him you cannot plant any more wheat then that farmer is going to resist because wheat is his crop rotation crop. Maybe in more modern agriculture you do not need to do that any more, but it certainly is, you might say, the custom, wheat being the principal rotation crop.
Mr. HUGHES. Where it is used in rotation, the allotment reflects that. This would not change the practice, he could follow the rotation.
Mr. SMITH. But if he wants to plant wheat every 3 years, he certainly should not be penalized, should he?
Mr. HUGHES. If he is devoting his entire farm to an entire crop each year of the three that would be different from the usual understanding of crop, rotation, and if he could prove that was his regular practice I think he should be entitled to consideration on it.
I think the thing you are mainly thinking about and the thing Congressman Thomson, from Wyoming, made his objection about was that in some areas during the period in which you determined the farmer's allotment, which was 2 or 3 years out of 10, as far as the individual farmer, the growers and anticipating controls planted more than the normal number to build history so that when he was reduced back by the allotment factor, he was still able to follow normal practice and that Congressman Thomson objected to and he said that it puts the others at a disadvantage.
There is some of that but it is very difficult to deal with and I do not see where it could be done legislatively.
Mr. WATTS. On that subject, it would be my thought that it would be very unfair for a fellow to lose base because he missed on 1 or 2 years, where sometimes he could not get it planted because of any number of things.
Taking another crop, in tobacco for a long time we operated on 3 and 5 years, in other words, if he did not plant for 5 years, he lost all of it and if he did not plant for 3 years he lost a certain proportion, but it would be kind of cruel to take an allotment away because he did not plant 1 year.
Mr. Hughes. That is probably more true of specialized crops, like tobacco than wheat.
However, if he has some good reason, abnormal weather conditions or something like that, he should be protected.
Mr. WATTS. Mr. Smith said that in his section there is nothing that they could grow but wheat, and if the farmer had a catastrophe and for some reason was unable to plant for 1 year, if the land were to lie idle, and he were to lose his allotment, what could he do?
Mr. ALBERT. He would only lose a portion.
Mr. HUGHES. I think that the land in that case would be rented, and no doubt the landlord's share of that crop might be tied up to see what happened to it, but the tenant actually operates the farm and there would not be any idle land. Somebody gets a crop on it unless there are abnormal weather conditions, because of course if you do not have the moisture, it is just foolish to throw away your seed in that soil, but in a case like that he should be protected.
Mr. Watts. One more question. As I understand, the reason that you will not need a penalty for overplanting is due to the law that we passed last year.
Mr. HUGHES. Yes. Mr. WATTS. Where there was penalty in the form of reduction of allotment.
Mr. HUGHES. That is right.
Mr. ALBERT. Anything else? (No response.)
Mr. ALBERT. Mr. Hughes, we want to thank you for your very fine contribution.
Mr. HUGHES. Could I add one thing before we leave? Mr. ALBERT. Yes. Mr. Hughes. We would like to emphasize the need for action on whatever is done about this, because farmers have a compliance date to meet and that starts pretty early in the southern States and those folks could tell you better than I, but it is as early as May 15 and the farmer needs to know quite a bit in advance and I think something should be done as soon as possible.
Mr. ALBERT. Does the Department have ready the language on these proposals?
Mr. MANWARING. Yes, sir.
Mr. ALBERT. We would like to have copies of those proposals. Off the record.
(Discussion off the record.)
Mr. ALBERT. Without objection, the committee will go into executive session for a few minutes.
(Whereupon, at 1:15 p. m., the committee retired in executive session.) (The following letter was submitted to the subcommittee:)
AMERICAN Farm BUREAU FEDERATION,
Washington, D. C., February 28, 1958. Hon. CARL ALBERT, Chairman, Wheat Subcommittee, House Agriculture Committee, House of Representatives,
Washington, D.C. DEAR CARL: The American Farm Bureau Federation policy dealing with wheat is quoted for your information.
"It is becoming increasingly clear that the present wheat program is inadequate to eliminate existing surpluses or balance production with current market needs.
"We recommend that all wheat producers with allotments be given a choice in the next marketing quota referendum between (1) the present price support program coupled with controls strict enough to eliminate the surplus and balance production with market needs in a reasonable period of time (this would mean repeal of the 55 million acre minimum national allotment) and (2) a program providing lower supports with no restrictions on production or marketing (this would make possible a greatly expanded use of wheat for livestock feed).
"In view of the fact that Congress has provided a marketing quota exemption for farmers who desire to produce wheat for home use only, we recommend termination of the 15-acre and 200-bushel exemptions. We further recommend that farmers be permitted to use the home use exemption without prior governmental approval.
*Recent legislation designed to prevent wheatgrowers from building up allotments by overseeding should be retained; however, we favor an amendment to provide that this rule shall not operate to reduce a farm's allotment base.”
You will note that we are recommending that the 15-acre and 200-bushel marketing quota exemption be repealed. In view of the fact that Congress has provided a 30-acre exemption for farmers who desire to produce wheat for home use, there is no longer a justification for the 15-acre and 200-bushel exemptions.
Retention of this exemption merely adds to the amount of wheat moving in commercial channels and undermines the market of regular commercial wheat growers. The exemption for home use should not require the farmer to secure prior approval of the Government.
We further recommend that the law enacted in 1957 to prohibit producers from building up an allotment base by overseeding be amended to provide that this rule shall not operate to reduce a farm's allotment base. Although the objective of this new rule is commendable, it illustrates the difficulty of trying to regulate individual farming operations by law. As previously pointed out, past programs have encouraged producers to overseed, particularly in the areas where moisture is the limiting factor in wheat production. If such producers continue to overseed they will lose acreage to areas where producers stay within their allotments. This comes about from the fact that counties and States now get a credit for acreage diverted from wheat under control programs. The original purpose of these credits was to keep producers who comply with allotments from losing acreage to those who overseed. The effect, however, is to create a disadvantage for areas which are subject to recurring droughts. We believe that the solution is to eliminate the “diversion credits” for 1958 and subsequent years. Since excess acres seeded for harvest in 1958 and subsequent years are not to be counted in determining future allotments, the original justification for diversion credits no longer exists.
Putting off the penalty from 1958 to 1959 does not solve the problem. The high risk, low cost areas which are mainly in the high plans will be further handicapped if farm bases are reduced due to overseeding. Problems of proper land use, and crop insurance features of carrying over excess wheat from good crop years to bad crop years are also involved.
We request that this letter be made a part of the record of the hearings before your subcommittee. Sincerely yours,
John C. Lynn, Legislative Director.