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as you know, and no doubt heard at various places, quantities of wheat and rice mentioned at one time or another that were extremely huge, but they should not be thought of as being consumption requirements for this year or any particular immediate period.
Mr. GATHINGS. Just what mention was made as to the rice as to quantity?
Mr. Nichols. I think there was mention at one time of a million tons of rice and 2 or 3 million tons of wheat. Very large quantities have been mentioned. But in terms of any prospect of practical negotiations or distribution in limited periods, they haven't been reduced to practicalities yet. It remains to be seen when they might be. The whole question of negotiated Public Law 480 agreements for periods of years ahead is a difficult one.
If they are scheduled in large amounts which would have to fit into unknown future marketing situations, the possibilities of congestion and conflict are somewhat greater than if we can operate essentially year to year, and know that the Public Law 480 commodities are what they are supposed to be, and that is generally supplementary to the imports that are financed by other ways.
Mr. GATHINGS. Yes. That provision is written into the act itself.
Mr. THOMPSON. I am afraid that we will have to stop at this time. We will probably get a rollcall or a quorum call in a few minutes.
The measure before us would freeze acreage and price supports at present levels, and it certainly behooves all of us to be there.
Thank you very much for your presence and your testimony, gentlemen. I think we will have to have some further discussions.
Mr. NICHOLS. Thank you.
Mr. THOMPSON. And I think we may sum this up this morning by saying, we certainly have developed that there is a market for rice that is not being filled, that if that market were filled, there would be no acreage reduction for next year's crop of rice, and the price support would be 86 instead of 75 percent.
We certainly developed that,
(Whereupon, at 12 o'clock noon, the hearing in the above-entitled matter was adjourned.)
RICE ACREAGE, 1958
TUESDAY, APRIL 29, 1958
HOUSE OF REPRESENTATIVES,
COMMITTEE ON AGRICULTURE,
Washington, D.C. The subcommittee met, pursuant to notice, at 10 a. m., in room 1308, New House Office Building, Hon. Clark W. Thompson (chairman of the subcommittee) presiding.
Present: Representatives Thompson, Gathings, Jones, and Krueger. Mr. THOMPSON. The committee will be in order.
Gentlemen, for the benefit of all here present, I would like to give you just a little bit of the background of this particular meeting.
The rice industry is a very troubled and worried industry from producer on through miller, including everybody, I guess, except the consumer; and some places in the world, the consumers are a little troubled.
We don't know, in the industry, what the future holds.
We don't know what the export program is going to be for next year. We are not sure that we know what the acreage program ing to be. We don't know what the price support will be.
With those various problems in mind, and without any specific questions to ask at this particular time, anyway, we have asked Mr. Marvin McLain, who is certainly—if he isn't the policymaker, he is on the policymaking level so far as this industry is concerned, if he would come up here and tell us exactly what we have to look forward to and what the program is to be.
I am going to suggest that after he has testified in any manner that he desires, that we go ahead with what questions occur to us and then let others from the industry who may be present, whether they made themselves known to me or not, join into the discussion either as witnesses or, perhaps, since it is a small group and a small place, we can make it more or less as a round-table discussion.
Mr. McLain, with that introduction and story of what we are trying to accomplish, we will appreciate hearing from you. STATEMENT OF MARVIN L. McLAIN, ASSISTANT SECRETARY OF
AGRICULTURE, WASHINGTON, D. C. Mr. McLAIN. Mr. Chairman, I have prepared here a very brief statement. We can get some of the facts as we see them in the Department out here, if I just run through them hurriedly.
We will try to answer any questions you may have about the statement.
Let me say this to begin with, that I have many very fine friends in the rice industry and have been very close to some of them, and I think they are a pretty practical group of people. I think that they are interested in any long-term approach to the rice problem that should be helpful to you people that are charged, of course, with the responsibility of writing the laws that the Department must operate under.
So, with that, I will go ahead and read this brief statement. We have tried to get into it some of the facts that ought to be of interest to this committee.
I am happy to be here today to discuss with you the rice situation with special reference to the administration's recommendations for rice.
As one of the basic crops involving mandatory price support and acreage allotments determined by formula, we feel it most appropriate for this committee to consider the problems of rice and possible solutions. While we have taken many actions to assist rice producers, we recognize that all of the problems have not been solved.
ACTIONS TAKEN TO ASSIST RICE PRODUCERS
We recommended and the Congress enacted, in 1954, the Agricultural Trade and Development Act, commonly known as Public Law 480, to dispose of surpluses.
Under title I of this law, we have programed the export movement of about 2512 million bags of milled rice. This is the equivalent of about 37 million hundred weight of rough rice.
Incidentally, unless action to extend Public Law 480 is taken soon, rice producers will lose some of the benefits which, otherwise, would be derivedf from title I of Public Law 480.
I am happy, may I say, to note that the House is going to move on hearings on Public Law 480. We have been successful in getting it through the Senate side, and I think it is to the interest of rice growers as well as wheat growers and many other growers that action be taken as soon as possible on it.
Under title II of Public Law 480 we have programed for donation to various governments 4.8 million hundredweight of rice--rough basis.
We recommended and the Congress enacted, in 1956, the Soil Bank Act.
Under this law, rice producers have made and are making substantial reductions in acreage and have received or will receive total pay. ments of about $28 million for the years 1956 through 1958.
We are providing supplies of rice for distribution to the schools under the school lunch program and to institutions. In the last fiscal year, we distributed 33 million pounds under this program.
We are making rice available for donation to the needy through various State outlets. In the last fiscal year, we distributed about 48 million pounds under this program.
We are sharing our abundance of rice with the needy abroad through various religious and charitable groups. In the last fiscal year, we distributed 201 million pounds under this program.
Under our barter authority, we have exported approximately one million hundredweight, rough basis.
Under our special storage programs, we have been able to increase available storage tremendously.
Fine storage facilities for drying and handling the rice crop have been developed. They will be a permanent asset to the rice industry.
In the past 2 years new storage facilities for several million hundredweight of rough and milled rice have been provided. I am happy to say that a substantial part of this total new storage has been provided by co-ops.
Of course, a tax writeoff was the main help in this area.
(1) A search for sources of breeding stocks resistant to prevalent diseases and insects, improved quality, increased yield, and improved straw;
(2) Finding and developing new and expanded uses for rice, including means of achieving better keeping qualities of milled or partially milled rice.
We are also cooperating with Cuba, Venezuela, and Colombia in an emergency program to develop resistant varieties for control of the destructive Hoja Blanca disease.
SUPPLY AND UTILIZATION OF RICE
By the start of the 1958–59 rice marketing year on August 1, 1958, we expect rice stocks to be down to about 17.3 million hundredweightthe lowest beginning-of-the-season stocks since the 1955–56 season.
At this level, stocks would be about 50 percent below the peak reached at the start of the 1955–56 season.
The total rice supply in 1958–59 is expected to be 62.6 million hundredweight. At this level, the supply would be slightly less than the level of the 1957–58 season.
Rice utilization in 1958–59 is expected to be about 43.5 million hundredweight, the same as in 1957–58. The exact level will depend upon our export volume. Currently, we anticipate 1958–59 exports of about 16 million hundredweight.
Subtracting the prospective utilization of 43.5 million hundredweight from the prospective supply of about 62.6 million hundredweight leaves the prospective carryover of 19.1 million hundredweight.
1958 CROP PROGRAMS
We again have an acreage allotment and marketing quota program, price support, and an acreage reserve program for the 1958 crops.
The national acreage allotment has been established at 1,653,000 acres, the minimum permitted by the Agricultural Act of 1956. In the absence of this minimum, the allotment would have been only 1.1 million acres.
Price support will be at not less than $4.33 per hundredweight.
The current parity figure, I think, would make this $4.45, wouldn't it?
Mr, MARTIN. About. Mr. McLain. This support level is subject to review at the start of the 1958 crop season when we will recalculate the supply percentage to determine whether the combination of this more up-to-date supply percentage and the parity price for July will require an upward adjustment.
The acreage reserve program signup for the 1958 rice crop will be a little over 170,000 acres. This compares with 242,000 acres in 1957.
The reasons for this difference in signup is accounted for largely by the $3,000 maximum payment per farm required by law for the 1958 soil bank program and the wet weather in Texas in 1957.
It is contemplated now that there will be no acreage reserve program for 1959 crop rice.
1959 ACREAGE ALLOTMENT
While it is still too early to make a definite statement, it would now appear that on the basis of present law, the 1959 acreage allotment for rice would be approximately 1 million acres, about 40 percent below the 1958 acreage allotment.
Since the domestic consumption of rice for the 1958–59 marketing year is expected to be about 27.5 million hundredweight, which is approximately the same quantity used during each of the 2 previous years, the size of the 1959 national rice acreage allotment under existing legislation will be dependent to a large extent upon the quantity of rice exported during the 1959–60 marketing year.
Now a word about the administration recommendations:
On January 16, 1958, the President submitted a series of recommendations to the Congress with respect to agriculture. Included in these recommendations were the following:
1. Authority to increase acreage allotments for * * * rice * * should be provided.
The President pointed out that it is likely that under the present legal formulas allotments for certain crops are likely to be reduced further.
He requested authority to allow the Secretary, in accordance with criteria to be submitted by the Secretary of Agriculture, to increase allotments up to 50 percent above the levels determined by existing formula. However, he pointed out that any acreage increases
* * must be related to price adjustments which will permit the growth of markets necessary to absorb the increased production.
This authorization for higher acreage allotments will permit greater efficiency and reduced costs of production.
The criteria for increased acreage allotments submitted by the Secretary follow:
If the Secretary determines after investigation that such increase is necessary in the interests of the welfare of the agricultural economy
1. To avoid hardships to producers of the commodity;
4. To prevent disruption in the orderly marketing of the commodity;
5. To insure adequate farm income;