Mr. GATHINGS. If that continues to hold, it will take quite a while

Mr. SATTERFIELD. It will take quite a while.

Mr. GATHINGS. To consume enough rice to keep these farmers going, and keep the wells running. With the situation as it exists now, with the Department of Agriculture asking that the soil-bank acreage reserve be eliminated for 1959, why it will be a very desperate situation that the farmer will face, will it not?

Mr. SATTERFIELD. Right.

Mr. GATHINGS. As I understood you, Judge Satterfield, that was in October that this meeting was held of the officials in the Department studying this question?

Mr. SATTERFIELD. During the crop-growing season this committee meets each month in which a production estimate is made to consider our supply situation. I believe that October was the first time that the committee attempted to project its estimate of rice exports to the 1958-59 marketing year. We had to make such projection in connection with the determination of acreage allotments and marketing quotas for the 1958 crop. In making such estimates we have to be guided by what is likely to develop in the way of a program for disposition through export channels. Evidently, the Commodity Credit Board decided this for us by its allocation of funds for the export of rice under the 480 program. Consequently, there was nothing we could do but revise our estimate of exports downward.

Mr. GATHINGS. Has there been a change since October?

Mr. SATTERFIELD. Not that I know of insofar as demand is concerned. I think the demand for rice under the 480 program is as great today as it was in October or even in September. However, I am not too sure of that since I do not keep track of all the requests that come in. The 480 program is handled primarily by the people in FAS, but I believe Mr. Ellis, who is on the sales staff of our Division, works with those people on rice and can probably give you a better answer than I.

Mr. GATHINGS. Mr. Satterfield, if we get 480 extended and have sufficient funds available for that program, would that go to help us or would it just be a static situation? I wondered whether or not it is essential that we get the 480 program extended so that we can move more rice into export.

Mr. SATTERFIELD. That is a little difficult question for me to answer. I am not one of the policymakers. I think it will depend on policy as to how they will distribute the funds between commodities.

Mr. PALMBY. I would like to make a comment on that, if I may, this point.

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I think it is self-evident without title I, we, certainly, would be in much more shape "stockwise" than we are, and further, that as regards the basic commodities rice has received far more as regards the acreage of that commodity in this country, far more benefits from title I than any other commodity.

Mr. GATHINGS. And the figures that were presented here by you today would indicate that 480 is one of the principal outlets for rice? Mr. PALMBY. Yes, sir.

Mr. THOMPSON. We didn't quite reach the price-suport basis, Judge. We only got through the preliminaries.

Mr. McLAIN. All we say to you is, in all honesty, that we think that would be a major step, if that could be done.

Mr. THOMPSON. Maybe it can be; maybe it can't.

As I say and I cannot speak for them

Mr. McLAIN. I have talked to people I respect very much in the industry, and you gentlemen have, too, that they are willing to accept that right now.

Mr. THOMPSON. Legislation is a give-and-take proposition. Where you have it at one end of the avenue, somebody who says it will be this and nothing else, it is awfully hard to get 435 men to agree to go along with any such thing as that.

Mr. MCLAIN. We just haven't said that in this instance. I tried to give you a little indication.

Mr. THOMPSON. Reading from the President's veto message, it says: When the Secretary of Agriculture has been given these authorities to adjust price support, acreage allotments, he will set the 1959 allotment at levels at least as high as those in this year for cotton and rice-these allotments will be substantially above the levels which would otherwise prevail.

He goes on to say that when necessary, a new authorization is provided in keeping with my "legislative recommendations," the special export program for our surplus crops will be enlarged.

Opportunities exist to export both for dollars and, through special programs, large quantities of our stable commodities."

I have been trying to interpret that ever since I first read it. I am not sure that I know yet exactly what it means.

In some ways it is very clear, and in some ways there is a veiled threat in there-or bribe-I don't know which-but, certainly, I interpret it as one or the other, at times.

I would surely like to know exactly what he had in mind.

Mr. MCLAIN. I think it is very simple to figure out what he had in mind.

Mr. THOMPSON. Giving exactly the program he says, and then he will give you a living acreage.

Mr. MCLAIN. No; he recognizes, as the Secretary of Agriculture recognizes and certainly I recognize that legislation isn't always exactly as any one individual wants it. We recognize that.

But I think there ought to be some steps taken in the direction of what he has asked for. I think the rice industry is willing to accept much of what he has asked for. The fact is, I am sure they are.

Mr. SORKIN. I think the reference to increased exports refers to the fact that the President recommended a billion and a half for Public Law 480 compared with a billion available this year. There is a 50 percent increase requested in those funds.

Mr. THOMPSON. Mr. Krueger, I have neglected you this morning. Mr. Krueger is one of the best consumers of rice we have and he has been extremely interested and a usefuly member of this committee. Mr. KRUEGER. Thank you, Mr. Chairman.

Not knowing much about the rice industry or rice growing, I might have some very simple questions. They may sound simple to you, but I would like to clear up the situation for myself.

You say you have a carryover at the present time of 19.1 million hundredweight?

Mr. MCLAIN. Yes.

Mr. KRUEGER. Is that a normal or abnormal carryover?

Mr. McLAIN. It has varied. As of course, during the emergencies we have had in the past, many times that carryover has been way down and, of course, we have had intervals when it has been way above that. We have the figures here. It is down considerably from the high.

Mr. KRUEGER. I wanted to ask this question: Is 19.1 million the normal carryover at the present time?

Do you consider it as being such?

Mr. MCLAIN. You go ahead and read it, Martin, for a period back. Mr. SORKIN. To supplement what Mr. McLain says, in 1953-54, it was a million and a half hundredweight. Then it jumped to seven and a half. Then it jumped to 26.7. Then it jumped to 34.6 and then dropped to 20.1.

We anticipate it will be down to 17.3 at the end of the current marketing year.

Mr. KRUEGER. What makes the variation?

Mr. McLAIN. World conditions.

Mr. SORKIN. Primarily world exports.

Mr. McLAIN. World conditions. When you are at war and those countries that normally produce rice are out of business, that is one thing. When you have them wanting to get back into the rice exportring business then it is another thing.

So it is very much tied in to world conditions.

Mr. KRUEGER. How about the rice crop raised in this country? Does that have much of an influence on it?

Mr. MCLAIN. The acreage has fluctuated some.

Mr. SATTERFIELD. Mr. McLain, I might give Mr. Krueger a little background on this which may clear it up some.

Prior to World War II, our acreage, I think, reached the highest point of about a million six where the allotment is to.

Mr. MCLAIN. Earlier than that, it was way below that.

Mr. SATTERFIELD. From 1.2 million to 1.6 million for a period of years. During the war and subsequent to the war, it increased up to about 4.2. Prior to the war, we carried a normal carryover of about two and a half million, normal conditions, but with the acreage changes increased, it is a little difficult to say what a normal carryover is because of your very varied marketing conditions along with increased acreage.

Mr. SORKIN. I think the basic element here, Mr. Krueger, is that the domestic consumption doesn't vary much.

Mr. KRUEGER. What is the domestic consumption average per capita?

Mr. SORKIN. It runs around

Mr. McLAIN. Per capita?

Mr. KRUEGER. I would like to know. I like rice.

Mr. MCLAIN. So do I.

Mr. DEAN. About 6 pounds.

Mr. MCLAIN. You are above average, I am sure of that.

Mr. SORKIN. I am, too.

Mr. THOMPSON. So is everybody else who eats it at all. That is the funny thing about it. Once they become familiar with rice, they eat way over their per capita. The ones who bring the per capita down are the ones who have never learned to eat it.

Mr. SATTERFIELD. The national per capita consumption is 5.8; outside of the traditional rice-consuming South, it is only about 2 pounds. Mr. McLAIN. There is a fertile field for work.

Mr. THOMPSON. There certainly is. I think if you look into it, you will find that if you compare the figures today with the figures of 5 years ago, some of the effort put out by the industry has borne fruit. Mr. MCLAIN. Have you ever thought of doing what the bean boys do here on the Hill? Serving rice here to educate all of the Congressmen and Senators?

Mr. THOMPSON. We do it every once in a while.

Mr. KRUEGER. I have another question, Mr. McLain: That is, the national acreage allotment has been established at 1,653,000 acres. Mr. McLAIN. The minimum permitted by law for 1958.

Mr. KRUEGER. Here on page 4 you say that we are going to reduce that to about 1 million acres.

Mr. McLAIN. This figure is the one that is required by law, on a law that was passed ahead of the 1957 crop, for a 2-year period. We established this 2-year minimum which, of course, accounts for this 1.6 million acres. This minimum expires at the end of this year. Then it will be figured under the old legislation.

It would figure back to around a million acres.

Mr. KRUEGER. That must be figured somewhat like the 55 million acres of wheat minimum. You say rice allotment expires this year? Mr. McLAIN. Yes.

Mr. SORKIN. In the case of wheat, it is permanent and in the case of rice it expires with this crop.

Mr. KRUEGER. With all the wheat hearings I attended this week, I can't see where we are going to put the wheat. We have a big crop in prospect now. We still have a minimum of 55 million acres, and I can't see, even with all the remedies proposed, how we can alleviate this surplus situation unless the acreage is cut further.

Mr. McLAIN. The 55 million we have for wheat is so high that it is more than we can consume and export in most years with the price we put on it.

Mr. KRUEGER. We had better stay with rice. That is all I care to comment at this time, Mr. Chairman.

Mr. GATHINGS. I am quite interested in your middle-ground approach, Mr. Secretary.

Mr. McLAIN. I was stating a middle ground that others had suggested to me. We are deeply interested in what happens to rice. It has some international repercussions, as do wheat and cotton, of course. And we realize that people who are in the rice business are equipped to be in it and would like to stay in it. Many of them are very efficient producers and many of them think that given the right chance they have a bright future.

But they hate to see this type of business hang over them that has been hanging over them. Many of these people have told me that they would be pleased if they could have for the time being a 75 percent support with the same acreage. They could get along fine. They think the industry would be better off.

That is what they are asking for here. While we think that is only one step, it certainly is an appropriate step in the right direction. We hope when you consider legislation that you consider all the steps that you can and should be taken.

Mr. GATHINGS. Well, now, would the Department look with favor on some type of referendum that would give the grower the privilege of getting increased acreage under the lower price support? You would have two choices in such a referendum.

Mr. McLAIN. This has the big disadvantage of immediately setting up two classes of ricegrowers which I think has a lot of disadvantages.

Of course, it is being talked about now for cotton. We think that would be unfortunate for rice. We think that the statesmen we have got in Congress ought to face up to the real problem, that the industry is willing to lower this support level with some consideration on acreage for a period of 3, 4, or 5 years or, as we have suggested, permanent charges. That this would be much more desirable for rice.

Now, we have a lot of reluctance about referendums. We have tried it. We tried it on corn. You have always the question whether you are going to have a 50-percent or 66% vote. Stop and think about referendums and analyze them, and the philosophy behind them, and ask yourself whether you would like to have labor set out by refer endum to determine what the minimum wage was going to be and whether you wanted to turn over that authority to any group.

I think it is something that if I were a Congressman I would have many reservations about. I think that legislation is a function of Congress. I think you ought to be able to know from talking to your constitutents what they do want and then do what is best and stand on the record.

I think that is a much firmer and better way to work out this legislation.

Mr. THOMPSON. He is confused now, too.

Mr. McLAIN. It seems to me that this legislation is your responsi bility, and not to be left up to the referendum.

I think there are a lot of people who are very gravely concerned even about the marketing-quota approach. I hear it all the time, because the people who don't like it, of course, complain to the Secretary of Agriculture and blame him for it.

Mr. GATHINGS. Is our problem in rice a matter of price, like this situation in some of the other commodities? I do know that in some of the commodities that I happen to be a little familiar with, the question of competitive price is most important.

Mr. MCLAIN. While I think it is more true with cotton than it is with rice, Mr. Gathings, it also applies to rice. Certainly we have seen what has happened to the cotton industry domestically. I think we have a realization by all people in the cotton industry today that something different has to be done.

I think the major problem in rice is not the price in the domestic market. However, it is a factor domestically, too. It is a big factor in our export movement, and it will be because we are going to have to be competitive in our export movement.

But currently, one of the real problems in the rice business, of course, is that countries that consume rice just don't have enough dollars to buy the rice. We are recommending the extending of Public Law 480 until that condition can be changed. We hope some day it will be changed.