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year.

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

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 6643 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 referendum 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 leg. islation.

Mr. THOMPSON. He is confused now, too.

Mr. McLain. It seems to me that this legislation is your responsibility, 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.

Mr. SATTERFIELD. The GSA has certain hospitals under its jurisdiction, and I believe all the Federal penal and correctional institutions come under the jurisdiction of the attorney general. Both would have the same problem on distribution. They could not use a whole carload lot at a time, but could use a substantial amount of additional rice if permitted to obtain it in less than carload lots.

Mr. MILLER. It is a question of which agency will break it down. A lot of these governmental agencies can accept it in carload lots and others cannot.

Mr. SATTERFIELD. They should be able to ship a carload to a certain point and there break it down and distribute it in less than carload lots.

Mr. MILLER. Going back to the question that Congressman Krueger has, it seems to me we could in turn package or break down to these domestic donation programs in less than these hundred pound containers.

Mr. SATTERFIELD. I believe there is a provision in the act of 1954 which would permit us to do this.

Mr. MILLER. I think so.

Mr. SATTERFIELD. It would cost the recipient only the cost of packaging. I believe this is in that provision.

Mr. THOMPSON. In this particular instance, I do not see any conflict of interest between wheat and rice, none whatever, because in this country, one is not a substitute for the other. I think we have perhaps a good market for it.

Mr. GATHINGS. I was impressed with the query coming from our colleague from North Dakota, and delighted to know that you are interested in rice in North Dakota. And I would like to ask the Department officials, or anyone of you whether or not there is a larger consumption in any particular part of the country. Do we eat more rice in the Southland, do they eat more rice in California, where rice is produced, or in Texas, or Louisiana, Arkansas, and Mississippi?

I just wondered whether or not there is any difference between consumption of rice in that part of the country where it is produced as against North Dakota, the Midwest, or the northeast or the northwest part of the country?

Mr. THOMPSON. Let me provide the opening remarks here. Where they eat rice at all they eat a lot of it. They either like it very much or they do not know about it. Once they learn about it, they eat it.

Mr. GATHINGS. That is correct. I agree. Here is what I want to know. These gentlemen I expect could enlighten us with respect to the school-lunch program. And we are looking to young Americans to eat this wholesome food and enjoy it, and as they go along through the years they will eat more of it, and their children and their children's children would eat more rice.

I wonder if you do have any information along that line with respect to the school-lunch program, and how it is being received ?

Mr. Ellis. I do not have any information as to the per capita use of rice in the school-lunch program. I am sure it is somewhat similar to the overall per capita consumption because where you have somebody preparing the meals using rice they are going to be more apt to ask for it than where they are not using it.

Of course, the consumption of rice does vary very materially in different parts of the United States. In Louisiana, and South Carolina and Georgia, Florida, more or less generally through the southeast area of the United States, the per capita consumption is relatively high. The highest a few years ago, at least, was in the southern part of Louisiana where it was, oh, almost 100 pounds per capita.

If you get up into some of the Northern States—I do not know about North Dakota specifically, probably up there it is considerably less than a pound per capita.

Then you have islands, you might say, for instance, in New York City, you have certain population groups up there that have a rather high per capita consumption. Puerto Ricans particularly—and the colored population would come next-eat it. And you have pretty much of a cross section. There are people who use a lot of rice and people who do not use any. In any large city you do have population groups that are fairly large consumers.

Mr. GATHINGS. I remember about 2 years ago they packaged some broken rice in about 10-pound bags and had these bags in all of the larger stores in Washington. I notice today you do not see the broken grain rice, which came at a reasonable price, too, for that 10-pound bag.

Do you recall that? Do you know just why it was that they sold the rice in that size quantity and that particular type of rice? putting it out that way.

Mr. Ellis. I do not recall it, particularly, in Washington at that particular time, but people who use large quantities of rice are frequently rather price-conscious and a 10-pound bag is a much cheaper way of distributing than putting one pound cellophane or cardboard cartons around it. And the price differential would be of considerable importance.

Mr. GaThings. I thought that we would always find those 10-pound bags for the larger families. I do not understand why they quit putting it out that way.

Mr. THOMPSON. I think you will find at that particular time there happened to be a considerable surplus of broken rice. That comes from memory and is subject to correction.

Mr. GATHings. If you will pardon me for interrupting this train of thought, we have some gentlemen from the State Department here who may have some light to shed on this subject. I hope you can put them on next for the reason that when the bells ring we will have to go to the floor. We have a piece of legislation pending today that may cure some of the pains that are hurting us in the rice industry.

Let us see who is going to speak.
Mr. Nichols, are you going to speak for the State Department?
Mr. NICHOLS. Yes.
Mr. GATHINGS. Judge Satterfield wanted to say something.

Mr. SATTERFIELD. Congressman Thompson, you asked a question earlier which I do not believe was answered, concerning the world demand situation on rice.

Last week I received a letter from the largest rice miller in Burma who visited this country last fall to study our production and marketing methods, and he indicated that their 1957 crop was about 25 percent less than anticipated earlier. He also indicated that their entire production had already been sold.

Maybe Mr. Ellis can fill us in on what has happened in Thailand which is the second largest exporter of rice in the world. I understand they have pretty well sold out.

Mr. THOMPSON. Is Burma the largest ?
Mr. SATTERFIELD. I believe so.

Mr. Ellis. They are normally the largest exporter and Thailand is normally second, and the United States comes along about third. I believe the situation in general is that both Burma and Thailand think that they have their supplies for the current year not actually sold but earmarked for definite destinations and that they will not be able to supply as much rice to some of their customers as will be requested from them.

Mr. Thompson. This information all points to the fact that rather than a smaller market for rice we have an expanding one this year. I think it is an important point.

Mr. GATHINGS. I just wondered, Judge, whether or not an estimate of the production in Thailand could be had for the current year? With a 45 percent cutback in production in Burma, what about Thailand ?

Mr. ELLIS. The reduction in Burma is not as a result of a deliberate cutback but as a poor crop condition.

I do not recall any specific percentage.

In Thailand, I believe the crop is expected to be about normal approximately normal. I haven't heard any figure.

Mr. GATHINGS. Where can we sell more rice in the current year and the months ahead? Where is that market? Where can it be disposed of?

Nr. MILLER. I believe that Pakistan offers more potentialities to receive rice than any other country.

Mr. THOMPSON. Pakistan?
Mr. MILLER. And India, too.
Mr. Ellis. And Indonesia, too.

Mr. MILLER. Our problem is not that there is a place where rice can be consumed but can we supply the rice at the price they are willing to pay. Certainly, the price at which we can supply the rice is a determining factor. We get back to what we can sell for dollars. And I think we have nearly agreed this morning that the amount of rice we are able to sell for dollars in this market is distinctly limited. So you will have to turn to some other type of program, such as 480, and then the selection comes down, what is the best judgment that the Department can use to appropriate eqnitably the available amount of money under Public Law 480 between the various commodities, taking into consideration the problems faced, that is, the supply problems faced in each of those commodities?

Mr. GATHINGS. You all have done fine work in moving this rice heretofore. And as a representative of a large rice growing district we are most appreciative of it.

Mr. MILLER. We would like to continue to do so. Mr. GATHINGS. I just wonder if you are getting along amicably with the Department of State?

Mr. MILLER. Yes, sir; our relations with the Department of State have been very, very good. I think Mr. Nichols can tell you that he and I have worked together on this rice situation to some degree, and I think our working relationships are quite good.

Mr. THOMPSON. I think this is a good place to put Mr. Nichols on right now.

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