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Mr. MERRILL. In my opinion, no, sir; they do not. You go out and establish an allotment for them. They wiil plant these peanuts and harvest them and they will think, “The peanut farmer has got a good deal," and so they go in and they grow 5 acres of peanuts.

Now, they do not have the equipment to take care of the peanuts and they have not had the experience in growing peanuts and quite a number of them will decide after 1 year's experience, “It is not quite as good a deal as I thought," so they will not plant them again.

But it takes 3 years during normal times for that allotment to disappear if a man is not using it and under current legislation it is absolutely preserved and charged against other farms.

Mr. GAThings. Take the acreage away from the established grower in that county and continue to give that man an allotment for 3 years even though he might not be interested in growing peanuts?

Mr. MERRILL. Well, under the automatic preservation, you see, you cannot take it away from him.

In the past, back in, say, 1951, if this should happen, then several years later, 3 years later he would have automatically gotten out of the peanut allotment business because he had not produced any peanuts during the 3-year period as prescribed by the law.

The perfect example of what you are talking about, I think, is this year in one particular State over 100 farmers who had never grown peanuts decided they wanted to go into the peanut business.

We received a report from that State last week and of the 176 acres—and I believe my figures are correct-of the 176 acres of peanuts that were planted, only 4 acres were harvested.

Mr. MATTHEWS. Mr. Chairman, may I ask a question or two here! Mr. McMILLAN. Yes.

Mr. Matthews. Mr. Gathings has pursued a line of questioning that I know all the members of the subcommittee are especially interested in, and I would like to pursue it for just a minute or two more.

I think what he brought out is our concern naturally about hurting the little farmer; and my colleagues on the committee know—and I know I speak for you gentlemen, too—that I certainly do not want to do anything to hurt the little farmer; and even at this late date, if I thought that it would, I would not press for the passage of this bill.

Is it your understanding, Mr. Merrill, that if this legislation is passed a man could still plant his 1 acre of peanuts without any allotment?

Mr. MERRILL. That is absolutely right.

Mr. MATTHEWS. And most of your little farmers would probably be interested in just that aspect of it. They would want to plant 1 acre of peanuts and most of them would not be concerned, as I see it, about going into peanut production on a larger scale. Do you think that is a true statement, Mr. Merrill?

Mr. MERRILL. Yes, sir; in my opinion it is true.

Mr. MATTHEWs. Now, if this legislation were passed, a farmer who had not produced peanuts before could qualify, but only on the basis of a new farm?

Mr. MERRILL. That is right. Mr. MATTHEWS. The one basic difference in the present situation and what the situation would be if this legislation were passed is that he could not qualify for an allotment purely on the basis of having planted it the year before!

for rice, as in Korea, for instance, and insist that they take wheat instead of rice; that they go ahead and build flour mills and so forth.

Mr. KRUEGER. Isn't that a good idea, Mr. Chairman? Mr. THOMPSON. You are on the Rice Committee now. Is that in your division? Mr. McLain. When it comes to programing, whether it be rice or wheat, it is an FAS problem and one that you could well raise before a hearing, but let me say this: We get badgered on both sides—the wheat people and the rice people I have constantly been accused that we have shown favorable treatment to both sides, so my conclusion is that when we get accused on both sides, that maybe we aren't doing too bad. I don't know.

Mr. THOMPSON. Of course, that is that side. On the other hand, to take a traditionally rice consuming nation which wants to buy rice, no, we won't sell it to you but we will sell you wheat

Mr. McLain. Here is the point, though. Some progressive wheat millers who have interests in developing markets in other lands, have been very aggressive in trying to get a market that they say will not replace rice for their various products like bolgar and other things, but will add to the desire of people after they once start eating this new product, not only to eat more of that, but also more rice.

I think the answer to your question is that there is hunger enough to utilize most anything we can furnish them if we can get the wherewithall to get it there at a price that they can pay. That is the whole problem of most of our agricultural commodities.

Mr. THOMPSON. There again you get into a statement which seems to be pretty well substantiated that there is a demand for rice in the world today, that that would completely eliminate all of our surplus if it were just filled. I think you have developed that. That brings us back to passing 480 which would give you more money to use for it, I suppose.

Mr. McLain. I think currently that is one of the main solutions, of course.

Mr. Thompson. Now let me ask you a $64,000 question. Would you accept the plan to remove the escalator clause provided we did not lower the minimm acreage below what it is this year and the price support below 75 ?

Mr. McLain. We think that would be a terrific improvement. I don't, of course, sign the bills at the White House or reject them, but I have some influence on what is done. We certainly think that it would be a major step in the right direction and would give it sympathetic hearing. We think further changes are needed, however.

I can't say that we would accept it or would not accept it, but this goes just about halfway the direction we think it ought to go.

Certainly, we are interested in seeing the rice industry prosper on a sound basis.

Mr. GATHINGS. Mr. Chairman, I think we ought to take into consideration that the rice farmer has already taken a considerable cut and to start talking about what he would get in 1959, if nothing is done, and start from there, is quite a different story from starting where we should start and that is to keep the rice operator in business.

An increase from there, rather than to start with some million acres, instead of the 1.6 million, plus that he has in 1958. You go back there to Texas. I know when I go back to Arkansas, they are aware what that rice acreage in 1958 is, but they don't know what to anticipate in 1959 provided there is no new law passed in the interim.

So I think when we go to talking about any type of a program for 1959, we ought to bear in mind the attitude of the farmer that is growing rice, and he is thinking about 1,630,000 acres national allotment.

Mr. THOMPSON. That is what we had this year? Mr. GATHINGS. He knows that. He knows something about that. But when you go to talking about cutting him back some 40 percent, and then start from there with any type of a program, the approach is quite different.

Mr. THOMPSON. He has already taken 40 percent cut below—what year was it that we started with, Judge?

Mr. SATTERFIELD. We started in 1955.
Mr. THOMPSON. In 1955. He has taken a 40 percent cut since 1955.
Mr. SATTERFIELD. Yes.

Mr. THOMPSON. And now we ask him to take 40 percent, another 40 percent.

Mr. McLAIN. We were just 1 year late in starting the cutback.
Mr. THOMPSON. You didn't have it in the law?

Mr. McLAIN. A lot of people thought if we interpreted the law right, we should have acreage allotments 1 year earlier. I will put

Mr. THOMPSON. It certainly would have helped. There is no question about that. You wouldn't have had an overhanging surplus to plague you.

If we can interrupt this phase for a little while, let's ask Mr. Miller of Comet Rice Mills to make a statement.

Won't you sit there at the end of the table? Mr. Miller, excuse me. Let's go back to your feeling, Mr. McLain, about a plan to remove the escalator clause. I had in mind, and I thought I had made it clear, that we were supposing that you would not lower the acres below what we had this year; that would be 1.6 million, wouldn't it?

Mr. McLain. I gathered from the way you raised the question that that was what you meant. I understood it that way.

(Discussion off the record.) Mr. THOMPSON. Mr. Miller, we appreciate your coming before this subcommittee this morning, and we will be very glad to hear whatever may be on your mind, hoping that you will develop a solution for the whole industry.

I consider Mr. Miller a constituent of mine because he operates so extensively down there in my country.

(Off the record discussion.)

it that way.

STATEMENT OF CLAUDE MILLER, PRESIDENT, COMET RICE MILLS

Mr. MILLER. Thank you, Mr. Chairman.

It is a privilege to have this opportunity to appear before this congressional committee. However, since I first learned that I was to be here at noon yesterday, I have not had time to prepare myself properly.

I am glad to express my opinions and beliefs, but I cannot hope to answer questions as to the detailed facts or give statistical data, as I have not had an opportunity, nor time, to prepare such material.

While I am president of the Rice Industry Association, a national rice promotion association that was formed recently, I do not speak for that group or any other group, but express only my own personal views and opinions.

I want to say at this point that in my dealings with the Department of Agriculture, I have found all of the officials and employees patient, considerate, cooperative, and helpful always.

I believe that some of the present practices and policies in dealing with rice could be improved. I am convinced that the world market can and will absorb all United States rice if rice produced in this country is offered for export at prices competitive with other sellers in the world market.

I believe if we could dispose of all rice surpluses and all future surpluses could be avoided

Mr. GATHINGS. Would you suffer an interruption now, Mr. Miller?

That is the very point I have been trying to get at this morning. I just wondered if you could give us a little light on the subject as to just where that level would be, and what is that competitive price on a particular type of rice that is used in the rice-consuming nations of the world.

Mr. MILLER. Congressman, I have in mind in the body of the little statement that I roughed out this morning, to suggest some of these changes that would meet this situation.

Mr. GATHINGS. I don't want to jump the gun.

Mr. MILLER. If I may, when I have finished, I will be happy toI have some world prices here in my brief case that I have recently received from Japan and other places, and I will be happy to go into those to any extent that you wish.

Mr. GATHINGS. I know that you have visited in the Orient in recent months, and that you do know that situation full well.

Mr. MILLER. I went over there. I don't know how much I know about it. I tried to learn something.

Mr. McLAIN. A pretty big place, isn't it?
Mr. MILLER. Yes, sir.

As I was saying, I think that all future surpluses could be avoided if certain improvements were made in the management of rice. It may be that existing laws compel the policies. If so, perhaps the law should be changed.

In other words, I am not suggesting why it is true. I am just sug. gesting that these are policies and practices which we respectfully submit could stand some improvement.

Unless some changes are made, serious consequences may befall rice millers. Some rice mills have closed in recent years, victims of the conditions that have made it impossible for them to continue to operate unless some relief is forthcoming soon.

It seems probable that other rice millers may be forced into bankruptcy also. Under the present circumstances that exist, it is difficult for even the most efficient rice mills to continue operating. Mills are expensive and cannot be easily and quickly replaced. If present mills are forced to close, it may be a long time before investors are found to build new rice mills.

During World War II there was need for rapid expansion of rice milling facilities. During and after the war, United States rice farmers and millers were called upon to meet unprecedented demands to feed our Armed Forces and send rice to allies and the other countries that depend upon rice, but whose crops had been destroyed by war activities.

Mr. McLain brought that point out in his earlier testimony.

United States rice millers met the demand, investing large sums in plants and equipment. Independent millers invested their own private funds to build these expensive mills. During the Korean war again, rice millers were called upon to meet increased demands and again they made further investments.

Since the end of the Korean war, the imposing of acreage controls has cut down the amount of rice to be milled, and the high support paid United States farmers has priced United States rice right out of the world markets.

Rice millers have been patriotic and have made big investments of funds, but they have found themselves in great difficulty. Some mills have had to close, others may be forced to suspend operation soon unless relief is found.

If another emergency should arise, the fine milling facilities that were once available, and which would be so urgently needed again, may go.

Replacement cannot be made quickly nor easily. Recently, I read that the Government is spending 42 percent of a $3 billion rehabilitation campaign to keep American shipping adequate to meet demands that could arise during an emergency.

We read that there is stockpiling of various types of strategic materials that may be needed in time of emergency. All this requires huge expenditures of public funds. If it is wise to spend billions of dollars to build ships and stockpile materials for possible future emergencies, it seems unwise to adopt practices and policies that are slowly destroying a vital food processing industry that is needed now and would be indispensable in an emergency.

I am convinced that rice millers do not want, nor need, subsidy nor Government help. I believe that if rice millers and rice farmers were permitted to carry on their business under the basic principles of free enterprise, they could grow and prosper and be ready to do their part promptly and well whenever the Nation needed them in peace and

Specifically, some of the ways that present policies and practices could be improved, in my own personal opinion, are:

First, present rice surpluses held by CCC could be offered for milling and export at prices competitive with the world market. Under RRDL 500, which Mr. Dean mentioned a few moments ago, or similar announcements, if option were granted for 30-day periods on stated lots of rice at realistic prices to individual rice millers, I believe the surpluses would soon disappear. These options are desirable since it is difficult to try to make sales unless one knows the cost of goods to be sold.

Let me stop and digress for a moment to explain what I mean. For instance, the Government of Greece at the present time has tenders out asking for submission of bids to sell rice to them.

The Government of the United States has rice offered, but it is offered on a basis of the bidder bidding the highest price to get that

in war.

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