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We feel a cushion of 5 percent, a quota which would provide 105 percent of the estimated requirements, is no more than a necessary safeguard against a short supply and the resulting bad effects that it has on the market.
Mr. ABBITT. How does that change the present law?
Mr. RAWLINGS. No cushion is allowed. I shall get to that point next. Frankly, under the present law we have a minimum national allotment of 1,610,000 acres, which with our trends in yields is producing roughly 10 percent more peanuts than there is need for. As long as we know that the quota with anywhere near normal yield will produce more peanuts than there is a consuming market for, there is no need for a 5 percent cushion.
But when we get to the next point where it is proposed to reduce from the minimum of 1,610,000 and the quota is set more accurately and realistically in line with estimated demand, then you get to the need of a cushion to safeguard against short supply.
Mr. ALBERT. We would not put any minimum acreage in the statute; is that right?
Mr. RAWLINGS. Yes, sir, Congressman Albert. We are proposing that we still have a minimum national allotment, but that it be set at a figure 10 percent below the present minimum, and further provide that the national allotment cannot be reduced by more than 5 percent in any one year. So if the present calculations, as we understand them from the people in the Department, are correct, it would take about a 10 percent reduction in the national allotment if we were to set this thing pretty much in line with demand; it would take a 5 percent reduction for 2 years to approach that.
We cannot tell conclusively what course this trend in yields per acre will take. A major research is being conducted on that right now. Actually we are making rather phenomenal progress in increasing the yields per acre. That is what we are confronted with.
I think that question clarifies the next point I wanted to cover so far as reducing the minimum national allotment but not an outright repeal of it.
Mr. ABBITT. Your information from the Department and others is that the minimum allotment is slightly too much?
Mr. RAWLINGS. That is correct. In other words, we have made faster progress in yields per acre than in consumption. We made modest progress in increasing consumption, but our yield per acre has increased at a little faster rate.
Mr. ABBITT. You are increasing your production per acre more than you are increasing the consumption.
Mr. RAWLINGS. That is correct, sir. The next major point, which I think consumes more space in H. R. 12566 than any other point, is a program which is intended to put the peanut program on a self-supporting basis and at the same time provide a continuing national fund for use in promoting the increased consumption of peanuts and peanut products. It provides that there will be a deduction from growers of not to exceed 10 percent for the first year, and thereafter 5 percent, in order to take care of four major items:
(1) The cost of diverting surplus quota peanuts;
(2) To pay for the administrative expenses of the three producer cooperative associations which administer the price-support phase of the program under contractual arrangement with the Commodity Credit Corporation;
(3) To pay for the diversion of lower quality peanuts in years when there is a surplus, to pay the market price to the sheller in order to justify his diverting them rather than putting them into the edible trade and ending up with higher quality peanuts being crushed and lower quality going to the trade; and
(4) To be used for a national promotion program. The bill spells out that that program would be started on a modest basis, and any increase or pickup in it would be geared to proven results. The most that can be earmarked for that phase of the program would be three-fourths of 1 percent of the current support price for peanuts. There is also a provision which states that in the event growers have accepted this phase of the program in a referendum—that is, the promotional and self-supporting phase—then the price-support schedule under our flexible support would range from 80 percent to 95 percent of parity instead of the present 75 to 90 percent, to partly compensate the grower from the deduction which will be made in order to pay for these diversion costs and to take care of the overall costs of the program.
They are the main points in this bill. The producers in our area feel the principles of this bill are sound. It is something we spent approximately 3 years considering at numerous meeting, not only in our area but with representatives from other areas.
We recognize there are conscientious differences of opinion. We certainly hope that the bill will serve as a vehicle whereby we can eliminate these areas of differences, to the end that we can come out of here with a constructive peanut provision in any overall farm bill which may be voted out.
I am not familiar in detail with that provision of the other bill, but I would say in general principle it is certainly for promotion. As I understand theirs, it is to promote foreign markets primarily.
Mr. ABBITT. Is the self-held based on favorable approval in a referendum?
Mr. RAWLINGS. Yes, sir. That whole phase of the program in this bill would not be operative unless two-thirds of the peanut growers throughout the United States voting in a referendum voted in favor of it. There is nothing mandatory about that phase of it. I would call it permissive legislation or enabling legislation.
Mr. ABBITT. So the self-help program would not go into effect and the deduction would not take place until and unless it was approved in a referendum?
Mr. Rawlings. By at least two-thirds of the growers voting in a referendum.
Mr. ABBITT. The purpose of that, of course, is to take the burden off the taxpayers and let the producers carry their own program, and also to put on a promotion program to increase the consumption of peanuts, at the same time limiting the amount that would be put in the promotion program.
Mr. Rawlings. That is right. We limit that with an upper limit of three-fourths of 1 percent of the current support price as the maximum limit. Of course, it could be a lesser figure as set by the Secretary.
Mr. ABBITT. Would you say the bill favors one particular area?
Mr. RAWLINGS. I very sincerely and conscientiously say that I believe everything we have previously discussed which might possibly be interpreted as being favorable to one area against another has been removed from this bill. We certainly welcome the opportunity to sit down and talk with anybody about any provision he thinks will give our people or anybody else an advantage over any other area which has not already existed.
Mr. ABBITT. In this bill, is the cost or the burden of the program to be carried by areas, or is the whole program all in one?
Mr. RAWLINGS. All in one. That is the difference between this bill and the bill introduced by Congressman Burleson.
Mr. ABBITT. In other words, you let all the deductions go into one pool, and that pool would carry the burden of the operation of the entire program.
Mr. RAWLINGS. Frankly, from a particular area standpoint, we would like the other provision better. That is an example of our leaning over backwards in order to remove a point of contention. Our growers are ready to go with it, although we concede there is a lot of merit in a slightly different proposal contained in the Burleson bill.
Mr. ABBITT. You would personally prefer an area program, but this bill consolidates it for the whole country.
Mr. Rawlings. That is right. Mr. ALBERT. Did I understand you to say, Mr. Rawlings, that the Virginia growers would be interested in this bill being pushed at this session only as a part of an omnibus farm bill?
Mr. RAWLINGS. Yes, sir. We do not think it would be well advised to put a peanut bill out by itself. We would be fearful of that, sir.
Mr. ALBERT. Is this the only peanut legislation which your growers recommend that the Congress act upon during the present session?
Mr. RAWLINGS. Yes, sir; although we look with favor on a bill which is now pending, introduced by Congressman Matthews. We think it has a lot to commend it.
Mr. MATTHEWS. Would the gentleman yield at that point ?
Mr. MATTHEWS. It would be my purpose, if we could not get this legislation on the Consent Calendar-and I think the chairman agrees we will not consider it. It is a minor corrective bill which the gentleman has approved, and I believe the Georgia producers and all the areas have approved it. I want to make it clear it would not be my purpose to push it unless we could get it on the Consent Calendar, after committee approval.
Mr. ALBERT. This bill would be your idea of the peanut title to a general farm bill?
Mr. RAWLINGS. Yes, sir.
Mr. ALBERT. Do you feel that the need for peanut legislation of this kind is pressing enough to jeopardize the chances of the cotton section or the wheat section of that bill, cotton and wheat being in more trouble than peanuts at the present time?
Mr. RAWLINGS. Frankly, I am not familiar enough with those particular commodities.
Mr. ALBERT. If cotton does not get a bill, they are out of business.
Mr. Rawlings. We certainly do not want to put anybody out of business. What worries us is that we have been all but put out of business once or twice. Members of this committee and other friends in Congress have gone right down to the wire with us on it. We feel it is much better to mend our fences and get our program in a more defensible position before that crowd hops on us again. We feel very strongly about that.
Mr. ÅLBERT. Thank you. I just wanted to get your position.
Mr. SMITH. Do I understand your position to be that the peanut growers are in favor of reducing acreage and increasing the price rather than increasing the acreage and lowering the price!
Mr. Rawlings. I do not think the peanut growers, certainly in my area, have ever been in favor of increasing the acreage and lowering the price.
Mr. Smith. You know a lot of grain producers got in trouble by thinking they could cut down the acreage and increase the price. Now we seem to see a tendency to want to lower the price and increase the
Mr. RAWLINGS. We have taken a very severe reduction in price in addition to the cutdown from the 90-percent level. We were affected more severely on the shift from the old parity formula to the modernized parity formula than any of the other basic commodities.
We already have had a lot taken out of our hide, pricewise, in addition to what happened to us in going from 90 to 81.4 or 82, sir.
Mr. SMITH. I have heard this phrase "under attack," both from you and from the other gentlemen who testified. Am I to understand that to mean under attack of the manufacturers of peanut products? Is that what you mean by “under attack”?
Mr. Rawlings. Primarily from a segment or group of manufacturers of peanut products. All the manufacturers of peanut products have not been associated with the group which pulls the string on us every now and then, but that is where the hub of it comes from, sir.
Mr. SMITH. That is all, Mr. Chairman.
Mr. McMILLAN. You have made an excellent witness, Mr. Rawlings. Thank you very much.
. Mr. ŘAWLINGS. Thank you, sir. Mr. Randolph, president, Alabama Farm Bureau Federation.
Mr. Randolph has to appear before the Senate tomorrow, and will not be with us if we continue tomorrow.
The committee will be glad to hear any statement you care to make, Mr. Randolph.
STATEMENT OF WALTER L. RANDOLPH, PRESIDENT, ALABAMA
FARM BUREAU FEDERATION
Mr. RANDOLPH. Mr. Chairman and gentleman of the committee, my name is Walter L. Randolph, and I am president of the Alabama Farm Bureau Federation. I am testifying for that organization, which has a substantial membership of peanut farmers in the peanut growing area of Alabama.
I called a meeting on March 27, 1958, at Ozark, Ala., of the peanut growers in the peanut-growing counties of Alabama. We have about 14 counties which grow considerable acreages of peanuts. I want to read to the committee part of a resolution which was adopted at that meeting after studying a previous draft of the bill by Congressman Abbitt.
Whereas the peanut producers of Alabama, in a meeting at Ozark, Ala., March 27, called by the Alabama Farm Bureau Federation, believe, after thorough discussion and study, that the proposed legislation on peanuts by the Virginia and North Carolina peanut associations appears to be most untimely; and
Whereas the peanut problems of all areas are more or less the same and these problems should be thoroughly studied and discussed before any changes are made in the now existing law and in this proposed legislation we find many areas of disagreement and because of the many uncertainties involved : Therefore be it
Resolved, That it is the opinion of this group of producers, representing the growers of Alabama, that no legislation of any kind should be introduced in the Congress at this time; and be it further
Resolved, That attempts be made to work out differences and if any effort is made to present any bill to the Congress on peanuts at this time the Southeast area would be compelled to vigorously oppose such legislation.
That is very similar to a resolution adopted previous to that time by a similar meeting in Georgia.
Mr. MCMILLAN. Mr. Randolph, was that resolution drawn up after the provisions of the Abbitt bill were removed as mentioned by Mr. Rawlings?
Mr. RANDOLPH. No, sir. This was adopted on March 27, 1958. I don't know just when the bill was revised. I think it was after that. The bill is dated May 20. I wanted to explain that the revision of the bill does not remove the objections which were voiced by this resolution. I want to go into those in just a few minutes in detail. The resolution states the general position of the peanut growers in Alabama on peanut legislation. We had at that meeting also the board of directors of the Alabama Peanut Producers Association. Mr. H. H. Knowles, the president of that association, is in the room, and also Mr. Grady Dunn, a member of the board of directors of that association, is here. They were present also at that meeting.
I shall be as brief as I can, Mr. Chairman.
We have about three principal objections to the legislation, although we have really more than that. No. 1, as we state in the resolution, we do not think this is the time to pass peanut legislation. Second, we do not see any need for any additional peanut legislation at this time. If we did see need for it, we consider this bill objectionable and discriminatory to Alabama producers.
The principal objection is section 2. I will take it the way Mr. Rawlings explained it. Mr. Rawlings said this provided for a 10 percent reduction in the allotment one year. It could be a total of 10 percent, but it doesn't read that way, Bill. Is that right?
Mr. RAWLINGS. That is what it is intended to mean. We may have made a mistake. I don't know.
Mr. RANDOLPH. Be that as it may, it is either 5 or 10 percent reduction in the national allotment. As is well known, there is a provision in the act now which has been referred to here previously, under which if any type of peanuts is found to be in short supply under certain rules in the bill, the allotment can be increased for that type of peanuts.
Mr. Chairman, we have the feeling that, whatever the intention of the sponsors of this bill was—and I have no doubt of their sincerity,