Mr. DUNCAN. You have on page 2 here of your bill where your allotment will be cut 5 percent. Now Mr. Rawlings said that should not be any more than 5 percent

Mr. ABBITT. In 1 year?

Mr. DUNCAN. In 1 year.

Mr. ABBITT. That is right.

Mr. DUNCAN. When you raise that allotment back again to one million six hundred ten, will you raise it back according to the type that is needed in the section where it is needed?

Mr. ABBITT. Well you are talking about if the Secretary exercises his discretion on the present law?

Mr. DUNCAN. Yes.

Mr. ABBITT. Don't you know that does not help history, it does not add to the future of the allotments? For instance, that law has been used several times since it has been on the books, and not one timeand I would like to be corrected if I am wrong-has it been used as history, or has it been used in securing additional allotment.

For that 1 year then, it has to be demonstrated there is a need for peanuts in that particular type and no need in the other type. Each type will get what is needed to meet the needs and demands of trade. Now do you see anything so wrong in that? That has not shifted any acres; has it?

Mr. DUNCAN. If you will pardon me, could I let Mr. Pace, who will follow me, go into a little more detail on that?

Mr. ABBITT. I was just worrying about you being worried about shifting acres. I though maybe your people were misinformed, because if this shifts acres, I am not familiar with the shifting. And I assure you there was not any intention to shift acres in that bill.

I think, as a matter of fact, the type of legislation needing strengthening-I think it should be spelled out-it does not do it here, when the Secretary should make the additional allotment. But it was not intended to do that in this bill, and I assure you, as far as I know, there will not be any shifting of acres from one area to another under either one of the bills.

We will be glad to have Mr. Pace, as far as I am concerned, tell us what he thinks about it. I am not critical of your position, but I was just trying to explain our position, what we intended to do, and assure you I think you are maybe seeing someone in the tent who is not there was not intended to be there.

Mr. MCMILLAN. Thank you, Mr. Duncan.

We are certainly honored and privileged today to have the former member of this committee with us, Mr. Stephen Pace, of Georgia. Mr. Pace had a part in writing about all of the farm legislation on the statute books today.

STATEMENT OF STEPHEN PACE, A FORMER CONGRESSMAN FROM GEORGIA

Mr. PACE. Mr. Chairman and gentlemen of the committee, may I first express to you very profoundly and very deeply, and I think I can say from the bottom of my heart, our thanks to you gentlemen for coming over here at this unusual hour to let us conclude this hearing. I know exactly the inconvenience that you have suffered, and I,

and those from the Southeast and I am sure from the other areas, appreciate it.

Mr. Chairman, it is a great privilege to appear before this distinguished committee and this subcommittee. It brings back, Mr. Chairman, many very fond recollections. After 1 term on the Military Affairs Committee, I sat here with you gentlemen for 12 long years, many, many very happy hours; many, many very interesting fights. It is good to be back for a day.

Mr. Chairman, I am speaking here as general counsel for the society, Eastern Peanut Association, and at the request of the president of the Georgia Farm Bureau on behalf of the growers of Georgia, Florida, and Alabama.

Reference has been made, first, to the matter of a separate bill, that they did not want a separate bill on peanuts, they wanted one in an omnibus bill. I was so attracted by the comments during the morning that as your distinguished colleague, the majority whip, left the Chamber at noon I asked him if he had any hope of getting a closed rule on the omnibus agriculture bill, and his reply was: Not the slightest.

So in my mind, I cannot see the distinction, if there should be a peanut paragraph or title in the bill, that the House could not, if it wants to, work on it for an hour or a day or a week, and surely determine its own will regardless of its being in an omnibus bill.

I want to make, as briefly as I can, a running analysis of the two bills which were presented this morning. In doing so, if any of the members of the committee have a question, I should like to have you simply lift your hands, and I will stop in order that there might be no misunderstanding as to what I should say.

Mr. Chairman and gentlemen of the committee, in my judgment there has never been a bill presented to the Congress as untimely as this legislation. I say that because throughout the years it has been my privilege to have an interest in the welfare of the peanut growers, and I have never known them to be in as complete a disagreement as they are in this hour.

Now reference was made this morning that what was being done by the proponents of this legislation was to perfect the program before it hit the floor and before the attack could start, and maybe there would be no attack if the Virginia-North Carolina bill should be enacted into law. Well, let's see whether there is a red flag in the legislation. It was said this morning that this is a plan for the growers, as I understood, to make the bill, the program, self-supporting. The bill provides I am talking about the bill by the distinguished gentleman from Virginia-provides that the growers shall contribute 5 percent into a fund, 5 percent of the parity price into a fund, for promotion and so forth. The bill then says in its concluding paragraph, as I recall, that the support price is raised 5 percent of parity, which, in effect means that the grower will not himself make any contribution. It means that the price under the present support level will go up $13.10 a ton because the parity price now is $262 a ton. It means when you add the 5 percent for the grower to put into the pot, you raise the price of farmers' peanuts $13.10. It is estimated that that would increase the price of shell peanuts about $25 a ton. That is, the sheller is going to have to buy them, and pay this extra 5 percent,

which he will pay, and, in effect, keep and send to the Government because, I presume, that the buyers will receive the payment.

Then secondly, it was testified this morning, as I understood my distinguished Bill Rawlings, that section 1 of the bill amending normal supply and amending total supply would raise the support price on peanuts to 90 percent of parity. That was the statement as I heard it. The support price on peanuts today is 82 percent of parity. So this bill, when it hits the floor, if it should, is calculated to raise the support price 8 percent of parity, and 8 percent of parity is $22.96. Therefore, if the bill reaches the floor it will have the effect, according to my calculation, of raising the price of shell peanuts to be paid by the manufacturers by $47.96 a ton.

Is that going to quiet this opposition we have had as to peanuts being a basic commodity? If the manufacturers find out that this bill is, in round figures, raising the cost of peanuts $48 a ton, is that going to put them to sleep?

I repeat, Mr. Chairman, that due to the division among the growers, due to the impact upon the manufacturers, I cannot see anything at the end of this line but the high possibility that the peanuts will be knocked as a basic commodity in the entirety, and this bill is inviting such an attack.

Now, Mr. Chairman, it is also untimely, if you will permit me to say so, for two other reasons: One is for the last 9 months one of the nicest things that has happened in the peanut industry in a long time, the consumption of edible peanuts is going up. Since the first day of last August, until this hour so far as I know, the last report I had is not this late, there has been a steady and substantial increase in the consumption of edible peanuts.

Mr. ABBITT. Let me ask you this one question right there. It was testified here somewhere along the line that peanuts dropped from 90 percent of parity to 82 percent, and then when the new modernized parity went into effect that we took a still further drop of about 5 percent.

Mr. PACE. My dear sir, modernized parity-the few things that I did in my service here was to question that, and to bitterly oppose it. Modernized parity, so far as the peanut growers is concerned, has been very, very harmful.

Mr. ABBITT. That is what I am getting at. When they had that drop from 90 to 82, and then took a drop under modernized parity, did that reduce the cost to the consumer in the least?

Mr. PACE. Yes, sir; it did. And I am wondering, Congressman-
Mr. ABBITT. Have you got a pound of peanuts recently?

Mr. PACE. Sir?

Mr. ABBITT. Have you bought any ball park peanuts recently?
Mr. PACE. Oh, I thought you meant--
Mr. ABBITT. I said to the consumer.

to the consumer?

Has there been any reduction

Mr. PACE. I think there has been some in peanut butter, sir. I can't tell you about candy.

But I have wondered, Congressman, what that reduction in price, what effect that reduction in price, has had upon this increase in consumption? I do not know

I appreciate your coming up here, and I know the committee does,

too.

Mr. MCMILLAN. Mr. Davis, if you will give the committee your full name and title.

STATEMENT OF ROY B. DAVIS, JR., PRESIDENT, VIRGINIA FARM BUREAU FEDERATION

Mr. DAVIS. Thank you, Mr. Abbitt.

Mr. Chairman and gentlemen of the committee, I am Roy B. Davis, Jr., president of the Virginia Farm Bureau Federation. We appreciate this opportunity to appear before you and present the views of the Virginia Farm Bureau Federation, an organization of more than 17,000 Virginia farm families who have paid, at this time, their 1958 dues.

Our organization represents all phases of Virginia agriculture, and we are constantly working to improve the farm income of Virginia farm families by working together as a group and accomplishing those things for Virginia agriculture by group action which they, as individuals, cannot, or find it more difficult to accomplish.

At our most recent annual State convention, the delegates from the county farm bureaus comprising the membership of the Virginia Farm Bureau Federation, adopted the following resolution:

We support the enactment of peanut legislation which will—

1. Permit peanut growers to decide in a referendum whether to adopt a selffinancing and promotional program designed to put the peanut program on a basis of no cost to the taxpayer.

2. Peanuts held by CCC be excluded from total carryover computations.

3. Provide for adjustment in the national acreage allotment for underharvesting.

4. Repeal minimum national acreage allotment with a proviso that it cannot be reduced more than 5 percent of the previous year's allotment.

5. Revise the method by which the Secretary determines a short supply of peanuts of a particular type and the method used in arriving at the increased acreage allotment to be provided for a type determined to be in short supply. 6. Provide for changing the conversion table to be used in determining the percentage of parity support by using the set of conversions now established for corn, wheat, and rice, instead of that now used for cotton and peanuts.

However, the delegates from the several States in attendance at the American Farm Bureau Federation annual convention several weeks after the Virginia convention adopted several resolutions which have a bearing on the proposals before this committee. The resolutions of the American Farm Bureau point up the essential nature of promotional work for agricultural commodities and urge increased support for sound, well-coordinated programs to promote the increased sale and total consumption of farm products without duplication of promotional effort.

This resolution states further the position of Farm Bureau that any funds raised for the purpose of promoting the sale of farm commodities should be collected on a voluntary basis, administered by an organization of producers, with handlers and processors included where it is mutually agreed that they should be included, and that such funds should be used solely for the specific purpose for which collected and not for legislative or political activities.

A second resolution which has a bearing on the proposals before this committee, states that

price-support levels should take account of competitive conditions, supply and demand, and market trends.

As we look at the situation facing peanut producers today, we see several trends which should be considered in the development of future policies. A recent publication of the United States Department of Agriculture which came to our attention showed that the 1957 acreage of peanuts in the United States had decreased to 94 percent of the 1935-39 average, while the world production in 1957 stood at 164 percent of the 1935-39 average.

Due to our increase in yields per acre in the past 20 years, production of peanuts, however, showed a somewhat different picture, with United States production increasing to 127 percent of the 1935-39 average, while at the same time the world production was increasing to 152 percent.

While it is not our contention that the relative loss of production in the United States, when compared to the world production of peanuts, should be an overriding factor in our decisions, yet these facts should be borne in mind when we consider policies affecting peanuts. All of agriculture and peanut producers in particular should well consider whether it is in their best interests to allow this gap to become wider or should we take steps to restore to the American peanut producer the opportunity to regain his historical portion of the world market.

However, it may well be in the best interests of our peanut producers and of agriculture in general to confine our efforts to supplying the domestic market without regard to world demands. We feel that peanut producers, through their representative organizations and legislators, should carefully consider these facts and take such steps as are necessary to protect their own best interests.

Referring specifically to some of the proposals in the legislation under consideration, we support the provisions which increase the carryover of peanuts for the purposes of definition of "normal supply" from 15 to 25 percent of the estimated domestic consumption, plus estimated exports. The purpose of this section is to have the peanut program more nearly conform to current practices in the industry and in this matter we are in agreement.

The above Farm Bureau resolution also calls for support of the amendment to the Agricultural Act of 1938, as amended, to exclude from total carryover computations the peanuts held by CCC and consider only those peanuts held in commercial channels for purposes of determining the supply of peanuts and calculating the supply percentage.

We feel that the technological advances in the production of peanuts have created a condition whereby the yield per acre has been increased to the point that in a normal year the present national minimum acreage allotment of peanuts will produce more than the requirements of the industry at the price level established under the law.

We, therefore, feel that the reduction in the minimum national acreage allotment is justified. We commend the peanut producers for recommending such an adjustment in the peanut program in view of the cost to the taxpayer for those peanuts produced over and above the market requirements. While the recommended reduction in the