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shellers and growers, and here were the people from the Virginia

Carolina area, all seeking the same objective, to get relief from this differential and the difference in the damages and so forth.

Was that not your idea? And that the only person now that stood between us and justice was the Department of Agriculture ?

Mr. Reagan. That was the impression left, sir.

Mr. ALBERT. Have you ever understood the reasoning of the Department of Agriculture in this matter?

Mr. REAGAN. I think many, many years ago it was based on some quality differences between the peanuts. I think that quality difference no longer exists.

Mr. Poate. Do you have any explanation or any reasonable explanation at all for allowing No. 1 runners to contain twice as much foreign matter as No. 1 Spanish?

Mr. REAGAN. I do not, sir. · Mr. Poage. Has anybody ever offered you an explanation, even a bad one?

Mr. REAGAN. Well, the best explanation I have had is it takes time to bring about these adjustments.

Mr. Poage. And Mr. Rawlings just testified we started 8 years ago with the Department, and you still think the Department is going to correct it. I do not. I think Congress is going to have to act. And if we do not act, I am in favor of letting the

act go. I am not in favor of continuing a program that has in it such manifest injustice.

Mr. ALBERT. That is what the Department wants.
Mr. PoAGE. Maybe so.

Mr. McMILLAN. We will hear from the Department a little later, so we can ask them that question.

Mr. REAGAN. Right along that point-and I want to close on this at this same hearing, the Southwest was delighted for Mr. Turner to, in his testimony, support uniform United States grade standards on shelled peanuts. Let me phrase it this way: We hope that the Department will act on this.

Thank you. Mr. MILLAN. Thank you, Mr. Reagan. Mr. Grant. Let me ask just one thing. Are you testifying in favor of all the sections of this bill, or just that one particular item you were talking about?

Mr. REAGAN. I am testifying in favor of all of the sections of the Burleson bill.

Mr. McMillan. He testified when we had the previous hearing and wanted to make some corrections.

Mr. GRANT. Are you testifying in favor of this 15-man Board!

Mr. REAGAN. Yes, sir. I believe both the Abbitt bill and the Burleson bill provide for this Advisory Board. And our group favors that.

Mr. Grant. How much is it going to cost the peanut growers, the man that is producing peanuts, to pay for this advice?

Mr. REAGAN. Well, as I recall, the members of that Board will be receiving their actual expenses when they come to Washington, and I believe it is $10 a day. And I doubt if they would meet very frequently, although I would hope that they would see fit to meet several Mr. GRANT. How much will the man that grows the peanuts be taxed! How much would he have to pay under this bill, in addition to what he now pays?

times a year.

Mr. REAGAN. The costs of the losses on the price-support program would be borne by the growers, by a deduction that would be made from the price they received in the market.

In other words, the growers would be bearing the cost of the pricesupport program. It would be removed from the taxpayer.

Mr. GRANT. It changes the whole system that we have today.

Mr. Reagan. That is right, sir, in this respect, that it shifts the costs of the support program. The feeling in our area—and this is held by both growers and shellers—is that the price support program is vulnerable because of the losses that have been sustained, and that right at the moment the price-support program is not under attack. So that now is a good time to bring about certain changes in the program which we feel will make it attackproof, because twice in the last several years we have seen quick attacks made on the peanut program and seen them almost succeed. And we do not want to see that succeed.

Mr. GRANT. Do you suggest the same program for milk and cotton and wheat and everything else that is grown?

Mr. REAGAN. Well, sir, I frankly have not studied those other commodities. In studying the peanut program, though, it seemed peculiarly suitable for this type of program, because we do have a ready dievrsion market, in that we can divert the peanuts into crushing at one-half their value for edible use.

Mr. GRANT. Thank you, sir.
Mr. McMILLAN. Thank you, sir.

Mr. ABBITT. Mr. Chairman, certain officials of the Virginia-Carolina Peanut Association were not able to get here today. And I ask unanimous consent that such officials from that association that desire may have leave to file at a later date a statement as to their feelings about this matter. And I would like the record to show that the Virginia-Carolina Peanut Association as of now is opposed to the bill in its present form.

Mr. McMILLAN. Thank you.



Mr. McMILLAN. Mr. T. Earl Bourne, of the Peanut & Nut Salters Association.

Mr. BOURNE. I think Mr. Gravelle will make the statement for our association, Mr. Chairman.

Mr. GRAVELLE. Mr. Chairman, I have a very, very short statement to make.

Mr. McMILLAN. Give the reporter your name and title, please.

Mr. GRAVELLE. My name is Louis X. Gravelle, attorney for the Peanut & Nut Salters Association.

The Peanut & Nut Salters Association is a nonprofit trade association composed of 24 active and 45 associate members. The active members purchase raw nuts, including peanuts, for processing--that

is, cooking and salting—for ultimate sale to the consuming public. The members of this association purchase in large quantities, and it has been estimated that the association annually purchases at least 75 percent of the total production of the extra large and medium type Virginia shelled peanuts.

The ePanut & Nut Salters Association is opposed to any legislation that will reduce peanut acreage, and thus reduce the supply of available peanuts.

Our only worry is the question of any possible reduction in peanuts. The growers grow them; the shellers shell them. We process them and sell them to the consuming public.

During the last few years, we have had several problems. One was some relief from the Tariff Commission, imports on peanuts. I think peanuts today are in rather short supply. And our purpose in coming here is to tell you that we would hate to see any legislation that would cut down the supply for the consuming public.

Other than that, we do not desire to go into the technicalities of the two bills.

Mr. McMillan. Any questions?

Mr. ABBITT. Mr. Gravelle, as I understand it, section 2 of the billand that is on page 2–does amend the minimum acreage allotment clause of the present law.

Do I understand you to say that if that section were eliminated, that your association, as of now, would have no objection to the bill?

Mr. GRAVELLE. I would rather put it this way. I think you have some rather technical legislation that is being proposed. I was in hopes that the Department of Agriculture would have gone on first this afternoon, so we could have had detailed information as to what, in their opinion, this bill would do or would not do. And in the absence of any information in that connection, we would much prefer to just tell the Congress that we don't want you to cut down acreages, because we sell more peanuts if they are available.

Mr. Ablitt. I can well understand your not wanting to go into the technicalities. I wouldn't want to myself, unless the Department made a statement.

Mr. GRAVELLE. Yes. We were in hopes that the Department representatives would testify first.

Mr. ABBITT. But what you are mainly concerned with now is that section that deals with more or less modifying and doing away with the minimum-acreage allotment, as guaranteed—1,160,100.

Mr. GRAVELLE. That is right.

Mr. Abortt. I might, for your information, say that a number of people have expressed to me the same feeling, and I think it is generally understood, among the people interested in this particular legislation-certainly those I have talked to—that if the bill were reported out, that provision would not be in it.

So far as I am concerned, I can speak for nobody else but myself, and don't pretend to. So far as I am concerned, that section is not necessary to the legislation. And I think the main reason it was put in there was, I understood, the Department had been harping on the fact that they could not get a good program so long as we had a guaranteed minimum, that they couldn't handle it or do anything about it.

Mr. Pace. Mr. Chairman, I am about done. There is a peculiar thing in the Southwest bill. It is difficult to understand. They come in the first section and amend normal supply, amend total supply, to increase the support price of peanuts up to 90 percent. As you all know-I am about done—as I have said, they raised the support up in the first paragraph and about the last one, as all of you know, you have got two flexible price-support schedules. You have got cotton and peanuts. Then you have another one for wheat, corn, tobacco, and what else. The supply percentage on wheat has been down to 102 percent to get 90 percent support. This percentage on cotton and peanuts can be as high as 108 percent and you still get 90 percent support. For some reason I don't understand, and it wasn't explained this morning, they have taken peanuts out of the 108 percent with cotton and they are putting it over with wheat which will have exactly the opposite effect. It will reduce this support price on peanuts.

Now, there may be some justification, but if there is, I can't think of it.

Now, the last section, Mr. Chairman, is a section that would have the effect of telling the Commodity Credit Corporation who should or should not administer the price support schedule. That may be a subject that this committee wants to go into, but I have very serious doubts about it.

Mr. Chairman, I am very grateful to you, sir. I am sorry I consumed so much of your time.

The CHAIRMAN. We certainly appreciate your taking time to give us your opinion of this pending legislation.

Any questions?
Thank you.
Mr. Turner, will you give a further statement?

Mr. TURNER. Mr. Chairman, I would appreciate the opportunity, please, sir, to help my good friend, Congressman Poage, as Mr. Abbitt, if I may, sir, to try to understand the things that you and certainly I am very deeply concerned about, Congressman Poage. I believe some of the best friends I have in the peanut industry are your constituents. We have fought this battle up one road and down the other.

The same thing goes with a lot of your constituents, Congressman Abbitt, and you have seen me at these peanut meetings over a period of 20 years, I suppose. Times and conditions change most everything, and it certainly has changed the peanut-growing habits, productionwise, tonnage per acre. Types of peanuts have been improved considerably by our esteemed gentlemen, some of Congressman Matthews constituents, who have added to the peanut industry a type of peanut, if you please, Mr. Poage, that has brought about this thing that you and I are talking about, maybe an inequity in differentials, if you please.

The Dixie runner peanut has replaced what used to be, Mr. Abbitt and Mr. Rawling, a hog peanut. It isn't so any more. It is now an outstanding competitive product. We don't deny that, not in one degree. We are proud of it. We are glad of it, sir.

Now, getting back to these differentials--and Mr. Moake I believe is not here—on the same grade, if you please, and this is going in the record, we pay within 50 cents a ton for Runner peanuts of what the sheller in the Southwest pays for a Spanish peanut. That is a matter of record.

Now, if you just look at the grade table that is provided by Commodity Credit, you will find that the base percentage of sound mature kernels is listed down under the base price of sound mature kernels of Spanish, Runners, and Spanish. Then you will find another section for Virginia. So you think, historically, they have used these figures over a period of years and adjusted for trends and higher percentage of sound mature kernels gradewise in the various types of peanuts like it happened to our friend in the Virginia-Carolina area. They have researched themselves into an awful predicament by producing a greater percentage of extra large peanuts that there isn't a market for, and today the Commodity Credit Corporation is outlawing it.

Now, back to your statement, sir. I feel sure that the people on the Southeast, No. 1, would not object to you growing all Runners in your area if you like. They don't want to. Then, neither will we object to you putting us or we putting you—and the shoe may fit the other way, Congressman--the same way we are with Spanish and Runners. I am sure that will be entirely satisfactory. I agreed with Mr. Moake. He called me a few weeks ago on the telephone from Texas. He said, would you object to our putting our grades on Spanish peanuts up to 112 percent? I said, not 1 minute. There isn't anybody in the industry that would object to it.

Now, if Mr. Smith of the Fresh Fruits and Vegetables Branch will agree to it, certainly we will agree to it, and I will go out from house to house and plead your cause for you. So, sir, I still say that on this matter of differentials, bet ween Southeast and Southwest Spanish, Southeast Runners and Southwest Spanish, I am sure that we can still sell that for you if that is what you want. Now, that is all I have to say about that."

Just one word, Mr. Chairman, and I will retire. There isn't a man in the world that would rather see a farmer make more money than I. I wonder if you can help the farmer make more money by eliminating his markets or pricing him out of the market. And I submit to you, gentlemen, and I want each of you to listen to this, the records in the Department of Agriculture today are that the biggest increase in consumption of peanuts is the Spanish, is for peanut butter. The next is for candy, and actually this is where the Spanish peanut and the Virginia peanut were hit the hardest. There is a consumption of salty peanuts this yaer where we have an 8 to 9 percent increase overall. In the salted trade that is a reduction in the consumption of peanuts.

Now, gentlemen, there can be only two reasons for that. One of them is you have either priced yourselves out of the market or some cheaper thing has come in and taken your place. There is no other reason. So I submit to you, gentlemen, to let you all kiss us out of here and you all throw this thing in the wastebasket until we can cret together and work out something that will do us all good. This is going to hurt all of us.

Thank you.
Vr. MCMILLAX. Thank you very much.

Vr. D. H. Iardin, manager, Georgia-Florida Peanut Association. Mr. Hardin.

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