The group was assured by Acting Secretary Sugg that copies of the minutes and of the redraft of the bill based on the actions of this meeting would be forwarded to each of those present as soon as possible.

There being no further business,the meeting was adjourned.
Respectfully submitted.

JOE S. SUGG, Acting Secretary.

MINUTES OF PEANUT MEETING IN RADIUM SPRINGS, FRIDAY, DECEMBER 6, 1957

H. B. Wilson, chairman, GFBF Peanut Commodity Committee, called the meeting to order at 10 a. m. and H. H. Knowles of Alabama gave the invocation. Chairman Wilson asked J. H. Wyatt, secretary, GRBF Peanut Committee, to read the minutes of the peanut commodity meeting held November 11 in connection with the GFBF annual meeting and also the minutes of the Atlanta meeting where proposed legislation was discussed.

Mr. Wilson explained the purpose of this meeting was to further discuss this proposed legislation and that the results would be sent to W. V. Rawlings, executive secretary, Virginia Peanut and Hog Association, who had worked with USDA officials in drawing up this proposed legislation. It was announced that Mr. Rawlings would be attending a meeting in Kansas City of National Commodity Committeemen, Monday, December 9, and would need farmers' opinion on legislation at that time.

Mr. Wilson explained that John P. Duncan, Jr., president, Georgia Farm Bureau, had called this meeting of the GFBF Peanut Committee and that Alabama and Florida had been invited.

Everyone in attendance was asked to stand and give their name, position, and from which State. Each State was well represented and enclosed is a list of persons in attendance.

Chairman Wilson called on Steve Pace, general counsel for Southeastern Peanut Shellers Association, to lead a thorough discussion on the proposed legislation. It was suggested that Mr. Pace discuss each proposed section of the bill and then after completion of the discussion that each section would be voted on separately. A lengthy discussion followed.

Below is the action taken by producers:

Bob Griffin moved the adoption of the section dealing with increasing the carryover, in the definition of normal supply, be increased from 15 to 25 percent. Motion was duly seconded and carried unanimously.

Bob Griffin also moved that the section, lowering from 108 to 102 percent (the supply percentage in figuring support prices) be deleted. Motion was duly seconded and carried unanimously.

Aubrey Hudson of Florida moved that the section dealing with total supply of peanuts and in determining total supply that peanuts acquired by or held by CCC be excluded in figuring total supply. H. L. Wingate of Georgia seconded the motion. Motion carried unanimously.

Bob Griffin of Alabama moved that the section dealing with the Secretary of Agriculture taking into consideration the carryover of peanuts in announcing national marketing quota, so as to provide for a normal supply of peanuts, be struck out for further study. Motion was seconded and unanimously carried.

H. L. Wingate moved that the section of the present law which prohibits the Secretary of Agriculture allotting less than 1,610,000 acres nationally be amended to provide that the national marketing quota for peanuts be not less than the smaller of 95 percent of the national acreage allotment for the preceding year or 1,529,500 acres. Motion was seconded by Mr. Cogburne of Florida and passed. C. W. White of Bainbridge requested that his vote be recorded as against this amendment.

C. W. White of Georgia moved that the section of the present law giving the Secretary authority to increase peanut acreage by types, be repealed. Motion seconded by Bob Griffin of Alabama and carried unanimously.

Grady Dunn of Alabama moved that the section dealing with setting up a promotional fund be amended by striking out wherever stated "10 percent for each succeeding year" and also the section "with respect to limitations upon the quantities of shelled peanuts, by types and grades below U. S. No. 1 grade, which may be marketed or otherwise disposed of for uses other than for feed or for crushing into oil or meal, or for export." Motion seconded by H. L. Wingate and carried unanimously.

H. L. Wingate moved that the section dealing with setting up of a fund of 5 percent above the announced support price of which one-fourth of the fund would go for promotion and the remainder of the fund to go for administration and any losses that may occur under the price-support program, be adopted. R. R. Donaldson of Alabama seconded motion and the motion carried.

C. G. Boyd of Florida moved that W. V. Rawlings be contacted and ask him to furnish persons in attendance at this meeting a copy of the final proposed peanut bill to be presented to the Congress in January. Motion seconded and carried. Meeting adjourned at 4: 30 p. m. Respectfully submitted.

Name, State and position:

W. L. Alford, Poulan, Ga., farmer.

J. H. WYATT,

Secretary, GFBF Peanut Committee.

G. L. Houston, Sylvester, Ga., Southeastern Peanut Association.

H. H. Conner, Jr., Eufaula, Ala., Southeastern Peanut Association.

S. R. Baxley, Tom Huston, Columbus, Ga., Southeastern Peanut Association. H. G. Richey, Southern Cotton Oil, Macon, Ga., Southeastern Peanut Association.

G. C. Davis, Arlington, Ga., Southeastern Peanut Association.

Rhett Bryson, Alabama, Southeastern Peanut Association.

H. M. Sessions, Enterprise, Ala., Southeastern Peanut Association.
E. J. Young, Dawson, Ga., Southeastern Peanut Association.

D. H. Harden, Camilla, Ga., GFA.

W. A. Cogburn, Florida, farmer.

Aubrey J. Hudson, Jackson County, Fla., Florida FB.

W. W. Glenn, Box 530, Marianna, Fla., Florida FB.

J. C. Cromley, Statesboro, Ga., farmer.

L. L. Mauldin, Georgia, GFA.

C. G. Fuqua, Georgia, GFA.

H. H. Knowles, Headland, Ala., GFA.

C. G. Boyd, Newberry, Fla., Florida FB.
Billy Newberry, Arlington, Ga., farmer.
R. R. Donaldson, Opalika, Ala., GFA.
Grady W. Dun, Samson, Ala., GFA.

B. B. Saunders, Jr., O'Brien, Fla., GFA.

W. C. Riverbark, Columbia, Ala., farmer.

Frank M. Stewart, Box 1631, Montgomery, Ala., Alabama FB.

Arlie Shultz, Route 2, Ocilla, Ga., farmer.

J. D. Gardner, Camilla, Ga., GFA.

G. C. Kearse, Leesburg, Ga., farmer.

R. L. Heath, Leesburg, Ga., farmer.

R. L. Griffin, Box 1631, Montgomery, Ala., Alabama FB.

H. L. Wingate, Box 7, Pelham, Ga., farmer.

Troy Barton, Macon, Ga., GFBF.

A. T. Mace, USDA.

J. E. Thigpen, USDA.

R. C. Singletary, Jr., Blakely, Ga., farmer.

Julian Maddox, Luverne, Ala., Luverne Peanut Co.

Elmer Paulk, Ocilla, Ga., GFA.

Billy Ewing, Georgia, farmer.

W. L. Paullin, Pelham, Ga., Columbian Peanut Co.

Mrs. Virginia Culpepper, Americus, Ga., Southeastern Peanut Association. A. J. Singletary, Blakely, Ga., farmer.

Roy E. Parrish, Moultrie, Ga., Goldkist.

Edward Jordan, Tifton, Ga., Farmers Gin & Peanut Association.

Yank Lamb, Omega, Ga., Farmers Gin & Peanut Association.

C. W. White, Bainbridge, Ga., farmer.

Pierce Christie, Dawson, Ga., GFBF.
H. B. Wilson, Abbeville, Ga., farmer.
J. H. Wyatt, Brooklet, Ga., farmer.

STATEMENT OF CLARENCE MILLER, ADMINISTRATOR, COMMODITY STABILIZATION SERVICE, UNITED STATES DEPARTMENT OF AGRICULTURE; ACCOMPANIED BY JAMES E. THIGPEN, UNITED STATES DEPARTMENT OF AGRICULTURE

Mr. MILLER. Mr. Chairman, I would like to apologize for not being able to come at the appointed time.

Mr. MCMILLAN. We understand one of the other committees had you tied up. That is perfectly all right.

Mr. MILLER. We appreciate the opportunity to express our position with respect to H. R. 12566 and H. R. 12545.

The Department is appreciative of the effort the growers have made to develop improved legislation for peanuts. However, the Department is opposed to both of these bills.

During the 1956-57 marketing year the consumption of peanuts increased about 8 percent. So far during the 1957-58 marketing year another increase of 8 percent has been recorded.

We believe this increase in consumption of peanuts is associated with somewhat more moderate prices, an adequate supply and vigorous advertising and sales efforts by manufacturers of peanut products.

I would like to add also, Mr. Chairman, that we recognize the good job that the growers and the producer organizations have done toward securing an increase in the consumption of peanuts.

We believe it is in the long-term interest to peanut growers to move in this direction. It is here that the administration proposal for discretion to determine the level of price support and to increase allotments seems to best come into focus.

The bills under consideration tend to move in the opposite direction in that they would maintain high level support on an inflexible basis. They would increase and tighten rather than reduce and relax the restrictions and Government regulations affecting the production and marketing of peanuts. Adoption of either of the bills would establish provisions which would tend to stifle further growth in the industry. The rigid provisions of both bills are contrary to the Department's recommendations with respect to price-support programs.

Either bill would produce major changes in the marketing quota acreage allotment and price-support legislation. Both bills provide for increasing the carryover percentage in the normal supply calculation and for eliminating Commodity Credit Corporation carryover in the supply percentage determination. The combination of these two provisions, both of which we strongly oppose, would tend to freeze the price support at 90 or 95 percent of parity.

The concept of self-supporting price-support operations contained in both bills may have some merit, but the Department is opposed to such provisions if they must be accompanied by high price supports and rigid controls which would restrict the growth of the peanut industry.

The provision in both bills for the use of funds for publicity and promotion of peanuts and peanut products is objectionable to the Department. These provisions would in effect place the Federal Government in the field of promotion of peanuts and peanut products,

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and we do not feel that Federal Goverment functions should be expanded into this type of activity. We believe private trade can promote, advertise and sell peanuts far more effectively than the Federal Government.

H. R. 12566 would reduce the minimum acreage allotment by 5 percent. H. R. 12545 makes no provision for reduction in the minimum acreage allotment but instead provides for an increase in the acreage allotment to offset underharvesting. Under present conditions this would mean an increase in the acreage allotment from the current minimum of 1,610,000 acres to about 1,770,000 acres.

Neither of the bills modifies the allotment and quota provisions to the extent deemed advisable by the Department in order to permit more freedom to growers and needed expansion of the industry.

H. R. 12545 would change the present law relating to short supply determination. The proposed method would be a simplification of the present system but would be unworkable since it would apply on an area basis instead of by types.

H. R. 12545 contains two provisions which are not closely related to the remainder of the bill. One of these refers to the determination of price support by types. The rigidity which would result from the suggestion would be highly undesirable. Also the relationships of price which would be established by the proposal are subject to serious question.

The second proposal provides that the Secretary shall not enter into any contracts with associations performing shelling operations where contracts are not available on the same basis to other shellers. The Department feels that this provision also places unnecessary restrictions on price-support operations.

In summary, the Department strongly opposes both of these bills. We feel that rigidity of either bill would, if adopted, constitute a backward step for the peanut industry.

Mr. MCMILLAN. Do any of the members care to ask Mr. Miller any questions?

Mr. POAGE. I would like to ask Mr. Miller what he thinks about continuing the practice of allowing a greater degree of foreign matter in grade A runners than is allowed in grade A Spanish?

Mr. MILLER. Congressman Poage, I would rather for Mr. Thigpen to answer these questions when we get into the technical aspects of discounts, premiums, and discounts for foreign matter in peanuts.

Mr. MCMILLAN. Mr. Thigpen, do you care to answer that question? Mr. THIGPEN. Mr. Chairman, Congressman Poage, the particular question relates to the shelled grade standards for peanuts, which are operated on a strictly voluntary basis, as a matter of service to people who sell shelled peanuts and people who buy shelled peanuts.

I personally think that it makes little difference whether the shelled standards are operated as they are, whether they are changed as the Congressman suggests by his question-it makes little difference. I think it would be possible to develop shelled grade standards which would serve the industry better.

Mr. POAGE. It may not make much difference, but you have known it has been a sore spot for a long time, have you not?

Mr. THIGPEN. I understand the question and the view of the people in the Southwest on it, yes, Congressman. It is not my responsibility administratively.

Mr. POAGE. No, but it is the Department's.
Mr. THIGPEN. It is the Department's, yes.

Mr. POAGE. And I am perfectly willing for Mr. Miller to pass the question to anybody he wants to. If you are not responsible, I would like to have somebody who is responsible tell me some good reason for allowing twice as much trash in No. 1 runner peanuts as in No. 1 Spanish. I don't care who gives me the answer.

Mr. THIGPEN. I will give an explanation which has been given, which I consider to be most logical. I wouldn't attempt to defend the particular setup on shelled grade standards. They can be improved, probably.

But as I understand, the way the grades have been set up thus far, there has been an effort to set grades which would let the bigger portion of the peanuts of each of the types move into the market within the grade divisions which have been No. 1, No. 2, and oil stock, with some variations.

I realize the question which goes with the 1.5 percent damage allowance, the tolerance on runners, and three-quarters of 1 percent on Spanish, or Virginias. But the explanation which has been given for that variation is that in the case of runners, on the average, there are more peanuts which have what they call concealed damagethat is inside the kernel-which cannot be detected by observation with the eyes, when shelled peanuts go over a belt, or which cannot be detected by electric eyes.

Now, if a change were made to, say, well, the damage can only be one-half of 1 percent, then theoretically there could be no, or very few, so-called No. 1 runner peanuts. And it is that point which is a bone of contention.

In the Spanish peanuts in the Southwest, in most years the damage can be brought to, say, three-quarters of 1 percent, by visual observation, use of electric eyes, because there is not so much of the concealed damage. Yet, the Southwest area people, the shellers in particular, feel that nonetheless, even though these 2 peanuts are inherently different, there should not be 1 that is called à No. 1 peanut, that has 1.5 percent damage, whereas theirs only has three-quarters of 1 percent damage when it is called a No. 1.

Mr. ALBERT. May I interrupt here a minute. Of course, the thing that causes the trouble is the market advantage that one gives the other. That is the whole story. Any Government policy that gives one section a break on the market over the other will always cause an

uproar.

Mr. THIGPEN. Congressman, I appreciate the remark. And I would sincerely like to see the shelled grade standards so revised that they would, I believe, better serve the industry.

Mr. POAGE. Then may I ask Mr. Miller who is responsible for revising them?

Mr. MILLER. It lies in the Department of Agriculture.

Mr. THIGPEN. It is the Agricultural Marketing Service. But I think in all fairness that the peanut people themselves know more about this question than anyone else, the shellers.

Mr. POAGE. We have questioned a great many of them this afternoon, and there is not a one that has not said they know of one reason why we should not apply the same rule. Not one has testified this afternoon as to why there should be a different rule.