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tion 359 (b) of the act as it now stands. The problem has been one which could not be corrected through administrative action alone.

We feel that the proposed revision of section 359 (b) is needed, and we favor its enactment. However, since peanuts have already been planted for harvest for the 1958 crop, we recommend that this provision be made applicable in connection with the 1959 and subsequent crops of peanuts.

Mr. MCMILLAN. Any questions anyone care to ask of Mr. Miller? (No response.) Mr. McMILLÁN. I believe that Mr. Thigpen and Mr. Merrill, who appeared before this committee on the previous discussion of this bill, have just about answered most of the questions that the members had wanted to ask on this proposed legislation.

Are there any further questions? Mr. GRANT. I would like, with your permission, Mr. Chairman, if I may, to ask a question.

Mr. MCMILLAN. Yes.
Mr. Grant.

Mr. GRANT. Do you contemplate that this legislation would increase the acreage in planted peanuts any appreciable

amount? Mr. THIGPEN. Mr. Congressman, I believe that the tendency would be to decrease it just slightly; otherwise, it would have no effect.

Mr. MILLER. This is just about the same type of legislation in its effect that Congressman Abbitt will recall was passed in regard to tobacco about a year ago:

Mr. ABBITT. Ýhat is right.
Mr. MILLER. We intend to take similar measures as we took then.

While the Department does not look with too much favor upon restrictions on production, we feel that just so long as we have a marketing quota program, that the noncooperators should not be rewarded as against the cooperators in the program. We feel that we are forced by present legislation to do that very thing.

Mr. ABBITT. Is it not true that the operation under section 359 (b) would cause a reduction in our peanut allotment except for the fact that we have already hit the minimum allotment?

Mr. MILLER. Yes; it would have a tendency to overproduce if it were not for that.

Mr. ABBITT. And it is a protection, more or less, for the cooperators and people that have allotments?

Mr. MILLER. We feel that is the effect.

Mr. ABBITT. Let me ask you this further question: Does section 359 (b) have anything to do with the basic commodities?

Mr. MERRILL. No, sir.
Mr. ABBITT. Off the record.
(Discussion off the record.)
Mr. ABBITT. Back on the record.

My understanding is that section 359 (b) and section 358 do not have anything to do with any of the basic commodities?

Mr. MILLER. No, sir; I do not think so.
Mr. ABBITT. Off the record again, please.
(Discussion off the record.)
Mr. McMILLAN. Are there any further questions?

Mr. MATTHEWS. Mr. Chairman, may I ask this question of Mr. Miller?

STATEMENT OF CLARENCE L. MILLER, ASSOCIATE ADMINISTRA.

TOR, COMMODITY STABILIZATION SERVICE, UNITED STATES DEPARTMENT OF AGRICULTURE; ACCOMPANIED BY J. E. THIGPEN, DIRECTOR OF OILS AND PEANUT DIVISION, COMMODITY STABILIZATION SERVICE, USDA; JAMES W. MERRILL, CHIEF, PRODUCTION PROGRAM BRANCH, OILS AND PEANUT DIVISION, CSS; W. K. SCHOONOVER, ATTORNEY, OFFICE OF THE GENERAL COUNSEL, USDA; AND RICHARD B. BRIDGFORTH. ASSISTANT DEPUTY ADMINISTRATOR, COMMODITY STABILIZATION SERVICE, USDA

Mr. MILLER. Yes, sir.

Mr. Chairman, we have a short prepared statement of one and a half pages.

Allow me to introduce to you those who are with me [introduces associates).

Mr. MILLER. I will read this brief statement and then these other gentlemen and I will fill in with the technical aspects and answers to any questions that you may have to ask.

Mr. MCMILLAN. All right; you may proceed.

Mr. MILLER. Mr. Chairman, in response to a request from Congressman Matthews, of Florida, the Department has previously taken the position of favoring enactment of the amendment to section 358 of the act as proposed in H. R. 12224.

This legislation, if enacted, would strengthen allotment and marketing quota provisions relative to peanuts. It would prevent additional farms from qualifying as "old farms" by producing excess peanuts and, thus, would prevent continued reduction in the farm allotments for established peanut producers.

I understand that a prior hearing on this proposal has been conducted by this committee and that representatives of the Oils and Peanut Division, CSS, testified in favor of its enactment.

Our position remains unchanged: We favor enactment of the proposed amendinent to section 358.

Section 2 of H. R. 12224 proposes a complete revision of section 359 (b) of the act.

This is the section which has provided the so-called 1-acre exemption from the provisions of allotments and marketing quotas. Under this section 1 acre or less of peanuts may be produced and marketet without an allotment and without incurring marketing quota penalties.

The revision of this section would provide that the 1-acre exemption would apply only to those farms on which the producers interested in peanuts do not share in peanuts produced on any other farm.

Enactment of this revised section would prevent farm operators from leasing numerous small tracts for the purpose of producing 1 acre or less of peanuts on each tract. It would also prevent a farm operator from utilizing his full allotment for commercial purposes and producing peanuts on another farm under the 1-acre exemption to be used for seed purposes the next year.

In some instances, particularly in areas where high yields of peanuts are obtained, there has been some abuse of the provisions of see

feed prices. And then you hear from the corn people. You hear from the grain sorghum people. So we say, let's get it behind us. You want us to move it. Mr. GATHINGS. Just one other thing. I hate to take up so much time, Mr. Chairman.

Here a few years ago we noticed on the Washington market here some broken rice in larger bags, 5- and 10-pound bags; I just wonder why you don't have those bags of broken rice for sale any more?

Mr. MILLER. Congressman, the mills offer broken rice for sale to the trade. Ordinarily it doesn't move well. Sometimes in perhaps times of depression, perhaps times of uncertain circumstances, you can sell some so-called second-heads, as they call them, or we have a brand we call Wonder Bits of rice which is second-heads which we offer in larger packages. But, frankly, they just, they are offered wherever the trade will buy them, but they are always available from the mills, and it is just that they won't move under certain circumstances.

Mr. GATHINGS. I had a letter from a fellow who had 7 children in his family and he said to me that he didn't want to buy a little old 1-pound package of rice; that he required a lot of rice for his folks. Mr. KRUEGER. He didn't want to discourage that. Mr. THOMPSON. Does that wind it up?

Mr. GATHINGS. Yes. • Mr. THOMPSON. I want to have my committee members hear this, and this is only subject to your approval, gentlemen, I would like to have Judge Satterfield and Mr. LeMay, or whoever in our shop is the proper one to do it, to draw us up a little bill embodying the $64,000 question I submitted to Mr. McLain, remove the escalator clause and leave this price support where it is, leave the acreage where it is, for next year.

I don't know whether we ought to project it beyond that or not.

Mr. SATTERFIELD. Let me ask this question, Congressman: I don't know whether you know of the rice industry group's testimony in the Senate here a couple of months ago in which all of the witnesses testified to the effect that they felt that the whole, both milling industry and producer groups, would go along with not a removal of the escalator clause, but suspension of it for 2 years I mean 3 years, for an extension of the present acreage for 2 years.

Now, do you want this bill drafted
Mr. THOMPSON. Draw it that way.
Mr. SATTERFIELD. Suspension of it, or repeal of it?

Mr. THOMPSON. I don't care; whichever is the more proper thing. Probably suspension.

Mr. SATTERFIELD. This was their testimony. Mr. SORKIN. We would prefer complete elimination. Mr. GATHINGS. I believe that some of these other commodities are planning on a 3-year program.

Mr. THOMPSON. Three-year suspension.

Mr. GATHINGS. Yes, 1959 through 1960 and 1961. Most of those programs are being considered now and cover 3 years.

Mr. THOMPSON. Let's leave it, then, to the General Counsel. I think that is the place to leave it and make it fit the rest of the program, so far as possible. But I would like to have it in bill form and submit it to the rice industry. Let them look at it and see what they think.

Can we do that?

Mr. SATTERFIELD. Mr. Schoonover is from the General Counsel's Office.

Mr. SCHOONOVER. We can work it out. Mr. THOMPSON. All right. Now, customarily we ask all those present if there is anyone else who wants to testify. It is late, but if there is anyone who wants to get something in the record, with the consent of my committee members, we will give them an opportunity to place it in the record at this point as their statement, or if they would like to be heard from, we will hear from them briefly now.

Mr. GATHINGS. I think that is a good suggestion, Mr. Chairman. It may be that some of them might have a table or some other information that they feel would make this record complete.

Mr. THOMPSON. Without objection, pertinent tables may be submitted in the record at this time.

Also, without objection, all testimony may be reviewed by the witnesses for grammatical corrections and so forth. We don't generally try to alter any factual information, but it may be edited, if you so desire, and if so, Mr. LeMay will arrange for it.

The record will be held open briefly for any of these submissions; it will be held open for a reasonable time.

We seem to have wound this up at exactly the right moment because there goes the bell.

Thank you very much for attending, gentlemen.
The committee stands adjourned subject to further call.

(Without objection by the chairman, the following letter has been inserted in the record :) AMERICAN RICE GROWERS COOPERATIVE ASSOCIATION,

Lake Charles, La., April 28, 1958. Hon. CLARK W. THOMPSON, Member of Congress,

Old House Office Building, Washington, D.C. DEAR CONGRESSMAN THOMPSON: It is my understanding that your House Agri. culture Committee will begin hearings tomorrow with respect to a continuing attempt to develop agricultural legislation during this session of Congress.

This is to suggest to you that I, acting as chairman of the Rice Program De velopment Committee representing all rice producing States, would recommend the following legislation for rice as being acceptable to the industry and a possible compromise of the disastrous impasse which now faces us and which would be acceptable to the administration :

1. Suspension of the escalator clause with respect to the level of price support for rice for a period of 3 years.

2. A minimum increase of 10 to 15 percent in rice acreage allotments over the present 1,652,596 acres with the total allotment to be allocated on exactly the same basis as it is now distributed to the States, counties, and producers.

3. The level of rice price support to be at the discretion of the Secretary of Agriculture at not less than 75 percent or more than 90 percent of parity.

We believe that the above suggestions would provide a workable opportunity to indicate whether the program suggested by the Secretary of Agriculture will do the job anticipated and it will at the same time allow the Secretary to administer the present surplus without running the risk of artificially increasing the level of price support and possibly the acreage allotment in this or future years by the surplus disposal program. Sincerely yours,

GEORGE B. BLAIR, General Manager. (Whereupon, at 12:15 p. m., the hearing of the subcommittee was adjourned, subject to call.)

х

PRICE SUPPORT PROVISION

HEARINGS

BEFORE THE

SUBCOMMITTEE ON PEANUTS

OF THE

COMMITTEE ON AGRICULTURE
HOUSE OF REPRESENTATIVES

EIGHTY-FIFTH CONGRESS

SECOND SESSION

ON

H. R. 11098, H. R. 12224, H. R. 12545, and

H. R. 12566

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