PEANUT ACREAGE ALLOTMENT WEDNESDAY, MARCH 26, 1958 HOUSE OF REPRESENTATIVES, COMMODITY SUBCOMMITTEE ON PEANUTS OF THE COMMITTEE ON AGRICULTURE, Washington, D. C. The subcommittee met, pursuant to notice, at 10:45 a. m., in room 1310, New House Office Building, Hon. John L. McMillan (chairman of the subcommittee) presiding. Present: Representatives McMillan (presiding), Abbitt, and Smith. Also present: Representatives Gathings, Matthews, Hagen, and Mabel C. Downey, clerk. Mr. MCMILLAN (presiding). The committee will come to order. The committee has met this morning for the purpose of considering a bill introduced by Congressman Matthews of Florida, H. R. 11098. (H. R. 11098 is as follows:) [H. R. 11098, 85th Cong., 2d sess.] A BILL To amend the Agricultural Adjustment Act of 1938 with respect to acreage allotments for cotton and peanuts Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section 344 of the Agricultural Adjustment Act of 1938, as amended (7 U. S. C. 1344), is amended by adding at the end thereof the following new subsection: "(n) The planting of cotton on a farm in 1957 or any subsequent year for which no farm acreage allotment was established shall not make the farm eligible for an allotment as an old farm under provisions of this section: Prorided, however, That, by reason of such planting, the farm need not be considered as ineligible for a new farm allotment under provisions of this section." SEC. 2. Section 358 of the Agricultural Adjustment Act of 1938, as amended (7 U. S. C. 1358), is amended by adding at the end thereof the following new subsection: "(i) The production of peanuts on a farm in 1957 or any subsequent year for which no farm acreage allotment was established shall not make the farm eligible for an allotment as an old farm under subsection (d) of this section: Provided, however, That by reason of such production the farm need not be considered as ineligible for a new farm allotment under subsection (f) of this section, but such production shall not be deemed past experience in the produc tion of peanuts for any producer on the farm." Mr. MCMILLAN. We have with us Mr. James W. Merrill and Mr. James E. Thigpen from the Department of Agriculture. Will you move up to the witness stand? We would like to hear the Department's views on this legislation. Mr. Matthews has indicated that he will make a statement or submit one for the record after the Department has spoken. STATEMENT OF JAMES W. MERRILL, CHIEF, PRODUCTION PROGRAM BRANCH, OILS AND PEANUT DIVISION, COMMODITY STABILIZATION SERVICE, UNITED STATES DEPARTMENT OF AGRICULTURE; ACCOMPANIED BY JAMES E. THIGPEN, DIRECTOR, OILS AND PEANUT DIVISION Mr. THIGPEN. Thank you, Mr. Chairman. I would like to make a short statement first. I believe that the problem here arises out of the situation which has existed on peanuts in recent years and which relates itself to the war, when the acreage of peanuts was roughly doubled at the request of the Department to provide peanuts for the production of oil. After the war that acreage was reduced by approximately half; the allotments by States are, I might say, frozen by existing legisla tion. With the price support for peanuts the crop is attractive to the farmers in the areas in which it is grown and consequently there is an effort on the part of farmers to increase their production or to get new allotments. Under existing legislation a farmer can plant peanuts without an allotment and the next year he becomes eligible for some allotment, or the farm becomes eligible for some allotment as an old farm. To the extent that allotments are established in such case the acreage involved must be taken away from the other farmers who have been growing peanuts for a longer period of time and who already have allotments. That creates a rather difficult situation on the part of these farmers who had their acreages cut by half after the war. The Department, even though this acreage is reduced by half, still is faced in most years with some surplus coming from the minimum total allotment which is fixed by law and the diversion of that surplus is a relatively costly item. The change proposed here would prevent a farmer from planting without an allotment in a given year and then obtaining an allotment as an old farm in the next year. It would not, however, prevent that farmer from obtaining an allotment as a new farmer. It would prevent a consideration of acre age grown without allotment as experience in establishing allotment for a new farm. I believe that is all that I care to say at the moment. Mr. GATHINGS. Mr. Chairman, I wonder if this gentleman from the Department would give us some information with respect to the reductions that the growers in peanuts have to take as the result of the fact that these people who plant small acreages in peanuts get the old-farm status and are permitted to get a little of that acreage which is taken away from those other farmers in the county. I just wondered how that affects these old growers who, I should think, grow more peanuts than the one with the smaller acreage. Mr. THIGPEN. Mr. Merrill, I believe you have the figures on that. Mr. MERRILL. I do not have the exact figures on the subject. I think however that I can point out pretty generally how it has affected them in the past. Now, that varies tremendously by States. for which they likely would be sold in the absence of such limitations. Such payments to shellers shall be made from the fund established pursuant to this section. “(g) The Secretary or his designee is authorized to enter into agreements with, or to approve agreements entered into between, persons or agencies designated by the peanut advisory committee for the purpose of developing and conducting on a National, State, or regional basis publicity, promotion, and other programs designed to increase the consumption of peanuts and the products thereof. "(h) The Secretary or his designee shall establish from payments into any fund in any year, after expenditures for the purposes for which such fund is established have been made or moneys for such purposes have been allocated during such year, a reserve to be used in any subsequent years(s) for the purposes of subsections (a) (2), (3), and (4) if the payments made into the fund during such subsequent year are insufficient to carry out such purposes. "(i) The Secretary or his designee shall, for the purpose of defraying the net losses sustained by the Commodity Credit Corporation during the calendar year in disposing of peanuts acquired under its price support program, transfer to the Commodity Credit Corporation from the amount which remains at the end of such calendar year in any fund established pursuant to this section, after expenditures have been made or moneys allocated during such calendar year for the purposes of subsection (a) (2), (3), and (4) hereof, that amount which is necessary to defray such net losses: Provided, That if the amount transferred to the Commodity Credit Corporation is insufficient to defray such net losses in disposing of peanuts acquired under its price-support program during such calendar year, the amount by which net losses exceed the amount transferred shall be paid with moneys available in any reserve created from any payments made into the fund in prior calendar years or, to the extent the moneys available in such reserve are insufficient to defray the total excess of such net losses, shall constitute a charge against any payments made into the fund in any subsequent calendar year, which are not designated for the purposes of subsection (a) (2), (3), and (4) hereof, after expenditures have been made or moneys allocated during such subsequent calendar year for the purposes of subsection (a) (2), (3), and (4) hereof." SEC. 4. Section 101 (d) of the Agricultural Act of 1949, as amended, is amended by adding at the end thereof a new subsection (8) as follows: "(8) if producers have approved the establishment of a fund in the manner and for the purposes prescribed in title VI of the Agricultural Adjustment Act of 1938, as amended, for each calendar year in which producers make payments into such fund the level of price support to cooperators shall be calculated as provided in subsection 101 (b), but the percentages of parity shown therein shall be increased by 5 per centum." [H. R. 12545, 85th Cong., 2d sess.] A BILL To amend the peanut marketing quota and price support provision of the Agricultural Adjustment Act of 1938 and the Agricultural Act of 1949, and for other purposes Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the Agricultural Adjustment Act of 1938, as amended, is amended as follows: (a) Section 301, subsection (b), paragraph (10), subparagraph (A), of the Agricultural Adjustment Act of 1938, as amended, is amended by striking out in the second sentence the language "15 per centum in the case of peanuts" and inserting in lieu thereof the language "27 per centum in the case of peanuts." (b) Section 301, subsection (b), paragraph (16), subparagraph (A), of the Agricultural Adjustment Act of 1938, as amended, is amended by changing the period at the end thereof to a colon and adding the following proviso: “Provided, That in determining total supply of peanuts there shall be excluded from the carryover any quantity of peanuts which, as of the beginning of the marketing year for which total supply is being determined, (i) is owned by Commodity Credit Corporation, (ii) represents collateral pledged to secure a price support loan made available by Commodity Credit Corporation, or (iii) remains to be delivered to Commodity Credit Corporation under purchase agreements made available by Commodity Credit Corporation." Section 358, subsection (a) of the Agricultural Adjustment Act of 1938, as amended, is amended (a) by inserting in the first sentence of subsection (a) immediately following the words "prospective demand conditions" the language "so as to provide, together with the carryover of peanuts, for a normal supply of peanuts"; (b) by inserting at the end of subsection (a) the following: "Provided further, That the acreage allotment in each State shall be increased by the estimated number of acres required under normal conditions to result in the harvesting of the number of allotted acres determined according to the first sentence of this subsection; such adjustment in acreage under this provision shall not be considered in establishing future State, county, and farm allotments by amending section 358, subsection (c), paragraph 2 of the Agricultural Adjustment Act of 1938, as amended, is amended to read as follows:" (2) Notwithstanding any other provision of law, the Secretary shall make an investigation not later than February 1 of each calendar year for each area to determine whether the estimated supply as of the first day of the marketing year which begins in such calendar year will be less than 90 per centum of the estimated consumption of peanuts from each area during such marketing year plus 90 per centum of the estimated consumption during the period from the beginning of the marketing year through the first full calendar month in which there normally is heavy movement of new crop peanuts (that is, October for the southeast and southwest areas and November for the Virginia-Carolina area). "If the Secretary finds an estimated short supply in any area, acreage allotments shall be increased to the extent deemed necessary, on the basis of the average yield in such area in the preceding five years, adjusted for trends and abnormal conditions, to provide additional production equivalent to the difference. Such increases in allotments shall be made for farms in the area by a uniform percentage of the regular allotments for farms for that year. The additional acreage required for such increases shall be in addition to the national acreage allotment, the production from such acreage shall be in addition to the national marketing quota, and the increase in acreage allotted under this provision shall not be considered in establishing future State, county, or farm acreage allotments." The Agricultural Adjustment Act of 1938, as amended, is amended by adding at the end thereof a new title V as follows: TITLE V-PEANUT FUND FOR PUBLICITY, PROMOTION, RESEARCH, AND OTHER PURPOSES "SEC. 395. (a) The Secretary shall not later than December 15th of each calendar year, conduct a referendum of farmers engaged in the production of peanuts in the calendar year in which the referendum is held to determine whether such farmers are in favor of, or are opposed to, the establishment with respect to the crops of peanuts which are produced in the three calendar years immediately following the year in which the referendum is held, of funds for the purpose of (1) developing and conducting publicity, promotion, and other programs designed to increase the consumption of peanuts and the products thereof, (2) research on peanuts, (3) providing payments to peanut grower cooperative associations which contract directly with the Commodity Credit Corporation in making price support available to producers for any administrative expenses, incurred by such associations in connection with peanut price support activities, which are in excess of the net income derived by such associations through price support activities in that year, (4) providing payments to shellers for marketing or otherwise disposing of for crushing into oil and meal, for export or for feed, any shelled peanuts of lower grades specified by the Secretary with regard to which use limitations are established by the Secretary pursuant to subsection (f) hereof, and (5) defraying the net losses sustained by the Commodity Credit Corporation in disposing of peanuts acquired under its price support prograin: Provided, That is, beginning with the calendar year immediately following the year in which the referendum is held, fewer than three years remain of the period for which marketing quotas have been approved by farmers, any fund approved by farmers shall be established only with respect to the crops of peanuts produced in each of calendar years which remain of the period for which marketing quotas have been approved: Provided further, That if as many as two-thirds of the farmers voting in any referendum vote in favor of the establishment of such fund, no referendum shall be held with respect to such fund during the years which remain of the period for which the fund is |