established. The Secretary shall proclaim the results of the referendum within thirty days after the day on which it is held.

"(b) Payments shall be made into funds established pursuant to this section by the person who buys or otherwise acquires the peanuts from the producer, or if the peanuts are marketed by the producer through an agent, the payment shall be made by such agent, and such person or agent may deduct an amount equivalent to the payment from the price paid to the producer: Provided, That no payment for purposes other than under subsection (a) (1) and (2) above shall be made into the fund with respect to the crop of peanuts produced in any calendar year during which marketing quotas are not in effect.

"The amount of any payment for the crop of peanuts produced during any calendar year of the period for which the fund is established shall not exceed the lower of (1) 10 per centum of such national average per ton level of price support, or (2) that per centum of such national average per ton level of price support which the Secretary determined necessary to provide a fund sufficient during such subsequent calendar year to accomplish the purposes for which such fund is established: Provided, That the amount of any payment made into the fund with respect to the crop of peanuts produced during such calendar year which shall be designated for the purposes of subsection (a) (1) and (2) hereof shall not exceed one per centum of such national average per ton level of price support: Provided further, That if the amount designated for the purposes of subsection (a) (1) and (2) hereof which remains unexpended or not allocated as of the end of any calendar year equals or exceeds $5,000,000, the amount of any payment into the fund for the crop of peanuts produced during the next succeeding calendar year and each succeeding calendar year thereafter, which is to be designated for such purposes, shall be that per centum of such national average per ton level of price support, but not in excess of one per centum, which the Secretary, upon recommendation of the Peanut Advisory Committee established pursuant to subsection (d) hereof, determines it necessary to maintain the amount designated for such purposes at a level not in excess of $5,000,000 and not less than $2,000,000 after expenditures for such purposes are made or allocated during the succeeding calendar year: Provided further, That each area shall separately bear the cost of the program in its area except for the purposes under subsection (a) (1) and (2) above.

"(c) The fund for each area, except for the purpose under subsection (a) (1) and (2) above, shall be maintained separately and the program, except for the purposes under subsection (a) (1) and (2) above, in each area financed out of the fund for that area. The deduction not to exceed 1 per centum shall be uniform and shall be maintained in a common fund for all areas. The remaining deduction may vary between areas depending on the estimated costs in each area and shall be maintained and administered in a separate fund for each area.

"(d) The Secretary is authorized to designate a person or agency to receive any payments made into the funds established pursuant to this section and the Secretary or his designee shall receive such payments and shall make expenditures from such funds for the purposes of this section.

"(e) The Secretary shall apoint from time to time a peanut advisory committee of 12 members consisting of two representatives of peanut growers from each of the major peanut producing areas (Virginia-Carolina, southeast, and southwest), one peanut sheller from each area, and three manufacturers of peanut products. The Secretary shall name the two grower representatives from each area from a list of five names submitted by the grower association in each area contracting directly with the Department to carry out the price support program in that area; namely, the Southwestern Peanut Growers Association in the Southwest area, the Georgia-Florida-Alabama Peanut Association in the Southeast area, and the Peanut Growers Cooperative Marketing Association in the Virginia-Carolina area; the Secretary shall name the sheller representative from each area from a list of three names submitted by the sheller organization in each area; namely, the Southwestern Peanut Sheller Association in the Southwest area, the Southeastern Peanut Association in the Southeast area, and the Virginia-Carolina Peanut Association in the Virginia-Carolina area; the Secretary shall name the three representatives from the manufacturers by naming one from each of lists of three names submitted by the National Confectioners Association, the Peanut Butter Manufacturers Association and the Nut Salters Association. This committee shall recommend to the Secretary or his designee with respect to (1) limitations upon the quantities of lower grade 23887-58-3

shelled peanuts, by types, and grades, which may be marketed or otherwise disposed of for uses other than for food, or for crushing into oil and meal, or for export, (2) the amount of expenditures to be made, and the manner in which such expenditures shall be made for the purposes of subsection (a) (1) and (2) hereof, during any calendar year, from that portion of the funds established pursuant to this section which is designated for such purposes, and (3) the amount which is necessary to maintain, during each calendar year which sueceeds the calendar year in which the unexpended and not allocated amount designated for the purposes of subsection (a) (1) and (2) hereof equals or exceeds $5,000,000, that portion of each fund designated for such purposes at a level not in excess of $5,000,000, and not less than $2,000,000 after expenditures for such purposes are made or allocated during such succeeding calendar year. The compensation of the members of such committee shall not exceed $10 per day while actually employed and actual necessary traveling and subsistence expenses, or a per diem allowance in lieu thereof.

"(f) The Secretary is authorized, upon recommendation of the Peanut Advisory Committee, to limit, pursuant to regulations issued by the Secretary, by types and grades, the quantity of shelled peanuts of specified lower grades which may be marketed, or otherwise disposed of, by shellers for primary uses other than for crushing into oil and meal, or for export, or for feed. If such limitations are placed in effect, the Secretary shall determine rates of payments to be made to shellers for shelled peanuts of the specified lower grades which are marketed or otherwise disposed of pursuant to such limitations or for crushing into oil and meal, for export, or for feed, which will compensate such shellers for such peanuts in a total amount not less than 100 per centum and not in excess of 110 per centum of the market value, as determined by the Secretary, of such peanuts for primary uses other than for crushing into oil and meal, for export, or for feed. Such payment to shellers shall be made from the area funds 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 and for research.

"(h) The Secretary or his designee shall establish from payments made into any area fund, after expenditures for the purposes for which such fund is established have been made or moneys for such purposes have been allocated or designated during any calendar year, a reserve to be used in any subsequent year for the purposes of subsection (3), (4), and (5) if the payments made into the fund during such subsequent year are insufficient to carry out such purpose.

"(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 and which is not designated for the purposes of subsection (a) (1) and (2) hereof, after expenditures have been made or moneys allocated during such calendar year for the purposes of subsection (a) (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 in that area dur ing such calendar year, the amount by which such net losses exceed the amount transferred shall be paid moneys available in any reserve created from any payment 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 for that area in any subsequent calendar year, which are not designated for the purposes of subsection (a) (1) and (2) hereof, after expenditures have been made or moneys allocated during such subsequent calendar year for the purposes of subsection (a) (3) and (4) thereof."

Section 101, subsection (a), of the Agricultural Act of 1949, as amended, is amended by adding, in the first sentence thereof, after the word "wheat", the word "peanuts".

Section 101, subsection (b), of the Agricultural Act of 1949, as amended, is amended by deleting from the first sentence thereof, the words "and peanuts".

Section 101, subsection (d), of the Agricultural Act of 1949, as amended, is amended by adding at the end thereof a new paragraph (8) as follows:

"If producers have approved the establishment of funds, in the manner and for the purposes prescribed in title V of the Agricultural Adjustment Act of 1938, as amended, for each calendar year in which producers make payments into such fund, the amount of the deduction shall be deducted from the price received by the grower."

Section 403 of the Agricultural Act of 1949, as amended, is amended by adding the following sentence at the end: "In the case of peanuts, the same support price shall apply to each 1 per centum Sound Mature Kernels for all types with a premium to be determined by the Department for Extra Large Virginia-type peanuts and for Valencia-type peanuts that are suitable for cleaning and roasting."

Section 401, subsection (a) of the Agricultural Act of 1949, as amended, is amended by adding the following sentence at the end: "In carrying out the price support program on peanuts, the Secretary shall not enter into any contracts either directly or indirectly with associations or their subsidiaries or affiliates where such associations are also engaged in shelling peanuts and where such contracts are not available on the same basis to other shellers of peanuts," Mr. MCMILLAN. Would the authors of these bills care to make a statement?

Mr. ABBITT. I do not care to make a statement at this time.
Mr. MCMILLAN. Mr. Burleson?

Mr. BURLESON. I did not understand Mr. Abbitt. Is Mr. Abbitt going to make a statement?

Mr. ABBITT. I will not make a statement today.

Mr. BURLESON. Whatever is the pleasure of the committee is mine also. I shall be glad to comment upon H. R. 12545 and present to the committee a representative of the shellers of the Southwest and a representative of the growers of the Southwest. If that is the order the chairman would like, or he may first wish to hear representatives of the Department of Agriculture on the two pending measures.

Mr. MCMILLAN. We would like to hear from you and then you may introduce the people you are interested in. We will hear them later and hear the members first.

STATEMENT OF HON. OMAR BURLESON, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS

Mr. BURLESON. Mr. Chairman and members of the subcommittee, I appear before you in support of H. R. 12545, 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.

For many years the peanut growers and shellers of the Southwest area have lived with a situation of disparity of treatment in the allotment of acres for peanuts, the differentials in grades, price supports, and other inequities.

These inequities are both legislative and administrative. Most of the inequities could have been removed by administrative procedures, but we have not been able to get the action required. At one time there may have been some reason for the advantage now accruing to the Southeast peanut growers and shellers over those of the Southwest, but if that advantage ever had merit, the time has long passed when it is justified. In this measure we are simply asking that we have equal opportunity with the other areas, and I think that is all intended by H. R. 12545, which I have introduced.

The gentleman from Virginia, Mr. Abbitt, a member of this subcommittee, has authored a similar measure which is applicable to the Carolina-Virginia area, as opposed to the Southeast which enjoys certain comparative advantages. The two bills are not irreconcilable and in many instances attempt to correct the inequities, which I believe are recognized to exist by members of this committee, the Department of Agriculture and all others who have looked with any objectivity in comparing the status of the three major peanut-producing areas of the country.

We here in the Congress have learned from past experience that it is necessary we lend one another fullest cooperation in order to protect the peanut program. We have recognized by uneasy experience that the peanut program, as such, is constantly in jeopardy, and that we needed one another at all times to maintain a fair position for our people in the business of raising and shelling peanuts.

The Southwestern growers and shellers have recognized this position and have sacrificed considerable of their rights and legitimate demands to these facts of life. We are not of a mind to disturb that cooperation, but we are to the point of no return and simply cannot continue at the disadvantage we now suffer.

Mr. Chairman, we are being priced out of the peanut market because of the differential of almost $6 a ton now applied between the Southwest Spanish and the Southeast Runners. We are in desperate circumstances and must come before this committee to beg of you to give us relief by lawful instructions to the Department of Agriculture. We are no longer willing to remain silent under the pressure that action at this time may place in further jeopardy the entire peanut program. We recognize this as a fact and would not be here today with this plea if there was any reasonable way to avert it.

In addition, Mr. Chairman, there are other provisions of H. R. 12545 which we believe will greatly improve the opportunities for peanut growers and shellers. We believe the self-help plan proposed in this bill will in time remove some of the criticism constantly voiced against the peanut program by those who would destroy it. We believe the losses now experienced under the direct support program would be drastically reduced, that it would give greater freedom of operation to growers and shellers; that it is workable; and that the program as we now know it would be largely placed in the hands of the farms themselves. Mr. Sydney Reagan and Mr. Ross Wilson, representing the Southwest growers and shellers, will develop this point and others more fully in their testimony.

Mr. Chairman, let me repeat that we have not the slightest desire to impose any unreasonable conditions upon the growers and the shellers of the Southeast. Contrarily, certainly we wish to help and cooperate with all other areas as we have in the past, if for no other reason that it is to our own advantage. If what we are asking in this legislation can be successfully proved unfair or without merit, then we will do as we have in the past, cooperate as long as our people are in business; but the time is here when either the farmers of our area must stop producing and move off their farms, and the shellers go out of business because we cannot continue the downgrade we are on by reason of the inequities now imposed upon us.

I sincerely hope that this committee will approve the provision of H. R. 12545 and will make it a part of any omnibus farm bill which may be produced in this session of the Congress.

Mr. Chairman, with your permission I would like to present to the committee Mr. Sydney Reagan who represents the shellers of the Southwest area.

Mr. MCMILLAN. I believe we have your name on this list.

Mr. BURLESON. I thought as a matter of continuity the committee would hear them in order, but whatever the committee wishes to do is all right.

Mr. MCMILLAN. I want to find out if any of the Members have to go to another committee meeting. I believe Mr. Sikes has to leave as soon as possible.

Mr. BURLESON. And I believe Mr. Thornberry has to go.

Mr. SIKES. I think you will find all the Members here have other committee meetings. We are pressed for time and if we could say a few words I think that would suffice for our purpose at this time. Shall I proceed, sir?

Mr. MCMILLAN. We will be glad for you to make any statement you desire at this time.

STATEMENT OF HON. ROBERT L. F. SIKES, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF FLORIDA

Mr. SIKES. I have the greatest respect for the introducers of the two bills that are before your subcommittee. Both are outstanding Members of the Congress and I know they are acting in good faith and in good conscience in what they are proposing. Nevertheless, I as a Member of Congress who represents a major peanut-producing area must protest very strongly the enactment of either of these measures. I would like to remind the committee that we have had the greatest difficulty in recent years in maintaining a support-price structure for peanuts. We have had great difficulty on the floor of the House of Representatives in protecting the growers of peanuts at all. If we open this field of legislation again, I do not know what might happen. I think it could be extremely dangerous to the whole peanutproducing industry, to every farmer who is a producer of peanuts. I earnestly hope the committee will keep this in mind.

I would like to point out, Mr. Chairman, that the legislation that is now before you would seriously divide the forces of the peanut producers, and to divide your forces in the face of the determined opposition to any peanut program that we have had demonstrated in recent years would be a very dangerous and could be a very foolhardy think. If we get to fighting among ourselves we are going to lose the whole program. That is exactly what I can see happening if we go ahead with this legislation.

I earnestly hope the committee will not report either of these bills. Thank you, sir.

Mr. MCMILLAN. Mr. Teague.

STATEMENT OF HON. OLIN E. TEAGUE, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF TEXAS

Mr. TEAGUE. Mr. Chairman, I appreciate very much this opportunity to appear before your committee in support of H. R. 12545, a bill to amend the peanut marketing quotas and price-support provisions of the Agricultural Adjustment Act of 1938, as amended.