Mr. GATHINGS. Well, now, would the Department look with favor on some type of referendum that would give the grower the privilege of getting increased acreage under the lower price support? You would have two choices in such a referendum.

Mr. McLAIN. This has the big disadvantage of immediately setting up two classes of ricegrowers which I think has a lot of disadvantages.

Of course, it is being talked about now for cotton. We think that would be unfortunate for rice. We think that the statesmen we have got in Congress ought to face up to the real problem. that the industry is willing to lower this support level with some consideration on acreage for a period of 3, 4, or 5 years or, as we have suggested, permanent charges. That this would be much more desirable for rice.

Now, we have a lot of reluctance about referendums. We have tried it. We tried it on corn. You have always the question whether you are going to have a 50-percent or 66% vote. Stop and think about referendums and analyze them, and the philosophy behind them, and ask yourself whether you would like to have labor set out by referendum to determine what the minimum wage was going to be and whether you wanted to turn over that authority to any group.

I think it is something that if I were a Congressman I would have many reservations about. I think that legislation is a function of Congress. I think you ought to be able to know from talking to your constitutents what they do want and then do what is best and stand on the record.

I think that is a much firmer and better way to work out this legislation.

Mr. THOMPSON. He is confused now, too.

Mr. McLAIN. It seems to me that this legislation is your responsibility, and not to be left up to the referendum.

I think there are a lot of people who are very gravely concerned even about the marketing-quota approach. I hear it all the time, because the people who don't like it, of course, complain to the Secretary of Agriculture and blame him for it.

Mr. GATHINGS. Is our problem in rice a matter of price, like this situation in some of the other commodities? I do know that in some of the commodities that I happen to be a little familiar with, the question of competitive price is most important.

Mr. MCLAIN. While I think it is more true with cotton than it is with rice, Mr. Gathings, it also applies to rice. Certainly we have seen what has happened to the cotton industry domestically. I think we have a realization by all people in the cotton industry today that something different has to be done.

I think the major problem in rice is not the price in the domestic market. However, it is a factor domestically, too. It is a big factor in our export movement, and it will be because we are going to have to be competitive in our export movement.

But currently, one of the real problems in the rice business, of course, is that countries that consume rice just don't have enough dollars to buy the rice. We are recommending the extending of Public Law 480 until that condition can be changed. We hope some day it will be changed.

Mr. GATHINGS. Public Law 480 is most important to the rice industry, no doubt. You know there is something that might be very valuable in the record right here.

If, and I am sure you have it readily available, you could let us have it, it would be a listing of the demand for rice over the past few years by various different countries, how much we have been able to furnish them.

Mr. McLAIN. Of what they wanted?

Mr. THOMPSON. I mean demands on 480. You have that, don't you? Mr. McLAIN. We would have to talk to our 480 people about that. I don't know whether they keep a record of all the demands for all commodities or not.

Mr. THOMPSON. It would be very helpful to us when we try to get 480 passed to be able to say that this is what has happened in Public Law 480: We have had so many requests; we have filled so many. If we had more authority, we could fill so many more.

Mr. MCLAIN. I would suggest this, if I might: You are going to have the hearing when all the 480 people are going to be here. I think you ought to have this information for all commodities. I would request that at that time. I think it would be more appropriate. Mr. SORKIN. It will be up on the 5th.

Mr. DEAN. Getting back to Mr. Gathing's question: As you remember, Mr. Gathings, after the takeover in 1952, 1954 and 1955 a milling program was developed because of a lack of storage, particularly in the South for rough rice and the milled stocks moved into CCC inventory. These stocks were put up for sale on a competitive bid basis for export for dollar sales and title I, Public Law 480.

Now, as you know, recently, we have changed the rice sales program where we are now offering CCC-owned rough rice for sale for export on competitive bids under the requirement that all of the milled rice from this rough rice must be exported.

Basically, I wanted to bring it up and I wanted to get the record clear that we have not had any trouble in moving a reasonable quantity of rice for dollars.

This is over 1 million hundredweight that we have moved for dollars and we are planning for this coming year about 3 million. Here is the program for this coming year.

In the past, what did CCC do for the rice people? We would take the rough rice over under the price support program and move it. into a mill and exchange the rough rice for milled rice. Then we would take the milled rice and put it into storage until the rice could be programed. We have done that for 3 straight years. This year, the program is simply this:

We are going to mill a certain quantity of the takeover of rough rice and we have just recently completed takeover in the South of 10 million hundredweight and 2 million on the west coast.

We are going to mill enough rough rice to get out of the way of the new crop.

In other words, we can't leave our rice out there to take up storage space when we have a new crop coming on, so that quantity will be milled and put into storage for program needs, particularly title 1.

The balance of the rice, which we will hold in the form of rough, will be put up for sale for export by our officer in Dallas, Tex., on competitive bids; the successful bidder must export the quantity of

eligible for allotments by reason of planting cotton or producing peanuts without an allotment. These reductions have been particularly disruptive in the case of peanuts.

So obviously we have had more trouble than cotton but I think there is a similar problem with cotton.

Mr. GATHINGS. It could arise.

Mr. ABBITT. It looks like the old growers in cotton have a little more protection than the old growers of peanuts.

Mr. MERRILL. Congressman, I think this is a major problem in those States like Texas that receive such large cotton allotments and therefore have tremendous reserves, because it speaks here of "if there is a reserve available," and you heard them speak of that tremendous reserve. I don't know what the allotment is in Texas-5 million or 6 million acres. Mr. GATHINGS. About 40 percent of the total allotment in the Nation.

Mr. MERRILL. And you could see how with that much acreage you would have a tremendous reserve and the problem would come about.

Mr. THIGPEN. That letter would not have been sent unless the Department felt that there was a problem on cotton and this, of course, was checked with the people in the Cotton Division-the letter was.

Mr. GATHINGS. I would like to have a little more information with respect to cotton from someone in the Cotton Branch because it is highly technical and we would like to know just where the problem is, if it does exist, and what the problem is and to what extent it exists. Even though it does affect peanuts to a high degree in Florida, I wonder why it is that it is not affecting peanut growers in Virginia. Mr. ABBITT. It does affect them.

Mr. GATHINGS. But not as much?

Mr. ABBITT. No, but our people are interested in it.

Mr. MERRILL. I think I can answer that question. The growing of peanuts in Florida has spread. At one time, there was a tremendous percentage of the acreage in Florida that was grown in Jackson County. The growing of peanuts has spread into other areas of Florida because the land there is suitable for the production of it and as it spreads, more people come in.

In the State of Virginia you will find, I believe, Congressman Abbitt, that nearly everyone in the so-called peanut area has an allotment of some type, whereas that is not true in Florida.

Mr. ABBITT. Practically every farm in that area-but they have some of the problems.

Mr. MERRILL. They have some of the problems, and I pointed out a while ago that there was a reduction taken there a couple of years ago because of this, but it is more prevalent in areas where just a few farmers have peanut allotments and others are attempting to come in. Mr. THIGPEN. And in Virginia it is more stable in the peanut production pattern than in Florida.

Mr. GATHINGS. They have been growing peanuts for a longer period of time in Virginia. I do not know much about peanuts and I am anxious to learn.

I just wonder what happens to these little growers. They do get these allotments. Do they plant that allotment in subsequent years? Do they follow through? Do they go into this thing really to establish themselves in the business of growing peanuts?

Mr. MERRILL. In my opinion, no, sir; they do not. You go out and establish an allotment for them. They will plant these peanuts and harvest them and they will think, "The peanut farmer has got a good deal," and so they go in and they grow 5 acres of peanuts.

Now, they do not have the equipment to take care of the peanuts and they have not had the experience in growing peanuts and quite a number of them will decide after 1 year's experience, "It is not quite as good a deal as I thought," so they will not plant them again.

But it takes 3 years during normal times for that allotment to disappear if a man is not using it and under current legislation it is absolutely preserved and charged against other farms.

Mr. GATHINGS. Take the acreage away from the established grower in that county and continue to give that man an allotment for 3 years even though he might not be interested in growing peanuts?

Mr. MERRILL. Well, under the automatic preservation, you see, you cannot take it away from him.

In the past, back in, say, 1951, if this should happen, then several years later, 3 years later he would have automatically gotten out of the peanut allotment business because he had not produced any peanuts during the 3-year period as prescribed by the law.

The perfect example of what you are talking about, I think, is this year in one particular State over 100 farmers who had never grown peanuts decided they wanted to go into the peanut business.

We received a report from that State last week and of the 176 acres and I believe my figures are correct-of the 176 acres of peanuts that were planted, only 4 acres were harvested.

Mr. MATTHEWS. Mr. Chairman, may I ask a question or two here? Mr. MCMILLAN. Yes.

Mr. MATTHEWS. Mr. Gathings has pursued a line of questioning that I know all the members of the subcommittee are especially interested in, and I would like to pursue it for just a minute or two more.

I think what he brought out is our concern naturally about hurting the little farmer; and my colleagues on the committee know-and know I speak for you gentlemen, too-that I certainly do not want to do anything to hurt the little farmer; and even at this late date, if I thought that it would, I would not press for the passage of this bill.

Is it your understanding, Mr. Merrill, that if this legislation is passed a man could still plant his 1 acre of peanuts without any allotment?

Mr. MERRILL. That is absolutely right.

Mr. MATTHEWS. And most of your little farmers would probably be interested in just that aspect of it. They would want to plant 1 acre of peanuts and most of them would not be concerned, as I see it, about going into peanut production on a larger scale. Do you think that is a true statement, Mr. Merrill?

Mr. MERRILL. Yes, sir; in my opinion it is true.

Mr. MATTHEWS. Now, if this legislation were passed, a farmer who had not produced peanuts before could qualify, but only on the basis of a new farm?

Mr. MERRILL. That is right.

Mr. MATTHEWs. The one basic difference in the present situation and what the situation would be if this legislation were passed is that he could not qualify for an allotment purely on the basis of having planted it the year before?

Mr. MERRILL. That is right; he could not qualify for an old-farm allotment purely on the basis of growing excess acreage.

Mr. GATHINGS. And the burden would be on him to go to the committee and ask that committee to intercede for him and probably to the State to get a new-farm allotment?

Mr. MERRILL. That is right. And I might point out here that Mr. Matthews introduced, along with Congressman Cramer, of Florida, legislation last year that excluded the production of green peanuts from the act. That legislation did far more to help the small farmer in his area that had not grown peanuts than anything of this nature would hinder him.

Mr. MATTHEWS. You still would not have any idea in Florida, say, of this six-thousand-odd growers, as to the number that might be affected, let us say, in that they could not qualify for a new allotment purely on that basis?

Mr. MERRILL. Well, Congressman, let me point out that of the 6,400 farms-that is farms, not peanut growers-you will have approximately 12 to 134 growers per farm throughout the Nation, maybe higher or lower than that in Florida-I am not sufficiently acquainted with the tenant situation there, but the farms that you are speaking of will be farms over and above this 6,400 and in the past those that have received allotments on the basis of excess acreage are included, but there would be a number over and above this.

Now, that number will be relatively small because, as you pointed out earlier, most of the farmers that are not equipped to grow peanuts are satisfied to grow only 1 acre.

So I think that the number in your State that this would affect in the future would be relatively small.

Mr. HAGEN. Are any new-farm allotments being granted in peanuts?

Mr. MERRILL. Yes, sir; and I am happy that you asked me that question.

This year there were approximately 4,000 acres of peanuts that were made available to be apportioned to so-called new farms. That is the farms on which peanuts were not produced in the 3-year period before the year for which the allotment is being established.

There were insufficient persons or farms eligible to receive the entire acreage. Therefore the Department had approximately 950 acres that were not used for new farms after we had established allotments that we considered equitable for all of the eligible farms. The 950 acres which were left over were prorated back to the States on the same basis as the original apportionment was made and it is constantly being used in the States to make adjustments; so we actually held back from the national allotment more acreage for new farms than was needed. The same was true last year.

Mr. HAGEN. The new-farm allotment comes directly through the Secretary of Agriculture without regard to States' lines?

Mr. MERRILL. No, the new-farm reserve is held by the Secretary of Agriculture and he determined the acreage not to exceed 1 percent of the national allotment which is the maximum under the law that should be held back for new farms.

The farmers who are interested in obtaining new-farm allotments for their farms go to the county ASC office and fill out an application which is nothing more than a questionnaire. He is asked what acre