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: Provided, 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 acreage 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. Mr. GATHINGS. Yes, I would imagine it would. Mr. MERRILL. In Mr. Matthews' State of Florida for example, farmers have taken in any 1 given year as much as 3 or 4 percent reduction because of having to establish these allotments for farmers who had never grown peanuts before. In other words, these farmers did not come in and make application for a new-farm allotment. They just went out and grew peanuts without an allotment. Establishing allotments for these farms has in certain years reduced the allotments for regular old farms by 3 or 4 percent. Mr. GATHINGS. And that would hurt, too, believe me, if it goes on year in and year out and that would make considerable difference in the income of these farmers; isn't that so? Mr. MERRILL. That is right. However, in that regard I would like to point out that the legislation that the Congress enacted last year on green peanuts did help the situation considerably. As you know, there is a tremendous acreage of green peanuts grown in Florida and prior to the enactment of the green peanut legislation the State and county ASC committees had to establish allotments for these green peanut farms so that the legislation did help that situation. Mr. GATHINGS. As I understand from Mr. Matthews' letter, they have approximately an allotment in the State of Florida of about 54,000 acres. These farmers, of course, would assume that if that same allotment of 54,000 acres comes to the State each year, they would be given the same acreage on their particular farm? Mr. MERRILL. That is exactly right, sir. Mr. GATHINGS. And I just wondered whether or not it is the opin ion of the Department-I did not get your comments as to whether or not you would favor Mr. Matthews' bill. Mr. MERRILL. Mr. Matthews, prior to introducing this legislation, wrote a letter to the Department requesting the Department's opinion on the bill. The Department informed Mr. Matthews that we favored the legislation. To carry it one step further, at the moment speaking of the problem close to Mr. Abbitt, this is not as serious a problem in the State of Florida as it is elsewhere-not as serious. Congressman Abbitt will remember that 2 years ago in Virginia, instead of a farm with a 10-acre allotment getting 10 acres, it received 9.9 acres. Every farm with an allotment of less than 9 acres did not receive a reduction. This occurred because of the factoring process. Now, those fellows down there had a terrible time explaining why allotments of over 10 acres were reduced. Mr. MATTHEWS. Mr. Chairman, may I at this point in the record submit the letter from Mr. True D. Morse, the Acting Secretary of Agriculture, dated March 14, 1958, in which the Department expressed approval of this legislation? Mr. MCMILLAN. Without objection. (The letter referred to is as follows:) Hon. D. R. MATTHEWS, House of Representatives. DEPARTMENT OF AGRICULTURE, Washington, D. C., March 14, 1958. DEAR CONGRESSMAN MATTHEWS: This is in reply to your request of January 2, 1958, for a statement of the Department's position relative to provisions of a bill which you plan to introduce during the current session of Congress. The Department favors enactment of legislation as proposed. As we understand your proposal, if enacted the legislation would provide (1) that the production of cotton or peanuts on a farm in 1957 or any subsequent year for which no farm acreage allotment was established would not make the farm eligible for an allotment as an old farm under provisions of existing legislation, (2) the production of these crops without an allotment would not cause the farm to be ineligible for a new farm allotment, and (3) the production of peanuts without an allotment would not be deemed as past experience in the production of peanuts for any producer on the farm. Under provisions of existing legislation the production of peanuts on a farm for which an allotment has not been established makes the farm eligible for an allotment as an old farm in the following year. In the case of cotton, the farm is eligible for an allotment the following year if reserve acreage is available to the county for establishing an allotment for such farms. Thus the allotments for farms on which cotton or peanuts have been grown for a number of years are subject to continued reduction to provide acreage for farms which become 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. We would recommend that the word "production” appearing twice in section 344 (n) of the bill you plan to introduce should be changed to "planting.” Enactment of the proposed legislation would not involve the expenditure of additional funds. The Bureau of the Budget advises that there is no objection to the submission of this report. Sincerely, TRUE D. MORSE, Acting Secretary. Mr. GATHINGS. It does not seem to me that it could do any harm. I do not see that the change in the law as suggested by Mr. Matthews could in any way be objectionable. Now, I want to ask you this. What percentage of the 54,000 acres in the State of Florida is held back at the State level as a reserve for the present year and for last year? Do you know what the Florida situation is? Mr. MATTHEWS. Yes, I believe I could give you that. In the State of Florida last year they actually received 53,031 acres which was apportioned among 6,405 farms. They held out for reserve 440 acres. Mr. GATHINGS. Who got that acreage? Mr. MERRILL. The old growers. But to show you how the thing works, a farmer with a 10-acre allotment in Florida received 9.8 acres, because they had to factor all the allotments in the State about 98 percent in order to bring allotments within the acreage allotted to the State. Mr. GATHINGS. The farmers have been complaining to you, Mr. Matthews, have they, that they have received about 9.8 out of a 10acre allotment? Mr. MATTHEWs. Well, I would say that the general complaint is that they just don't understand why their allotment is reduced each year, when they look and see that the total amount apportioned to the State is pretty constant. They just don't understand it. Would the gentleman yield? Mr. GATHINGS. Yes. Mr. MATTHEWS. Mr. Merrill, could you give me an idea as to how many of these six-thousand-odd peanut growers in Florida are those who just plant 1 acre each year? Mr. MERRILL. The ones who plant less than 1 acre each year are not reflected in the 6,000 because under the act we do not establish allotments for farms on which 1 acre or less of peanuts are grown. You have numerous farmers in the State of Florida who grow half an acre or just, say, less than 1.1 acre peanuts. They are not reflected in this total. Mr. MATTHEWs. They have to plant at least 1 acre to get an allotment? Mr. MERRILL. Yes, sir. The act excludes both for penalty and for allotment purposes farms where 1 acre or less of peanuts is produced. Mr. MATTHEWS. In other words, the point I am trying to get at is, the general idea of the total number of peanut producers that might be affected if this legislation is passed to the extent it would deprive them of the opportunity of planting their 1 acre. Mr. MERRILL. It would not deprive any farmer of planting 1 acre. It would simply deprive those farmers of obtaining allotments that plant over an acre of peanuts without an allotment. Mr. ABBITT. Would the gentleman yield? Mr. MATTHEWS. Yes. Mr. ABBITT. In other words, if a man planted 4 acres without an allotment, in the next year he would come in with a request for an allotment because of his peanuts that he produced? Mr. MERRILL. That is right. This act, if I may say so Mr. ABBITT. The tobacco people have taken care of their problem by similar legislation? Mr. MERRILL. That is right. Mr. ABBITT. So that when a man plants 1 acre of tobacco he gets no credit. Mr. MERRILL. It is rather interesting to know how the law reads on that point and I will read from section 358 (d): The Secretary shall provide for apportionment of the State acreage allotment for any State through local committees among farms on which peanuts were grown in any of the three years immediately preceding the year for which such allotment is determined. Then it goes on and about one or two sentences down it says: Any acreage of peanuts harvested in excess of the allotted acreage for any farm for any year shall not be considered in the establishment of the allotment for the farm in succeeding years. These farms had no allotment, so it would appear that there is a slight conflict there as to what Congress intended. Mr. ABBITT. Would you read that last sentence again? Mr. MERRILL (reading): Any acreage of peanuts harvested in excess of the allotted acreage for any farm for any year shall not be considered in the establishment of the allotment for the farm in succeeding years. Mr. THIGPEN. I might add that if a farm would have peanuts harvested on it, it would not be eligible as a new farm for next year. Mr. MERRILL. That is right. Mr. HAGEN. As I understand it, any grower can grow 1 acre of peanuts. Mr. MERRILL. That is right. Mr. HAGEN. And that does not classify him as an old farm? Mr. MERRILL. Yes, sir; it classifies the farm as an old farm. Mr. HAGEN. Even if he grew less than an acre? Mr. MERRILL. Yes, sir. Mr. HAGEN. What do they do with those peanuts? They cannot market them, can they, without penalty? |