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national minimum acreage allotment, with further advances in yields per acre and good growing conditions with present production practices, may not completely relieve the overproduction situation, this reduction of 5 percent is a step in the right direction.
We further commend our peanut producers for their proposal to establish a fund for surplus diversion. In making such a recommendation, they realize the uncertainties of production will lead them to a point from time to time where the supply of peanuts will be greater than the need of the market. We feel that such a proposal is sound and recognize that while the allotment and marketing quota program is beneficial to peanut producers, it should be so developed that the cost to the taxpayer in general will be held to a minimum.
In view of our desire to develop farm programs which recognize competitive conditions, we would question the manner in which this fund is to be created. Since this fund is to be created by increasing the price-support level of peanuts, will it further reduce the opportunity of our peanut producers to compete in the world market and increase the opportunity for producers of competitive products in the edible nut and spreads for bread field to displace even more peanuts in the domestic market.
There is an earnest desire that the net income of peanut producers be increased to the highest possible level, but to do this we feel that measures which restrict their market and increase the opportunity for his competitors may be of questionable value. It is our firm belief that such competitive factors as price, quality, and availability have a direct bearing on the market possibilities for peanuts.
If, however, peanut producers feel that such an increase is needed to assure the establishment of a diversionary fund and are willing to accept the possible further loss in market, we will support the proposal in the proposed legislation.
With respect to the fund for promotional purposes, it is our feeling that this fund should be collected on a purely voluntary basis and not be used to displace or duplicate publicity and promotional funds now being used by the industry to increase the sale of peanuts. We would, therefore, oppose inclusion in the bill the collection of funds by Federal legislation for promotional purposes but support efforts by producer organizations to collect funds on a voluntary basis for this purpose. If such funds are needed, and there is always a possibility that general advertising would not increase consumption of a commodity, we feel that peanut producers will support such programs on a State, local, or organization basis.
With respect to the peanut program in general, the Virginia Farm Bureau Federation supports the present allotment and marketing quota program, but urges peanut producers to develop ways and means whereby their production facilities, land, labor, and capital may be used to the highest degree of efficiency to the end that our economic condition might be improved by producing for the market.
Mr. Chairman, genetlemen of the committee, we appreciate this opportunity of appearing before you and presenting our views on this matter.
Mr. McMillan. Mr. Abbitt, do you care to ask any questions?
Mr. ABBitt. No. I would just sike to commend Mr. Davis on his fine presentation. I want to express my appreciation to you for coming up here to appear before the committee.
Mr. Davis. Thank you, Mr. Abbitt.
Mr. McMillan. Mr. Davis, it is evident you have give this legislation a great deal of study. We have had a little controversy, as you know in our committee, as to whether this is the proper time to take this type of legislation up, and whether it should be taken up with the overall farm bill.
What do you think about that proposal ?
Mr. Davis. Well, sir, in view of the fact that I understand there are some producer representatives—and I may be in error, since I did not attend the earlier hearing—that are not completely together on this, I would be inclined to question the advisability of pushing too far or too fast.
It seems to me it would be very highly desirable to develop a program that would certainly have the support of the producers from the several production areas.
. Mr. McMILLAN. We all feel that it is very essential that we get all the peanut growers together on any proposed legislation, at least. Only a very small percentage of the House Members are even interested in peanuts, and, of course, we do not want to do anything to hurt the peanut cause if we can help it.
Mr. Davis. I would certainly like to see legislation of this type move forward. And it was certainly my hope that the producers from the other areas would see fit to support, at least in general principles, the proposal.
Mr. McMILLAN. If they cannot get together, you would suggest that they take it up in a separate bill?
Mr. Davis. I would question moving it too fast, and possibly treating it as a separate bill.
Mr. McMillan. Mr. Poage, would you care to ask any questions?
Mr. Poage. Yes. I just want to ask if you feel there ought to be an equalization of price supports for the identical grades in various areas?
Mr. Davis. Well, certainly I feel, sir, that they should be based on competitive conditions. If the market for the several types would be as strong for one type as the other, yes.
Mr. Poage. I really should say the several types. Do you believe we should have the same support for Spanish peanuts in the Southwest as we do in the Southeast Spanish peanuts of the same grade.
Mr. Davis. I would certainly think they should be more nearly competitive than they are at the moment. We feel in Virginia that ours under the present support schedule, the differential is too great, and we would like to see it narrowed, if not totally equalized.
Mr. Poage. Now, what about the tolerance for foreign matter! Would you agree with me that it should be the same in all types of peanuts?
Mr. Davis. Sir, I would have to disqualify myself as an expert on this matter.
Mr. Poage. I am not asking you as an expert.
Mr. McMILLAN. Thank you very much, Mr. Davis. We are glad to have your statement for the record.
Mr. Davis. Thank you very kindly, Mr. Chairman.
STATEMENT OF WILLIAM RAWLINGS, CAPRON, VA. Mr. RAWLINGS. Mr. Chairman, if I could have permission to file a supplemental statement, I feel that would suffice rather than taking the time of the committee. The supplemental statement would deal specifically with certain statements made principally by Mr. Pace and Mr. Duncan and Mr. Turner at the hearing 2 weeks ago that in our opinion are factually incorrect, and we would seek to correct the record in that respect. I have the material. I do not mind going over it verbally. I would be glad to.
But I just thought as a means of saving time, if I could have permission to file the clarifying material.
Mr. McMILLAN. Without objection, it will be included in the record. (The supplement statement referred to follows:)
STATEMENT OF WILLIAM D. RAWLINGS, EXECUTIVE SECRETARY OF THE ASSOCIATION
OF VIRGINIA PEANUT & HOG GROWERS, INC. Under questioning by Congressman Abbitt, Mr. Stephen Pace, made statements relating to the consumptino of peanuts and peanut products which apparently are inconsistant with the official figures of the Bureau of Labor Statistics.
"Mr. ABBITT. That is what I am getting at. When they had that drop from 90 to 82 and then took a drop under modernized parity, did that reduce the cost to the consumer in the least?
"Mr. PACE. Yes, sir, it did. And I am wondering, Congressman-
"Mr. ABBITT. I said to the consumer. Has there been any reduction to the consumer.
"Mr. PACE. I think there has been some in peanut butter, sir. I can't tell you about candy."
Mr. Pace left the impression that the drastic reduction in price support level which had severely hurt the producer had been passed on to the consumer in the form of cheaper peanuts and peanut products. He was particular positive about peanut butter, although not quite as positive about other peanut products. In view of the fact peanut butter accounts for approximately 50 percent of the end use of peanuts, it is significent to note that, according to figures by the Department of Commerce, Bureau of Labor Statistics, the following average annual prices per pound have been recorded as being paid by consumers for peanut butter since 1953: Cents
Cents 1953_. 49.0 | 1956..
53. 6 1954. 49.3 1957.
53. 6 1955. 54. 4 | 1958 (Jan. to Apr.).
54. 2 Since 1953 the national average support price for peanuts has been: 1953.. $237. 60 | 1956.-
$227.04 1954. 244. 40 1957.
221. 40 1955_--244. 80 | 1958..
1 213. 20 1 Tentatively announced.
The foregoing figures indicate that in 1954 the consumer paid for a pound of peanut butter 396 percent of the support price per pound of farmers stock peanuts. In 1957, the consumer paid for a pound of peanut butter 484 percent of the support price to growers of a pound of farmers stock peanuts.
Certainly the official figures from the Bureau of Labor Statistics do not substan. tiate the statement nor impression made by Mr. Pace on May 27.
Mr. Duncan, president of the Georgia Farm Bureau Federation, stated there was only one producer from Georgia at the Atlanta meeting.
The minutes show there were nine representatives of Georgia growers at the meeting held in Atlanta November 18 and 19. They were as follows: H. L. Wingate, immediate past president of the Georgia Farm Bureau Federation, H. B. Wilson, chairman of the peanut committee of the Georgia Farm Bureau, Bobby J. Locke, Georgia Farm Bureau, M. E. McDowell, Georgia Farm Bureau, Charles Shirley, Georgia Farm Bureau, D. H. Hardin, manager, GFA, J. D. Gardner, counsel for GFA., R. L. Mauldin, a director in GFA, and Elmer Faulk, a director in GFA. There were more representatives from the State of Georgia than from any other peanut State.
Prior to the meeting, Mr. H. H. Knowles, of Headland, Ala., president of the Alabama Peanut Producers Association, vice president of the Alabama Farm Bureau Federation and a director in GFA, had been contacted and requested to assume the responsibility for selecting and notifying the grower representation in the Southeast. Mr. Knowles very kindly agreed to assume this responsibility and the minutes show there was excellent grower representation from the Southeast in attendance.
Mr. Turner stated that in the salted trade there had been a reduction in the consumption of peanuts.
The USDA publication, Peanut Stocks and Processing of May 23, 1958, shows that for the season through April 30, 1958, there have been 132 million pounds of peanuts used for salting compared to 125 million pounds during the same period a year earlier.
Mr. Turner stated: “They have researched themselves into an awful predicament by producing a greater percentage of Extra Large peanuts that there isn't a market for, and today the Commodity Credit Corporation is outlawing it."
It is true we have made strides in producing extra large kernels in the Virginia-Carolina area and it appears we are in a position to produce adequate Extra Large to supply or reasonably supply the demands of the trade with any. where near normal growing conditions. However, the statement, “the Commodity Credit Corporation outlawing it" is totally without any foundation whatsoever. The Commodity Credit Corporation, at the request of growers and others interested in the industry in our area has lowered the support price to 50 percent of parity on a particular variety of peanut which has a number of undesirable characteristics and it was not felt wise to do other than discourage the production of that particular variety. Similar action was taken several years ago with reference to florispan, a variety developed in the Southeast. However, to leave the impression that Commodity Credit Corporation is outlawing the production of Extra Large is fantastic.
Mr. Stephen Pace went into considerable detail and consumed much time in pointing out to the committee that the provision in H. R. 12566 dealing with setting the marketing quota at a figure which would produce 105 percent of a normal supply of peanuts. Mr. Pace went through considerable arithmetic and came up with the conclusion that the provision would result in the production of only 618,000 tons of peanuts and would be 59,000 tons short of actual needed requirements.
In an analysis of the present law, the Abbitt bill and Burleson bill, the Oils and Peanut Division of the Department of Agriculture interpreted the Abbitt bill to produce a quota of 714,000 tons and result in a total supply of 864,000 tons of peanuts.
I am anxious for the record to show that according to the interpretations of the Department of Agriculture this particular provision of H. R. 12566 would have a quite different effect than Mr. Pace pictured to the committee. Attached heretu is a comparison of present and proposed legislation as worked out by the Oils and Peanut Division on June 2, 1958, and I ask that this be included as a part of the record.
Mr. POAGE. I would like to ask Mr. Rawlings what his views are about this matter of a differential in tolerance of foreign matter in various types of peanuts.
Mr. RAWLINGS. Our people feel very strongly that it should be the same.
Mr. POAGE. So do we.
(H. R. 10967, 85th Cong., 2d sess.) A BILL To establish a comprehensive family farm income improvement and protection
program, to provide additional consumer safeguards, to enable farmers to keep barbel supplies of farm commodities in reasonable balance with demand therefor, and for other purposes
Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act shall be known as the "Family Farm Income Improvement Act of 1958".
SECTION 1. Section 101 of the Agricultural Act of 1949, as amended, is amended by adding at the end thereof the following: "Notwithstanding any other provision of law, the Secretary of Agriculture and the Federal Farm Income Improvement Board, established by this Act, are authorized and directed to maintain through price-supporting loans, purchases and purchase agreements; parity income deficiency payments; or other methods the returns to farmers wbo stay within applicable farmwide, commodity-group, and individual-commodity marketing quota and if producers of the commodity or commodity-group bare not disapproved the proclamation of marketing quotas for that commodity or commodity-group, at a level not in excess of the parity-income equivalent prices of the several commodities nor less than 80 per centum of the parity-income equivalent prices of the several commodities: Provided, That the eligibility of any farmer to obtain farm income protection under this section shall be limited to not more than actual sales by such farmer or the maximum sales of economically adequate family-operated farms as determined for each type of-farming area or subarea or other type-of-farming classification, by the Secte tary upon affirmative recommendation by two-thirds vote of the Federal Faro Income Improvement Board, which ever is smaller; and the eligibility of any farmer to obtain farm income protection for any commodity shall be limited to actual sales of such commodity by such producer or the proportional part of the sales of such commodity by such producer that is equal to the ratio that total maximum sales of economically adequate family-operated farm bears to the total sales of all farm commodities by the producer, whichever is smaller: And provided further, That no farmer shall be eligible to receive more than $3,500 of parity-income deficiency payments in any one calendar year."
PARITY-INCOME EQUIVALENT PRICE FORMULA
SEC. 2. The Agricultural Adjustment Act of 1938, as amended, is amended as follows:
(a) Section 301 (a) (1) is repealed.
(b) Section 301 (a) (2) is amended by changing “(2)" to "(1)” and adding at the end thereof the following: "The parity-income equivalent price of any agricultural commodity shall be a price per unit that when multiplied by the marketing quota or expected sales for such commodity plus estimated volume of such commodity utilized on farms where produced will equal the parity gross income for such commodity.”
(c) Section 302 (f) of Public Law 897, Eightieth Congress (7 U. S. C. 1301a); is amended by inserting after the word "parity” the last time it appears and before the word “prices” the last time it appears the words “income equivalent”.
BALANCING MARKET SUPPLIES WITH DEMAND SEC. 3. Notwithstanding any other provision of law, the Secretary and the Federal Farm Income Improvement Board, established by this Act, are authorized and directed to initiate the programs provided in this section to enable farmers to keep the market supply of the commodities they produce in reasonable balance with demand.
(a) The Secretary is authorized and directed upon recommendation adopted by two-thirds vote of the Federal Farm Income Improvement Board, established by this Act, to determine and proclaim, prior to October 15 of each year, a na: tional farmwide all-commodity farm marketing quota for the succeeding crop year.
(1) The national farmwide all-commodity farm marketing quota shall be the total value of all farm commodities, calculated at parity-income equivalent prices, as the Secretary and the Federal Farm Income Improvement Board may deter mine can be sold by farmers at not less than 80 per centum of parity-income equivalent prices in such crop year calculated on the assumption that the number