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Mr. Mack. It is tighter than we would like.

Mr. Poate. All right. And yet you are doing pretty well right now, aren't you? You are using more than usual.

Mr. Mack. We are having more freedom in the market.

Mr. Poate. As a amatter of fact, you are getting peanuts for less money than you were getting them before.

Mr. Mack. Well, I think the price fluctuated quite a bit in recent months.

Mr. Poage. Dropped.

Mr. MATTHEWs. If the price has dropped to the peanut farmer, has the price of your product to the consumer dropped any, Mr. Mack?

Mr. Mack. There are many items that go into the cost of the production of a finished product. Concerning most of them we are not controlled to the extent we are in the raw material of peanuts. And I do not have actual cost sheets. But I can say this. For instance, in peanut butter, when you place it on the shelf in a supermarket, in a glass jar, and the housewife goes down with her basket, she has the youngsters with her. They all like peanut butter, and she wants to buy it. And she does buy it.

Now, the question is how much does she buy. Does she buy just enough to pacify those children, because it is a natural favorite with the youngsters. Or does she buy all that she wants.

When peanut butter must compete with other commodities, agricultural commodiites, which become manufactured products, like preserves, that do sell for less, we feel that there is considerable lost in sales because of that situation.

You have free market items in some commodities, and controlled market in peanuts.

Mr. MATTHEWS. I don't believe I made myself clear.
Mr. PoAGE. You made yourself clear, but he didn't want to answer.

Mr. MATTHEWS. It looks like the less the farmer gets, it just looks like that price never reflects itself in a cheaper price to the consumer.

I remember 1 day on the floor we had a delightful colleague who said, "Oh, if we didn't have a price support on peanuts, my children could buy peanut candy bars cheaper.” I checked and the best of my information is that the peanuts that went into the candy bar was one-half of a cent. In other words, I didn't think the price support on peanuts had a thing in the world to do

Mr. Mack. I shall be pleased to talk about both candy and peanut butter.

Mr. MATTHEWS. My question was, I think the evidence here is that peanut farmers have been getting less. Now, is your price to the consumer any less as a result of the lowered price the peanut farmers are getting.

Mr. Mack. Now, you mentioned candy. The popular price of the candy bar is a nickel. But the question is what do you give the customer for a nickel ?

The larger the size of the bar, and the more peanuts that are contained in it, the more you can sell. A youngster goes in there with a nickel. There are a lot of things he wants to look over. And which bars will he buy. He might buy a bag of jelly beans. He is going to get the most he can for his nickel.

Mr. Poage. Have you made the peanut bars any larger because of the drop in the price of peanuts?

Mr. Mack. There are more peanuts in the bar.

Mr. MATTHEWs. It looks to me like the peanuts we get in these little packages get less and less every time.

Mr. Mack. Congressman, we have heard that for a long time. And if they were continuing to become less and less there wouldn't be any by now.

Mr. ALBERT. What would you say about the elimination of the national minimum acreage?

Mr. Mack. We do not favor reducing the available supply of peanuts. We want to sell more peanuts. We think that the farmers interest lies not so much in the price per ton, but in the net, the eventual net, that he makes himself. And we think that in the long run he will earn more money and have more money in his pocket if there is more freedom in the program, so he can sell more. And we think that the turn is coming. We are pleased with the way things are beginning to move.

Mr. ALBERT. Of course the history of that is they were selling them for about 50 cents a bushel when they had all the freedom they wanted.

Mr. Mack. Well, that was in 1933, and your banks all failed and everything else went broke then. And most of your industries that were broke then are doing pretty well today.

Mr. ALBERT. We didn't have all these built-in backstops at that time on either agriculture or many other things.

Mr. Mack. Well, you do not have the controls on the other industries that you have on peanuts today. And most of them are doing very well today.

Mr. Poage. That still brings me right back to the question I asked you and you have not answered it yet. At what price should peanuts sell today?

Mr. Mack. Congressman, I am not a grower, not a sheller, I am not a manufacturer, and I am not a price expert. And it is not entirely a question of price. It is a question of availability of supply. I am not trying to be evasive, but I cannot tell you, and in fact it would not be my function as a trade association spokesman, to tell you what I think a price should be.

Mr. Poage. I understand full well it is not your function to. They didn't pay you to come down here and tell us that, because they don't want us told. But you volunteered as a witness, and I think it is up to you to answer the questions.

Do you think $200 a ton is too much for peanuts?

Mr. Mack. You can ask me $300 for that matter. And I am just not a price expert. We think that the announcement of the Department this year of the level of support is reasonable under the conditions.

Mr. Poage. You think the present price is about what it ought to be? Mr. MACK. We think the Secretary has done an excellent job.

Mr. Poage. Then, do you think he should not reduce the support next year?

Mr. Mack. Well, you have a law on it, Congressman, which we think is a much better law than we had before. I know you don't agree with that, sir.

H. B. Wilson, Georgia Farm Bureau, Peanut Committee Chairman, Abbeyville,

Ga. Bobby J. Locke, Georgia Farm Bureau, Dawson, Ga. W. E. McDowell, Georgia Farm Bureau, Blakely, Ga. Charles Shirley, Georgia Farm Bureau, Blakely, Ga. D. H. Harden, manager, Georgia Farm Bureau, Camilla, Ga. J. D. Gardner, Georgia Farm Bureau, Camilla, Ga. R. L. Mauldin, Georgia Farm Bureau, Slyvester, Ga. Elmer R. Faulk, Georgia Farm Bureau, Ocilla, Ga. B. B. Saunders, Georgia Farm Bureau, O'Brien, Fla. W. V. Rawlings, Association of Virginia Peanut & Hog Growers, Capron, Va. C. R. Barlow, Association of Virginia Peanut & Hog Growers, Smithfield, Va. A. L. Glasscock, Association of Virginia Peanut & Hog Growers, Chuckatuck, Va. J. L. White, president, Association of Virginia Peanut & Hog Growers, Elberon,

Va. H. H. Hudson, Southwestern Peanut Growers Association, Box 489, Holdenville,

Okla. Ross Wilson, Southwestern Peanut Growers Association, Gorman, Tex. Marcus B. Braswell, president, North Carolina Peanut Growers Association,

Whitakers, N. C.
Joe S. Sugg, North Carolina Peanut Growers Association, Rocky Mount, N. C.
R. Hunter Pope, North Carolina Peanut Growers Association, Enfield, N. C.
George P. Kittrell, North Carolina Peanut Growers Association, Corapeake,

N. C.
W. B. Anderson, Greenwood, Fla.
J. E. Thigpen, USDA, Washington, D. C.
C. T. Mace, USDA, Washington, D. C.

Following the listings of those in attendance, Chairman Wingate called on
W. V. Rawlings, executive secretary of the Association of Virginia Peanut and
Hog Growers of Virginia to relate the background leading up to this meeting.

Mr. Rawlings gave a general outline, setting forth the developments which led up to this meeting, and in so doing pointed out the activities which had been carried out by Joe S. Sugg, executive secretary of the North Carolina Peanut Growers Association, and himself, working with the full cooperation of personnel in the Oils and Peanut Division of the United States Department of Agriculture and attorneys in the United States Department of Agriculture. He specifically pointed out that there was no intention on the part of the VirginiaCarolina area representatives to draft proposed legislation for any other area, but that this activity had been done in the interest of laying down some basic principles as a framework on which this group in the meeting here today could work toward arriving at legislation suitable to the three peanut-producing areas of the United States. He further pointed out that in order to have something with which to work that these principles had been drafted in bill form, along with laymen's explanations of each section, and statistical analysis that this material had been sent to all the people who had been designated as representatives to this meeting in each producing area prior to this meeting, in order that they might become familiar with the material. Mr. Rawlings stated further that he had additional copies for distribution to those present who had not previously received copies.

Mr. Wingate then called on Joe S. Sugg for any comments relative to the background for this meeting, and Mr. Sugg emphasized the necessity for the producers of peanuts in the United States designing and drafting a program of their own liking without outside influence. The need for a new program which would be equally beneficial to the growers and more acceptable to the public has been greatly demonstrated in the past by the continuous attack on the peanut program in the Congress. He further stated that it was the feeling of the designers of the guide material to be used in the meeting today that basically this draft would go a long way toward meeting these requirements. Mr. Sugg further pointed out the existence of and the activities of the Conference of Commodity Organizations which would lend strength to the peanut grower organizations in trying to get peanut legislation enacted through the Congress.

Mr. Ross Wilson, representing the Southwestern Peanut Growers Association, was called on and he concurred generally with the expressions of Mr. Rawlings and Mr. Sugg.

Following these general statements, Chairman Wingate suggested that we first have Mr. Rawlings go over in a general way enclosure No. 2 of the material, which is the laymen's description of the draft of the bill and that following this

general approach the draft of the bill be discussed section by section and paragraph by paragraph, in detail using both enclosure No. 1 and enclosure No. 2 to help clarify the various points developed in the discussions. This plan was followed in the remainder of the meeting, which continued through Monday and adjourned at 11:30 a. m., Tuesday, November 19, 1957.

During the discussions of the bill, certain changes were made, and certain instructions were issued, which would create changes in the redraft of the bill. The group voted that Mr. Rawlings and Mr. Sugg be appointed to work out a redraft of the bill in conformance with the wishes as expressed by the group in this meeting, and working with Mr. Thigpen, Mr. Mace, and the lawyers of the Department of Agriculture. The group in appointing Sugg and Rawlings to this job recognized the closeness and their geographical location, making it more simple for them to work with Washington representatives.

The following actions with respect to the draft were taken:

First page, section 301, subsection (b), Agriculture Adjustment Act 19:38, approved with the exception that the words “or held for" be added following the words "acquired by' on line 5 of paragraph b of the draft.

Also add to this paragraph the following wording: "In addition, any peanuts that are held by the owner under a loan arrangement with the Commodity Credit Corporation will be excluded. Furthermore, inedible shelled oil stock will be excluded from the carryover."

Section 2 was approved as drafted with the exception: on page 2, line 4, the figure "90" would be changed to "95” and that the figures in line 5 on page ? be changed to read "1,529,500" and that the section be worded so that such acreage allotments if granted under the section 358-C2 on page 2 not count in the history used in determining future peanut allotments.

Section 395, beginning on page 3, was reviewed with the following change: On page 4, delete the words in line 8 "and pursuant to section 359F of this“.

On page 5, under paragraph (b), line 7, insert the word “average" between the words of “of” and “price” and delete on the same line following the word "support" the words “by types".

In this same section reword so that the payment made into the fund will be 194 percent of the per ton level of the national average support for eligible peanuts and that the funds developed by this 144 percent payment would be earmarked and designated for publicity, sales promotion, and other programs.

That paragraph (d) on page 5, line 2, delete the words "not less than".

Lines 4 and 5, amend to show 3 sheller representatives 1 from each area and to show 3 manufacturing representatives.

On page 6, under paragraph (d), the portion in quotes starting at “provided" be rewritten so as to show that 114 percent of the payment to the fund as previously set forth in section (b) on page 5.

Paragraphs (e), (f), and (g) were approved as written.

That the words on page 8, under (h), "and pursuant to section 359F of this Act" be deleted and the proviso in section 8, beginning with the word prorideda on the fourth line from the bottom of the page and continuing on page 9 to section 6, be omitted.

Sections 6, 7, 8 on page 9 were approved as written.

Those delegates present approved the entire draft as changed and amended, as indicated in the above notes, with the exception that the Alabama Farm Bureau asked for the privilege to consult their representatives upon their return home and indicate their action at the earliest possible date with respect to the seciton dealing with promotional funds, and the delegates from the Southwest also requested the privilege of further discussing with their representatives at home and indicating their position at the earliest possible opportunity on the portion of section 39.5 which deals with the payment into the fund for diversion of surplus peanuts during seasons when their crop is in short supply.

It was further agreed that should legislation based on this bill be enacted in 1958 that it would not be made effective until the crop year 1959.

l'pon the completion of the discussions on the bill, Chairman Wingate took the opportunity, along with other representatives present, to express his appreciation to those who were active in formulating plans and instigating this meeting, and a number of those present expressed their opinion that this meeting was the most harmonious meeting of peanut producers relative to legislative matters that they had ever experienced.

STATEMENT OF CLARENCE MILLER, ADMINISTRATOR, COMMODITY

STABILIZATION SERVICE, UNITED STATES DEPARTMENT OF AGRICULTURE; ACCOMPANIED BY JAMES E. THIGPEN, UNITED STATES DEPARTMENT OF AGRICULTURE

Mr. MILLER. Mr. Chairman, I would like to apologize for not being able to come at the appointed time.

Mr. McMILLAN. We understand one of the other committees had you tied up. That is perfectly all right. .

Mr. MILLER. We appreciate the opportunity to express our position with respect to H. R. 12566 and H. R. 12545.

The Department is appreciative of the effort the growers have made to develop improved legislation for peanuts. However, the Department is opposed to both of these bills.

During the 1956–57 marketing year the consumption of peanuts increased about 8 percent. So far during the 1957–58 marketing year another increase of 8 percent has been recorded.

We believe this increase in consumption of peanuts is associated with somewhat more moderate prices, an adequate supply and vigorous advertising and sales efforts by manufacturers of peanut products.

I would like to add also, Mr. Chairman, that we recognize the good job that the growers and the producer organizations have done toward securing an increase in the consumption of peanuts.

We believe it is in the long-term interest to peanut growers to move in this direction. It is here that the administration proposal for discretion to determine the level of price support and to increase allotments seems to best come into focus.

The bills under consideration tend to move in the opposite direction in that they would maintain high level support on an inflexible basis. They would increase and tighten rather than reduce and relax the restrictions and Government regulations affecting the production and marketing of peanuts. Adoption of either of the bills would establish provisions which would tend to stifle further growth in the industry. The rigid provisions of both bills are contrary to the Department's recommendations with respect to price-support programs.

Either bill would produce major changes in the marketing quota acreage allotment and price-support legislation. Both bills provide for increasing the carryover percentage in the normal supply calculation and for eliminating Commodity Credit Corporation carryover in the supply percentage determination. The combination of these two provisions, both of which we strongly oppose, would tend to freeze the price support at 90 or 95 percent of parity.

The concept of self-supporting price-support operations contained in both bills may have some merit, but the Department is opposed to such provisions if they must be accompanied by high price supports and rigid controls which would restrict the growth of the peanut industry.

The provision in both bills for the use of funds for publicity and promotion of peanuts and peanut products is objectionable to the Department. These provisions would in effect place the Federal Government in the field of promotion of peanuts and peanut products,

23887-58-9

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