(b) Each State's acreage allotment shall be prorated to the counties, parishes, farms, and/or persons on the basis of the 1955 acreage allotment, except that for the first year it shall be prorated in accordance with existing law and regulations. The determination of whether the allotment shall be on the farm or on the person shall be made by each State committee. There shall be no national reserves. (c) Not in excess of 1 percent of the State acreage allotment may be withheld by the State or county committee and used for adjustments and new producers, except that in the year 1956 reserves shall be in accordance with existing law. II. Each year the Secretary of Agriculture shall determine the quantity of rice deemed adequate to supply the primary market, which shall include the United States, its Territories, and Cuba. This shall be designated as the “national primary quota" and shall be in units of hundredweights of rough rice. The balance of the world shall be designated as the "secondary market." The total primary market as determined by the Secretary shall be supplied from current crops. (a) In 1956 the national primary market quota shall be apportioned to each State in the same ratio as each State's 1955 total production bears to the total United States production in 1955, using the latest available official figures. In each succeeding year the national primary market quota shall be apportioned among the States in the proportion that each State's average acreage production times that State's allotted acres bears to the total United States production, utilizing a 3-year moving base period beginning in 1955, except for 1957 a 2-year base period shall be used. (b) The State primary market quota shall be apportioned to each farm and/or person in 1956 on the basis of each farm and/or person's acreage allotment in the light of its or his average dry weight production for the year 1955; except that in abnormal situations the State or county committee shall have the discretion in specific cases to adjust a producer's average production to reflect his normal production and in the exercise of this discretion may consider the producer's production in 1953 or 1954. In each succeeding year the State primary marketing quota shall be apportioned on the basis of each producer's normal yield per acre in the 3 calendar years next preceding times allotted acreage in the year for which the determination is made, except that for 1957, the 2 calendar years next preceding shall be used to determine normal yield. (c) One percent of the State's primary marketing quota may be withheld by the State committee and may be used for adjustments and new producers. Farms or persons securing acreage allotments out of the State acreage reserve shall be given a production quota for the primary market out of the said marketing reserve computed on the basis of the average production per acre for the State for the previous year. III. All rice produced within the national acreage allotment shall be supported at 75 percent of parity for the year 1956 and not less than 50 percent of parity in each succeeding year, provided that in all instances the said rice meets the eligibility requirements, variety and grade differentials being considered. IV. Certificates for each producer's share of the primary market shall be issued by the Government on the following basis: (a) For the year 1956, there shall be a fixed support price of 55 percent of parity. The value of the certificate for the said year shall be the difference between this 55 percent and 95 percent of parity. The acceptance by the producer of this certificate in 1956 shall be an effective waiver of his right to have support on his total crop at 75 percent as provided in existing law. Each year thereafter the Secretary shall fix a support price which shall be not less than 50 percent of parity. In fixing this support price the Secretary shall give predominant consideration to setting support at a level low enough to move American rice in export markets and enable American exporters freely to compete in the world market against foreign rice sellers at competitive prices, to the end that rice will not be placed under support except at the disaster level of 50 percent of parity. The certificates shall have for each year the fixed value equal to the difference between the said support price, as set by the Secretary, and not less than 90 percent of parity. The value of the certificate shall be fixed without regard to varietal or grade differentials. (b) In accordance with regulations to be prescribed by the Secretary, certifi cates shall be issued upon proof of production or upon proof of planting a sufficient number of acres to yield the producer's marketing quota as fixed under the provisions of paragraph II (b) above. "Proof of planting," as used herein, means acreage measurement and certification by the county committee as carried out under existing law and regulation. (c) Certificates shall be negotiable and cashable at face value upon issuance. V. A producer shall suffer the loss of his acreage history unless he plants acreage each year equivalent to 90 percent of his yearly acreage allotment (except that for the year 1956 the Secretary may permit planting of no less than 75 percent in lieu of the 90 percent of the producer's yearly acreage allotment); provided, however, that he shall suffer no loss of acreage history if he releases to the county or State committee the unplanted acreage allotment or certifies to his county or State committee that he has released the unplanted acreage allotment to another designated producer or farm. Any release to another designated producer or farm shall not be made without the approval of either the State or county committee. The county or State committee may distribute such unplanted acreage to other producers on any equitable basis determined by the committee. Any unused acreage within any State shall not be reallocated or distributed to any other State or to any producer within another State. If a producer releases to another producer or to a county or State committee all, or any part, of his acreage allotment required to produce all or any part of his primary market quota, such producer shall suffer the loss of his marketing certificates on the portion released and any producer succeeding to such acreage shall acquire the marketing certificates thereon. Any producer who releases all or any part of his share of the acreage allotment for 3 years in succession shall lose his acreage history thereon. A producer receiving any acreage rights released by another shall acquire history thereon only if his transferor shall have lost his history. The producer acquiring the acreage shall get the benefit of the full history on the acquired acreage rights if he has received them in each of the 3 years. If he has received them for 2 of the said 3 years, he shall be entitled to two-thirds of the history, and if for 1 of the said 3 years, to one-third. VI. The total, or any part, of a producer's production, if grown within the allotted acreage, which meets the minimum grade specifications, shall be eligible for loan or purchase agreement. Loan value for 1956 shall be based on 75 percent of parity, or, if the producer has waived the 75 percent support as provided in paragraph IV A above, the loan value shall be 55 percent of parity. VII. Every first seller of processed rice and every importer of processed rice shall be required to purchase marketing certificates from the United States Government, equivalent to the converted value of the rough-rice certificates, on all sales or imports. "Processed rice," as used herein, shall mean rice in any form whatsoever from which the hull or husk has been removed, including "milled rice," "undermilled rice," "unpolished mill rice," "brown rice," "converted rice," "malekized rice," "parboiled rice," "fortified rice," "vitaminized rice," "enriched rice," and others. The Secretary of Agriculture shall prescribe regulations to establish the converted value of the marketing certificates in accordance with the following factors: (1) The national historical milled-rice yield, which is hereby determined and declared to be (a) Whole-grain milled rice. Total Percent 48. 1 9.0 6.5 5.9 69.5 (2) The historical price relationship between and among the classes of rice listed in subparagraph (1) next preceding, in accordance with price statistics collected and reported by the Market News Service of the Department of Agriculture in the 3-year period immediately preceding the effective date of this act. The Secretary shall adjust the mill-yield percentages listed in subparagraph (1) to provide conversion factors for brown, undermilled, and parboiled rice. Certificates shall be made available by the United States Government for all imports and sales which any first seller can make in the primary market. On proof of export sales, payment for certificates covering the said export sales shall be abated. The abatement shall be in the form of an offset against any payments required to be made to the United States Government for certificates covering imports and sales of processed rice. VIII. In order to make the transition from the price-support plant currently in effect to this proposed plan, inventory adjustment cerctificates shall be issued to all owners of rough rice and to owners of processed rice, upon which a first sale has not been made, in their inventory at July 31, 1956, except such rough rice as may have been acquired from the Commodity Credit Corporation. The value of such inventory adjustment certificates shall be the difference between the support price to which this act shall apply, i. e., 55 percent of parity, and the support price for the rice produced in the year immediately preceding the first crop of rice to which this act shall apply, i. e., 85 percent of parity. Inventory adjustment certificates shall be cashable by the Commodity Credit Corporation at their face value, or they may be used in payment for primary marketing certificates. IX. To assure the effective administration of this program, legislation should provide for the following civil and criminal penalties: A. Penalties on producers for noncompliance: 1. Loss of certificates for primary market. 2. No support on any of the rice produced. 3. Penalty of 50 percent of parity on excess acreage times normal yield per acre. 4. No history earned on excess acreage. B. Penalties on first sellers for violation. 1. Civil penalties: (a) Payment of liquidated damages equal to twice the value of the required certificate. 2. Criminal penalties. (a) First sellers shall be required to file monthly statements setting forth basic facts required by law. A false statement in any material respect would then make them liable under the provisions of the Federal Criminal Code relating to false and misleading statements to the Government. X. Rice shall be included in the Agricultural Commodity Set Aside Act (7 U. S. C. A. 1741-1747) for strategic purposes and for other purposes prescribed in said act. All CCC rice, rough and processed, in inventory as of 60 days after the beginning of the first marketing year following passage of this proposed law, shall be transferred to and become a part of the commodities set aside under the said act. This stockpile shall be maintained by the Commodity Credit Corporation at not more than 25 million hundredweight nor less than 20 million hundredweight in terms of processed rice. XI. This program contemplates that rice shall continue as a basic commodity and that marketing quotas as prescribed by existing legislation shall be in effect with appropriate penalty provisions for noncompliance. The CHAIRMAN. Have you a statement that you want to make? Mr. ALIOTO. No; I haven't a direct statement. I will be glad to answer any questions you have in mind. The CHAIRMAN. Senator Hickenlooper and I would like to know how this proposal would work. Assume you are a rice farmer and Mr. Blair here is a first purchaser? Mr. ALIOTO. All right. Senator HICKENLOOPER. You have 5,000 bushels of rice or 10,000. The CHAIRMAN. Any amount you want. Mr. ALIOTO. I first would like to use hundredweights of rice because that is what we are using in the industry; that is what are using in this plan, that we are speaking of. This plan generally contemplates the issuance of two type of certificates. The first is going to be a grower's certificate. And the second is going to be in effect a miller's certificate. Although it will cover, of course, sellers and importers as well. These certificates will work within the framework of the acreage allocations or acreage allotments as we have understood those acreage allotments in connection with past farm programs, in connection with the existing farm programs. The acreage allotment will first be set by the Secretary of Agriculture on a national basis. That will be set with a minimum and a maximum to meet the objection that has been made here by the State Department. Then that acreage allotment will be brought from that national basis down to a State basis, and that will probably be set on the basis of a formula that we can agree on in the next 2 days. That will be either the actual ratio in the 1955 allotment, for example, or in some other specific year. So we are basing it on specific experience, and not anything that is new or novel. Then that State allotment will be brought down to the farmer, the actual grower on the basis of perhaps his 1955 ratio or his 1955 percentage. That is one element. That is an allotment. That was very much along the lines of the acreage allotments we have now. Then the Secretary will fix a figure of the hundredweights of rough rice necessary to cover the domestic market. Year in and year out the domestic market in rice has been relatively inelastic. It does not make any difference what we charge. It is generally about the same. Let us assume 50 percent of the crop. He will set that national quota as we will call it. That national quota is then brought down to the States on the basis of production ratios. We will say the production in the State of Louisiana is the ratio that it bears to the national production. Thereafter that quota, which is brought down to the State level, will be distributed to the farmers on the basis of studies on average yield. We are trying to agree on years and I think we can do that. We are very, very close to agreement on that. So that the farmer will have two things in this setup: He will have his acreage allotment and he will have his quota. Senator Hickenlooper. He will have his acreage allotment? Senator HICKENLOOPER. Under this plan is it contemplated that the acreage allotment will in fact produce more rice than the domestic market can consume? Mr. ALIOTO. Yes. In other words, the plan is basically a plan to permit us to export rice in markets that we know want our rice and we can sell it if we are competitive. It is all predicated upon an export market. Senator HICKENLOOPER. Roughly, how much would that excess be over and above the domestic? Mr. ALIOTO. Let us assume 50 percent-that is probably a pretty good figure. Senator HICKENLOOPER. For the sake of argument. We will not hold you to the exact percentage for the moment. Mr. ALIOTO. It is a fair estimate. Senator HICKENLOOPER. Assume it is 50 percent. So he grows one 1 hundredweight of rice and only 50 or half a hundredwieght will move into the domestic market. Mr. ALIOTO. That is correct. Senator HICKENLOOPER. Very well. Mr. ALIOTO. He will be given Senator HICKENLOOPER. For the domestic quota. Does the Secretary of Agriculture under your plan calculate at what price that should move into the domestic market? Mr. ALIOTO. Yes. We think that there should be a very strong statement of a legislative standard in this act, that will direct the Secretary to prescribe a world market figure, calculated to permit the American exporters freely to compete in the world market at competitive prices. And calculated, too, to keep rice away from support except at a disaster level of 50 percent. In other words, he should fix that on a realistic basis each year. Senator HICKENLOOPER. If it is all right with you for me to go further The CHAIRMAN. Surely. Senator HICKENLOOPER. I am a little confused. I want to understand it. Let us take 10,000 hundredweights of rice-50 precent of that under all of the determinations is calculated to move into the domestic market. Mr. ALIOTO. Yes. Senator HICKENLOOPER. Fifty percent is calculated to be what we might call free rice, to be traded. Ön those figures, let us make an arbitrary assumption that the Secretary of Agriculture has looked over this situation and he has fixed the price of rice per hundredweight. We will assume an arbitrary figure that there would be somewhere in the neighborhood of what he might say that rice ought to move into the domestic market. Mr. ALIOTO. Let us say approximately 50 percent of parity or $2.50. Senator HICKENLOOPER. Then he establishes a support price of 60 percent of parity. Mr. ALIOTO. On everything? Senator HICKENLOOPER. On the 5,000 or the 10,000. Mr. ALIOTO. He establishes a support price of 60 percent of parity on everything, including the 10,000. Senator HICKENLOOPER. On the 10,000. Mr. ALIOTO. That is right. Senator HICKENLOOPER. That 5,000 moves into the domestic market. Suppose it sells at 60 percent of parity-suppose he hits it right on the nose. Mr. ALIOTO. In the domestic market. Senator HICKENLOOPER. In the domestic market. All right. Do I understand that the grower in one way or another will get the difference between the price reflected by 60 percent of parity and 90 percent of parity? Mr. ALIOTO. And not less than 90 percent in the form of certificates. Senator HICKENLOOPER. On what-on the 5,000 or 10,000? Mr. ALIOTO. He will get it on the 5,000 which we assume will be his domestic quota. On this other 5,000 he does not get anything except knowledge of support at pretty much the disaster level, which would be 50 presumably. Senator HICKENLOOPER. I thought you said that the 60 percent would go on the whole 10,000. |