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The CHAIRMAN. Thank you. Your paper will be made a part of the record at this point.

(The prepared statement of Mr. S. E. Cloniger follows:)

1. RECOMMENDATION OF DEPARTMENT OF AGRICULTURE BY J. E. THIGPEN, DIRECTOR, OILS AND PEANUT DIVISION, WASHINGTON, D. C., BEFORE THE TARIFF COMMISSION IMPORT HEARING AND INVESTIGATION, JANUARY 4, 1955, WASHINGTON, D. C. Based on best information available and most dependable and impartial other sources of information which could be obtained, recommendation was made that 32,000 tons farmers' stock peanuts, equivalent 21,000 tons shelled peanuts, be permitted imported with a variable import fee, which would bring cost of peanuts landed in the United States (which would include 7 cents regular duty) into line with domestic price at about 26 cents per pound shelled peanuts.

(1) RESULTS OF TARIFF COMMISSION HEARING

On March 9, 1955, the White House and the President of the United States, not Tariff Commission nor Department of Agriculture, permitted 25,500 tons shelled peanuts, equivalent 38,000 tons farmers' stock peanuts, to be imported into the United States with a 7 cents per pound plus an additional 2 cents per pound duty.

(2) SECOND HEARING BEFORE TARIFF COMMISSION

At the second hearing before the Tariff Commission, April 19, 1955, the Department of Agriculture recommended that imports be increased from 25,500 tons shelled to 53,500 tons shelled, equivalent to 79,800 tons farmers' stock, which was 20,220 tons more peanuts than the Southwest area produced in 1954.

Results of second hearing

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On May 16, 1955, the White House and President of the United States removed any quantitative limitations on imported peanuts, threw imports wide open until July 31, 1955, with 7 cents plus 2 cents duty.

Soon after this release and when the 1955 crop began to move to market the shelled market in the United States dropped from approximately 26 cents per pound shelled to approximately 19 cents per pound. With a shelled market at 19 cents per pound, shellers are being forced to only pay slightly above loan to growers.

For the first time in history early crop peanuts in east Texas are bringing growers slightly above loan prices. Today farmers' stock market ranges from $228 (loan price) to a maximum of $230 per ton, 70 grade basis.

Proof foreign-grown peanuts are selling under United States market at a profit.-723,423 pounds of the new quota on imports of 1,709,000 allotted have entered into United States. (Weekly Peanut Report, vol. XXXVII, No. 38, September 21, 1955).

Recommendations made by SWPGA and all other grower associations, all shellers of the United States and Congressmen from the peanut producing States If and when it is determined imports are necessary to supply the edible trade, we recommend imports be limited to a specific volume and a specific date be set for import termination in order to eliminate any interference with the 1955 price support program in the United States. If imports are needed for edible trade, sufficient duty be imposed which would not allow foreign peanuts to be sold under United States domestic market.

Recommendation by end-users

End-users made recommendation that 200,000 tons of peanuts were needed and that the 7 cents plus 2 cents duty would not allow foreign grown peanuts to sell under United States domestic market and that it would be impossible for importers to import enough peanuts by July 31, 1955, to affect the United States domestic market.

After the two hearings on peanut imports the White House defied all recommendations which had been made by growers, shellers, Congressmen from peanut producing areas and the Department of Agriculture.

On May 16, 1955, the President of the United States authorized the unlimited importation of peanuts through July 31, 1955. All peanuts imported were subject to a fee of 2 cents per pound in addition to a regular duty of 7 cents per pound.

The import quota for the current year beginning August 1, 1955, is limited to 1.7 million pounds of which more than 724,863 pounds have already been imported into the United States.

(3) RESULTS TO DATE AND PREDICTED RESULTS CAUSED BY UNLIMITED IMPORTS

A. Lowering peanut growers' income tremendously.

B. Forcing small peanut growers off farms.

C. Forcing United States shellers out of business.

D. Affecting and could destroy price support on peanuts which was voted for by more than 90 percent of growers.

E. Demoralizing good faith of peanut growers in bringing consumption and production in line.

Example: In 1953 there was a small loss in peanuts. In 1954 practically no loss on peanuts and no CCC inventory of peanuts.

As best can be determined and in accordance with information released by the Department of Agriculture more than 118 million pounds of the total peanut imports entered the United States during the period March to July 1955, when import restrictions were released. This is the equivalent of more than 88,000 tons farmers' stock peanuts and more peanuts than the Southwest area produced in 1954.

DAMAGE TOLERANCE WHICH EXISTS BETWEEN RUNNER AND SPANISH TYPE PEANUTS UNDER UNITED STATES RULES UNFAIR TO GROWER, SHELLER, AND CONSUMER

As presented at Waco, Tex., January 13, 1954, to House Committee on Agriculture, Hon. Clifford R. Hope, chairman. To date, nothing has been done to correct this situation.

(Follows as recorded in long-range farm program, hearing before the Committee on Agriculture, House of Representatives, 83d Congress, 2d session held at Waco, Tex., January 13, 1954. Printed for the use of the Committee on Agriculture serial R, part 16, pages 2322-2325 and 2326:)

STATEMENT OF S. E. CLONINGER, REPRESENTING THE SOUTHWESTERN PEANUT GROWERS' ASSOCIATION, GORMAN, TEX.

Mr. CLONINGER. Mr. Hope and members of the committee, our organization operates in the regional States of Texas, Oklahoma, New Mexico, Louisiana, and Arkansas. I am here on behalf of the approximately 40,000 peanut growers in these States, the 36 peanut shellers, and the consumers.

The problem I would like to present to you has to do with damage tolerance on the runner-type peanut and the Spanish-type peanut. I am indeed grateful for the privilege of appearing before the committee to present this problem, which is a problem to the people of our area and our economy.

I would like for this committee to view these 2 exhibits, one which shows peanuts containing seventy-five hundreths of 1 percent damage and the other containing 22 percent damage. It will be necessary to view those together to get the full significance of it. We have prepared briefs to give you facts and figures. This brief is supplemented by resolution passed and adopted by the Texas Farm Bureau.

On runner peanuts, which are produced principally in the southeast area, they have a damage tolerance of 21⁄2 percent. That is on shelled peanuts. On Spanish peanuts we have a damage tolerance of seventy-five hundreths of 1 percent. The difference in value gives a runner sheller approximately $8 per ton advance. Here in the Southwest we can't continue to operate, that is, the growers and the shellers, with $8 difference per ton. To point out more what I am saying, I will briefly review the 1951, 1952, and 1953 programs. In 1951 we had what we call a purchase program. That year we acquired excess peanuts at the oil value. We resold those peanuts at 105-plus carrying charges. At the end of that year we turned back to CCC, after our operating expenses were paid, a little over $1,800,000 we were in the black. Had the other areas operated on the same principal that money could have gone back to our peanut growers, but that had to offset losses in the other two areas.

In 1952 we had what we call a loan program. That year our organization spent approximately $50,000 seeing that the price-support program worked, and it did work. We operate as a true cooperative. Our farmers did receive

64440-56-pt. 4—22

price support or better. We had a short crop and the shellers bought the entire crop. You will be interested to know how we are getting along on the 1953 program which we are still in, although we are in 1954.

To date we have acquired from 13,200 members 60,100 tons of peanuts, all of which except 2,191 tons are in Segregation 1, a high quality peanut. We have advanced these growers a little over $12 million. In addition to the 60,000 tons of peanuts we have acquired, the shellers of our area have acquired approximately 80,000 tons of peanuts and have paid farmers approximately $15 million. At the present time we sold or are under obligation to sell approximately 18,000 tons of these peanuts, which is about a third of them. We think we are going to sell over half of them and we know it is possible to sell all of them if we can get the job done and we are trying to do that in order that the Government won't lose any money.

Gentlemen, we think we are right in this thing and we would like for you to review this brief and make your determinations on merit only.

I thank you.

(The documents referred to above are as follows:)

To: House Committee on Agriculture.

WACO, TEX., January 13, 1954.

From: Southwestern Peanut Growers' Association, Gorman, Tex.

Subject: Damage tolerance which exists between runner and Spanish-type peanuts under United States rules which is unfair to growers, shellers, and con

sumers.

Hon. CLIFFORD R. HOPE,

Chairman, House Committee on Agriculture, Washington, D. C.:

(1) Growers: Runner peanuts taking Spanish market.

(2) Shellers: Runner shellers have approximately $8 per ton advantage over Spanish shellers.

(3) Consumers: Consumers buy peanut butter containing 21⁄2 percent damaged runners as compared with 0.75 of 1 percent damage in Spanish.

Proof

1. Runner peanuts. Farmers stock: Allowance for damage without penalty under price-support schedule, 1 percent.

No. 1 shelled: Allowance for damage without penalty under United States rules, 22 percent.

Southwest Spanish.

Farmers stock: Allowance for damage without penalty

under price-support schedule, 1 percent.

No. 1 shelled: Allowance for damage without penalty under United States rules, 0.75 of 1 percent.

Explanation: You will note that No. 1 shelled runners are allowed a damage tolerance of 1.75 percent more than Southwest Spanish whereas the damage allowance on farmers' stock under price-support schedule is the same for both runner and Southwest Spanish. This is not consistent and places the Southwest Spanish grower and sheller at a great disadvantage in trying to compete with the runner sheller. The runner sheller's picking cost is eliminated on the 1.75 percent and he also can sell the 1.75 percent at the No. 1 shelled price. These items amount to at least $8 per ton on farmers' stock which represents the runner sheller's advantage.

2. Runner peanuts have been improved since United States rules were made years ago. Hidden damage to runner peanuts no longer exists.

3. Dothan, Ala., Dothan Eagle, April 15, 1953, by Ed Briggers, farm editor. Heading: "Peanut progress talked at headland substation."

"Concealed damage is not a threat to the industry any more, thanks to Dixie runner seed.

"Peanut yields are getting higher and higher; quality is getting better and better."

4. The Southwestern Peanut Growers' Association and the Southwestern Peanut Shellers' Association have submitted evidence and gone on record giving facts which proves the damage tolerance under United States rules which now exists between runner and Spanish peanuts is unfair.

5. Eastland County Farm Bureau resolution on damage tolerance, October 29, 1953.

6. Texas Farm Bureau resolution on damage tolerance, November 9, 10, 11, 1953.

7. Letter from George L. Prichard, Director, Fats and Oils Branch from Virginia Growers Peanut Cooperative.

8. On many occasions the past year the Southwestern Peanut Growers' Association and the Southwestern Peanut Shellers' Association have presented the unfair damage tolerance which exists between runner and Spanish peanuts to officials of the Bureau of Standards, Inspection Service, and to the Fats and Oils Branch. These officials have recognized the fact, however, no one will take a stand and nothing has been done to correct this situation.

We respectfully submit this brief and earnestly request your consideration on merit alone.

Respectfully yours,

SOUTHWESTERN PEANUT GROWERS' ASSOCIATION, By S. E. CLONINGER, Manager.

EASTLAND, TEX., January 6, 1964.

Mr. S. E. CLONINGER,

Manager, Southwestern Peanut Growers' Association, Gorman, Tex. DEAR S. E.: Enclosed is the copy of the Eastland County Farm Bureau resolution on damage tolerance of shelled Spanish and shelled runner peanuts that was adopted by the voting body at the county convention October 29, 1953. You may present the resolution to the House Agricultural Committee that meets in Waco, January 13, 1954. Something should be done to correct the damage tolerance on shelled runner and Spanish peanuts.

Sincerely yours,

RAY A. NORRIS,

Secretary, Eastland County Farm Bureau.

RESOLUTION OF THE EASTLAND COUNTY FARM BUREAU ON DAMAGE TOLERANCE OF SHELLED SPANISH AND SHELLED RUNNER PEANUTS

Whereas shelled runner peanuts with a damage of 21⁄2 percent with no penalty are classed as No. 1 peanuts and shelled Spanish peanuts with a damage of three-fourths of 1 percent are classed as No. 1 peanuts, both go into edible trade; Whereas shelled runner peanuts are underselling shelled Spanish peanuts, due to unfair damage tolerance;

Whereas grading procedures were established on runner peanuts before runner peanuts were improved as now exist;

Whereas shellers in some areas are being allowed picking cost on damaged runner peanuts, which does not exist; and

Whereas the proper correction be made on damage tolerance which will probably equalize prices on shelled runner and shelled Spanish peanuts: Now, therefore be it

Resolved by the voting body of the Eastland County Farm Bureau, this the 29th day of October, 1953, adopt this resolution and direct such resolution to be placed on record with copies to Secretary of Agriculture, Washington, D. C.; Director, Fats and Oils Branch, Washington, D. C.; Director, Bureau of Standards, Washington, D. C.; Texas Farm Bureau, Waco, Tex.

Was approved by vote.

A. Z. MYRICK, President.
RAY A. NORRIS, Secretary.

FESOLUTIONS AS ADOPTED BY TEXAS FARM BUREAU STATE CONVENTION, MINERAL WELLS,

TEX., NOVEMBER 9, 10, AND 11, 1953

1. We insist that the proper correction be made on damage tolerance which will properly equalize prices on shelled runner and shelled Spanish peanuts. 2. We insist that the 1954 peanut loan program be announced and all information be published not later than July 1 and each year thereafter.

3. Reaffirm our support on resolutions that have been passed concerning acreage, grading, and general recommendation on peanuts.

UNITED STATES DEPARTMENT OF AGRICULTURE,
PRODUCTION AND MARKETING ADMINISTRATION,

Mr. MELVIN E. SHELL,

Gorman Peanut Co., Gorman, Tex.

FATS AND OILS BRANCH, Washington, D. C., August 17, 1953.

DEAR MELVIN: This in reply to your letter of August 5, concerning grading, standards.

At the time we wrote you, we had only received a reply from Ben Birdsong, president of the Virginia-Carolina Peanut Association, opposing the Southwest proposal on damage discounts for runner peanuts. Later, we received a reply from the Growers' Peanut Cooperative giving qualified approval. The cooperative expressed the view that all shelled peanuts should have the same tolerance for damage, or, in other words, that grade standards should be changed. They further stated, however, that if this were not practical they agreed with the recommendation of the Southwestern groups on damage discounts. With kindest regards, Sincerely,

GEORGE L. PRICHARD, Director.

COMPARISON OF GRADING RULES ON RUNNER AND SPANISH PEANUTS-UNITED STATES RULES ON No. 1 SHELLED AND GOVERNMENT-SUPPORT PRICES ON FARMERS STOCK

Tolerances allowed in grades before penalty

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As shown above, Runners are allowed 22 percent unshelled or damaged in U. S. No. 1 shelled before any penalty.

In Runner farmers stock penalty of $3.30 per ton is assessed for each 1 percent damage over 1 percent and up to 7 percent.

As shown above, Spanish are allowed three-fourths percent unshelled or damaged in U. S. No. 1 shelled before any penalty.

In Spanish farmers stock penalty of $3.30 per ton is assessed for each 1 percent damage over 1 percent and up to 7 percent.

Thus it is noted that Runner peanuts are allowed 14 percent more damage than Spanish in No. 1 shelled, whereas the Runner farmers stock is bought on the same damage basis as Spanish. This creates an advantage to the Runner sheller which amount of advantage is shown by the following example:

Figuring 1 pound of shelled peanuts is in 11⁄2 pounds farmers stock (1,333 pounds shelled peanuts is in 2,000 pounds of farmers stock), then 1 percent damaged kernels in farmers stock would be 12-percent damage in shelled peanuts. No. 1 Runner shelled allowed 21⁄2-percent damage (pounds per ton of farmers stock)

33.3

No. 1 Spanish shelled allowed 4 percent damage (pounds per ton of farmers stock

10.0

Difference, to be sold as No. 1 shelled (pounds)_.

23.3

Price per pound (No. 1 shelled).

$0.18

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