order to obtain their views and recommendations. These meetings and the initial policy announcement of course preceded the disastrous March freeze which almost wiped out this year's domestic tung production. As a result we have passed from what at one time was a very serious surplus situation to one now wherein there appears to be an approximate balance between prospective imports and domestic availabilities and consumption requirements. These developments have had their effects on the market and as a result, the meeting in October was held to reappraise the entire situation.

We believe that the revised policy meets with approval of most segments of the tung industry but recognize that there may be some in the industry who disagree at least in part with existing policy. Prices received for tung oil, Gulfport basis, since the sales policy change in October have ranged from 23.55 to 24 cents per pound. CCC stocks now total approximately 17 million pounds, having been reduced from about 39 million pounds on hand a year ago.

If additional information is desired, please do not hesitate to let us know.
Sincerely yours,

J. E. THIGPEN, Director, Oils and Peanut Division.

UNITED STATES DEPARTMENT OF AGRICULTURE,
Washington, February 14, 1955.

USDA ANNOUNCES LIMITED WEEKLY OFFERINGS OF CCC-OWNED TUNG OIL The United States Department of Agriculture announced today that until further notice the Cincinnati Commodity Stabilization Service (CSS) Commodity Office will make weekly offerings on a competitive bid basis of limited quantities of tung oil. Bids may be submitted for either domestic or export sale. The initial offering, for which bids must be received by 10 a. m., e. s. t., February 17, is of 480,000 pounds.

The tung oil offered is from Commodity Credit Corporation stocks acquired under price support operations. These stocks currently total about 38.3 million pounds. The limited quantities offered from these stocks, Department officials explained, are intended to reduce this inventory and to make available to buyers in this country a stable source of supply, either for domestic use or for export.

It is anticipated that additional limited quantities of tung oil will be offered for sale on Thursday of each week until further notice. An announcement giving the quantities sold, the sales prices, and the buyers will be issued by the Cincinnati CSS Commodity Office the following day.

Bids under this week's offering should be submitted to Cincinnati CSS Commodity Office, 1010 Broadway, Cincinnati 2, Ohio, for receipt not later than 10 a. m., e. s. t., February 17. Offers to purchase will be considered f. o. b. tankcars or tankwagons, present storage location, or f. o. b. vessel at port areas agreeable to CCC. Preference will be given to offers providing for buyers' tankcars or tankwagons. Assurance is given by CCC that oil delivered will meet Federal quality specifications. Buyers will be responsible for obtaining any required export licenses. Acceptance will be made by telegram to successful bidders filed not later than 2:30 p. m. the same day. Unsuccessful bidders will be notified by collect telegram only if notice is requested. Sales will be made in accordance with terms and conditions outlined in announcement CT-OP-5, available from the Cincinnati CSS Commodity Office. CCC reserves the right to reject any and all bids.

(1951-USDA 394–55.)

UNITED STATES DEPARTMENT OF AGRICULTURE,
Washington, October 7, 1955.

REVISED SALES PLAN FOR CCC TUNG OIL ANNOUNCED

The United States Department of Agriculture announced today a revised plan for marketing its remaining stocks of tung oil. These stocks, acquired by the Commodity Credit Corporation in price-support operations on tung nuts and currently totaling approximately 20.8 million pounds, were previously offered in limited quantities on a weekly basis.

Under the revised sales plan, developed by the Department after receiving views and recommendations of various segments of the tung oil industry in a meeting in Washington October 4, the CCC will make monthly offerings of speci

fied quantities of tung oil on a competitive bid basis. The initial offering for the rest of October will be of 25 tank cars (about 1.5 million pounds), and thereafter monthly offerings of 32 tank cars (about 1.92 million pounds) will be made until all remaining CCC stocks are sold. In the event the announced quantities offered each month are not sold, the size of the offering the following month will not be increased.

Bids are to be submitted to the Cincinnati CSS Commodity Office, 1010 Broadway, Cincinnati 2, Ohio. Bids on the initial offering of 25 tank cars must be received not later than 12 noon, e. s. t., October 14, and those on subsequent offerings not later than 12 noon, e. s. t., of the first Tuesday of each month, all for acceptance on the day following. All bids must be made on a Gulfport, Miss., or Roseton, N. Y., basis (as indicated by the bidder), f. o. b. buyers' tank cars, and must include destination points so that transportation charges may be equalized. All tung oil supplied under the revised sales plan will be certified as meeting Federal specifications and as not containing a "beta" condition unless specifically so offered. Any "beta" oil offered by CCC will be included as part of the total monthly offering, but tank bottoms and oil not meeting Federal specifications will not be included.

The revised sales plan announced today is designed to continue to provide orderly marketing of tung oil over a long period of time and thereby insure, insofar as possible, continued availability of domestic tung oil until oil from the 1956 tung nut crop becomes available. The 1955 crop of tung nuts was severely damaged by freezing last spring, and a very small crop is in prospect. (2656

USDA 2613-55.)

UNITED STATES DEPARTMENT OF AGRICULTURE,
COMMODITY STABILIZATION SERVICE,

Washington 25, D. C.

(This letter sent in response to numerous inquiries regarding export sales policy for tung oil.)

This acknowledges your recent communication addressed to the Secretary, recommending against the export of CCC-owned tung oil.

During the past several months CCC has been selling tung oil on a competitive bid basis without regard to the ultimate disposition of the oil. No price concessions have been made to promote export sales and consequently exports have been insignificant except for some reexport of imported oil.

The Department does not intend to attempt disposition of tung oil through special export offerings. Instead we plan to merchandise oil in an orderly manner in much the same way as it has been offered in the past except that offerings will be made monthly rather than weekly. Monthly offerings will be made in amounts calculated to assure distribution of CCC oil over the major part of the coming marketing year.

A press release outlining the new sales policy for tung oil is enclosed for your further information.

Sincerely yours,

JOHN H. DEAN, Deputy General Sales Manager.

The CHAIRMAN. All right, we will now go to rice.

Mr. Chalkley, please. Give your name and occupation, please.

STATEMENT OF H. G. CHALKLEY, CHAIRMAN, RICE COMMODITY COMMITTEE, LOUISIANA FARM BUREAU, LAKE CHARLES, LA.

Mr. CHALKLEY. My name is H. G. Chalkley. I am a rice producer and I live in Lake Charles, La.

The CHAIRMAN. Proceed.

Mr. CHALKLEY. Senator, I would like to say that while I am the chairman of the rice commodity committee of the Louisiana Farm Bureau, I am a rice producer and what I speak, the information I give here is given not only as a representative of that group but as an individual.

64440-56-pt. 5- -33

The CHAIRMAN. Thank you.

Mr. CHALKLEY. The Louisiana Farm Bureau rice commodity committee met in Lake Charles, La., on Monday, October 22, 1955, at which time representatives from all of the major rice growing parishes in Louisiana were present. These representatives requested that your committee favorably consider the following suggestions in connection with a permanent farm legislation as it applies to rice.

1. The producers of rice feel that in the development of a farm program that your committee should take into consideration that the fact that the agricultural economy is not dependent on price alone, but on net income, and therefore any program which tends to limit production on the basis of high price (domestic and preferential) markets only, is bound to bring about burdensome surpluses and the economic collapse of the rice producers.

2. The rice producers of Louisiana feel that a program of scarcity and Governments payments in the form of either direct or indirect subsidies is simply a temporary panacea, and that the long-range policy of this Government should be to encourage maximum agricultural production in line with world demands. This program should be written not only to afford the producers protection, by means of support loans for the domestic and preferential markets only, but should allow him to determine how much, if any, he wishes to produce for the world market in competition with other producers.

The producers under such a program would not be penalized for overproduction, but would only be eligible for a loan on that portion of their crop which was consumed in the domestic and preferential markets. This program would cost the United States Treasury a lot less and immediately bring about a reduction of Government-held surpluses.

Senator SCHOEPPEL. Do I understand you to mean that would be the two-price system for rice?

Mr. CHALKLEY. Yes, sir.

3. The producers of agricultural products in Louisiana feel that preferential treaties regarding agricultural commodities are essential for the economic welfare of both this country and other nations. However, the preferential or favored nation as adopted in the past, particularly as regards Cuba, is not realistic and we feel that where our Government gives preference for the importation of agricultural products, the same consideration for preferential treatment in the movement of agricultural products into other countries should either be a part of the same agreement or in the case of two treaties or understandings. They should be definitely tied to one another. In other words, a condition such as exists today whereby the United States must take the maximum amount of sugar from Cuba and they, not being bound by definite quota provisions, take the minimum amount of rice and obtains her additional supplies by either encouraging rice production or getting it from other sources, while our domestic producers of sugar are being cut back in their acreage so Cuba can get the benefit in the increased domestic consumption.

4. The experience of the rice industry, in attempting to export, shows that there is a very great need for the establishment of an international or a universal system of grading of agricultural products. Our system of grading and standards are not understood, nor do they portray the necessary information regarding the quality of

farm products. We feel that it is essential that your committee make whatever arrangements are necessary to have the nations of the free world meet and draw up an international or universal grading system for cereals and grains.

The rice commodity committee of the Louisiana Farm Bureau wishes to reiterate and respectfully request to include the testimony presented by me as their representative, before a subcommittee of the Committee on Agriculture and Forestry, United States Senate, on May 24, 25, 26, 1955, which is contained in the printed report of the hearing on rice programs, pages 76 through 82. We would like to again enter this information in this hearing.

This committee action was approved by the Louisiana Farm Bureau Convention at the annual meeting held in July 1955. The rice producers of Louisiana feel that the time has come for us to recognize facts and to put first things first. The United States, by virtue of the support levels and restrictive acreage, is today the proud possesser of practically all of the world surplus of agricultural commodities with the exception of wheat. We find the world's acreage and production of these commodities increasing and the United States market disappearing solely because of our high level support as they are putting the commodities on the world market just slightly below our support price and by virtue of these support prices we are not competitive and in most instances the question of a few cents on a hundred pounds spells the difference between our being able to sell our products to the world on the basis of quality in direct competition to other countries.

The CHAIRMAN. Mr. Chalkley, am I to understand from your statement that you want to let rice production go on without any kind of curtailment ?

Mr. CHALKLEY. Senator, we feel that the domestic and prefential portion of our rice production should be supported at, say, 90 percent of parity. But any amount which we raise in excess of that should be free to move on the world market.

In the program which was presented and is contained in this document of the hearings, there was a suggestion that there be a floor loan on this overacreage to prevent dumping. We have been charged in our two-price system that we are going to dump on the world market. There is a provision in here which provides that a low price floor loan be put on to prevent being charged with dumping and to allow orderly marketing.

The CHAIRMAN. To make it specific, what you are suggesting is that the ricegrowers of the Nation be permitted to produce all the rice they desire and as to the amount consumed domestically, and that which they have under more or less contractual treaty to sell to preferential countries, as to those two, they would be paid 90 percent of parity.

Mr. CHALKLEY. Yes.

The CHAIRMAN. And the preferential country pay that and not us; is that it?

Mr. CHALKLEY. That is right.

The CHAIRMAN. Whatever in excess let it be sold at whatever the market would bring wherever it can be sold; is that right? Mr. CHALKLEY. That is correct.

The CHAIRMAN. How would you separate the two? What procedure would you follow in marking off that part which would be sold domestically and to preferential customers? Would you do it on a certificate plan?

Mr. CHALKLEY. There are several ways it can be worked.

The CHAIRMAN. Give us the best way.

Mr. CHALKLEY. My answer is this: that if you put this on the basis of a certificate each man would receive a certain representing percentage of the world market in the normal production, not acreage. When that is done if he wants to make a loan, a parity loan, on his crop, he would have to turn over to the Commodity Credit not only the bonded warehouse receipt representing that many pounds of rice, but also the certificate he received indicating that that is his percentage or his amount representing his domestic consumption.

Senator SCHOEPPEL. Do I understand you to say you want him to get his percentage of the world market?

Mr. CHALKLEY. The domestic market.

Senator SCHOEPPEL. I thought you said "world market."

Mr. CHALKLEY. If I did, I meant domestic. In other words, his certificate would say, for the sake of argument, his pro rata share was a hundred barrels, to get a figure. Now he would go to the Commodity Credit if he wanted to make a loan at 90 percent of parity, take a bonded warehouse receipt evidencing actual possession of rice, and attached to that would be his hundred-barrel certificate. On that basis he would get a 90-percent loan.

Senator SCHOEPPEL. Might I ask what is your rice surplus at the present time?

Mr. CHALKLEY. Rice surplus, Senator, at the present time is equal to approximately 1 year's supply. This came about in 1 year. In 1954 the producers of rice by their representatives, at the request of the Secretary, we had a meeting in Washington to advise him what to do. We asked that acreage allotments be put on rice for the crop year 1954 because of the cotton-acreage allotments. We knew there would be a definite shift from cotton to rice. It did shift-400,000 acres in 1 year, 25-percent increase in rice acreage, by virtue of cotton allotments. We told them it would happen, but the Secretary's advisers didn't see the picture as we saw it.

The result is Commodity Credit took over last year 26 million hundredweight of rice.

Senator EASTLAND. What is domestic consumption?

Mr. CHALKLEY. 26 million hundredweight, approximately.
Senator EASTLAND. What is production this year?

Mr. CHALKLEY. Estimated at 44 million. Čommodity Credit will take over, they estimate this year, 14 million.

Senator EASTLAND. Now, what about the actions of the State Department?

Mr. CHALKLEY. Senator, I was going to get to that in just a minute. I wanted to be sure I answered the Senator's questions.

Senator SCHOEPPEL. I have another question before the gentleman goes into his further testimony, which I am interested in because it looks as if you are in trouble, too.

You say you want to permit your ricegrowers to grow whatever rice they want to grow. Do you mean you want them to do that in the