where end users and consumers are forced to use, merchandise and/or consume a type other than their preference merely because there may be an overall adequate supply of peanuts. However, and this is most important, a shortage of Virginias in the grades of mediums, extra large, fancies, and jumbos cannot be supplied by either of the other types regardless of how ample their supply is. These four grades are premium peanuts and found only in the Virginia type. 3. ADDITIONAL Some skepticism has been indicated about this approach due to the fact we received an increase in Virginia type in 1951 of 81,800 acres and from the 1951 crop approximately 20 percent was diverted by CCC. Three factors contributed and were responsible for any diversion of Virginia-type peanuts from the 1951 crop and these factors should be known and understood by all. First, there was no diversion by CCC of No. 2's in the Virginia-Carolina area from the 1951 crop and this threw approximately 12 percent, farmers stock basis, more Virginia-type peanuts on the market than was anticipated at the time the allotments were made. Second, the 1951 crop was the first big step-up in yield per acre for our area. Our average yield per acre increased 209 pounds in 1951 as compared to 1950. The difference between a 209-pound yield increase per acre and the average of the preceding 3 years accounted for approximately 38,000 tons more peanuts than was reasonably indicated at the time the allotments were issued. The combination of this fact together with the discontinuance of a No. 2 program in the area resulted in approximately 23%1⁄2 percent more Virginia-type peanuts being available in 1951 than was indicated at the time the allotments were increased. Third, in the price-support schedules for the 1951 crop the differential for Virginia type over other types was increased by This factor also had material effect upon the movement of the 1951 crop. This minimum request takes no recognition of the fact Virginia-type allotments were reduced approximately 9 percent in 1953 from the 1952 level, despite the fact only 4 percent of the total Virginia-type production from the 1952 crop was diverted by CCC; and in 1954 Virginia-type allotments were reduced approximately 5 percent from the 1953 level, despite the fact less than 0.5 of 1 percent of the total Virginia-type production from the 1953 crop was diverted by CCC (this minute quantity was diverted because of previously referred to faulty CCC warehouses). The reduction of 14 percent in Virgina-type allotments during this period without any type increases exceeds by 10 percent the percentage of the Virginia-type crop diverted during a like period and is further justification for our minimum request. 4. CONCLUSION Time is of the essence in this matter. The lateness will cause some inconvenience, however, this is completely negligible compared to the ruinous and disastrous consequences of a second year of short supply of peanuts or an inadequate supply of any type or types of peanuts. It is our request and hope that the Department will give this matter expeditious action and we wish to make it clear that we do not have factual information relating to possible needs for other type increases. We ask, and are confident the USDA will give, careful consideration not only to our factual request, which request is based upon and within the scope of and intent of the provisions of the act before referred to, but to any other factual requests based upon pertinent provisions of the act, which may be made by representatives of other areas. We have to the best of our ability sought to factually present current data, together with the recommendation of all segments directly concerned with the Virginia type in order that the Department might evaluate such data and recommendation in the light of section 304 and section 358 (c) (2) of the Agricultural Adjustment Act of 1938 as amended. ASSOCIATION OF VIRGINIA PEANUT & HOG GROWERS, INC., Mr. EARL M. HUGHES, DEAR MR. HUGHES: We have been informed that the United States Department of Agriculture has decided not to give public notice by publication in the Federal Register of its intent to carefully consider the need for increasing the national peanut allotment in order to assure an adequate supply of peanuts, or to give like notice of its intent to carefully consider the need for increasing the peanut allotments to certain States in order to assure an adequate supply of all types of peanuts. Virginia peanut producers are quite disappointed at this decision and are fearful it puts producers and the Department of Agriculture in a very vulnerable position. You will recall our representatives, together with representatives of other producing areas and representatives of all segments of the peanut industry, met with you on Tuesday, April 5, and to the extent of our ability sought to point out to you and other Department of Agriculture officials the extreme seriousness of the situation confronting growers and the industry. Previously like representations had been made to the Oils and Peanut Division. We felt very strongly that the matter at least warranted publication of public notice in order that the Department would then be in a position to act timely in event a thorough investigation warranted either a type increase or an overall increase. Certainly such public notice would not serve to commit the Department of Agriculture to any increase unless the investigation warranted an increase. It is our recollection such public notice has been given in the past and such earlier even though thorough investigation later did not warrant any increase in some years, while in other years increases were justified and were granted. The position of the Virginia producers has been and still is that first public notice should be given by the Department of Agriculture in order to place the Department in a position to act timely in granting an increase if facts warrant such. Next, we are convinced it is sounder and in line with the intent of the Congress to proceed under 358 (c) (2) of the Agriculture Adjustment Act, as amended, on a type basis. This section clearly states in part that, "Notwithstanding any other provision of law, if the Secretary of Agriculture determines, on the basis of the average yield per acre of peanuts by types during the preceding 5 years, adjusted for trends in yields and abnormal conditions of production affecting yields in such 5 years, that the supply of any type or types of peanuts for any marketing year, beginning with the 1951-52 marketing year, will be insufficient to meet the estimated demand for cleaning and shelling purposes at prices at which Commodity Credit Corporation may sell for such purposes peanuts owned or controlled by it, the State allotments for those States producing such type or types of peanuts shall be increased to the extent determined by the Secretary to be required to meet such demand but the allotment for any State may not be increased under this provision above the 1947 harvested acreage of peanuts for such State." It is just not conceivable it would require the same percentage increase for each type in order to assure an adequate supply of each type. On two previous occasions the Department of Agriculture has proceeded to grant type increases under this section, however, the method or formula used in so doing has not been made available to us or our representative in the House of Representatives, despite requests that the method or formula be made available. Bearing in mind we are still completely in the dark as to the method or formula, all we are asking is that current supply, demand, and other pertinent data be incorporated in the established method or formula and the Department of Agriculture act according to the outcome. In other words, if this procedure should result in a 10 percent increase for Spanish, a 2 percent increase for Runners, and no increase for Virginias, we are ready to go with the results. All we ask is an adequate supply of United States of America produced peanuts of each type. On the other hand, if it should show a 10 percent increase for Virginias, a 2 percent increase for Spanish, and no increase for Runners we do not feel other areas or segments of the industry should object, or the Department of Agriculture refuse to allocate sufficient acreage to provide an adequate supply of each type of peanuts in accordance with the provisions of section 358 (c) (2) of the Agriculture Adjustment Act as amended. We cannot agree with nor do we believe anyone can defend the statement made during our conference on April 5 that peanuts are peanuts and are readily substitutable. The Congress recognized the exact opposite of such a philosophy when section 358 (c) (2) of the Agriculture Adjustment Act as amended was enacted. This section was enacted for the express purpose of giving the Secretary authority and requiring that he act in order to assure a sufficient supply of each type of peanuts. Even if we agree such a philosophy is reasonable, we are confronted with no more than an opinion which is in conflict with section 358 (c) (2) of the Agriculture Adjustment Act as amended and a provision of the law which growers are confident will be adhered to. You will recall one area recommended to you an approach under section 371 (a) of the Agriculture Adjustment Act as amended. If after getting all of the facts, the decision by the Department of Agriculture is that this is the fair, equitable approach and within the intent of the law as set forth in section 304, section 371 (a), and section 358 (c) (2), we have nothing further to say. However, in fairness to our own conscience we cannot recommend such an approach. We earnestly ask that the Department of Agriculture reconsider its decision not to give public notice and thus provide an apportunity for hearing by interested persons, for the following reasons: 1. The seriousness of the situation is indicated and set forth in the reopening of hearings by the Tariff Commission on April 19 at the request of the Secretary. 2. Failure to reconsider, in our opinion, would not be in harmony with section 304 of the Agriculture Adjustment Act, as amended: “In carrying out the purposes of this act it shall be the duty of the Secretary to give due regard to the maintenance of a continuous and stable supply of agricultural commodities from domestic production adequate to meet consumer demand at prices fair to both producers and consumers." 3. Section 358 (c) (2) was enacted, and we are confident the legislative history supports the conclusion, it was intended to not only authorize the Secretary but require that he consider type requirements in considering allotment increases, in order to assure an adequate supply of each type, and thus avoid situations where end users and consumers are forced to use or consume a type other than their preference merely because there may be an overall adequate supply of peanuts. If our general understanding of the current peanut legislation is in error, or in conflict with the interpretation by the Department of Agriculture, we would appreciate being so advised, as we understand it is the thinking of many Members of the Congress our current legislation is adequate to permit the Secretary to act and also require that he act to avoid the totally disastrous consequences of 2 successive years of short supply and foreign peanuts. In event it is not adequate we will strongly urge an immediate investigation by the Agriculture Committees to determine appropriate corrective legislation. If, on the other hand the legislation is generally as we and many Members of the Congress generally understand it, but the Department of Agriculture does not consider the facts brought to their attention by every segment of the industry of sufficient urgency and merit to at least give public notice, and provide an opportunity for interested persons to be heard, then in fairness to all it should be clearly understood by growers, shellers, end users and consumers where the responsibility rests for any resulting disastrous consequences which will result if we are forced into a second consecutive year of short supply and imports or the consequences of a shortage of any type. We are so concerned over the implication of the present situation and it is 30 vital to us, we trust you will be tolerant of the length of this letter and our frankness. We merely want to do all in our power to be sure you have the full picture. Sincerely, WILLIAM V. RAWLINGS, MEMORANDUM IN SUPPORT OF REQUEST FOR DISMISSAL OF APPLICATION OF CERTAIN PEANUT END USERS FOR INVESTIGATION AND MODIFICATION OF PEANUT-IMPORT QUOTA IMPOSED UNDER SECTION 22 OF THE AGRICULTURAL ADJUSTMENT ACT OF 1933, AS REENACTED AND AMENDED By a letter to the Commission dated October 22, 1954, certain end users of peanuts requested an investigation, hearing, review, and modification of the import quota on peanuts heretofore proclaimed by the President pursuant to section 22 of the Agricultural Adjustment Act of 1933, as reenacted and amended. By letter dated October 26, 1954, the Southeastern Peanut Association requested that the Commission deny said application on the ground that the application should have been filed with the Secretary of Agriculture instead of the Tariff Commission and that the Commission is without jurisdiction to institute an investigation and hearing under section 22 on the basis of such application. SECTION 22 OF THE AGRICULTURAL ADJUSTMENT ACT (OF 1933) Section 22 authorizes the imposition of restrictions on agricultural imports if the importation of such commodities or their products would render or tend to render ineffective or materially interfere with certain agricultural programs or operations undertaken and administered by the Secretary of Agriculture. It is clearly the purpose of the statute to protect domestic agricultural producers and agriculture programs developed for their benefit. As originally enacted section 22 vested all authority of initial investigation with respect to any matter within the scope of section 22 in the President. By Executive Order 7233, the President delegated this function exclusively to the Secretary of Agriculture under which the Secretary was given complete authority to prescribe the manner in which requests for action under section 22 are required to be made by any interested person and to conduct the initial investigation with reference to any matter within the scope of section 22. By the reenactment and amendment of section 22 on June 28, 1950, the Congress, in substance, wrote this delegation into the statute, by substituting the "Secretary of Agriculture" for the "President," in the section specifying the procedure for investigations. It is clear from the legislative history that the Congress intended that the Tariff Commission should have very limited powers and that initiating action should be in the Secretary of Agriculture and the President. Nowhere in section 22 is the United States Tariff Commission given any authority to institute investigations and hearings on its own motion or upon application of interested persons. Paragraph (d) of section 22 authorizes the President to suspend or terminate proclamations made pursuant to section 22, but only after investigation, report, finding, and declaration made in the same manner as is required for the initial proclamation issued under paragraph (b) of section 22. Since as a condition precedent to the issuance of a proclamation under paragraph (b), there must be an investigation and report of the Tariff Commission, which investigation can only be instituted upon the direction of the President after receipt of advice from the Secretary of Agriculture, similar procedural steps are necessarily required for the modification or suspension of an import restriction. It is clearly just as important, if not more so, for an application seeking removal of an import quota to be submitted to the Secretary of Agriculture as it is for an application seeking initial imposition of a quota since even a public announcement that an investigation is to be made is likely to result in grave and irreparable injury to domestic agriculture. The present application being filed at the time when domestic crop is just being harvested and marketed seeking what we believe is obviously an unreasonable increase in the import quota, if not made for such purpose, necessarily has the effect of depressing producer prices. It is for this reason that the statute wisely requires applications under section 22 for action to be lodged with the Secretary of Agriculture, who is in the best position to advise the President and the Tariff Commission as to the impact upon agriculture and agricultural programs. If the Conogress had intended to empower the Tariff Commission with authority to institute investigations and to conduct hearings of the kind and type which would support action under section 22, either with respect to the imposition of a quota or the renewal of a quota, it would have been a simple matter for it to have so provided instead of providing, as it did,; "After investigation, report, finding, and declaration in the manner provided in the case of a proclamation issued pursuant to subsection (b) of this section, any proclamation or provision of any proclamation may be suspended or terminated by the President." Subsection (b) refers to investigations authorized to be instituted under subsection (a) which are investigations which can only be made upon direction of the President after receiving advice of the Secretary of Agriculture. It is important to observe that in other instances when the Congress desired to give the Tariff Commission authority to initiate and conduct investigations on its own motion or on the request of interested parties, it expressly so provided. Thus, section 7 (a) of the Trade Agreements Extension Act of 1951 gives to the Tariff Commission express authority to act upon its own motion or upon the request of any interested party. If Congress had intended for the Tariff Commission to so act in connection with section 22 matters, it would similarly have so provided. That the view expressed herein is in accord with the plain meaning of the statute was recognized by the Chairman of this Commission when he stated to the Senate Committee on Agriculture and Forestry on April 22, 1953, as follows: "In the first place, I want to emphasize that the Commission cannot initiate section 22 investigations on its own motion or on application of any interested party. "The law provides for Commission investigations under section 22 only when the President directs the Commission to make such investigations. "That is important." This view is also squarely in line with the provisions of Executive Order 7233 issued by the President on November 23, 1935, to implement the administration of section 22. EXECUTIVE ORDER 7233 Paragraph (1) of Executive Order 7233 empowers the Secretary of Agriculture alone upon his own motion or upon request of any interested party to make such preliminary investigations with reference to matters within the scope of section 22 as he may deem desirable. Paragraph (2) authorizes the Secretary of Agriculture alone to prescribe the manner in which requests for action under section 22 shall be submitted by interested parties. Paragraph (3) provides that the Secretary of Agriculture shall determine whether the showing or facts disclosed in an application warrant further investigation and requires that the Secretary make his recommendation to the President, so that the President in the light of such recommendation may direct that no further action be taken or cause an investigation to be undertaken by the Tariff Commission. Paragraph (4) authorizes the Tariff Commission to make investigations, but only when so directed by the President. This is the only delegation of authority from the President to the Commission, and it limits the Commission to investigations directed by the President. In this connection, it is important to note that no distinction is made between investigations in connection with the imposition of import restrictions and investigations pursuant to application of interested persons for the termination or modification of import restrictions. No distinction is made because the statute does not so do. Under the terms of the Executive order, it is patent that there has been no delegation to the Tariff Commission under either the statute or the Executive order to conduct investigations under section 22, except upon direction of the President. It is equally clear that there has been delegated to the Secretary of Agriculture, and not to the Tariff Commission, the authority to prescribe the manner in which requests for action under section 22 are to be made and to make preliminary investigations with respect to those matters within the scope of section 22. REGULATIONS The regulations of both the Tariff Commission and the Secretary of Agriculture provided that applications from interested persons for any action pursuant to section 22 are to be filed with the Secretary of Agriculture. RULES OF THE TARIFF COMMISSION Part 204 of the Rules of Practice and Procedure of the Tariff Commission relate to investigations under section 22. Section 204.2 of the Commission's rules state that the United States Tariff Commission will make investigations only when directed by the President. Footnote (1) to this paragraph states that applications for investigations under section 22 must be filed with the Secretary of Agriculture. No distinctions are made in this rule between investigations in connection with a proposed imposition of an import restriction and investigations in connection with the modification or termination of an import restriction. It is plain, therefore, that under the Commission's own rules all applications for investigations pursuant to section 22 are to be filed with the Secretary of Agriculture. Section 201.8 of the Commission's general rules relating to investigation carries a footnote stating as follows: "Under Executive Order 7233 of November 23, 1935, applications for investigations under section 22 of the Agricultural Adjustment Act, as amended, must be filed with the Secretary of Agriculture. For procedure governing such applications see 7 Code of Federal Regulations, part 6." |