When you get into the thing it gets worse and worse and worse. We point out that peanut growers will receive a lower support price at 90 percent of the so-called modernized parity than they will at even 75 percent of the old parity.

We are mindful of the complexity of this problem; we appreciate that the so-called modernized formula results in a higher parity for some commodities. We are not familiar with the need for upward adjustments, perhaps some are merited, all may be merited, but we are familiar with what it does to peanut growers in the producing areas. We recommend the following:

Permanently extend dual parity retroactive to January 1, 1956, and as soon as practicable

The CHAIRMAN. Old or new formula?

Mr. RAWLINGS. Permanently extend dual parity instead of a 1-year or 2-year extension, and I would like to comment on why we recommend that. We find right now it is very disturbing to marketing. I understand it is happening in other commodities in anticipation of flexible price supports next year on cotton, but on peanuts right now the users of peanuts are sitting back and it is clear they are buying on a very limited hand-to-mouth basis to insure that at the end of the year they have a minimum supply on hand in anticipation of a 5 percent lower price they know they will get if it is nothing but transitional parity next year.

If we don't have a firm extension of dual parity we will have that demoralized marketing situation for 4 years ahead of us. We also recommend that the Congress undertake a thorough study of the parity formula question with a view to eventually devising a formula which will be fair to all consistent with fundamental concepts of parity and will work as intended.

The CHAIRMAN. That is what some thought of this new parity. Have you any specific recommendations? Just to criticize won't help. If you have specific recommendations, let us have it.

Mr. RAWLINGS. The specific one is a permanent extension of dual parity, sir.

The CHAIRMAN. What do you mean by that?

Mr. RAWLINGS. Instead of a 1-year extension of dual parity, or 2 years, permanently extend dual parity.

The CHAIRMAN. What do you mean by dual parity?

Mr. RAWLINGS. Dual parity is a continuation of what we had up through this year, as I understand it, whichever formula gives the better.

The CHAIRMAN. That is what I suggested a while ago, that the old formula together with the new one be extended under the law. Mr. RAWLINGS. Yes, sir.

The CHAIRMAN. You understand?

Mr. COOLEY. You make one other recommendation which is permanent extension of the 90 percent price-support program for peanuts. Mr. RAWLINGS. Yes, sir; but we are saying at the same time we don't mind anybody voting on it. We know what we want. Mr. COOLEY. They have to vote on it anyway.

Mr. RAWLINGS. Yes.

Mr. COOLEY. You would not be willing to support at a high level the unlimited production of any particular commodity; would you?

Mr. RAWLINGS. No, sir; we said I think-I meant to say anywayit was our position so long as the producers subscribed to marketing quotas and acreage allotments and yield as prescribed by Congress.

Mr. COOLEY. If the beef cattle or poultry or dairy people could work out some control program and present it to Congress then I think they would be justified in asking for the same support level given to row-crop producers who are controlling crops. As Mr. Murray pointed out, the dairy people realize they have a difficult problem in trying to control production.

The CHAIRMAN. All right.

Mr. RAWLINGS. We recommend repeal of the present minimumallotments provision whereby the minimum national allotment is now fixed at 1,610,000 acres so that allotments and quotas for edible purposes could be fixed lower closely in line with demand. However, together with this--and it is the most important thing to us-is the necessity to amend section 358 (c) (2) of the Agricultural Adjustment Act of 1938, as amended, so as to remove the discretionary authority of the Secretary of Agriculture and in general assure that the original intent of this section is complied with.

The CHAIRMAN. Would you recommend that we provide no acreage floor but just leave it to the administrator?

Mr. RAWLINGS. No, sir. We say do that but together with it we want to be clearly understood, that we don't want to remove this unless a good bit of the discretionary authority now vested in the Secretary under section 358 (c) (2) is eliminated. And in order to conserve time I will state that the recommended revisions of section 358 (c) (2) are outlined in our full statement which we are filing with the committee, sir.

It gets into the recommendations, which are fairly well detailed, sir. Virginia peanut growers have been, and are now, giving thoughts to means of further improving the peanut price-support program, a program which we consider one of the more effective and better programs now operative. We are especially interested in a practical method of permanently putting the program on a self-financing basis and at the same time provide a continuing fund which would permit an effective, year after year national campaign to promote and increase the per capita consumption of peanuts and peanut products.

At this time our thinking is not final and we realize, this together with other recommendations, must not only be refined but thoroughly coordinated with growers in other States. However, our present thinking and approach is along the following lines.

In addition to the elective price-support programs before outlined from which peanut growers would each 3 years also be permitted by referendum to elect a self-financing and promotion program. In event the program had appeal to the growers of some other commodities to which the program was reasonably adaptable, as we believe it would be, certainly we would favor them having the same opportunity of choice.

Six dollars per ton would be added to what would otherwise be the support price; $12 per ton would be deducted from producers by buyers and remitted to a central fund by buyers, on all peanuts marketed by producers, to cover the cost of handling and diverting peanuts not

64440-56-pt. 6-22

needed to meet edible requirements and provide adequate promotional funds.

The law should make it possible, with grower approval in a referendum to within reasonable upper and lower limits, increase or lower the $6 and $12 on the same pro rata basis, as experience indicates necessary. The amount of the payment could thus be fixed each 3 years to provide funds estimated to be needed to cover handling, diversion, and promotion costs for the next 3 years, plus any amounts owed to CCC or minus any surplus carried over in the fund from prior years.

A predominantly grower committee, but providing for sheller, broker, and manufacturer representation would be established to jointly administer the fund with the USDA.

As much as 35 percent of the total yearly fund, the exact amount to be determined by the committee, would be made available on a contractual basis by the Secretary of Agriculture to an agency or agencies designated by the industry committee for us in publicizing peanuts and peanut products and promoting their increased consumption.

It is estimated, the funds accruing to the general fund from payments of $12 a ton by growers would be sufficient, after allowing for the maximum promotional funds, to cover the cost of diversion of surplus averaging 8 percent of the total production.

We believe this basic approach offers much promise and we ask your study of the general approach as we continue to work on refinements and coordination with other growers in other areas.

Mr. COOLEY. How on earth could a program of that kind possibly be constitutional?

Mr. RAWLINGS. We have been told by people within the Department of Agriculture that in the opinion of the legal people over there that this thing would hold. We knew on the surface at first we raised the same question, sir. I don't know that it is an official opinion from the Department of Agriculture but we have been told it has been checked by the Solicitor's section and on an approach along that kind could be made so it would hold.

Mr. COOLEY. The processing tax was eliminated?
Mr. RAWLINGS. Yes, sir.

Mr. COOLEY. You know that you cannot use a tax field with the Federal Government to raise revenue for a particular purpose, beneficial to a particular group. I do not see how you could possibly bring a program of that type within the four corners of the Constitution. I think the industry might do something of that kind just as the dairy industry. They have a self-help program and they are trying to finance and help solve their own problems. It seems to me that it would be well for the peanut industry to try to work it out within the industry itself.

Mr. RAWLINGS. Bear in mind what we are proposing assuming that it would hold water legally-and we had been advised in the Department it would-it would be a completely self-supporting program and at the same time it wouldn't require any kitty to start us off or anything else. We would have a continuing fund year after year to get out and do a job on promoting increased consumption of peanuts and peanut products.

Mr. COOLEY. That would be somewhat in the nature of price insurance which I have been trying to have the Department officials explore for several years. It seems to me that if the insurance companies of

the country can insure everything that they now insure, we certainly should be able to work out a price insurance program.

The CHAIRMAN. Mr. Snelson, please. Give your name in full and your occupation.

STATEMENT OF DAVE SNELSON, LEICESTER, N. C.

Mr. SNELSON. I am Dave Snelson, a dairy farmer and a burley tobacco grower from Buncombe County up in the mountains of this State in the last congressional district.

Well, I would start off by saying we have in the county that I am from, Buncombe County, a little more than 3,000 burley growers. They have fifty-three one-hundredths of an acre each on the average. That is a very little. That is the class of people that you have been talking about here in the hearing this morning, the one-gallus crowd. Those people live on the farm, 9 out of 10 of them. They have I guess the smallest income of any farm group in the United States. That fifty-three one-hundredths of an acre of tobacco grown by those people buys more washing machines, more refrigerators-where they have electricity, some don't have I would say, than all the tobacco grown in Kentucky with those big 100- and 200-acre allotments out there. These are poor people that grow this tobacco up there in the mountains. They own their little home, the most of them do. And when they cut the minimum acreage back to fifty-three one-hundredths that was the wrong thing for those people up there. I would love for it to have been left at 7 anyway. I think it ought to have been. I don't make my living from burley tobacco, though I do have an acre and eight-tenths allotment on my farm. Me and my two boys live on the farm. The thing that we are very much concerned about up there, you take a farm, a man starting out to try to make a living on the farm, he will have invested forty to fifty thousand dollars. The man that works at public works at these big places, I am not objecting to high wages, that is all right, but he has more take-home pay and he doesn't have anything invested except maybe a dollar and a half or $2 dinner bucket. He makes as much money as we do off of a forty or fifty thousand dollar investment.

I don't see how you could expect them to stay on the farm. The CHAIRMAN. Mr. Snelson, are you telling this committee that a small farm in the mountains has an investment of as much at $50,000? Mr. SNELSON. Some do where they are in the dairy business. I am in the dairy business.

The CHAIRMAN. The little farmer who has five-tenths of an acre of tobacco has something else; does he not?

Mr. SNELSON. That is about all of his money crop. He makes everything he eats on the farm. This goes to buy their clothes and what little, probably their children go to school and maybe the Government helps them about buying milk at school. The buses pick them up and bring them to school. They are too far back to work at any public works and it seems to me that if the maximum allotment could be left at seven-tenths it would have benefited more of the poor people that are trying to stay out on the farm. I am talking about one county. There will be probably somebody here with all the figures for all of the burley belt in this State. We at present are getting along very good in the dairy business.

We did have about 3 pretty hard licks below the belt, 2 bad dry years that dried up everything and then last spring everything was froze, the temperature dropped to about 12° when our barley was just about ready to go into the silos and froze everything down. We was declared a disaster area and I thought maybe you could tell me what that meant.

The CHAIRMAN. That means you could get cheap money to recoup. Mr. SNELSON. Yes, that is right. And we had some little better spirits there for a few days and then we went into this designated place where we were to receive our little allotments and I went in and of course I happened to know this gentleman very well that was in that place, and I asked him what the chances were to get a little handout and he said, "Dave, my Lord, if I was to let have some money every banker in this country would jump on the boys up in Washington."

you

He said we can't let anybody have money here that can get it anywhere else. My Lord, if that is disastrous-we was declared twice disaster areas and we never derived a penny yet. I don't think there is not too much use of asking any more.

Two years ago

when all of our hay was gone and looked like all our cattle was going to starve, then we got declared a disaster area but we didn't get no help.

Senator, did you boys get any down here?

Senator SCOTT. No, sir; they stated we were doing all right.

The CHAIRMAN. Have you any suggestion to make to us as to how to solve this farm problem?

Mr. SNELSON. I would like for the minimum allotment to be raised back up to seven-tenths of an acre.

The CHAIRMAN. That was done just recently.

Mr. SNELSON. Was it?

The CHAIRMAN. Yes.

Mr. SNELSON. It is raised back?

The CHAIRMAN. No, it is not raised back. You would have to repeal laws you passed last year or this year, but we will be glad to consider it.

Mr. SNELSON. I will tell what Kentucky wants to do. They can use them big farms out there to raise some of these short-tail horses for Great Britain so you fellows will loan them the money to buy them with and we will get them to do away with their allotments for 5 years, they say if they can lose their farm for 5 years and still hold their allotments they will do that and not raise burley tobacco. That would be a fine trade to make if we could make that trade. The CHAIRMAN. We will consider it, sir.

Any questions?

We thank you very much.

Mr. Blalock, please.

STATEMENT OF H. G. BLALOCK, PRESIDENT, VIRGINIA FARM BUREAU FEDERATION, RICHMOND, VA.

Mr. BLALOCK. H. G. Blalock, farmer in Mecklenberg County, and also connected with the Virginia Farm Bureau Federation. Senator SCOTT. Mecklenberg County, Va.?

Mr. BLALOCK. Yes, sir.