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BURLEY TOBACCO-PROCLAMATION OF MARKETING

QUOTAS

TUESDAY, FEBRUARY 23, 1971

HOUSE OF REPRESENTATIVES,
SUBCOMMITTEE ON TOBACCO OF THE
COMMITTEE ON AGRICULTURE,

Washington, D.C. The subcommittee met, pursuant to notice, at 3:10 p.m., in room 1302, Longworth House Office Building, the Honorable Watkins M. Abbítt, presiding.

Present: Representatives Abbitt, Stubblefield, Mathis, Wampler, Miller.

Also present: Representative Carter of Kentucky, Mrs. Christine S. Gallagher, chief clerk; Lacy C. Sharp, general counsel; and Hyde H. Murray, associate counsel.

Mr. ABBITT. I will ask that the committee come to order.

Before us we have House Joint Resolution 365, by the Honorable William Wampler, distinguished Congressman for the Ninth District of Virginia. (H.J. Res. 365, as introduced by Mr. Wampler, is as follows:)

(H.J. Res. 365, 92d Cong., first sess.) JOINT RESOLUTION To extend the time for the proclamation of marketing quotas for

burley tobacco for the three marketing years beginning October 1, 1971 Resolved by the Senate and House of Representatives of the United States of America in Congress assembled, That, notwithstanding any other provision of law, the Secretary of Agriculture may defer any proclamation under section 312 of the Agriculture Adjustment Act of 1938, as amended, with respect to national marketing quotas for burley tobacco for the three marketing years beginning October 1, 1971, until the date he determines is necessary to permit growers to be notified of their farm marketing quotas and the referendum to be held prior to normal planting time.

Mr. ABBITT. I think probably we had better hear from the Department representative first. We are pleased, as always, to have our friend here from the Tobacco Division, Mr. Todd. Joe, can you give us some information on this.

STATEMENT OF JOSEPH J. TODD, DEPUTY DIRECTOR, TOBACCO DI.

VISION, AGRICULTURAL STABILIZATION AND CONSERVATION SERVICE, U.S. DEPARTMENT OF AGRICULTURE

Mr. TODD. Mr. Chairman and members of the committee, my name is Joseph J. Todd, Deputy Director, Tobacco Division, Agricultural Stabilization and Conservation Service, U.S. Department of Agriculture.

(1)

I am pleased to give the Department's views on House Joint Resolution 365, joint resolution to extend the time for the proclamation of marketing quotas for burley tobacco for the 3 marketing years beginning October 1, 1971.

The resolution authorizes the Secretary to defer the proclamation of marketing quotas for burley tobacco for the 3 marketing years beginning October 1, 1971, until the date he determines is necessary to permit growers to be notified of their farm marketing quotas and the referendum to be held prior to normal planting time. The purpose of the resolution is to provide additional time for the Congress to consider legislation designed to make the marketing quota program more effective in adjusting supplies of burley tobacco to demand. We are advised that the subcommittee will hold a hearing on March 2 to consider bills which provide for farm poundage quotas for burley tobacco in lieu of the acreage allotment program now in effect.

The Agricultural Adjustment Act of 1938, as amended, provides that the Secretary shall proclaim marketing quotas for burley tobacco for the 3 marketing years beginning October 1, 1971, no later than February 1, 1971. Public Law 91-641, approved December 31, 1970, authorized the Secretary to defer such proclamation until March 1, 1971. House Joint Resolution 365 would further extend the final date for the proclamation until the date the Secretary determines is necessary to permit burley tobacco growers to be notified of their , farm marketing quotas and the referendum held prior to normal planting time.

The approval of this resolution will have no effect on administrative expenses or CCC capital funds.

The Department recommends that the resolution be passed. The Office of Management and Budget advises that there is no objection to the presentation of this report from the standpoint of the administration's program.

Mr. ABBITT. Thank you very much.
Any questions?
Mr. WAMPLER. Mr. Todd, what would be the cost of this legislation?

Mr. TODD. There would be no cost attached to this resolution. This resolution is only a question of when we do something that we have got to do anyway, so there is no cost involved in connection with this resolution.

Mr. WAMPLER. Thank you.

Mr. ABBITT. This is similar to one we already passed, except this leaves it entirely to the discretion of the Secretary, and the other one just gave him 60 days or 30 days.

Mr. Topp. Thirty days, and this one goes up to normal planting time. We feel the farmers have to know their allotments or quotas or whatever it might be by planting time.

Mr. ABBITT. Any questions?
Mr. STUBBLEFIELD, No questions.
Mr. ABBITT. Mr. Miller?

Mr. MILLER. Mr. Todd, there is no reason why we should have a date in here limiting to a given time so that the people who will be wanting to plant will be aware what they should plant. Now, I know it is open end. Could a problem come up because it is open end?

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Mr. Todd. I do not think so, Congressman Miller, because it says they have got to be notified prior to normal planting time, and normal planting time varies a little bit throughout the

burley area. You plant tobacco in your district later than they do in Mr. Wampler's, for instance, so we would assume this applies to the earliest date, so it would have to be done in time to hold a referendum prior to the normal planting time.

Mr. MILLER. Thank you, Mr. Chairman.
Mr. ABBITT. The gentleman from Georgia?
Mr. MATHIS. No questions.

Mr. ABBITT. We thank you very much, Joe. You have been a help to us and we are appreciative.

I see we have the distinguished gentleman also from Kentucky, Mr. Snodgrass. Would you like to have something to say?

STATEMENT OF FRANK SNODGRASS, VICE PRESIDENT AND MAN

AGING DIRECTOR, BURLEY AND DARK LEAF TOBACCO EXPORT ASSOCIATION

Mr. SNODGRASS. Thank you, Mr. Chairman. For the record, I am Frank B. Snodgrass, vice president and managing director of Burley and Dark Leaf Tobacco Export Association at 1100 17th Street NW., here in Washington.

My organization is a federated trade association composed of the following member organizations: Burley Auction Warehouse Association, Mount Sterling, Ky.; Burley Leaf Tobacco Dealers Association, Maysville, Ky.; Burley Stabilization Corp., Knoxville, Tenn.; Burley Tobacco Growers Cooperative Association, Lexington, Ky.; Eastern Dark Fired Tobacco Growers Association, Murray, Ky.; Virginia Burley Tobacco Growers Association, Abingdon, Va.; Virginia Dark Fired and Sun Cured Tobacco Export Association, Farmville, Va.; Western Dark Fired Tobacco Growers, Murray, Ky.; Association of Dark Leaf Tobacco Dealers and Exporters, Bowling Green, Ky. Mr. Chairman, I greatly appreciate this opportunity to appear be

I fore your subcommittee to express the views of our membership in endorsing the enactment of House Joint Resolution 365. We urge that this resolution be adopted at the earliest in order to further extend the time for the proclamation of marketing quotas on burley tobacco for the three marketing years beginning October 1, 1971.

The tobacco leadership is in accord that a more effective method of controlling burley production than the present acreage control system must be enacted. Legislative proposals providing for quantitative controls for burley production has been introduced in both houses of the Congress, and I have been advised that hearings will be held on these measures by the appropriate subcommittees of the Senate and the House on Tuesday, March 2, 1971.

The enactment of legislation permitting quantitative controls for burley production is both necessary and highly desirable. This has been necessitated by the increasing yield per acre and the downward trend of domestic usage due to technological changes in the use of imported leaf in the manufacture of domestic cigarettes and tobacco products.

We, therefore, urge the adoption and passage of House Joint Resolution 365, which will permit the Congress the necessary time to consider the pending legislation that would provide for an orderly and effective production control for burley tobacco.

I thank you.

Mr. ABBITT. Thank you very much. We appreciate that information and appreciate your interest in our subcommittee as well as the tobacco dealers of America.

Any questions?
Mr. WAMPLER. No.
Mr. STUBBLEFIELD. No.
Mr. ABBITT. Mr. Miller ?

Mr. MILLER. Mr. Snodgrass, did I understand the problem also to be one of exporting, we're not exporting as much burley tobacco?

Mr. SNODGRASS. No, it is on the domestic side. In fact, our export of burley has increased over the last 4 to 5 years.

Mr. MILLER. Do you have any figures to show us about how much?

Mr. SNODGRASS. Roughly 10 percent of the crop, somewhere between 58 and 60 million pounds.

Mr. MILLER. Per year?
Mr. SNODGRASS. Per year, yes.
Mr. MILLER. Thank you, Mr. Chairman.
Mr. ABBITT. Any questions?
Mr. MATHIAS. No.
Mr. STUBBLEFIELD. Mr. Chairman, may I ask Mr. Todd a question ?
Mr. ABBITT. Sure.
Mr. STUBBLEFIELD. Off the record.
(Off the record discussion.)
Mr. STUBBLEFIELD. Thank you.

Mr. ABBITT. Thank you, Joe. We are very pleased to have the record show that the Gentleman from Kentucky, Dr. Tim Lee Carter is with ÚS.

Dr. Carter, would you like to ask Mr. Todd or Mr. Snodgrass any questions? We would be glad to hear from you, whichever.

Mr. CARTER. I thank the distinguished Chairman. I do not believe I have any questions at this time.

Mr. ABBITT. You are welcome if you like. Is there anyone else that wants to be heard ?

Mr. MILLER. Mr. Chairman?
Mr. ABBITT. Yes, Mr. Miller.

Mr. MILLER. Could I ask one question about the pool tobacco you said there were about 500 million pounds. That is last year, and that is tobacco that has been added to the pool over the years?

Mr. Todd. No, sir. It is total, from all of the crops. I think we have some 1962 crop, and I think we have, in fact, a few pounds of the 1961 crop still under loan.

Mr. MILLER. That is what I was after, how far back do you go. 1961 would be the earliest year of tobacco in the pool?

Mr. Todd. Yes, sir, just a very small quantity of 1961 crop, and beginning 1962 primarily.

Mr. MILLER. From 1962 on?
Thank you very much, Mr. Chairman.

Mr. Todo. Including the 1970 crop, what we have already taken under loan. That crop is sold now.

Mr. CARTER. Mr. Todd, are you in favor of poundage control, socalled poundage control bill!

Mr. Todd. We have a request in the Department for a report on Senator Cooper's bill now, and the Department has not taken any

official stand on it. I would be glad to give you my personal view.

Mr. CARTER. All right. I have asked you for your opinion. Mr. Todd. Personnally, I think it is inevitable, Mr. Carter, because yields have gone up. We have set a record each of the past 2 years and we have in our county ASCS offices a record of marketings from each farm, and we have a number of farms that have already obtained yields of 3,500 to 4,000 pounds per acre, and we hear that there are test plots that have gone up considerably beyond that. So, I think we have to get something other than acres to keep supply in line with demand.

Mr. CARTER. Well, along with that, what about your Government purchases of tobacco ! Have they increased ? Did they increase this year or did they lessen?

Mr. Todd. The loan take from the 1970 crop was considerably less than from the 1969 crop, but we had all of this loan tobacco that is more or less segregated from the market by virtue of its price, so that accounts for the fact that even though we have a substantial surplus, we had an excellent market this past year with only 81/2 to 9 percent moving under Government loan.

Mr. CARTER. Then if we have a market next year and the next such as we have this year, would that continue to lessen the problem?

Mr. Todd. No; not unless we can move some of these loan stocks. That is the problem, the huge amount we have under Government loan.

Mr. CARTER. If we get down to the poundage proposals, is it not true that this will circumvent the five-tenths acreage allotment below which it cannot be cut, according to law?

Mr. Todd. Yes; if you get on a poundage basis, under the proposals that are being considered now there is no minimum protection. That is right.

Mr. CARTER. There is no minimum protection there. Have you noticed that all of the big farmers throughout the area support this bill and the vast majority of the small farmers oppose it!

Mr. Todd. No, sir. I agree with you that I think most of the larger, so-called larger farmers are supporting the poundage controls, but we are receiving some letters from some of the smaller ones too—they are divided.

Mr. CARTER. We have 35,000 allotments, I believe, in my district, 60 percent of which have bases of five-tenths or less and, of course, by law that cannot be cut. This, of course, would permit the pounds which they can, which they are allotted, to be cut, and when this is done it seems to me that, of course, naturally, the amount of money they will receive will be decreased. Is that not true?

Mr. Todd. That is true of all the growers; yes, sir.

Mr. CARTER. And true of small growers too! Would it not be lessened, would it not hurt, really, the status of the small farmer a great deal

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