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I ask that there be included in the Record of the hearing my statement to this Subcommittee at the hearing held on December 8, at which I outlined and the Department of Agriculture reviewed, the burley situation, and recommendations were received from several of the same individuals who are appearing today. I would ask also that there be included in the Record my statement in the Senate on December 31, when I first introduced a bill to provide poundage controls for burley tobacco, so that it could be discussed at meetings and as widely as possible throughout the burley belt. At that time also, I introduced a resolution in the Senate, as did Congressman Wampler of Virginia in the House of Representatives, securing a postponement of the declaration of the Secretary of Agriculture of quotas under the existing acreage allotments program, to provide time for a more effective plan to be considered by the Congress. That deferral was further extended by a resolution, S. J. Res. 44, which I intro. duced on February 18 and which was enacted by the Senate and the House, with the full cooperation of this Committee and the House Committee on Agriculture, in one week--and as a result a cut in allotments of 25 percent or more has not had to be ordered by the Secretary.
This year, on February 11, I reintroduced the poundage bill in substantially the same form, which is the proposal now before this Committee, and which the House Subcommittee on Tobacco is holding hearings this afternoon. I ask also that my February 11 statement in the Senate be included in the Record.
Mr. Chairman, I have been very anxious that all who desire have an opportunity to make their views known, either for the bill or against the bill, and I hope that the hearing record can be kept open for a reasonable time for statements and letters which may be made part of the record or filed with the Committee.
The principal facts are these :
The burley tobacco program, which provides 90 percent of parity price support, and which has been one of the most successful farm programs over the years, depends absolutely on strict and effective production controls. In the past, this control has been a limitation on the amount of land-acres which a farmer having an allotment may plant and market. But yields per acre have steadily increased, through the use of fertilizer, closer planting, better varieties, and even irrigation. In the early forties yields were 1,000 pounds per acre; last year they exceeded 2500 pounds per acre. During the years that use of burley tobacco expanded, with the general population growth, this increased yield was largely offset by greater use. But in recent years, government loan stocks increased and a surplus has built up, and the testimony that we received on December 8 and the statements of the Department of Agriculture and those who know the program, recognize that acreage allotments alone will no longer effectively control production. They could only do so through massive cuts in acreage, which would work a hardship on thousands of farmers, and which will prove less and less effective.
This is especially true at a time when the use of burley tobacco has begun to decline somewhat, and estimates expect this decline to continue. The decline in use also markedly affects the surplus reduction effort required under existing law. For example, with the formula goal of 2.8 years supply, when there is a decline of 10 million pounds in use, 28 million pounds of supply automatically becomes surplus which must be worked off. On a rising market, supplies appear as an asset, but as a burden on a declining market.
So, while farm prices have been good, and while only a small percentage of the 1971 burley group went to the pool, it is evident that the burley program is in serious difficulty. For if a surplus and the Federal investment in burley stocks continues to grow, the price support program will no longer continue to enjoy public support and the support in the Congress which it has always had.
Tobacco growers have always given strong support to their price support prograin-by votes of 97 percent and 98 percent and 99 percent in the regular referenda which occurred every three years. They have known that they must control production to avoid large losses to the government or costs to taxpayers, and they have "shown their willingness to keep supplies in line with demand" as President Eisenhower stated in 1956. I believe they will do so now.
I would point out briefly two provisions which I hope the Committee may onsider.
First, Congressman Abbitt, Chairman of the Tobacco Subcommittee, and Congressman John Watts of the Sixth District of Kentucky, have introduced H.R. 4328 and H.R. 4462, which are substantially identical to S. 789. The House bills, however, provide for larger leasing, and for the sale of quotas within counties. I have always opposed the leasing of burley allotments, but believe that it might be helpful on a limited basis, permitting small growers to grow a larger amountenough to support a family farm type operation—or to lease their small allotment to another farmer to be grown.
I oppose the sale of allotments, I am concerned that it could lead to the concentration of allotments in the hands of a few farmers in each County having the largest resources in capital, equipment and labor. I do not want to see the allotments, often small but held by a widow or family without great means, brought up—perhaps at a time of some personal hardship_leaving them without this means to supplement their annual cash income.
I point out that in the definitive case, Lee vs. Berry, the Supreme Court of South Carolina held in 1951 that the allotment "runs with the land", and is not made to an individual. This has been the historic basis of the tobacco allotments, and I consider that the sale of allotments would violate that principle, and change the quotas into a kind of Federal franchise which can be bartered back and forth. The allotments also have become associated with the farms they are assigned to, and to permit their sale would depreciate the value of these farms. I urge this Committee not to authorize the sale of burley quotas, either within or across county lines—and if leasing is approved, to limit it to an amount which would not encourage the concentration of tobacco production in a few hands.
Second, a provision of the bill on page 6, lines 15 and 16, sharply limits the discretion of the Secretary of Agriculture in establishing farm marketing quotas for the first year, which would be the 1971 crop. It provides that the preliminary farm quota, determined by averaging the farm marketings for the four highest of the last five years (including the good 1970 crop marketed at the end of last year), may not be reduced by the Secretary more than 5 percent. I hope the Department will testify to this point. It may be that such a provision is too restrictive, and could result in a 1971 crop slightly greater than estimated use or no smaller than estimated use depending somewhat on the amount of leasing, and the number of allotments not now planted which would be grown under poundage. In that event, no progress would be made in reducing surplus stocks until the following year, when a reduction in quotas would have to be made in the 1972 crop.
I believe now that it would be better to strike this proviso so that the Secretary would set the first year farm quotas on the same basis as in succeeding years—that is, at the level necessary to accomplish an orderly reduction of excess supplies, which the bill otherwise defines as not to exceed 10 percent of annual use. This would be a straightforward way of dealing with the problem we face, and would reduce the possibility of a further reduction in 1972. If the crop forecasts of use prove reliable, it would mean that further reductions would be necessary only to accommodate any decline in use. Once poundage is adopted, the largest factor requiring allotment cuts-increasing yields of 4 percent a year—would no longer operate to require cuts in allotments.
Mr. Chairman, fue cured tobacco, which is the largest type grown changed its method of production control in 1965, and since that time surplus supplies have been steadily reduced, prices have been good, and exports have increased. They have got their house in order. But as Senator Jordan pointed out at the earlier hearing, if burley tobacco is in trouble, farmers will lose their burley support program-and in fact, the entire tobacco program could go down. We must not allow this to happen.
When a farm program gets in trouble, and production controls are no longer effective, it is the responsibility of the Congress, with advice from the Department of Agriculture and support from the farmers themselves, to change that program so that it will be effective and can continue to meet the needs of farmers. Then, whatever program is decided upon should be submitted to the farmers for their approval-or, if they choose to reject it, they could produce without controls and without price support. I trust that would not occur.
I am convinced that, difficult as it may be, the time has come to change the production control method of the burley tobacco price support program.
I hope the plan I have outlined, which I believe has the unified support of all interested groups, will be approved by this Committee, adopted by the Congress, and approved by burley growers. This is not an issue between large and small producers, or between the interests of different states. Rather, it is an effort to save the burley tobacco price support program for all growers, large and small, in all the burley states.
Mr. ABBITT. I have here a telegram from the managing director of the Bright Belt Warehouse Association, Inc., from the Commonwealth of Kentucky, and I ask that that be put in the record.
(The telegram from the Bright Belt Warehouse Association, above referred to follows:) Hon. WATKINS M, ABBITT, Chairman, Subcommittee on Tobacco, House Agriculture Committee, House Office
Building, Washington, D.C.:
F, S. ROYSTER, Managing Director, Bright Belt Warehouse Association, Inc. Mr. ABBITT. And a telegram also on H.R. 4388, and I assume that can be printed, from the Tennessee Farm Bureau.
(The telegram from the Tennessee Farm Federation, above referred to, follows: U.S. Congressman WATKINS M. ABBITT, Chairman, Subcommittee on Tobacco, Committee on Agriculture, House of Rep.
representatives, Washington, D.C.: The Tennessee Farm Bureau supports House bill 4388 as an alternative to the sharp acreage cuts which we understand are contemplated. If the present acreage allotment program for Burley tobacco remains in effect, continued sharp acreage cuts applicable to only a portion of growers is creating an intolerable situation. Provision for leasing and sale of allotments as contained in House bill 4388 should lessen the impact of eliminating the minimum provisions of present law, a step which we believe necessary. We urge the House to insist on this and to hold fast a maximum allowance for lease or sale of no less than 25,000 pounds and that these be authorized on a statewide basis.
CLYCE M. YORK,
President, Tennessee Farm Federation. Mr. ABBITT. We also have here a resolution and a statement of Mr. Edward B. Eller, and they will also be made a part of the record.
(The resolution above-preferred to and the statement of Edward B. Eller, follow :)
RESOLUTION OF THE HOUSE OF REPRESENTATIVES, COMMONWEALTH OF KENTUCKY
A resolution declaring the support of the House for the proposal to put burley tobacco allotments on a poundage basis.
Whereas burley tobacco production is of the highest importance in Kentucky, resulting in an annual cash income of a total of $300,000,000 to a total of 200,000 families; and
Whereas the burley tobacco support program, which in past years has been one of the most successful of government price-support programs, is now threatened by a combination of declining use of burley tobacco and increasing yields per acre due to application of fertilizer, irrigation, development of new varieties and other intensive cultural practices; and
Whereas it appears that the burley tobacco program and its benefits can best be preserved by changing the farm allotments from an acreage basis to a poundage basis; and
Whereas bills to accomplish this objective have been introduced in both Houses of Congress : Now, therefore, be it
Resolved by the House of Representatives of the General Assembly of the Commonwealth of Kentucky :
1. That this House declares its approval and support of the proposals to change the burley tobacco allotment program from an acreage to a poundage basis;
2. That the Clerk of this House is directed to send a copy of this resolution to the Secretary of Agriculture, to each member of Kentucky's delegation in Congress, and each member of the House and Senate Committee on Agriculture.
3. That the Clerk of this House is directed to request that a copy of this resolution be entered into the record of the hearings on these proposals Attested:
ADDIE D. STOKLEY, Assistant Clerk of the House.
STATEMENT OF EDWARD B. ELLER, AGRICULTURAL MARKETING AGENT, VIRGINIA
DEPARTMENT OF AGRICULTURE AND MARKETING
Mr. Chairman, Gentlemen of the Committee, I am Edward B. Eller, an Agricultural Marketing Agent for the Virginia Department of Agriculture and Commerce, with headquarters in Abingdon, Virginia. I work with the Tobacco Marketing Section and with burley growers in the marketing of burley tobacco.
I appreciate this opportunity of appearing before you and presenting the position of our department on behalf of our commissioner, The Honorable Maurice B. Rowe. Commissioner Rowe asked me to express his regrets that he is unable to be with you and his approciation of the opportunity of presenting his views.
That a change in the production adjusting program for burley tobacco is needed becomes quite clear when one studies the operation of the present program over the past five years. During this period strong efforts have been made to reduce surplus of burley to more reasonable levels by limiting acreage.
By increasing yields, burley growers have offset the expected reduction in production. During the same period, a decline in use of burley has reduced the need for carry-over supplies to the extent that the surplus is now fifty million pounds greater than five years ago.
By transferring the production adjustment principal to a quantitative market basis, as proposed by this legislation, we believe progress can be made in time to bring surplus to more reasonable levels. We recognize that this proposal will place responsibility for adjustment on each farm, but we feel that this proposal protects each farm from loss of marketing opportunities due to wind, hail, fire, crop disease, and crop loss from other causes, and the flexibility it gives each farm through lease and transfer of the quota more than offsets any reduction that will be needed if use can be maintained at, or near, present levels.
We further recognize that to go to a quantitative marketing quota will permit each grower to use his land and managerial ability to produce the tobacco the market wants without undue reference to yield. This should help maintain use levels for burley tobacco.
Basically we feel that acreage-poundage principal employed by flue-cured growers is superior to the poundage principals proposed by this legislation. However, since there are elements within the burley industry who take a different view, we would not propose to jeopardize the passage of this legislation by insisting the acreage-poundage be substituted for the proposal, provided that firm assurance can be given that the program will be administered to prevent the movement of burley tobacco into marketing channels without being properly charged to a marketing card. If this can be reasonably assured we would urge the passage of this proposed legislation.
Mr. ABBITT. And also, if any other members of the committee want to submit statements, it can be done.
Now, did we skip anybody who wants to be heard. Dr. Carter, just one minute.
Mr. CARTER. Yes, sir.
Mr. WAMPLER. Dr. Carter, I want to commend you on your statement. I know that it is one you made with all of the sincerity at your command, and honest men and honest women, and reasonable men and reasonable women can differ. But I know that what you have told us is what you believe, and I know there are others that share that view.
You indicated that you thought perhaps the bill should be amended with a proviso for an amendment that would, in effect, write in a minimum poundage somewhere in the range of 1,600 to 1,750 pounds for the half acre; is that correct?
Mr. CARTER. That is right. That is quite true. These farmers, there are so many of them, and 57 percent of them in my district, and 47 percent in the State at large. When they see their acreage cut they might very well decide to leave, or that they want no program rather than the poundage. You see, there is quite a sizable number of them. Not only that, I think they should have a way to earn a living, and this is their way of doing it.
Mr. WAMIPLER. Well, I certainly have no quarrel with that, and speaking for what I think is generally true of tobacco growers, not only in your area, but throughout the entire burley-producing area, most of them would rather work and earn $1,000 or $1,200, or whatever it might be rather than to go on welfare and have someone give it to them, or have the taxpayers give it to them, and this is exactly what is going to happen if we lose the program, in my opinion.
Some weeks ago I was appearing before a committee in the other body and I said with all of the sincerity at my command that if we kill this tobacco program, that the administration had better crank up their family assistance program, because we are going to have a lot of people from my area coming on welfare that are now earning their way by tobacco.
Now, you have expressed a legitimate concern, and others have expressed it, and I am not prepared to say, but I wondered if you had given any thought to this suggestion of providing a minimum cut for the 5 percent for the next 3 erop years, and that would apply equally to all of those ?
Mr. CARTER. I would certainly accept that rather than the present program which would cut 5 percent the first year and perhaps 10 to 15 the next year; yes, sir.
Mr. WAMPLER. As I recall in Mr. Frick's testimony he indicated that it would be the hope of the Department that if the bill is passed that the farmers or growers would be notified of their quotas prior to the referendum. Now, assuming that the Department, because of the pressures of time, was unable to make that known to each grower, is it your opinion that the growers in your district would vote against poundage, or would they be more inclined to vote against poundage if they knew the fact of what their quota was going to be before the referendum?
Mr. CARTER. It is difficult to say. I feel that if the growers in my area, all of them knew just what the quota meant, they might go against the bill. I would hope that they would not.
Mr. WAMPLER. Well, as the ranking minority member of this committee has so often said, as we try to adopt farm legislation we have this problem of communication with the farm community itself. Now, from time to time we have had the leaders of the farm organizations and their testimony is extremely helpful.
Mr. Belcher has frequently said that if we had time to go along and sit on the wagon tongues of the farmer and discuss this, it would make our job a whole lot easier. Yes, sir; but we do not have time to do that?