1959 marketing year, the Secretary, through local committees, shall establish for each of such farms a single combined tobacco acreage allotment for the 1958-1959 marketing year and subsequent marketing years applicable to one kind of tobacco, either type 21 (Virginia) fire-cured tobacco or type 37 Virginia sun-cured tobacco, whichever kind of tobacco the owner of such farm or his representative designates with respect to the 1958-1959 marketing year and notifies the local committee of such designation within a period of time as determined and fixed by the Secretary. In the absence of such a designation and notification by the owner or his representative of any farm for which a single combined tobacco acreage allotment shall be established as provided in this section, the Secretary shall designate such combined allotment for such farm as either a type 21 (Virginia) fire-cured tobacco acreage allotment or a type 37 Virginia sun-cured tobacco acreage allotment after taking into consideration the prevalent kind of tobacco grown in the area in which such farm is located, the curing facilities on such farm, and the proximity and nature of marketing outlets. The single combined tobacco acreage allotment determined as heretofore provided for each farm for the 1958-1959 marketing year shall be in lieu of and shall equal the total of the acreage of the type 21 (Virginia) fire-cured tobacco allotment and the acreage of the type 37 Virginia sun-cured tobacco allotment for the 1958-1959 marketing year established for such farm. No contract entered into under the acreage reserve program for the 1958 crop of type 21 (Virginia) fire-cured tobacco or of type 37 Virginia sun-cured tobacco shall be affected by the establishment of a single combined tobacco acreage allotment for a farm as provided in this section. If the establishment of farm acreage allotments as provided in this section are approved in the special referendum as heretofore provided in this section, and thereafter two or more farms, of which one or more has a type 21 (Virginia) fire-cured tobacco allotment and another or more has a type 37 Virginia sun-cured tobacco allotment, are combined and operated as a single farm, a single combined tobacco acreage allotment designated for either type 21 (Virginia) fire-cured tobacco or type 37 Virginia suncured tobacco as heretofore provided, shall be established for the combined farm in lieu of and shall equal the total acreage of the allotments for type 21 (Virginia) fire-cured tobacco and type 37 Virginia sun-cured tobacco established for the farms comprising the combined farm for the marketing year for which such single combined tobacco acreage allotment is established. For marketing years subsequent to the marketing year for which a single combined tobacco acreage allotment is first established for a farm as provided in this section, the history of past marketing or of past harvested acreage from such farm of both type 21 (Virginia) fire-cured tobacco and type 37 Virginia sun-cured tobacco shall constitute the past marketing of tobacco or the past harvested acreage of tobacco of such farm in determining a single combined tobacco acreage allotment therefor. "(c) Notwithstanding the national marketing quotas for the marketing year beginning October 1, 1958, announced by the Secretary for each of the two kinds of tobacco described as type 21 (Virginia) fire-cured tobacco and type 37 Virginia sun-cured tobacco, each of the State acreage allotments for such kinds of tobacco apportioned by the Secretary to the State of Virginia for the marketing year beginning October 1, 1958, shall be increased or decreased respectively by the amount of acreage equivalent to the corresponding net total change in farm acreage allotments for each of such kinds of tobacco for such marketing year which result from the establishment of single combined tobacco farm acreage allotments as provided in this section. In determining and announcing the amount of the national marketing quotas for type 21 (Virginia) fire-cured tobacco, and type 37 Virginia sun-cured tobacco in terms of the total quantity of each of such kinds of tobacco which may be marketed during the marketing year beginning October 1, 1959, and during each of the four succeeding marketing years thereafter, the Secretary shall increase or decrease such national marketing quotas determined as provided in section 312 (b) and the Virginia State acreage allotments for type 21 (Virginia) firecured tobacco and type 37 Virginia sun-cured tobacco to reflect correspondingly the changes which previously have occurred in the total acreage allotted for each of such kinds of tobacco pursuant to this section. Notwithstanding any marketing quota determined and announced for type 21 (Virginia) fire-cured tobacco and type 37 Virginia sun-cured tobacco for the marketing year beginning October 1, 1959, and for each marketing year thereafter, each of the State acreage allotments for such kinds of tobacco apportioned to the State of Virginia for any such marketing year shall be increased or decreased respectively by the amount of acreage equivalent to the corresponding net total change in farm acreage allotments for each of such kinds of tobacco for such marketing year which results from the combination of farms and the establishment of single combined tobacco farm acreage allotments as provided in this section. The sum of the State acreage allotments for type 21 (Virginia) fire-cured tobacco and type 37 Virginia suncured tobacco determined for any marketing year as provided in section 313 shall not be increased or decreased by reason of any increase or decrease in the State acreage allotment for each of such kinds of tobacco previously provided for in this paragraph to reflect net changes occurring in acreage allotted." Mr. ABBITT. We have a report here from the Department on the bill, H. R. 12840, dated June 13, 1958, addressed to Chairman Cooley and signed by True D. Morse, Acting Secretary. Without objection we will include it in the record at this point. (The document referred to is as follows:) DEPARTMENT OF AGRICULTURE, Hon. HAROLD D. COOLEY, Chairman, Committee on Agriculture, House of Representatives. DEAR CONGRESSMAN COOLEY: This is in reply to your request of June 10, 1958, for a report on H. R. 12840, a bill to amend the Agricultural Adjustment Act of 1938. This Department recommends that the bill be passed. The bill amends the Agricultural Adjustment Act of 1938, as amended, so as to eliminate problems involved in the administration of the marketing-quota and price-support programs on a small number of farms in Virginia, which have both Virginia fire-cured and Virginia sun-cured tobacco allotments. During the period 1946-49, inclusive, when quotas were in effect on fire-cured and not in effect on sun-cured, production of sun-cured expanded into the fire-cured area. In the fire-cured area, the influence of environmental and cultural practices is such that the two kinds of tobacco cannot be distinguished one from the other either in the production stage or at the time of marketing. As a practical matter, on the farms having both kinds of allotment, only one kind of tobacco is produced. The bill provides that, subject to approval of growers in a special referendum, the allotments on these dual-allotment farms will be reclassified to whichever the farm owner elects as the kind he plans to produce. The bill only affects Virginia, since these two kinds of tobacco are grown exclusively in Virginia, and does not increase or decrease the total acreage allotted within the State for the two kinds of tobacco. It therefore does not adversely affect any other area. The net effect of the bill is one of properly describing the allotments. Enactment of the bill would not increase the risk of losses under the pricesupport program and would not increase the administrative costs of operating the quota program since the cost of holding the special referendum and reclassifying the allotments would be offset by savings resulting from the reduction in the number of allotments to be serviced. The Bureau of the Budget advises that there is no objection to the submission of this report. Sincerely yours, TRUE D. MORSE, Acting Secretary. Mr. ABBITT. We also have a number of persons here from the Department of Agriculture. Particularly, we are pleased to have Mr. Clarence Miller, who is Associate Administrator of the Commodity Stabilization Service. Mr. Miller, we would be pleased to hear from you and your associates. Would you, for the record, introduce your associates at this time so that the record will show who is here from your Department? You always, I might say, Mr. Miller, have been very cooperative with this subcommittee, as well as the full committee, and we appre ciate your interest on behalf of the tobacco program, the tobacco growers, and the tobacco subcommittee. Thank you for being here, and if you and your people will come up now, we will be glad to hear from you. STATEMENT OF CLARENCE L. MILLER, ASSOCIATE ADMINISTRATOR, COMMODITY STABILIZATION SERVICE, UNITED STATES DEPARTMENT OF AGRICULTURE; ACCOMPANIED BY JEFF D. JOHNSON, DEPUTY DIRECTOR, TOBACCO DIVISION, COMMODITY STABILIZATION SERVICE; R. B. BRIDGFORTH, ASSISTANT TO THE DEPUTY ADMINISTRATOR FOR PRODUCTION ADJUSTMENT, COMMODITY STABILIZATION SERVICE; FRANK R. ELLIS, CHIEF, COMMODITY PROGRAMS BRANCH, TOBACCO DIVISION, COMMODITY STABILIZATION SERVICE; JOSEPH J. TODD, CHIEF, PRODUCTION PROGRAM BRANCH, TOBACCO DIVISION, COMMODITY STABILIZATION SERVICE; AND B. G. ANDREWS, CHIEF, PROGRAM ANALYSIS BRANCH, TOBACCO DIVISION, COMMODITY STABILIZATION SERVICE Mr. MILLER. We appreciate this opportunity of appearing before the committee. We, too, have always enjoyed the pleasant relationships that we have had with the committee in dealing with our tobacco problems. This particular bill deals with a knotty problem that we have encountered in our operations for a number of years. We feel that in the course of the testimony we will bring out the reasoning back of our report and impress upon the committee the necessity for the adoption of this legislation in order that we might cope with the particular situation that exists as between dark-fired and sun-cured tobacco in the State of Virginia. Mr. Jeff Johnson is the Deputy Director of the Tobacco Division of CSS, and will be the chief witness this morning. And we have with us also Mr. Dick Bridgforth, the assistant to the Deputy Administrator for Production Adjustment. Incidentally, as you know, Mr. Chairman, Mr. Bridgforth is from, nearby at least, the area affected and probably knows as much about the particular problem as any man we have in the Department. We have also with us this morning Frank Ellis, in charge of our Price Suport Branch in the Tobacco Division; and we have Joe Todd, in charge of marketing quotas; and B. G. Andrews, in charge of our statistical data and our economist in the Tobacco Division of CSS. So with your permission, we will have Mr. Johnson proceed and read his statement. Mr. ABBITT. That will be fine. We are particularly pleased to have your associates with us, and in particular, Mr. Bridgforth who is, as you say, not only from Virginia, but practically from the area affected. He knows the program as well as anyone in our State. He is doing a real job for our people, and I am particularly glad to have him with us. We will be glad to hear from Mr. Johnson at this time. I am Jeff D. Johnson, Jr., Deputy Director of the Tobacco Division, Commodity Stabilization Service, United States Department of Agriculture. I appreciate very much the opportunity to appear before this committee in connection with H. R. 12840, a bill to amend the Agricultural Adjustment Act of 1938 with respect to marketing quotas and acreage allotments for Virginia fire-cured and Virginia sun-cured tobacco. The Department recommends that this bill be passed. This legislation is needed to correct a local, but nonetheless serious, administrative problem. To outline the reasons for the existence of this problem, we must go back to the 1946-49 period when marketing quotas were not in effect for Virginia sun-cured tobacco, but were in effect for Virginia fire-cured tobacco. During this period, many farms which historically had produced only fire-cured tobacco began to produce Virginia sun-cured. While the areas in which these two kinds of tobacco are produced are, to some extent contiguous, the expansion of suncured production took place in the fire-cured area where, due to climatic and soil conditions, as well as cultural practices, the tobacco, even when produced from true sun-cured seed, takes on the characteristics of fire-cured tobacco. Thus, the expansion of the production of sun-cured tobacco in the fire-cured area is tending to defeat the purposes of the quota program. Tobacco people in Virginia recognized this problem and initiated inclusion of a provision in the Agricultural Act of 1948, which was carried forward into the act of 1949, requiring the proclamation of marketing quotas for Virginia sun-cured tobacco whenever quotas were proclaimed for fire-cured tobacco. Accordingly, quotas were proclaimed for Virginia sun-cured tobacco for the 1950 crop and approved by the growers. At that time, sun-cured tobacco allotments were, of course, established for those farms in the fire-cured area which had built up a production history. In the years since 1950, operators of farms with both fire-cured and sun-cured allotments have tended more and more to grow both allotments from the same seed varieties, with the same cultural and curing practices. This means that, as a practical matter, the differentiation between the two kinds of tobacco at time of measurement on the farm and at the time of marketing is essentially an arbitrary one since the tobaccos are not distinguishable. Actually, on most of these farms, tobacco now produced on the 2 allotments is, in fact, 1 kind, not 2 kinds, as the allotment records and marketing cards indicate. The tobacco produced on these sun-cured allotments in the fire-cured area is practically all marketed at the regular fire-cured markets, and a substantial part of it moves into regular fire-cured usage channels. In order to promote effective administration of the quota and pricesupport programs in the Virginia fire-cured and sun-cured producing areas, discussions have been held with representatives of grower organizations, auction warehousemen, and with dealers and exporters concerned with these kinds of tobacco with the view of finding a solution to the problems. On March 13, 1958, a meeting was held in Richmond, Va., at which time it was generally agreed that legislation was necessary to satisfactorily deal with the situation. Following this meeting, a committee was formed to further study the problem and to develop recommendations as to the legislation needed. H. R. 12840 recently introduced by Congressman Abbitt is the result of these meetings and discussions and reflects the views and recommendations of the affected individuals and groups concerned with the production and marketing of these two kinds of tobacco. The bill, H. R. 12840, provides for three things. First, the holding of a referendum of all sun-cured and fire-cured growers to determine whether they favor correcting the problem by the method provided in the bill. Second, if two-thirds of the growers voting, favor the proposal, then the owners of those farms which have both kinds of allotments will have the 2 allotments combined into 1, with the grower having the right to elect which of the 2 kinds he plans to produce in the years ahead. The bill makes provision for the county committee, with the approval of the State committee, to make this determination when the grower fails to make such election. The third part of the bill provides for increasing and decreasing the respective amounts of the fire-cured and sun-cured national quotas and State acreage allotments to the extent necessary to offset the net change in the total of the acreage allotments for the two kinds resulting from this reclassification of allotments. It is specifically provided in the bill that the sum total of the acreage allotted for the two kinds of tobacco will not be increased or decreased by reason of this reclassification. The proposed legislation will eliminate the problems involved in administering the tobacco program under the circumstances heretofore described. The bill does not result in placing Virginia tobacco growers in an advantageous position as compared to growers of firecured and dark air-cured tobacco in other producing areas. It does not, in fact, affect the relationship of the various producing areas since it will not, in our opinion, result in any more or any less Virginia firecured or Virginia sun-cured tobacco being produced than would be the case if the legislation were not enacted. The net effect of the bill is to properly describe the allotments and the tobacco produced on such allotments. Mr. ABBITT. Thank you very much, Mr. Johnson, for your state ment. As I understand it, this bill affects only type 21 and type 37 tobacco? Mr. JOHNSON. Yes, sir; that is right. Mr. ABBITT. Which is grown exclusively in Virginia? Mr. JOHNSON. Yes, sir; that is correct. Mr. ABBITT. And I further understand that it will not result in any more acreage being produced in Virginia? Mr. JOHNSON. That is right, sir. Of the combined, of the two types. Mr. ABBITT. Whatever change from sun-cured, and no more than that, will go into 21, and whatever change from 21, and no more, will go into sun-cured? Mr. JOHNSON. That is correct. Mr. ABBITT. With the result being there will be no more total tobacco acreage than we already have? Mr. JOHNSON. That is right, sir. Mr. ABBITT. As I understand from you, there is a problem in administering the program because of the fact in the true type 21 area, type 37 tobacco, sun-cured, is more or less grown along the same manner and goes into the same stock, does it not? |