STATE ADMINISTRATION OF ACREAGE RESERVE PROGRAM

Mr. MARSHALL. Now, if I understood you, talking with the chairman a moment ago about this acreage reserve, some States followed the Federal Register and others, as I understood you, will scale back the payments.

Mr. MCLAIN. Mr. Manwaring, do you want to comment on what States

Mr. MANWARING. All States except Minnesota agreed to stay on the first-come, first-served basis. Minnesota decided to scale back under present legislation and the present appropriation.

Mr. MARSHALL. So you will have a situation where you will have Iowa on one basis and Minnesota on a different basis.

Mr. McLAIN. Of course, now most everybody will be taken care of so it won't make a great deal of difference.

Mr. MARSHALL. That will be providing that the State share is within the additional $250 million.

Mr. MCLAIN. That is right.

Mr. MARSHALL. What will happen with a State like Iowa for example, if they now exceed their share?

Mr. MCLAIN. They will just get their pro rata share.

If the $300 million we could use for corn isn't ample, there will be some that won't be able to participate.

Mr. MARSHALL. Then will you scale the payments in Iowa if you are slightly over?

Mr. MCLAIN. No. Under the policy there following these other States they will use the amount of funds they have to take care of all the can up to the amount of money we finally give them.

Of course, it will be prorated to all participants on the basis of the amount of that we have and we hope it will be 100 percent.

Mr. MARSHALL. I think I can understand the situation all right, for example, use Iowa since it is in that category.

Say you have allotted to Iowa the share of the additional $250 million. Suppose that is not enough.

Will that mean on a first-come, first-served basis that there will be be someone who will be out?

Mr. MCLAIN. That is right.

Mr. MARSHALL. Just directly out.

There is no scaling.

Mr. McLAIN. That is right. We hope that the withdrawal opportunity we have given in this press release will offset that.

Mr. MARSHALL. That can lead to some difficulty if 2 farmers happen to sign up just exactly at the same time, 1 in and 1 out.

Mr. MCLAIN. Well, again, we have great confidence in our State and county committees and this was not decided on a spur of the moment basis. It was decided with pretty thorough checking with the county committees and the fact is when the Texas State committee, which is our largest State as far as cotton is concerned, found out that we were even thinking of prorating this, they just really blew their top and we had some people on the House Agriculture Committee that did likewise.

So this is not all one-sided. I want the record to show that. Even in Congress

Mr. WHITTEN. Would the gentleman yield?

Mr. MARSHALL. Yes.

Mr. WHITTEN. May I say again that it is not a matter of personal opinion, on the part of any individual Member of Congress, or anybody in Texas, or anyone elsewhere. You have to look back to the basic law that says each farmer is entitled to the fair and equitable opportunity to participate.

The Department took the view that those who got in first could get it all and those who did not get in would get none and that that constituted a fair and equitable opportunity to participate.

I take the view as a lawyer that that does not meet the requirements of that law. Involved in it again is what is a fair and equitable opportunity to participate. It is not a case of you trying to please me or trying to please any other Member of Congress.

The question involved is, What does the law require? You did agree, I believe, in the earlier hearing that, at the time we had our hearings you had authority to scale back payments or scale back acreage, to get everybody who tried to sign up at the proper time the same treatment. It was after the Department refused to affirmatively require that by the State committees that the committee and Congress provided extra money for those who signed or attempted to sign.

Mr. MCLAIN. I agree that is part of the record, but I want to point out that there were some members of the House Agriculture Committee who disagreed with the philosophy. They felt the other way. It just happened and we just had to face up to it as administrators. I just wanted that part of the record

ACREAGE RESERVE FOR CORN

Mr. MARSHALL. Mr. Secretary, I would like to have placed in the record any administrative rulings which you have put into effect this last year which would have tightened the regulations in connection with corn and acreage reserve.

Mr. McLAIN. All right.

Mr. MARSHALL. If you have tightened it up any way.

Mr. MCLAIN. We have a total allotment for feed grain which tightened it up considerably.

We will be glad to do that.

Mr. MARSHALL. We want that placed in the record.

Mr. MCLAIN. Yes.

(The information referred to is as follows:)

1958 ACREAGE RESERVE PROGRAM

Excerpts from the regulations under the Soil Bank Act that were made effective or changed for the 1958 crops and that put additional restrictions on farms participating in the acreage reserve.

"8485.308 Maximum acreage limitations on extent of participation. Participation with respect to any farm shall be subject to the following maximum acreage limitations:

"(a) The acreage placed in the acreage reserve for any commodity may not exceed the farm allotment for the commodity.

"(b) The acreage placed in the acreage reserve for all commodities on the farm may not exceed the farm soil bank base less the number of acres in the conservation reserve at the regular rate: Provided, That, in the case of any farm which during 1957 participated in both the acreage reserve and the conservation reserve programs, the acreage placed in the 1958 acreage reserve may not exceed the sum of (1) the acreage permitted to be devoted to soil bank base crops under the conservation reserve contract, plus (2) the acreage placed in the 1957 acreage

reserve.

"(c) In the case of spring wheat, the acreage placed in the acreage reserve may not exceed the farm allotment less (1) the number of acres, if any, on the farm placed in the acreage reserve under an agreement covering winter wheat, and (2) the number of acres, if any, planted to wheat in the fall of 1957 on land on the farm (excluding the number of acres planted on any such acreage reserve). "(d) Any other limitations specified in the supplement covering the particular commodity.

"§ 485.313 Farm soil bank base—(a) General. A soil bank base shall be established for each farm on which land is placed in the acreage reserve. If a soil bank base has been established for a farm under an existing Conservation Reserve Contract, such established base shall also be used for purposes of the acreage reserve program. It shall be the responsibility of the farm operator to furnish to the county committee the information needed from him to establish the farm soil bank base.

"(b) Soil bank base period and adjustments in base. (1) Except as provided in subparagraph (2) of this paragraph, the soil bank base for the farm shall be the average acreage of land devoted to soil bank base crops during the years 1956 and 1957, subject to (i) adjustment by the county committee where necessary to make due allowance for abnormal weather conditions to the extent that such abnormal weather conditions affected the acreage of such crops during such period, (ii) such downward adjustment of 1957 crop acreages as is necessary to eliminate any soil bank base acreage credit for new land brought into the production of soil bank base crops after December 31, 1956, to the extent that such new land is not offset by the retirement of cropland on the farm to noncropland, and (iii) such downward adjustment as may be necessary to eliminate soil bank base acreage credit resulting from considering the 1956 or 1957 acreage reserve as being devoted to a crop of the commodity covered by the agreement in cases where the soil bank base acreage credit thus given would, if not adjusted, result in increasing the soil bank base acreage above the acreage which would have been grown on the farm in 1956 or 1957 in the absence of participation in the acreage reserve program. The soil bank base established hereunder may provide different acreages for alternate years when necessary to reflect an established summer fallow rotation system, provided the average of the acreages for such alternate years shall equal the acreage as determined above. "(2) If the soil bank base established as provided in subparagraph (1) of this paragraph is less than the sum of the 1957 'old farm' allotments for all commodities, the soil bank base so determined shall be subject to upward adjustment as follows: If the 1956 or 1957 acreage devoted to a commodity (including acreage placed in the acreage reserve) is less than the respective 1956 or 1957 allotment for such commodity but is not less than 90 percent of such allotment, the 1956 or 1957 acreage devoted to the commodity shall be increased to equal the respective 1956 or 1957 allotment: Provided, That the resulting adjusted soil bank base shall not exceed the sum of the 1957 'old farm' allotments for the farm.

"(c) Soil bank base crops. The soil bank base crops shall consist of all crops produced for harvest on the farm other than (1) annual grasses pastured or cut for hay or ensilage, provided a crop of seed or grain was not harvested from such grasses, (2) biennial legumes, (3) perennial grasses and legumes, (4) annual legumes except soybeans, cowpeas, peanuts, field and canning peas, and field and canning beans, (5) land devoted to a garden primarily for home consumption, and (6) orchards, vineyards, small fruits, and nursery stocks.

"If the farm was entered in the 1956 or 1957 acreage reserve program, the smaller of (i) the number of acres which the producer agreed to place in the acreage reserve, or (ii) the number of acres by which the commodity was reduced below the farm allotment (or soil bank corn base in the case of 1956 corn agreements) shall be considered as being devoted to a crop of the commodity covered by the agreement and shall be included in determining the soil bank base: Provided, That if the amount of the reduction below the allotment, in the case of 1957 agreements, has not been determined at the time the farm soil bank base is established, the number of acres included in determining the base shall be that which the producers agreed to place in the acreage reserve.

"(d) Notice of soil bank base. The operator of each farm for which a soil bank base is established shall be given written notice of the amount of the soil bank base established for the farm unless the farm is covered by a Conservation Reserve Contract. Appeals from the soil bank base established for a farm shall be governed by § 485.332.

"(e) Correction of errors. Prior to the approval of an agreement, the county committee may correct any error made in establishing the soil bank base. After the agreement is approved and signed by the county committee, a downward adjustment shall not be made if the county committee determines that the producer had no reason to know of the error.

"If the county committee determines that the producer had reason to know that the farm soil bank base was in error, the farm soil bank base shall be the corrected farm soil bank base. In such case, the agreement filed shall be deemed terminated. However, a new agreement may be filed within 15 days after the mailing date shown on the notice of the corrected farm soil bank base mailed to the farm operator.

"(f) Permitted acreage of soil bank base crops. (1) Except as provided in subparagraph (2) of this paragraph, the permitted acreage of soil bank base crops shall be the farm soil bank base less the number of acres placed in the acreage reserve under all 1958 agreements for the farm and less the number of acres in the conservation reserve at the regular rate.

"(2) In the case of farms which during 1957 participated in both the acreage reserve program and the conservation reserve program, the permitted acreage of soil bank base crops shall be the farm soil bank base less the number of acres in the conservation reserve at the regular rate and less any amount by which the number of acres placed under 1958 acreage reserve agreements exceeds the number of acres placed under 1957 acreage reserve agreements.

"(g) Notice to farm operator. The farm operator shall be given written notice of the number of acres planted to soil bank base crops on the farm in excess of the permitted acreage.

"(h) Effect of failure to dispose of acreage in excess of that permitted. The disposition of acreage in excess of that permitted shall be in such manner that no part of the acreage can be harvested and shall be in accordance with the conditions set forth in such notice. The producer must, not later than the final date for disposition specified in such notice, notify the office of the county committee that he has disposed of the acreage in excess of that permitted for harvest and pay the cost of determining the adjusted acreage. If the acreage in excess of that permitted is not so disposed of, the agreement shall not be deemed violated, but the following provisions of this paragraph shall apply:

"(1) If the permitted acreage of soil bank base crops is zero, the producer shall not be entitled to any compensation under the agreement if he fails to dispose of all acreages planted to soil bank base crops.

"(2) If the permitted acreage of soil bank base crops is more than zero the producer shall not be entitled to any compensation under the agreement if the final acreage of soil bank base crops exceeds the permitted acreage of such crops by more than one acre or three percent, whichever is larger.

"(3) If the permitted acreage of soil bank base crops is more than zero, and the final acreage of soil bank base crops exceeds the permitted acreage of such crops by not more than one acre or three percent, whichever is larger, the acreage otherwise eligible for compensation shall be reduced by the amount of such excess. If two or more agreements are in effect for a farm, any excess soil bank base acreage for which a reduction is to be made shall be apportioned among the agreements in the proportion that the acreage otherwise eligible for compensation under each agreement bears to the total acreage otherwise eligible for compensation under all agreements.

"(4) If the farm operator is not given timely notice as to the correct number of acres planted to soil bank base crops in excess of that permitted, and the county committee determines that the producer made a reasonable effort, through measurement or otherwise, to dispose of the acreage in excess of that permitted, the acreage otherwise eligible for compensation shall not be reduced because of the failure to dispose of such acreage.

***

"§ 485.319 Additional provisions relating to tenants and sharecroppers. (c) (1) In the case of a change in ownership of a farm, if the land was previously farmed by a tenant or sharecropper, an agreement shall not be approved for the new owner for at least one year after the change in ownership, unless the land is continued to be farmed by a tenant or sharecropper, or the county committee determines that the new owner would normally farm the land without a tenant or sharecropper.

"(2) In addition to the grounds for not approving an agreement specified in paragraph (a) of this section or in subparagraph (1) of this paragraph, the county committee shall disapprove an agreement where such action is for any other reason determined by the county committee to be necessary in order to protect the interest of the tenants and sharecroppers.

"§ 458.307 Agreement not to be approved if reduction would occur without Soil Bank. The county committee shall not approve an agreement for any farm if the county committee determines that the reduction in the acreage of the commodity involved would occur even in the absence of participation in the acreage reserve program.

"§ 485.328 Schemes or devices to defeat purposes of agreement. No producer entering into an agreement with the Secretary hereunder shall employ any scheme or device which would tend to defeat the purpose of the agreement. It shall be considered a scheme or device to defeat the purpose of the agreement for a producer having an agreement for a commodity on one farm to exceed the allotment for the commodity on another farm if he knowingly exceeds by a substantial amount the acreage normally devoted to the commodity on such farm. Such action shall constitute a scheme or device without regard to the fact that under the marketing quota regulations the producer may market the production from 15 acres of wheat without marketing quota penalty, or may harvest 30 acres of wheat pursuant to section 335 (f) of the Agricultural Adjustment Act of 1938. as amended. Effective with respect to agreements covering spring-planted commodities, a producer shall be considered to have exceeded by a substantial amount the acreage normally devoted to a commodity on a farm if he has exceeded by more than ten (10) percent the larger of (1) the allotment. or (2) the highest acreage devoted to the commodity on the farm in either of the years 1956 or 1957."

Mr. MARSHALL. Now, in connection with this acreage reserve as far as corn is concerned, you have in your justification a list of the States and the total acreage allotments for commercial corn.

Now, I notice that some of these States do not have the same counties in the program as 1957 they had in 1955.

I would like to have a list of comparable counties placed in the record showing the planted corn acreage for 1955 as compared with 1957, not broken down by counties but by States but I want the counties comparable so that there is not

Mr. MCLAIN. So that you got the same number of counties.

Mr. MARSHALL. The same counties within the State.

Mr. MCLAIN. You wanted 1955 and 1957.

Mr. MARSHALL. 1955 and 1957 planted acreage.

Mr. MCLAIN. Yes.

(The information referred to is as follows:)

1957 commercial area (894 counties)-Planted acres, 1955 and 1957