PREVIOUS HEARING ON ACREAGE RESERVE PROGRAM Mr. WHITTEN. Also, in connection with this hearing I think it would be well that the hearings on the 1958 acreage reserve program as they appear in the second supplemental bill be placed in the record at this point, pages 201 through 224. (The pages referred to are as follows:) FEBRUARY 4, 1958. 1958 ACREAGE RESERVE PROGRAM Mr. WHITTEN. Mr. McLain, we have a serious situation developing in connection with the 1958 acreage reserve program. Nearly every Member of Congress from the corn and cotton areas had contacted me with regard to the problem. I have had numerous letters from farm organizations, from Members of Congress, and from farmers. Many farmers went to the local ACP office at the time directed, stayed there for days, only to be told their number was too high for inclusion. I have been bombarded with similar letters forwarded to me by other Members of Congress. I have had that same story from the farm bureau and other organizations in my State. I have had it from all the agricultural agencies. As a result of that turmoil, I thought it well to make a record as to what has occurred, what the situation is, and as to what might be done to straighten the matter out. EXCESSIVE PAYMENTS TO INDIVIDUALS Last year in connection with the acreage reserve program, this committee had before it an investigation which showed the tremendous amounts of money that were paid out to certain individuals throughout the country. I would like to include in the record at this time examples of some of the various cases. (The material is as follows:) Of the 4 States visited by the staff in connection with tobacco production, there was 4 payments over $10,000, all of which were in Connecticut. The following reflects such payments: Producer A (agreement No. 357) Amount $40, 162. 55 29, 829. 51 11, 047. 60 10, 473.95 A producer from Grand Forks County, Gilby, N. Dak., executed agreement No. 46-018-482 on July 16, 1956. He had an original allotment of 761 acres and planted 43 acres of spring wheat within his original allotment and the balance in durum wheat. Since the Durum Act provided a bonus of 2 acres for each acre he planted within the allotment, the producer planted an additional 568 acres above his allotment, or 1,286 acres of durum wheat. His conditional allotment was the 43 acres of spring wheat plus the 1,286 acres of durum wheat, totaling 1,329 acres of wheat. He destroyed none of it but under the formula issued by the Soil Bank Division he was considered to have underplanted his allotment of 761 acres to the maximum amount under ARP or 50 percent of his original allotment, namely 380 acres. The county ARP payment rate was $1.24 a bushel and the normal yield for the acreage involved was 22 bushels per acre. Applying this rate and yield his compensation was $27.28 per acre and since he placed 380 acres in the program his payment amounted to $10,366.40. In considering this payment, the staff desires to emphasize that with an original allotment of 761 acres he planted 1,329 acres of wheat. He destroyed none but still received $10,366.40. Mr. WHITTEN. I would like in connection with the Acreage Reserve Act to insert section 104 of the Soil Bank Act, Public Law 540 of the 84th Congress, chapter 327. (The section reads as follows:) EXTENT OF PARTICIPATION IN PROGRAM SEC. 104. For purposes of the acreage reserve program the Secretary shall establish a national reserve acreage goal for the 1956, 1957, 1958, and 1959 crops of each commodity specified in section 103 (a). The limits within which individual farms may participate in the acreage reserve program shall be established in such manner as the Secretary determines is reasonably calculated to achieve the national reserve acreage goal and give producers a fair and equitable opportunity to participate in the acreage reserve program, taking into consideration their acreage allotments or farm base acreages, whichever may be applicable, the supply and demand conditions for different classes, grades, and qualities of the commodity, and such other factors as he deems appropriate. LIMITATION ON INDIVIDUAL PAYMENTS Mr. WHITTEN. This committee, faced with this controversial program and with the approval of the full Committee on Appropriations, reported out to the House of Representatives an announced acreage reserve program of $500 million for the crop year of 1958. The House of Representatives adopted on the floor a limitation of $2,500 per producer and then eliminated all of the $500 million authorization. I would like the exact language of the paragraph, as amended, to be included in the record at this point. (The information is as follows:) Provided, That no part of this appropriation shall be used to formulate and administer an acreage reserve program with respect to the 1958 crops, or in total compensation being paid to any one producer in excess of $2,500 with respect to the 1958 crops. Mr. WHITTEN. The bill then went to the Senate, and the Senate restored the program announcement of $500 million. The Senate also added an amendment limiting the payment to any one producer to $5,000. I would like to have the exact language in the record at this point. (The amendment is as follows:) Provided, That not to exceed $34,500,000 of the total sum provided under this head shall be available for administrative expenses: Provided further, That no part of this appropriation shall be used to formulate and administer an acreage reserve program which would result in total compensation being paid to producers in excess of $500,000,000 with respect to the 1958 crops, or in total compensation being paid to any one producer in excess of $5,000 with respect to the 1958 crops. Mr. WHITTEN. In conference, it was agreed, and the bill as finally passed authorized a $500 million program for 1958, the maximum amount before the conference, with a limitation of $3,000 per producer. COMPTROLLER GENERAL'S DECISION I have before me the Comptroller General's opinion in which he construed at your request the law as it finally was passed and it supports your interpretation which would permit some farmers with more than 1 farm to receive more than $3,000. I ask that this Comptroller General's decision be incorporated in the record at this point, and we will include your letter to him also. (The above-mentioned documents follow.) Hon. JOSEPH CAMPBELL, Comptroller General of the United States. AUGUST 9, 1957. DEAR MR. CAMPBELL: The Department of Agriculture and Farm Credit Administration appropriation bill, 1958, as passed by Congress, provides with respect to the soil bank that "no part of this appropriation shall be used to formulate and administer an acreage reserve program which would result *** in total compensation being paid to any one producer in excess of $3,000 with respect to the 1958 crops." I would appreciate your decision as to the meaning of the word "producer" as used in such provision of law and as to the manner in which the provision should be applied. The provision was first introduced as an amendment on the floor of the House. Discussion of the amendment is contained in the Congressional Record of May 15, 1957, pages 6182-6184, the Congressional Record of June 11, 1957, pages 7931-7936, the Congressional Record of July 9, 1957, pages 10005-10008, and the Congressional Record of August 1, 1957, pages 12105-12106. The report of the Senate Committee on Appropriations (Rept. No. 415) and the statement of the House managers issued in connection with the conference report (Rept. No. 683), while making mention of the limitation, do not appear to shed any light on its interpretation. It is our view that the $3,000 limitation should be applied to each producer's share of the compensation payable for all commodities with respect to a partic ular farming unit, i. e., farm, rather than to the compensation payable to him with respect to all farms in which he may have an interest. If the statute is so construed, the limitation would apply to each farm separately and a producer having an interest, for instance, in 3 separate farms could receive as much as $3,000 in compensation for each farm. Our view as to the meaning of the statute is based on several factors. Although the Soil Bank Act itself does not contain a definition of the word "producer," the regulations governing the 1956 and 1957 acreage reserve programs, as well as the conservation reserve program, define producer as meaning any person who is an owner or a landlord, cash tenant, standing-rent tenant, fixed-rent tenant, share tenant or sharecropper. A similar definition is contained in the regulations governing the agricultural conservation program, the price-support programs, and the acreage allotment and marketing quota programs. Under such definition, it is necessary to look to each farming unit to determine whether a person is a producer and the term "producer" under such definition has no meaning except as it relates to a particular farm. Briefly stated, the word "farm" is defined in the regulations governing the 1956 and 1957 acreage reserve programs, as well as the conservation reserve program, as meaning all adjacent or nearby farm or rangeland under the same owner which is operated by 1 person. Likewise a similar definition is contained in the other agricultural programs mentioned above. It appears reasonable to assume that Congress, in adopting the provision in question, had in mind the definition of the word "producer" and the word "farm" as used in the 1956 and 1957 acreage reserve programs and other agricultural programs and intended the $3,000 limitation to apply to each such producer on each such farming unit. In explanation of the term "producer" as used in the provision in question, Senator Mundt, one of the conferees, made the following statement on the floor of the Senate: "What we were trying to do *** was to establish a ceiling to avoid unduly large payments to a single farm operation. "So I think it should be established in the Record here and now that what we had in mind in conference was really a $3,000 limitation on a single farm operation or on a single farm; that it is the producer we have in mind, rather than a farm owner who might own several farms. In my own State of South Dakota, frequently there are widows who support themselves from the income of 2, 3, or 4 pieces of property which they rent on shares to different tenants. "I should like to establish with the chairman of the Senate Subcommittee on Agricultural Appropriations the fact that we were not trying to discriminate among tenants; we were thinking in terms of the producer, as that word applies to the operator of a single farm, rather than to the individual who might own several farms, and thereby, by working out some acreage reserve contract with one tenant farmer, preclude himself from participating with other tenants on different farms to the disadvantage of those other tenants" (Congressional Record, August 1, 1957, p. 12105). Another factor is the significant difference between the language used by Congress in establishing a $2,500 limitation in the same act in connection with the appropriation for the agricultural conservation program. The language used by Congress in connection with such appropriation provided that no participant shall receive more than $2,500. The term "participant" has been used by Congress in the same connection in previous appropriation acts and it has been construed to mean that the limitation applies to a person with respect to all farms in which he has an interest. It appears that Congress by the use of the word "producer" in connection with the soil-bank appropriation rather than the word "participant" clearly meant to distinguish between the two programs. The interpretation which we propose to place upon the provision in question would aid substantially in carrying out an effective acreage reserve program for 1958. The application of the provision to all farms in which a person has an interest would, we believe, operate to prevent the Department from obtaining enough participation in the program to achieve the acreage reserve goals for the major commodities covered by the Soil Bank Act. In order to aid you in your determination, we have set forth the following examples: 1. A owns three farms, each of which he rents on a share basis to a tenant who operates the farm. Each farm has allotments for wheat, corn, and rice. The producers (A and the respective tenant) on each farm wish to participate in the acreage reserve program with respect to all three commodities. In the absence of the $3,000 limitation, A's share of the total compensation for each farm would be $1,500 or a total of $4,500 for the 3 farms. Each of the tenants would receive $3,000 in compensation for each farm. It is our view that the $3,000 limitation would not affect A's right to receive $1,500 for each farm or a total of $4,500 for the 3 farms, or each tenant's right to receive $3,000. 2. A owns three separate farms and operates them himself using hired labor rather than renting them to a tenant-operator. Each farm has allotments for wheat, corn, and rice. With respect to each farm, A wishes to place all 3 commodities in the program. In the absence of the $3,000 limitation, A's total compensation with respect to all commodities for each farm would be $2,000. It is our view that the $3,000 limitation would not affect A's right to receive $2,000 for each farm or a total of $6,000 for the 3 farms. 3. A owns 3 separate farms and operates them himself with the aid of 3 sharecroppers on each farm. Each farm has allotments for wheat, corn, and rice. The producers (A and the 3 sharecroppers) on each farm wish to participate in the acreage reserve program with respect to all 3 commodities. In the absence of the $3,000 limitation, A's share of the total compensation for each farm would be $1,500 or a total of $4,500 for the 3 farms. Each of the sharecroppers would receive $750. It is our view that the $3,000 limitation would not affect A's right to receive $1,500 for each farm or a total of $4,500 for the three farms, or each sharecropper's right to receive $750. 4. Assume the same facts as those set forth in the first example above, except that in the absence of the $3.000 limitation A's share of the total compensation for each farm would be $20,000 and each tenant's share would be $40,000. It is our view that under the $3,000 limitation, A and each tenant would be limited to $3,000 in compensation for each farm. We would appreciate receiving your decision at the earliest possible moment since it is urgent that the signup period for winter wheat agreements begin in the next 2 weeks, and it will be necessary to inform our State and county committees of the proper application of the $3,000 limitation prior thereto. If you so desire, we would be glad to confer with you or your representatives at any time on this matter. Enclosed are copies of the regulations governing the 1956 and 1957 acreage reserve programs and the conservation reserve program. Sincerely yours, MARVIN L. MCLAIN, COMPTROLLER GENERAL OF THE UNITED STATES, DEAR MR. SECRETARY: On August 9, 1957, the Assistant Secretary of Agriculture, Marvin L. McLain, requested our decision concerning the meaning of the word "producer" as used in the limitation on the funds made available for the acreage reserve program under the Soil Bank Act, contained in the Department of Agriculture and Farm Credit Administration Appropriation Act, 1958, Public Law 85-118, approved August 2, 1957, (71 Stat. 338). The appropriation limitation involved, in pertinent part, reads as follows: "Provided further, That no part of this appropriation shall be used to formulate and administer an acreage reserve program which would result * * * in total compensation being paid to any one producer in excess of $3,000 with respect to the 1958 crops." Subtitle A, title I of the Soil Bank Act, Public Law 540, approved May 28, 1956 (70 Stat. 188, 189), provides that under the acreage reserve program producers shall be compensated for reducing their acreage of certain basic commodities below their farm acreage allotments or farm base acreage. Section 105 (a) of the act provides that the rate of compensation payable to producers for participation in the program shall be at such rate or rates as the Secretary of Agriculture determines will provide producers with a fair and reasonable return for reducing their acreage. Section 124 authorizes the Secretary to prescribe such regulations as he determines necessary to carry out the program. Your Department takes the position that the Congress intended the $3,000 limitation to apply to each producer with respect to a particular farming unit, rather than to operate as a ceiling on the amount of compensation that can be paid to him for all farms in which he may have an interest. The effect of the construction contended for is to apply the limitation to each farm separately so that a producer having an interest, for example, in 3 separate farms could receive as much as $3,000 for each farm or a total of not to exceed $9,000. The letter sets forth several other examples of payments, so far as concerns such interpretation of the limitation, as an aid in our determination of the matter. In support of that position the Department points out that while the enabling act contains no statutory definition of the term "producer," the administrative regulations governing the 1956 and 1957 acreage reserve programs, as well as the conservation reserve program (subtitle B), defines it to mean any person who is an owner or a landlord, cash tenant, standing-rent tenant, fixed-rent tenant, share tenant, or sharecropper. Also, that a similar definition is contained in the regulations on the agricultural-conservation program, the price-support programs, and the acreage allotment and marketing-quota programs. Under that definition, the Department contends that it is necessary to look to each farming unit to determine whether a person is a producer, and that the term "producer" has no meaning thereunder except as it relates to a particular farm. The word "farm" is defined in the referred-to regulations as meaning all adjacent or nearby farm or rangeland under the same owner which is operated by one person. Thus, the Assistant Secretary expresses the view that the Congress, in adopting the provision in question, had in mind the definition of the words "producer" and "farm" as used in the 1956 and 1957 acreage reserve programs and other agricultural programs and intended that the $3,000 limitation apply to each such producer on each such farming unit. In further support of this view, the Assistant Secretary quotes the following statements made on the floor of the Senate (Congressional Record, dated August 1, 1957, p. 12105) by Senato Mundt one of the conferees of the committee of conference on the Department of Agriculture appropriation bill, 1958, and concurred in by Senator Russell, spokesman for the managers on the part of the Senate, during consideration of that part of the report of the committee of conference relating to the limitation in question. "What we were trying to do *** was to establish a ceiling to avoid unduly large payments to a single farm operation. "So I think it should be established in the Record here and now that what we had in mind in conference was really a $3,000 limitation on a single farm operation or on a single farm; that it is the producer we have in mind, rather than a farm owner who might own several farms. In my own State of South Dakota frequently there are widows who support themselves from the income of 2, 3, or 4 pieces of property which they rent on shares to different tenants. "I should like to establish with the chairman of the Senate Subcommittee on Agricultural Appropriations the fact that we are not trying to discriminate among tenants; we were thinking in terms of the "producer," as that word applies to the operator of a single farm, rather than to the individual who might own several farms, and thereby, by working out some acreage reserve contract with one tenant farmer, preclude himself from participating with other tenants on different farms, to the disadvantage of those other tenants." The primary question here involved is whether the limitation quoted above on the use of funds made available to the Department of Agriculture to carry out the acreage reserve program of the Soil Bank Act inhibits your department, during the fiscal year 1958, from paying "to any one producer in excess of $3,000 with respect to the 1958 crops." Of course, there can be no more convincing evidence of the purpose of a statute than the words by which the legislature undertakes to give expression to its wishes; and, on first examination of the provision, there |