. Mr. WATTS. And the two provisions, as I understand it, one increases the penalty from the present 50 percent to 75 percent of the previous year's average, and the second provides that the growing of excess tobacco does not grant any additional base to the grower thereof.

Mr. MILLER. Yes, sir.

Mr. WATTS. I believe I have followed the correspondence of the State committee and all of the recommendations that have been made, and that those two have been fairly universally agreed to, not only by the Department, but by all groups that have made a study of the situation. Is that correct?

Mr. MILLER. From the information that I have received in communications from those organizations, I think they have been unanimous on that.

Mr. WATTS. I remember distinctly last year when Senator Clements introduced a bill in the Senate Senator Clements and Senator Cooper were joint sponsors of the bill-and I sponsored one in the House, to raise the penalty from 40 percent to 50 percent, and the Department did not at that time take a position in favor of raising the penalty.

Mr. MILLER. I think at that time they did not. There were no objections, but they took no position in favor of it or against it.

Mr. WATTS. The thinking has now changed in the Department in regard to that feature.

Mr. MILLER. The Department now feels that the 75 percent is more desirable than the present 50 percent.

Mr. WATTS. Your fourth provision about the penalty reductions, I would assume from listening to your statement that you are aiming that principally at fellows who hide out a patch of tobacco in a cornfield that does not get measured or fellows who in collusion with some fellow who measures it deliberately overplants, deliberately undermeasures and markets the entire amount that he raises irrespective of what his quota might be.

Mr. MILLER. Yes, sir. It is aimed at that type of individual.

Mr. WATTS. You feel that is essential as a method of deterring the very growers who vote the program in from taking such action as will injure those growers who are complying with the program.

Mr. MILLER. Yes, sir; it would be a method of defending those people who are cooperators against those who would willingly and knowingly commit a fraud to misrepresent acreage.

Mr. WATTS. As I understand your proposal, you propose that if a man hides out an acre of tobacco in a cornfield-we will use that as an illustration-and fails to report it and it is not counted in his marketing quota, in the next year's quota he shall suffer a reduction in comparison to his excess of the former year?

Mr. MILLER. That is correct.

Mr. WATTS. In other words, if he raises an extra acre of tobacco and hides it out, and he has a 3-acre base, and raises 4 and hides 1, then the next year his base should be reduced to 2 acres.

Mr. MILLER. Yes, sir.

Mr. WATTS. I believe you said that Mr. Bridgforth was going to be here to testify on the enforcement angle.

Mr. MILLER. On the compliance work; yes, sir.

Mr. WATTS. I do not know whether you will agree with me or not, but it is my opinion that the enforcement or the compliance angle has been handled rather laxly in many instances. Do you agree with that?

Mr. MILLER. To the extent I could not say. In some instances I would say so.

Mr. WATTS. That has not been done on the level in Washington, but more or less on the local level.

Mr. MILLER. I am not in a position to say exactly where that laxity has occurred.

Mr. WATTS. You served, Mr. Miller, as the chairman of the ACP committee in the State of Kentucky, did you not?

Mr. MILLER. Yes, sir.

Mr. WATTS. There is quite a bit of burley tobacco raised in Kentucky.

Mr. MILLER. 85 percent, I believe.

Mr. WATTS. Did you run into any problems in the enforcement end of this thing when you were serving in that capacity?

Mr. MILLER. Yes, sir; I did.

Mr. WATTS. Did you run into instances where proper enforcement was not in effect?

Mr. MILLER. I would say so; yes, sir.

Mr. WATTS. Didn't you in some instances even remove committees because you didn't think they were doing the type of job that Congress expected them to do, and the Department wanted them to do?

Mr. MILLER. Yes, sir; I did.

Mr. WATTS. Do you think much can be accomplished by a proper enforcement of the program?

Mr. MILLER. I do, yes, sir.

Mr. WATTS. Do you not think if we are going to call on the grower from year to year to take cuts that the Department and all the State agencies and the local agencies should see to it that those farmers who are living with the program are given every protection that can be possibly given them against a violation of the program?

Mr. MILLER. I think that is necessary for the success of it, yes, sir. Mr. WATTS. You think that your Department is in a position to see that that job is correctly done?

Mr. MILLER. Yes, sir.

Mr. WATTS. Let us go back to your first proposition, Mr. Miller, the reduction of the quota. I believe in response to a question from Senator Clements you stated that a further reduction would fall somewhere between the figures of 15 and 20 percent, if granted.

Mr. MILLER. Yes, sir.

Mr. WATTS. That is an additional added to the 10?

Mr. MILLER. Yes, sir.

Mr. WATTS. Which would make somewhere between 25 and 30 percent reduction.

Mr. MILLER. I would estimate that to be approximately correct. Mr. WATTS. You stated that in making your estimate last November when you proclaimed the quota that you underestimated the crop by 88 million pounds.

Mr. MILLER. That is correct, sir.

Mr. WATTS. What reduction in the quota would be required to compensate for the error in estimate of 88 million?

Mr. MILLER. Approximately 20.

Mr. WATTS. 20 percent more?

Mr. MILLER. Yes, sir.

Mr. WATTS. 20 percent more reduction would take care of the 88 million?

Mr. MILLER. That is correct, sir.

Mr. WATTS. Of course, we are not dealing in tobacco or I hope this committee is not, and the Department, on a 1 year basis. Provided you were permitted to make a further reduction of somewhere between 15 and 20 percent on this crop and provided we get a normal yield on the acreage that will be left, what is your prognostication with reference to a cut or status quo or increase for the 1956 crop in view of the circumstances you have and your normal expected yield on what acreage would be used under your proposed cut?

Mr. MILLER. Congressman Watts, sir, there are too many factors involved for me to be able to make an estimate.

Mr. WATTS. You might not be able to make an estimate, Mr. Miller, but I feel that being in possession of the facts you are, that you could tell this committee whether or not in your opinion it would be necessary to take further cut on the 1956 crop.

Mr. MILLER. Congressman Watts, it is my own personal opinion that a reduction of some proportion would be necessary on the 1956 crop, unless the disappearance picture changed.

Mr. WATTS. In other words, it is your personal opinion and on that I want to say I am in complete agreement with you that even though we cut this crop 25 or 30 percent this year, unless the picture of disappearance improves, and you know of nothing in the foreseeable future that is going to improve it

Mr. MILLER. No, sir.

Mr. WATTS. As a matter of fact, isn't it going down?

Mr. MILLER. No, sir; I would not say that. I see nothing in the immediate future that will improve the picture.

Mr. WATTS. In view of that, it is your further personal opinion that in spite of this cut that we will be faced with a rather sizable cut in 1956, if we hope to hold supply and demand in line with one another.

Mr. MILLER. I would not say it would be sizable, Congressman Watts. It is our hope that with this reduction, if we are allowed to take another look at the 1955 allotment, that the reduction in 1956 would be comparably minor.

Mr. WATTS. Let us add the two together. Is it your opinion that the two cuts together would somewhere in the neighborhood total, if we waited until next year, about 50 percent?

Mr. MILLER. I believe I stated a moment ago, Congressman Watts, that if we produced as much tobacco in proportion in 1955 that we did in 1954, and we were not able to reduce the allotment for 1955, it would necessitate a reduction in excess of anything heretofore invoked. At the present time I would be unable to estimate what that figure would be, but I would say that your estimate is not too far from wrong.

Mr. WATTS. Well, as a matter of fact, wouldn't my estimate be a little on the conservative side on the basis of the figures you have? Mr. MILLER. I would hesitate to comment on the other than to say you are approximately correct.

60286-55-2

Mr. WATTS. In other words, we might as well face up to the fact that in the course of the 2 years unless something drastic is done, we are faced with something like a 50 percent or in excess of 50 percent in the 2-year yield.

Mr. MILLER. I would say that would be approximately correct.

Mr. WATTS. Let us go back to your sixth proposition on which you made no specific recommendations, but I assume that the Department certainly recognized the problem that it poses or you certainly would not have mentioned it, and that is the minimum acreage.

Mr. MILLER. That is correct.

Mr. WATTS. The acreage this time is .7 of an acre as a minimum. If my memory serves me right, in the year 1947, I believe, did not the Department recommend that the minimum acreage provision be eliminated from the law?

Mr. MILLER. At that time, Congressman Watts, I do not recall whether they recommended a reduction in the minimum acreage provision or its elimination. I do know that in 1952 only July 2, a recommendation was made to reduce it to .5 instead of at that time .9.

Mr. WATTS. That was in 1952, at the time we did reduce it from 1 acre to .7.

Mr. MILLER. From .9 to .7.

Mr. WATTS. Prior to that our position was, if I remember, that the tobacco grower could not live with a protected acreage of 1 acre in view of the fact that the average acre base throughout the entire Burley Belt was 1.5 acres at that time, and with a protected minimum of 1 acre, the minimum was shoving the average right in the face.

As I understood your testimony a few minutes ago, or maybe I got this from some other place, the average tobacco base today is about 1.1 acres, is it not?

Mr. MILLER. About 1.2, yes, sir.

Mr. WATTS. And we are faced with the same proposition in regard to the minimum acreage crowding the average base that we were faced in 1952.

Mr. MILLER. I would say that is approximately correct. The benefits derived by that reduction have been taken up in the period that has expired since that time.

Mr. WATTS. I believe you testified before that 64 percent of the 'allotments were of .7 of an acre or below.

Mr. MILLER. That is correct.

Mr. WATTS. That would leave 36 percent ranging from .8 on up. Mr. MILLER. That is correct, sir.

Mr. WATTS. I have a compilation here that I would like to include in the record at this point and I would like to make a comment about it, and I would like the committee to hear this. In the .8 group there are 14,000 bases; in the .9 group there are 7,700 bases; in the 1 acre group, there are 7,300 bases; in the group from 1.1 acre to 1.5, there are 26,000 bases; and from 1.6 to 2.5 acres there are 28,000, and all the remaining bases from there on up only represent 35,000 bases. That is 35,000 out of 324,000, which represents about 10 percent that are above 2.5 acres.

Mr. MILLER. Yes, sir.

(The data referred to above are as follows:)

Burley tobacco acreage allotments-Estimated number of 1955 allotments by size

NOTE. It is estimated that 2,300 farms have allotments in excess of 10.0 acres. of the total.

This is 0 of 1 percent

Mr. WATTS. Now, with the burley people faced with something like a 50 percent cut--we will talk about that, whether that is an actual figure or not-what is going to be the effect of one-third of the growers taking a 50 percent cut and still maintaining the 0.7 minimum base?

Mr. MILLER. The Department has received a great deal of correspondence on this matter, Congressman Watts, protesting that the one-third of the producers have been taking the reduction.

Mr. WATTS. Is it a fact that the one-third have been taking the reductions heretofore?

Mr. MILLER. Approximately so, yes, sir. Of course, that is diminishing as the number reduced goes below 0.7. Incidentally, that would be rather drastically reduced in the medium future, and there will be a greater percentage of them placed within that protective cover of 0.7 or less.

Mr. WATTS. You already have imposed a 10 percent cut which would change the picture, and even that will reduce many of those bases above 0.7 into a lower category. Now, with a 50 percent cut, that looks like it is in the offing, are we not going to find ourselves with everybody in the protected group except about 35,000 bases?

Mr. MILLER. It could easily do so, yes, sir, if the reduction of 50 percent is necessary for this year. If that estimate of 50 percent is made necessary, it could easily be done.

Mr. WATTS. Do you think it is possible to maintain the program on a basis that the farmers will support if the 50 percent cut is required to be taken by one-third of the growers. This cut has to be announced prior to the voting date on the Department program.

Mr. MILLER. Yes, sir.

Mr. WATTS. What is your thought along that line?

Mr. MILLER. To predict a referendum of that type, I would not be in a position to do at the present time.

Mr. WATTS. You are a tobacco grower, aren't you?

Mr. MILLER. Yes, sir.

Mr. WATTS. And you associate with tobacco growers all the time? Mr. MILLER. Yes, sir.

Mr. WATTS. What is your personal view-not as the head of the Tobacco Branch-of the effect of an impact of that kind, with onethird of the bases taking a 50 percent cut and winding up with a situ