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ation where every base in the country with the exception of a very limited few are placed in a protected category?

Mr. MILLER. Let me say first that even though two-thirds of the producers would be protected and not affected by a further reduction of the proportion you mentioned, it is my personal opinion that the majority vote in the referendum would not be 96 percent.

Mr. WATTS. It is not your opinion that it would be 66% percent? Mr. MILLER. I wouldn't say that, no sir. I still wouldn't say that. Mr. WATTS. You would agree with me that it would be touch and go as to whether it was a two-thirds majority?

Mr. MILLER. It would be a rather close vote, I think.

Mr. WATTS. Isn't the question really that faces the burley situation that faces every grower, and not one type of grower against another type? Isn't it the whole industry that is involved irrespective of the amount that is grown?

Mr. MILLER. That is correct.

Mr. WATTS. Isn't it necessary in dealing with this problem to deal with that on the basis that each grower recognizes the full problem and the full implication of what might happen to the program and they are all going to have to cooperate if we hope to save the program? Mr. MILLER. That is correct, sir.

Mr. WATTS. Is your Department will to go to the field in the various tobacco-producing sections of our Burley Belt and by letters and other ways try to bring this matter forcibly to the attention of the producers so that we can get their reaction and so that the committee and the Department will know what the thinking of the growers is in regard to the matter?

Mr. MILLER. It would be most desirable, I should say, and we would welcome the opportunity, Mr. Watts.

Mr. WATTS. If this committee should think it advisable, then, I assume you would be willing to go to the field and take other action that you think necessary in tobacco channels to bring this critical situation to the attention of the growers with the idea of getting a reaction from them so that we in turn could attempt to reflect their thinking.

Mr. MILLER. Mr. Watts, of course, the Department would not attempt to influence the referendum, but we would present to the fullest the true situation as it exists, and as I attempted to present it here this morning.

Mr. WATTS. Doesn't it really boil itself down to a question of whether we save the minimum acreage or whether we save the program? We can't have both, can we?

Mr. MILLER. I would say that the grower will have to answer that question, sir.

Mr. WATTS. What is your opinion about it as a grower?

Mr. MILLER. I cannot feature a continued reduction in allotments if they become necessary, and they might become necessary if the poundage per acre rises to more and more coming within 0.7 or less.

Mr. WATTS. We have established, I would assume, by this table that I referred to that with the 50 percent cut in the offing over 2 years period that there is going to be just about 10 percent of the bases of burley tobacco left in the unprotected category whereas the other 90 percent would fall under the protection.

Mr. MILLER. Yes, sir.

Mr. WATTS. Would it not be a physical impossibility to maintain a program on that kind of basis? The Department does not take the position nor certainly anyone else that a fellow who happened to have a thousand-acre farm and who had historical background of producing tobacco is entitled to have the same base as the fellow with 2 acres of land. That has never been the Department's judgment, has it? Mr. MILLER. Not to my knowledge, no, sir.

Mr. WATTS. Not only with tobacco, but any other crop.

I have prolonged this thing, Mr. Chairman. I am very much interested and wrapped up in it, and I wanted to explore it fully. I yield

now.

The CHAIRMAN. I know of the gentleman's great interest in this matter. We appreciate your contribution. Is there anything else you wanted to add?

Mr. WATTS. No. I am very well satisfied that Mr. Miller and the Department will go to the field at the committee's suggestion and try to come up with some recommendations with regard to the minimum. How long would it take you to do that, Mr. Miller?

Mr. MILLER. I would say we could break our forces in half and have at least 10 days. We are ready to move Monday morning, sir, if it is agreeable. In other words, as soon as we can set the meetings up.

Mr. WATTS. I want to say for the record that I guess I represent as many small growers as anybody. I represent a number of the larger ones. But I think the growers generally understand that it is the whole program that is going down if something is not done. I am assuming from the statements that were made by President Eisenhower in the state of the Union message last year, and by the statements of Secretary Benson before this committee, and other places, and his statement before the Appropriations Committee this time, that the Department of Agriculture is anxious, ready, willing and able to lend all the assistance and help it can toward seeing to the success of this program.

Mr. MILLER. That is correct, sir.

Mr. WATTS. That is all, Mr. Chairman.

The CHAIRMAN. Thank you, Mr. Watts. The Chair would recognize Mr. Hoeven.

Mr. HOEVEN. I know very little about tobacco, but I am convinced from what I have heard this morning that the tobacco growers are in trouble. I am particularly interested in your recommendation No. 2. I understand in spite of the 50-percent penalties there are 8,000 excess acres of tobacco, is that correct?

Mr. MILLER. Approximately that, yes, sir.

Mr. HOEVEN. You say the Department does not favor eliminating quotas entirely as suggested at one point. Do you think that raising the penalty figure to 75 percent is going to do the job?

Mr. MILLER. With the elimination, sir, of the so-called credit for overplanting and the increase from 50 to 75 percent.

Mr. HOEVEN. Isn't it a matter of degree? You have 8,000 excess acres at 50 percent. You are still going to have 4,000 excess acres if you increase the penalty to 75 percent.

Mr. MILLER. I do not think it would go to that excess; no, sir. Having the two together, as we mentioned a moment ago to Congressman Watts, the two propositions go hand in hand. There is more incentive, I would say, to produce excess tobacco acreage for the benefits of credit

of overplanting than from the benefits of financial remuneration from the sale of the tobacco itself.

Mr. HOEVEN. You referred to the surplus problem as it involves the Commodity Credit Corporation. You use the term "disappearance.” Do you mean consumption?

Mr. MILLER. Within the immediate future. I would say within the 2-year period immediately ahead we see no opportunity for increased consumption of tobacco, especially on the domestic market side.

Mr. HOEVEN. Is that on the retail level?

Mr. MILLER. If it were domestic consumption, yes; it would have to be at the retail level.

Mr. HOEVEN. We have heard a great deal during the past year about the injurious effects of tobacco on health. Is that being reflected in your surplus problem?

Mr. MILLER. It might to some extent, sir, but not to the extent that we have been led to believe by the publicists attached to the program. There are other factors that are more important than that.

Mr. HOEVEN. Do you have any figures for the record?

Mr. MILLER. No, sir; we do not. Breaking the proposition down categorically as to the causes for the slack or the total?

Mr. HOEVEN. That is right.

Mr. MILLER. No; we are unable to tell that or even make an estimate. Mr. HOEVEN. Or whether any part of this slack is due to the information that is going out to the country that the use of tobacco is injurious to health.

Mr. MILLER. No, sir.

Mr. HOEVEN. Is that reflected at all in the surplus situation?

Mr. MILLER. It is to some extent; yes, sir. It is reflected in our problem.

Mr. HOEVEN. To what extent.

Mr. MILLER. I would not be able to tell except to say that the total consumption of cigarettes in the United States has decreased approximately 4.8 percent in the last 3 years.

Mr. HOEVEN. What is the cause of that?

Mr. MILLER. A little slackening off in consumer income is one. Mr. HOEVEN. Isn't consumer income at an all time high?

Mr. MILLER. It is stabilized, I would say, sir, a little bit. We are not in a period of as much tension as we have had heretofore in the immediate past 2 or 3 years. Certainly the years of the war when the very tension of the life itself was conducive to a heavier consumption of tobacco of all types. Also, we have made a study in the Department and found that the so-called smokers that were born during the depression or coming in now to that stage or age when they would normally begin smoking rather heavily, and there are few of those people, because of the slowing down of the birth rate during those years of 1932 to 1935.

Mr. ABBITT. Thank you. The Chair recognizes Mr. Bass from Tennessee.

Mr. BASS. I am of the middle Tennessee district where we raise quite a bit of all types of tobacco. Most of the questions that were on my mind have been asked, but I would like to go a little bit further into the overplanting with reference to the red card situation.

I believe Senator Clements asked the question that we never got answered. How many pounds of this 670 million pounds of tobacco that was produced in 1953 was red card tobacco?

Mr. MILLER. We have never broken that down, Mr. Bass, into poundage. We do not have the poundage on 1954 as yet. We will break it down eventually.

Mr. BASS. Do you have the number of acres of red card tobacco? Mr. MILLER. We have the acreage.

Mr. Bass. In comparison to the number of acres that were allotted to 1954, what percentage of the allotment is in overplanting?

Mr. MILLER. We had so-called red card production on 10,000 acres.
Mr. BASS. How many acres were allotted totally last year?
Mr. MILLER. 398,000; approximately 400,000.

Mr. BASS. And 10,000 acres of that tobacco was red card tobacco?
Mr. MILLER. Yes, sir.

Mr. BASS. The same situation probably existed in 1952 and 1953, did it not?

Mr. MILLER. No, sir; it did not, strange to say.

Mr. BASS. Then 1954 was an unusual year for red card tobacco.

Mr. MILLER. Yes, sir; it was. That is the first year that I pointed out a moment ago that we had 8,000 acres raised in excess of the quota for the first time in any type of tobacco.

Mr. BASS. Would you suggest that a great deal of the problem right now has been brought about through the red card tobacco?

Mr. MILLER. Yes, sir, definitely.

Mr. BASS. Let me ask you this question. I want this strictly for information. I am not trying to bring out a point here. Why do we have to continue red-card tobacco?

Mr. MILLER. We had the question posed a moment ago. I believe someone made the remark that we were probably operating within some sort of monopoly.

Mr. BASS. Any time we have a quota program we operate under one. Mr. MILLER. Not an absolute monopoly.

Mr. BASS. What is the difference of an absolute monopoly and a 95-percent monopoly? A monopoly is a monopoly. Even the cotton quota program is. The wheat quota program is not a monopoly, be cause we allow them a 15-acre elimination program. In tobacco we have an allotment.

Mr. MILLER. Yes, sir.

Mr. BASS. The people who sincerely try to follow this program are being run out of business because we have allowed over a period of a few years here a great amount of red-card tobacco. Don't you think that is partially true?

Mr. MILLER. There has been a great bit produced.

Mr. BASS. Do we have to have red-card tobacco?

Mr. MILLER. Let me say, sir, that the act itself provides certain escape valves that keep the program from being an absolute monopoly. Mr. BASS. If the escape becomes a penalty, then it is a pretty bad escape clause. If it is going to wreck the entire program, in other words.

Mr. MILLER. I would like to say, sir, that it is not a penalty of punishment.

Mr. BASS. I am talking about the fact that it punishes the real tobacco grower if we continue to allow the red-card people to overpro

duce and flood the market and we have to cut the legitimate grower year after year as a result of the operation of the red-card people. Mr. MILLER. He is certainly penalized by that tobacco produced in excess of those allotments.

Mr. BASS. There is no doubt about it.

Mr. MILLER. No, sir.

Mr. BASS. Why can't we eliminate red-card tobacco?

Mr. MILLER. You could eliminate part of the problems by making an absolute monopoly where a man could not produce any excess tobacco. It would eliminate part of it.

Mr. Bass. For next year you have allotted 478 million pounds.

Mr. MILLER. Yes, sir.

Mr. BASS. That is the recommendation of the Department.

Mr. MILLER. Yes, sir.

Mr. BASS. When the red-card tobacco goes on the floor, how many pounds will it be?

Mr. MILLER. If it operated as it did in 1954, the 478 could easily be 650. May I qualify that statement for the purposes of clarity? Not wholly from the production from excess, as we call red-card tobacco. We are getting a vast increase in poundage per acre.

Mr. BASS. I am going to get to that in just a minute. I want to finish with this red-card situation. Getting into a monopoly, occasionally we have to have monopolies if we protect the innocent. We have to have laws to take care of this. Wouldn't part of your problem be cured if we eliminated red-card tobacco on the market next year?

Mr. MILLER. Yes, sir; if we eliminated all red-card tobacco I suppose it would mitigate the circumstances.

Mr. BASS. How many people then who have been legitimately following the tobacco-quota program would we be hurting if we did that? Mr. MILLER. You would not be hurting any of those people.

Mr. Bass. In other words, all we would be doing is just confining the program to the people who are interested in carrying out the quota program and interested in the overall tobacco-producing situation. Mr. MILLER. I suppose you could say that; yes, sir.

Mr. BASS. Hasn't the red-card situation been sort of a premium to the man who increased the surplus supplies? It has been a premium to him. We then allowed him to come in as a regular member of the organization. That is sort of an initiation fee; is it not?

Mr. MILLER. He has been given the incentives of credit for overplanting for doing that, and a profit on the sale of the tobacco.

Mr. BASS. For the record I want this to be perfectly clear, that the Department is here to make recommendations. But I would want to go on record here and recommend legislation to eliminate for 1 year at least all red-card tobacco, and see how the program works out. Senator CLEMENTS. Would you permit me to ask one question along that line?

Mr. BASS. Yes, sir. I yield to the Senator from Kentucky. Senator CLEMENTS. Would the passage of legislation to carry out your recommendations 2 and 3 practically eliminate red-card tobacco? Mr. MILLER. Yes, sir; I am of the opinion it would.

Senator CLEMENTS. With all the incentive taken away he would have to raise his crop for 25 percent of the previous year's average market price without getting any credit for the following year.

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