Mr. BASS. I am talking about the 1954 quota. That was what you propose for 1955. If we go back a period of 5 years, and take that sort of an average, the more red cards we get, the more pyramiding we get. This increase that happened in 1949 or 1950, 1951 or 1952, as a result of red card tobacco, continues to pyramid, and goes on top of the quota.

I sincerely believe if we could incorporate some kind of program whereby we eliminate the overproduction of tobacco, I don't believe we would be faced with a 50-percent cut in 1956. I certainly don't want want to see it. We just absolutely have to prevent it.

From an economic standpoint we cannot go to these farmers in Tennessee in my district, and Kentucky in Mr. Chelf's district, that need the income that they are getting from the tobacco production, which is their lifeblood, and say, "we have so many millions of pounds of tobacco, and you can't raise but half of what you raised last year.' That is not going to send their children to school, and it is not going to buy food and clothing for the family. We just can't do something like

that.

We have to start a program and let the people who are really complying with the program raise enough tobacco to feed their families. They are not interested in how many millions of pounds we have in the warehouses and this thing and that and the other.

I sincerely believe in running the renegades out of the program and getting the program to where we can justify a cut if we have to have one, so that we can show that this was brought about by the under use of the tobacco. This overproduction that we have allowed to exist is the basis of the entire problem more than the decrease in disappear

ance.'

Don't you think we should work only from that angle more than anything else?

Mr. WRATHER. As I say, I think it would be very helpful to improve the compliance. I don't think we can get away from the fact that our yields per acre have increased tremendously. These growers that you are referring to are growing twice the poundage. In other words, you used the term cutting them 50 percent. If they were cut 50 percent they likely would still be producing as many pounds as they were 4 and 5 and 6 years ago.

Mr. BASS. Wouldn't that penalize the small man more than the big man?

Mr. WRATHER. That is getting into something else.

Mr. BASS. I would like to have that in the record.

Mr. WRATHER. I was going to add this. We are continually or our experimental station people are, coming out with new improved varieties which are resulting in higher yields per acre. We are having quite a bit of irrigation, as you know.

Mr. BASS. That is the reason I want to ask you this. The small man cannot afford that equipment. The man who has only 0.7 of an acre or 1 acre can hardly afford to buy the equipment necessary to double his production.

Mr. WRATHER. There is no point in me pursuing that. I think what the Congressman has said this morning is basic. What we have all

got to do is try to save the program. Even though it may be better to take his cut, he may still be better off than he will be if we go along and let the program die or go out because of over production. I don't think that is something that any of the growers can dismiss.

Mr. BASS. What is the average per pound per acre, Mr. Todd? Do you have that figure? The one that was produced last year.

Mr. TODD. The latest estimate that was made was as of December 1. The estimate then was 1,528 pounds per acre for the entire United States. That is obviously low, because the crop turned out about 88 million pounds more than that. If the acres don't change, that would be 1,660 pounds. That is for the United States as a whole.

Mr. Bass. It appears to me that what we should get is some kind of regulation this year where we are not going to over produce and come back with a big cut next year. I think we should have some regulation that will keep this excess tobacco off the market in 1955. If we continue to build in 1955 like we did in 1954, we will be faced with a problem, Mr. Miller.

Mr. MILLER. That is right.

Mr. BASS. It appears to me that we should enforce some sort of regulation to keep more tobacco off the market this year than we are going to have disappear. I don't know how we are going to do it. That is what I am trying to find out. I certainly don't want to face the situation where we fail where we have the opportunity this year of eliminating the excess tobacco coming on the market in 1955 and in 1956, we come back and say the only thing we can do is cut it 50 percent. That is not going to solve the problem at all. Let us try to stop it now before the plants get in the ground. I would hate to see a single pound of red card tobacco go on the market this year and next year come in here and cut the legitimate farmers who have been complying with this program.

I am not going to vote for it. I am not going to tell them that I am forcing them into a situation of starvation when we let others do this overproduction. I want to find how to stop it this year and not next year. This business of letting people overproduce and sell more pounds because he can afford more irrigation things and can raise twenty-three or twenty-four hundred pounds of tobacco on the acre, and the other farmer doesn't have the quota that will permit him the investment to raise that, he can only market fourteen or fifteen hundred pounds on his, is not fair.

So what is your recommendation this year outside of cutting them as you said a minute ago?

Mr. MILLER. Are you addressing me, Congressman Bass?

Mr. BASS. Yes. I would like to try to find out what we are going to do this year. When I left here after lunch and began to think what my farmers are going to do next year on a 50 percent cut, I was disturbed for the welfare of my farm people.

Mr. MILLER. The answer to that, Congressman Bass, we set forth in the five recommendations, really directing four specifically at that problem, that we read this morning, namely, that the act be amended to permit us to go back and look at the 1955 allotments this year, granting that it is late. The rate of penalty be increased from 50 to 75 percent for excess production, tied together with the elimination of the so-called credit for overplanting.

Mr. Bass. I remember your five recommendations. Let me ask you this question. You establish for the quota of 1955, 478 million pounds. That represents a 10 percent cut, in the 1954 production. Mr. MILLER. Yes, sir.

Mr. BASS. If we produce 478 million pounds in 1955, would we be faced with a cut in 1956?

Mr. MILLER. I would say we would, yes, sir.

Mr. BASS. Why did we set up 478 million pounds for this year? Mr. MILLER. Because the production of 1954 came in afterwards. Mr. BASS. That represented an increase of 88 million pounds. Mr. MILLER. Yes, sir.

Mr. Bass. I would not worry about 88 million pounds. We can carry over 88 million pounds, if we can get some kind of regulation. Let us forget about the 88 million pounds. We will say that is an accident, it should not have happened. But let us not let that accident happen this year. Let us get some regulations.

The Department says 478 million pounds is all the tobacco we can afford to market this year. Let us get a regulation out so as to see that only 478 million pounds of tobacco are marketed this year. How do you do it?

Mr. MILLER. I think to prohibit the marketing of the tobacco raised in excess of acreage allotment, but that would not control absolutely the 478 million. To put an absolute ceiling on the crop at 478 million pounds for 1955 production would require of necessity a poundage allotment.

Mr. BASS. If that is what it is going to require to keep a tobacco quota program, there is your answer, gentlemen.

Mr. ABBITT. Of, course, you have to get the farmers satisfied before we can set a program. We cannot set a program that is not going to satisfy them.

Mr. BASS. Yes. He has set a regulation of limiting it to 478 million, and all we have to do is insist that it be complied with. If you don't intend for that figure to be carried out, there is no reason to establish that figure, is there? All we need to do now is to insist that there is only 478 million pounds of tobacco marketed this year, and that is what the regulation calls for.

Mr. MILLER. I would think, Mr. Bass, it would probably require two acts. It would probably require an act of Congress to amend the act itself. I am not sure, but what then it would require a referendum of the growers before the planting.

Mr. BASS. You mean it would require a referendum for them to carry out the regulation? The 10-percent cut has already been accepted.

Mr. MILLER. Yes, sir.

Mr. BASS. The 10-percent cut amount to 478 million pounds.
Mr. MILLER. Yes, sir.

Mr. BASS. Would it require a referendum for the law to be enforced? Mr. MILLER. Mr. Bass, we have not set a requirement or absolute ceiling at 478 million pounds, but we are attempting to reduce production to that amount. I think that is where the difference is. What I am trying to say to you is that under the present law we have no authority to set an absolute ceiling of 478 million pounds on tobacco. Mr. BASS. In other words, this 478 million figure doesn't mean anything.

Mr. TODD. Let me answer that. There is a little technicality involved there. You are right. The 478 million really does not mean anything because the law now provides for the program to operate on an acreage basis. The national quota is in pounds. That is theoretically the amount of tobacco which is needed to be grown to keep supply in line with demand. We take that national quota and apportion among the States in pounds. Then the law provides that the Secretary may convert, and he has done it for the past 15 years, the State quota from pounds into acres. But the law specifically provides that that conversion will be made on the basis of the average yield per acre during the 5 years preceding the year in which the computation is made.

Mr. BASS. And we keep increasing every year, and that makes the average below

Mr. TODD. Last year the 1954 yield was not known. So the law provided using the 5 years 1949 through 1953. That 5-year average yield was 1,320 pounds per acre. When you divide that into 478 million pounds, you come out with 362,000 acres. There are about 7,000 acres more added on to maintain the present amendment, so it actually will be 369,000 acres.

Mr. BASS. How do you maintain the minimum?

Mr. TODD. We had a 10 percent cut. But you cannot cut one below 0.7 of an acre or 25 percent of his acreage, or the allotment he now has, whichever is the lowest. We have actually cut them below the minimum provided by the law.

Mr. BASS. That is above the 478 million.

Mr. TODD. Yes, that is in addition to computation. The big factor is the yield per acre that we will get in 1955. No one knows, of course. So far we have used the 5 years 1949-53, which was 1,320 pounds per acre. If we get 1,800 pounds per acre, we will have away too much tobacco.

Conversely, if we drop down and did not get but 1,000 ponds an acre, we will be in pretty good shape.

Mr. BASS. How long has it been since you did not cut back allotments?

Mr. TODD. We cut them 3 years in a row, 1953, 1954, and 1955.
Mr. BASS. There is only 1 or 2 years in the past 10.

Mr. TODD. I will be glad to run through them since 1940 if you like. 1955 we cut 10 percent; 1954, 8; 1953, 10; 1952, the same as 1951, and 1951 we had an 11 percent increase. We had a 15 percent reduction in 1950.

Mr. BASS. What I am trying to get at, and I am sure you realize, is that the farmers are getting tired, disgusted, and disgruntled, year after year after year, of being cut. I know whose fault it is. It is our fault. I don't accept responsibility for what has gone on before I got here, but I will have to accept some responsibility for it if we don't work out a program to keep from cutting every year. That is, as long as the present disappearance rate of tobacco continues.

Mr. TODD. I believe the thing is right at hand. I know it is not as easy as I say. Mr. Bass, you make it sound easy. It is not that easy. I realize it is not that easy. But at the same time what we need to do is to pass some kind of law, Congressman Watts, that we don't have the continued production of more tobacco than we can afford to have on the market.

Mr. WATTS. I would be delighted if the gentleman could come up with one.

Mr. BASS. I believe I can come up with it if you will get rid of your red-card tobacco, and put this on the poundage basis.

Senator SCHOEPPEL. I would like to ask one question.

Mr. BASS. I will stop there, Senator.

Senator SCHOEPPEL. That is quite all right. It is interesting to me, not knowing too much about this tobacco business. But this discussion seems to lend some validity to an approach through red-card tobacco. As an old cattleman and a wheat man in my country, I must say we have our problems, too. Would we need legislation to prevent loans being granted or made on red-card tobacco?

Mr. WRATHER. There is no loan on it now. It would be illegal to make them now.

Mr. BASS. Mr. Miller, since you don't want to get into a monopoly, would 90 percent be a monopoly?

Mr. MILLER. Congressman Bass, it is a matter of degree. I believe someone said this morning the higher the penalty and the more restrictive, the more near it becomes a monopoly, and the more near it is subjected to an attack as a monopoly from outside forces.

Mr. BASS. Do we now have any percent of national allotment for new farms?

Mr. MILLER. Yes.

Mr. BASS. What percent of the national allotment is that?

Mr. MILLER. Under the law we are allowed 212 percent for new farms, 211⁄2 percent for adjustment of inequities. We are at the present time using one half of 1 percent for new farms annually, and one half of 1 percent of the national allotment is reserved for adjustment. That is 1 percent of the total.

Mr. BASS. I believe we would be better off if we increased the amount for new farms. This business of getting in the program by over production, I am very much opposed to it.

Mr. MILLER. You understand, Congressman Bass, there is a limitation on that.

Mr. BASS. I understand that, too.

Mr. MILLER. Your percentage cannot be greater than that average of the community or county.

Mr. BASS. I understand that. How many acres, Mr. Todd, were used last year in Tennessee for new farms?

Mr. TODD. For new farms?

Mr. BASS. That is right.

Mr. TODD. Tennessee last year, 179 acres for new farms.
Mr. BASS. And new farm allotments?

Mr. TODD. Yes, sir.

Mr. BASS. You don't know how much was overplanted?

Mr. TODD. Yes, sir.

Mr. BASS. In order to secure allotments?

Mr. TODD. That is a different thing. The one you are getting at is how many acres were added on account of overplanting.

Mr. BASS. That is right. How many acres were added on account of overplanting?

Mr. TODD. I don't have that by States. In establishing our 1955 allotments we added 3,997 acres. Let us say 4,000 acres for the United States. We said the excess acres were 10,400.

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