increase of the soil bank price per pound for dark tobacco will place it in line with prices paid for other commodities. We should further remove the dollar limit per acre restriction. The time for placing dark tobacco in the soil bank should be extended to April 1, 1957, since it is admitted that the present limit of February 28 will not allow growers sufficient time to become familiar with the provisions of the law and to determine what they should do with reference to taking advantage of provisions of same.

It is necessary that the authority provided for under Public Law 540 for a payment of the fair amount for tobacco acreage be utilized immediately. Forty-five million dollars was set aside in the soil bank for tobacco for fiscal year 1957. Only a small portion of this amount has been consumed. It is submitted that the amount set aside for burley to be placed in the soil bank will not be consumed. The number of applications now pending in most counties requesting permission to place dark tobacco acreage in the soil bank consumes more than the allotted money set aside for dark tobacco. According to figures recently submitted to me, the number of applications now pending for dark tobacco seeking admission into the soil bank together with the 10-percent acreage reduction for dark fire-cured and 15percent acreage reduction for dark air-cured will make the total reduction for 1957 amount to some 35 percent. Certainly no such reduction should be grought about during the year 1957.

Since the introduction of House Joint Resolution 195 and H. R. 4690, the Secretary of Agriculture has removed the ceiling on the amount of a grower's tobacco acreage allotment which may be placed in the soil bank. The order provides that in counties with acreage allotments under 2,000 acres, growers will be permitted to place up to 100 percent of their allotment in the soil bank, and in the major producing counties with more than 2,000 acres of allotments, growers will be permitted to bank up to 100 percent of their allotments if the county and State agricultural stabilization and conservation committees certify that it will not injure the area's general economy.

This action was proper and now places the dark-tobacco farmer in a position where he can help correct any surplus problem with which we are now confronted.

I believe that our export market for dark tobacco will improve during the next few years. Public Law 690 of the 83d Congress transferred the agricultural attaché program from the State Department to the Department of Agriculture, and this transfer, in my opinion, will continue to facilitate trade with foreign areas as the direct result of the coordinated effort of our present worldwide system of agricultural attachés and with our commodity and country specialists working in full cooperation with our trade and Government contacts. Improvement in the staffing and general overall accomplishments of the Foreign Agricultural Service will bring about improvements in our export trade for dark tobacco and out other agricultural commodities.

Exports of unmanufactured tobacco from every source during fiscal year 1956 amounted to 578,000,000 pounds, export weight, and this was 25 percent larger than the amount exported during the previous year. In fact, this was the largest amount exported since the fiscal year of 1947. According to my information, the value of exports for this particular year amounted to $379 million. The

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factors involved which stimulated United States exports during the past fiscal year including the following: Sales for foreign currency as provided for under Public Law 480; low stocks abroad in relation to consumption of tobacco products; increasing world consumption of cigarettes manufactured from light tobaccos; high levels of economic activities abroad; expanded imports of foreign goods into the United States; and improved gold and dollar reserves position in a number of important foreign markets.

The domestic export market for dark tobacco shows a total of 23,125,000 pounds sold during the fiscal year 1955–56.

We will be confronted with a 35-percent reduction in dark tobacco in the year 1957 if the Secretary's acreage order is sustained and the applications now pending for admission into the soil bank are accepted.

I respectfully urge that this committee take the necessary action favorably reporting House Joint Resolution 195 restoring the acreage reduction for dark air-cured and dark fire-cured tobacco ordered by the Secretary of Agriculture on January 25. If the committee deems this action inadvisable then a favorable report should be given to H. R. 4690 which amends the Soil Bank Act to the extent that any and all acreage reductions in the 1957 allotment be automatically placed in the soil bank with the farmers being paid 50 percent of parity instead of the present rate of 371⁄21⁄2 percent of parity.

Again I want to thank you, Mr. Chairman, and the members of your committee for the opportunity to appear before you in support of House Joint Resolution 195 and H. R. 4690.

Mr. Chairman, I request permission to insert in the record a table showing the counties in the Second Congressional District of Kentucky participating in the 1956 bank acreage reserve program, together with the 1957 allotted acreage for dark air-cured and dark-fire cured tobacco.

Mr. ABBITT. Without objection the table will be made a part of the record.

(The table referred to follows:)

Counties in the Second Congressional District of Kentucky participating in the 1956 bank acreage reserve program together with the 1957 allotted acreage for dark aircured and dark fire-cured tobacco

Mr. NATCHER. I also ask permission, Mr. Chairman, to insert in the record a table showing the counties in the Second Congressional District of Kentucky, participating in the 1957 bank acreage reserve

program.

Mr. ABBITT. Without objection that table will also be made a part of the record.

(The table is as follows:)

Counties in the Second Congressional District of Kentucky participating in the 1957 bank acreage reserve program

Mr. NATCHER. Mr. Chairman, I also request permission to include in the record a resolution adopted at the Hopkinsville meeting of the executive committee of the Three Dark Tobacco Associations.

Mr. ABBITT. Without objection the resolution will be included in the record.

(The resolution referred to follows:)

RESOLUTIONS ADOPTED AT HOPKINSVILLE MEETING OF THE EXECUTIVE COMMITTEES OF THE THREE DARK TOBACCO ASSOCIATIONS, FEBRUARY 20, 1957

No. 1: Motion by Mr. Hoffman, seconded by Mr. Shanklin, that this group go on record as approving the soil bank as a suitable vehicle for reduction of the large surpluses of dark tobacco now on hand, since restrictions have now been officially lifted so that a grower may place all or any part of his dark tobacco in the soil bank.

No. 2: Motion by Mr. Maloney, seconded by Mr. Shanklin, that dark tobacco payments in the soil bank be increased to 50 percent of parity of the various types, in order to put tobacco in the same position as other commodities.

No. 3: Motion by Mr. Boyd, seconded by Mr. Meriweather, that the time for placing dark tobacco in the soil bank be extended to April 1, 1957, since it is considered that the present limit of February 28 will not allow growers sufficient time to become familiar with the provision of the law and to determine what they should do with reference to it.

No. 4: Motion by Mr. Boyd, seconded by Mr. Haddon that we recommend that the 10-percent acreage cut on dark fired tobacco and the 15-percent cut on dark air-cured tobacco be restored insofar as it affects base acreage and that this restored acreage be put in the soil bank and soil-bank payments made on same. Mr. NATCHER. Thank you, Mr. Chairman.

Mr. WATTS. Mr. Chairman, I compliment my colleague on the thoroughness with which he has gone into this matter. He has presented a splendid statement.

Mr. MCMILLAN. I, too, congratulate our colleague. Anything he wants from this committee I am in favor of giving it to him.

Mr. McINTIRE. Not coming from a tobacco area I shall look upon your statement as guidelines.

Mr. NATCHER. Thank you, gentlemen.

Mr. ABBITT. We are fortunate to have with us Mr. Roy Davis of my State. He is president of the Virginia Farm Bureau, is an outstanding tobacconist, and a splendid fellow. He knows the farm program, and I have the greatest confidence in him.

Mr. Davis, the committee will be pleased to hear from you at this time.

STATEMENT OF ROY B. DAVIS, JR., PRESIDENT OF THE VIRGINIA FARM BUREAU FEDERATION

Mr. DAVIS. Mr. Chairman, gentlemen of the committee, and Mrs. Blitch, I have a statement which I should like to make to the committee and I shall furnish members of the committee with a copy later.

At its annual convention in November 1956, the Virginia Farm Bureau Federation said, in part: We approve the intentions of the current soil-bank program. We recommend that the program be so administered as to accomplish the ends for which it was designed, that is, to reduce surpluses now in storage and to reduce production of these commodities now in surplus rather than as a relief measure. And further with respect to price supports: We well recognize that when the Government obligates itself to provide price supports for any commodity, the producers of that commodity have an equal obligation to make whatever adjustments in production that may be necessary to keep supplies and demand in proper balance.

Applying these policies to the current tobacco situation, we feel that tobacco producers are responsible for the reduction in production necessary to bring annual production into line with current demand. and that any reduction in excess of this should be considered eligible for consideration under the soil bank.

With regard to the flue-cured-tobacco reduction ordered for 1957 it would appear that a part of this reduction was necessary to reduce production to the current disappearance level and the remainder was for the purpose of surplus reduction.

Based on a 1956 production of 1,410 million pounds and an annual disappearance level of 1,250 to 1,275 million pounds, one-half of the reduction is necessary to reduce the 1957 crop to the current demand level and one-half for surplus reduction. Therefore, we feel that approximately 10 percent of the cut ordered in flue-cured tobacco might well be considered in line with the intent of the Soil Bank Act. Supply and demand data for other types of tobacco would reveal applicability of these policies to those types. Current production in burley is slightly below disappearance and a soil-bank base above current allotments would have to be established, if these producers are to be equitably treated. Most of the reduction ordered for darkfired tobacco, types 21 to 23, seems to be for surplus reduction, and is considered in line with the intent of the Soil Bank Act.

With reference to H. R. 769, which is the proposed amendment to Public Law 480, specifically to require the sale abroad at world prices of 150 million pounds of tobacco, the policy of the Virginia Farm Bureau Federation is that the tobacco programs be operated on a sound

basis and without loss to the taxpayers of the United States. This pledge was given Congress when the present program was written. To date the price-support program for the major types have been operated without loss. Unless sales of tobacco from stabilization cooperative stocks are handled under the pricing structure of these organizations losses will be incurred. If losses are incurred the tobacco programs will be discredited and proponents of these programs will have lost their major argument for their retention in their present form.

We do not feel it is necessary to go back on our word and thus invite a crippling revision of our programs. Our opposition to this amendment at this time does not preclude our favoring such action at some future time, if producers fail to cooperate in producing tobacco with high market demand.

Reports from producing areas indicate a strong intention on the part of producers to produce the kinds of tobacco needed by the market.

Although the tobacco situation, especially in flue cured, is critical we do not feel it is such that we must change it to an export subsidy program and run the risk of having the whole program drastically revised.

This statement does not in any way lessen our desire to dispose of surplus tobacco, and we urge the managements of the tobacco stabilization cooperatives to continue their intensive efforts to reduce stocks in any manner that will not discredit the price support programs. Mr. Chairman, that concludes my statement, and I will furnish copies of it to the committee.

Mr. ABBITT. We deeply appreciate your coming up here and we thank you for your very fine statement.

Mr. MCMILLAN. Mr. Davis, I have a copy of a letter addressed to Mr. Abbitt, from the general counsel of the R. J. Reynolds Tobacco Co., and this states that if we dispose of 130 million pounds of this so-called undesirable, well, the tobacco they don't want apparently, there would be no reason for the 20 percent acreage reduction recently placed on the farmer by the Secretary of Agriculture.

Mr. DAVIS. Yes.

Mr. MCMILLAN. There would not be any reason for any reduction. Now would you want to follow a policy just to take care of the stabilization bureau down at Raleigh?

Mr. DAVIS. No, sir, I do not; but I do not, certainly at this time, feel that we are in such a position that we must incur a loss. I think, and our feeling definitely is that when we entered the program, when our program was set up on the present basis of 90 percent support, the leaders in the tobacco industry gave Congress a pledge we would support a program that would not cost the taxpayer of the United States anything.

Mr. MCMILLAN. The farmers are not to blame and should not forever be called on to take all the loss.

Mr. DAVIS. The leaders of the tobacco-producing industry, yes. My predecessor was one of the men who testified as such. I feel, personally, that at this time, if we get ourselves into a position where we will incur a loss, that you gentlemen, who are very friendly to the tobacco program would have an awfully difficult time to retain it in its present form.