This bill simply provides that starting with this year's crop, darkfired Virginia type tobacco will be on its own support price and taken off burley support. Fire-cured tobacco is produced in the States of Virginia, Tennessee, and Kentucky. It is divided into three main types; type 21 produced exclusively in central Virginia in 13 counties; type 22 produced in Tennessee and Kentucky; and type 23 in western Kentucky. There is a small quantity of type 24 also produced in Kentucky but its acreage is so small that it is of little consequence in the problems confronting us. Each of the types have separate and distinct qualities and are used by different manufacturers for different purposes or certainly to produce different blends and aromas. Approximately 50 percent of type 21 tobacco is used domestically and approximately 50 percent is exported. Domestically is it used mainly for snuff with a small quantity used for wrapper on plug tobacco and a small quantity for the manufacture of Italian-type cigars. The snuff manufactured from type 21 tobacco is a different kind of snuff than is the snuff manufactured from other types of fire-cured tobacco. Type 21 exports go mainly to the Austrian Tobacco Monopoly for the manufacture of Virginia cigars used in Austria and Bavaria. Some type 21 tobacco goes to Norway and Sweden for chewing tobacco, pipe tobacco, and snuff. A small amount goes to Switzerland for the manufacture of cigars, pipe tobacco, and chewing tobacco; a small amount goes to Britain for cut smoking tobacco used by pipe smokers and Netherland imports some. In 1919, type 21 producers raised 64,000 acres of tobacco. In 1957 the allotment is only 8,756 acres. There are 7,343 allotments with an average of 1.19 acres per farm. In the past 4 years we have produced 40 million pounds of type 21 tobacco. During the same period we have disposed of 47.3 million pounds. In 1956 we produced 10.7 million pounds and disposed of 12.7 million pounds. One can readily understand that soon, if we continue the present trends, we will have no markets for Virginia fire-cured tobacco. The demand is greater than the production. No commodity can retain its markets if its production is continually less than the needs and demands of the trade. In the past 10 years type 22 fire-cured tobacco produced 455.5 million pounds and the disappearance was 425.7 million pounds. In 1956 type 22 produced 44.4 million pounds and disposed of only 36.5 million pounds. In the past 10 years type 23 fire-cured tobacco produced 171.5 million pounds and the disappearance was 166.4 million pounds. 1957 total allotment: Virginia fire-cured type 21, 8,756 acres; firecured type 22, 25,362.1 acres; fire-cured type 23, 11,037.52 acres. H. R. 5002 has two purposes: (1) to separate Virginia fire-cured tobacco type 21 from the other fire-cured tobaccos and make it a separate kind of tobacco so it will be treated on its own merits in the making of allotments and marketing quotas; and (2) under the present law fire-cured tobacco of all types is supported at "75 percent of the burley support price." Section 2 of the bill simply disassociates Virginia fire-cured tobacco from the burley support price and provides that Virginia fire-cured shall be supported on its own parity. Burley, fortunately for the burley tobacco growers, for the last year or two has been in a very fine position, as you know. Some of our people are afraid it has been going too fast and might eventually price dark-fired tobacco out of the market. The purpose of section 2 is simply saying that starting with the 1957 crop dark-fired tobacco, the Virginia type, will be supported at its own parity rather than tied to burley. That, in general, is the purpose of the bill. We will ask the growers and anybody else interested in the legislation to appear today and tomorrow to testify. It developed that some of the people in Kentucky and Tennessee probably had a conflict and it was not agreeable for them to be here today or tomorrow. We have agreed that they will be heard at a convenient date, later on we hope this month. If we cannot hear them this month, we will hear them at some convenient time. And I assume that the type 21 boys, some of them cannot be here today; if they want to come back, we will hear them. In other words, the purpose of the subcommittee is to hear anybody who wants to be heard at some convenient time. Mr. BASS. Mr. Chairman. Mr. ABBITT. Yes, sir; Mr. Bass. Mr. BASS. The people who want to be heard from Tennessee and Kentucky did contact you? Mr. ABBITT. Yes, sir. They want to be heard, and it was not convenient to be heard at this time. Mr. BASS. So you have an agreement with them that they could be heard later? Mr. ABBITT. They could be heard at some time agreeable to them and agreeable to the subcommittee. We are delighted to have Congressman Natcher, from Kentucky, here with us today. Congressman, we are glad to have you and know of your great interest in tobacco. Mr. NATCHER. Thank you, Mr. Chairman. Mr. ABBITT. We are glad to have Congressman Harrison, from Virginia, who is vitally interested in the problem, and Congressman Poff, from Virginia, who I know is just as interested as any of us, and Congressman Tuck. We are delighted to have you gentlemen here. What we would like to do, if it is agreeable, is to hear the witnesses who are from away, and then hear the Congressmen tomorrow, if that is agreeable, if any of the Congressmen want to wait until we have our second hearing to hear from them, it will be fine. In other words, we are going to get along fine, and we are going to try to do what is most convenient to all of our people. Mr. Tuck. We will be glad to appear any time it suits the convenience of your subcommittee. Mr. ABBITT. Let us say we will hear the Congressmen tomorrow, unless something develops in the meantime. Thank you very much. Does anybody else care to say anything before we have a witness? Mr. NATCHER. Mr. Chairman, as I understand it, the Members of Congress will be heard tomorrow? Mr. ABBITT. Or later if they prefer. Mr. NATCHER. With your permission, Mr. Chairman, I would like to defer my statement until the Representatives of Kentucky and Ten nessee appear, if that meets with the approval of you and the subcommittee. Mr. ABBITT. That is agreeable to me. I had that in mind when I made that statement. Our first witness is Mr. T. B. Hall, general manager of the Virginia STATEMENT OF THOMAS B. HALL, GENERAL MANAGER, VIRGINIA Mr. HALL. Mr. Chairman and members of the Agricultural Committee of the House of Representatives, my name is Thomas B. Hall of Farmville, Va. I am general manager of the Virginia Dark-Fired Tobacco Growers Marketing Association of Farmville, Va., and represent the producers of type 21, Virginia dark-fired tobacco. As you gentlemen know, type 21 is produced in approximately 14 counties in the Piedomont area of Virginia, a distance of possibly 300 to 500 miles from the production area of any other types, such as type 22 produced in eastern Tennessee and type 23 produced in Kentucky. It has caused us in Virginia much concern to be classed as a kind of tobacco with types 22 and 23, and we have continually requested the Department of Agriculture for the past 12 years, asking that this tobacco be separated and considered on its own merits. Types 22 and 23 cannot be substituted for type 21, the former types being very strong and heavily smoked in comparison to type 21. In support of H. R. 5002, I would like to offer the following figures as taken from this report of the Department of Agriculture. In 1955 the disappearance of type 21 was 12,700,000 pounds against a production of 10,700,000 pounds in 1956 which will reduce the stocks by 2 million pounds. Of the stocks on hand as reported, there is not as much as 1 year's production that can be purchased as most of this tobacco reported as stocks is tobacco held by manufacturers for aging and use in the manufacture of their products. A considerable quantity of the tobacco reported as available stock is tobacco which was purchased on orders from foreign manufacturers and a large percentage of this tobacco has been paid for and is being held in this country awaiting shipment instructions. In the beginning of the price support program, it was soon discovered that due to the excedeingly low price period no satisfactory base period could be found that would give the producer cost of production; therefore, methods were sought whereby some program could be worked that would give our producers the cost of production plus a reasonable profit for their labor. After careful consideration and in consultation with the extension agencies and the agricultural colleges, it was decided that it cost 75percent as much to produce an acre of type 21, 22, and 23 tobaccos as it did to produce an acre of burley tobacco. A resolution was offered and passed by both Houses of the Congress of the United States providing for the above basis of support. This program worked well until the average price of burley tobaccos reached such a high price that it raised the prices of our tobacco level to a point that foreign manufacturers have sought foreign grown 1 tobacco to blend with our tobacco. This, of course, has reduced the demand for our leaf. Our producers feel that this resolution should be passed in order that we may base our support program on the commodity being produced rather than based on a different type of tobacco which is no way similar in its characteristics or uses. We are informed by dealers that although there are undesirable grades being produced, they have been unable to supply the demand for foreign orders in the last 5 years. We believe that unless this legislation is passed that we will gradually lose our orders for these tobaccos and drive out of business the man who produces the product. This we cannot do for many of our producers are small farmers who depend entirely on tobacco for cash crop, and their acreage in the farm is too small to turn to livestock or any other type of farming. It now appears with a 10 percent reduction ordered by the Department of Agriculture for the 1957 crop and 15 to 20 percent placed in the soil bank that we could easily come up with a 25 to 30 percent cut in the 1957 crop, dropping the 1957 production 25 to 30 percent below the 1956 production of 10,700,000 pounds. This happening will cause all interested in any phase of this business to operate at a loss and will take approximately $1 million in cash out of the area. We feel that this can be helped by the passage of this legislation and will leave it to the producer to fight his own battles on the merits of his own product and its relationship to parity, and will not be controlled by other types of tobacco which are not interchangeable or the same. There are many factors which I have not attempted to point out, but feel sure that others to appear before this honorable body will call to your attention. As a representative of these fine people who produce type 21, Virginia fire-cured tobacco, I wish to thank you gentlemen for your patience and consideration, and to express to you my sincere appreciation for this opportunity to appear before you and present these facts and ideas on the necessity for the passage of this bill. I respectfully urge you to approve this bill, H. R. 5002, and support this bill when it comes to the floor of the House. I thank you, Mr. Chairman. Mr. ABBITT. Mr. Hall, we appreciate so much your fine statement. As I gather from what you said, the sum and substance of what you say is that you feel, along with the grower of dark-fired tobacco, Virginia type 21, in Virginia, that they want and desire to stand on their own merits to receive such acreage allotments that the needs and demands of the trade justify and to stand on their parity support price. Mr. HALL. I believe, Mr. Chairman, that I am in as close touch with the producers of dark-fired tobacco as many other one man, and I believe that 90 percent of our farmers, at least, would like to see this legislation, because I believe it will benefit their position and put them in a better position in the tobacco world. Mr. ABBITT. It will actually place them on their own merits. Mr. HALL. Absolutely. Many of them have felt all along that we should be on our own merits, but the position had been such that we just could not ask for it. Mr. ABBITT. Is there any question by the members of the subconmittee? Mr. MCMILLAN. Mr. Hall, I presume you grow this type of tobacco yourself? Mr. HALL. Yes, sir. Mr. MCMILLAN. You own a farm? Mr. HALL. I own a farm and have a small allotment. It was 2.7 acres last year. I think it is down to 2.4 now. Mr. MCMILLAN. You want to retain the 90 percent support parity that we have on regular tobacco is that right? Mr. HALL. We want 90 percent, but we want it on our own merits rather than 90 percent of 75 percent of burley. Mr. MOMILLAN. I see. Thank you. Mr. WATTS. Mr. Chairman, I would like to ask a few questions. Mr. ABBITT. Mr. Watts. Mr. WATTS. Mr. Hall, is it? Mr. HALL. Yes, sir. Mr. WATTS. Mr. Hall, all three of these types, 21, 22, and 23, are known as fire-cured tobacco, are they not? Mr. HALL. Yes, sir. Mr. WATTS. Dark-fired cured tobacco? Mr. HALL. That is my understanding, sir. Mr. WATTS. How long have they been tied together in this manner that you referred to? Mr. HALL. When the program was first inaugurated Mr. WATTS. 1938. Mr. HALL. Under the law in 1938. I think we had a program prior to that. It was under the old loan of RFC, Reconstruction Finance Corporation. Mr. WATTS. What is the essential difference between these types of tobacco? Mr. HALL. Well, I think, Mr. Watts, that that will be brought out in a few minutes here with some samples. Our tobacco is a milder tobacco, not smoked near as much as the tobacco in Tennessee and Kentucky. Mr. WATTS. Not smoked as much? Mr. HALL. No; I mean not fired as much in the barns. Mr. WATTS. I have been told if you took type 21 seed and planted it in type 22 territory or type 23 territory, or took type 23 seed and planted it in type 21 territory, or if you took type 21 seed and planted it in type 23 territory, you would produce type 23 tobacco. Mr. HALL. I would not be able to answer. Mr. WATTS. If you took type 21 seed and planted it in type 22 territory, you would produce type 22 tobacco, or if you took type 23 seed and planted it in type 21 area, you probably would produce type 21 tobacco, that the principal difference was in the soil condition, the manner in which it is handled and the manner in which it is fired. Mr. HALL. I would not be in a position to answer that, sir. Mr. WATTS. How much tobacco did you place under loan in 1955-56? Mr. HALL. I do not have those figures. Mr. Lancaster, one of my associates, probably has those figures. Mr. WATTS. Somebody else probably has them? |