increased above the base acreage allotment by the acreage equivalent of the overage or underage for the preceding year. Similarly, the annual poundage allotment would be the annual acreage allotment multiplied by the yield per acre and, therefore, reflects the extent of the overage or underage for the preceding year.

Under this system, the base acreage allotment for each farm would be established based on the proclamation of the amount of the national marketing quota by the Secretary. The annual acreage allotment and the annual poundage allotment would, however, be established by the grower or growers on each farm. Therefore, increases in yields per acre on individual farms would not necessitate across-the-board reductions of acreage allotments. This system assumes that the yields per acre for the individual farms would be fixed one as to the other to the same extent that acreage allotments are fixed one farm as to another. Therefore, failure on any farm to produce the amount of the annual poundage allotment because of adverse weather or underplanting would increase the allotment for that farm for the next year. Conversely, the production of more than the annual poundage allotment would reduce the allotment for the next year. Accordingly, the incentive to plant more than the allotment with the expectation of destroying the excess would be largely eliminated. Also, the extraordinary incentive which is present under acreage controls only to maximize the yield per acre without regard to quality and other factors would seem to be eliminated.

FLUE-CURED TOBACCO: COMPARISON OF ACTUAL SUPPLY WITH COMPUTED RESERVE SUPPLY LEVEL

SUM OF 275% OF ANNUAL DOMESTIC CONSUMPTION AND 165% OF ANNUAL EXPORT QUANTITIES, PLUS 5% THEREOF (AVERAGED FOR CURRENT AND PRECEDING YEARS).

USDA TOBACCO DIVISION CSS MARCH 1957

685

Flue-cured tobacco: Comparison of actual supply with computed reserve supply level: This chart shows the actual supply level of flue-cured tobacco and a computed reserve to indicate a desired level of supply based on current rate of disappearance. In 1951-52, actual supplies of flue-cured tobacco were in balance with the desirable supply level. Since that time, total supply has continued to increase with significant increases in the last 2 years, even though allotted acreages under the marketing-quota program have been reduced in an effort to maintain supplies more in line with demand. In that same period, a decline in total use of flue-cured tobacco has caused some decline in the desirable supply level. Total supplies currently at a record 3,681 million pounds exceed the desirable supply level by 685 million pounds.

FLUE-CURED TOBACCO: YIELD PER ACRE
AVERAGES 1929-1953, ANNUAL 1954-56

Flue-cured tobacco: Yield per acre, averages 1929-53, annual 1954-56: This chart shows the steady and consistent increase in yields per acre for flue-cured tobacco. From 1929 to 1953, 5-year average yields show a definite upward trend for each period. For the past 2 years, 1955 and 1956, there has been a significant increase in annual yields, reaching an alltime record of 1,624 pounds per acre for the 1956 crop. A comparison of actual yields with 5-year average yields used for computing marketing quotas (5 years preceding the year in which quota is computed) shows that for 1955 and 1956 increases in actual yields resulted in 240 and 310 million pounds of tobacco, respectively, over and above that which would have been produced on the same acreage with "proclaimed quota yields." The 550 million pounds excess due to the extremely high yields represents 80 percent of the total surplus of flue-cured estimated to be 685 million pounds at the beginning of the 1956-57 marketing year.

Flue-cured tobacco: Assumed purchase requirements for filter and nonfilter cigarette manufacture: This chart illustrates the impact of filter cigarette production on the purchase requirements for leaf during the recent period when filter-tip cigarette consumption gained importance in the industry. The illustration is based on the assumption that (1) a 21-month stock level as of the beginning of the marketing year is the "target" stock level by manufacturers, (2) filter cigarettes utilize different grades and qualities of leaf than nonfilter cigarettes, and (3) the estimated total production of cigarettes in 1956-57 to be about the same quantity as in the previous year but projected as 35 percent filter and 65 percent non-filter. Assumed leaf purchases for nonfilter cigarettes which represented almost the total leaf requirement of 774 million pounds from the 1952-53 crop increased to a peak of 823 million pounds in 1953-54 and then rapidly decreased as filter cigarette consumption replaced the old-line nonfilter brands. From the 1956-57 crop, leaf purchase requirements for nonfilter cigarettes were assumed to have reached a low of only 390 million pounds, representing a reduction of 53 percent from the peak purchase requirements and are expected to decline still further during the 1957-58 marketing year to around 345 million pounds. Though there was about a 22-percent decline in total cigarette leaf purchase requirements from the peak year in 1953-54 to the 1956-57 crop, a much greater decline was experienced in requirements for nonfilter cigarettes which was accompanied by a significant increase in requirements for filter cigarettes.

Senator SCOTT. Our first witness will be Mr. Eugene Mugge of Madison County, representing the Florida Farm Bureau Tobacco Committee. Will you proceed, Mr. Mugge?

STATEMENT OF EUGENE MUGGE, REPRESENTING THE FLORIDA FARM BUREAU TOBACCO COMMITTEE, GAINESVILLE, FLA.

Mr. MUGGE. Senator Scott, distinguished guests, and friends: Before I begin here, I would like to ask you gentlemen if it is possible to try to neutralize your thinking in regards to this thing that we have before us and try to listen carefully for the next few minutes

and let us see the facts about this case from both sides and let us put them on the balance scale of justice here and see which side has the preponderance of evidence, and let us see just exactly what the facts are, and I believe if you listen carefully to me for the next few minutes, weighing things carefully, that each and every one will feel just exactly as I do right now.

First, I would like to ask, please, those of you who are Florida tobacco growers just raise your hands, let us see how many of you there are here.

(A showing of hands.)

All right, and I hope everyone is in the same boat as I am.

I am a tobacco grower and I have been for 22 years and I make my living on the farm, my living comes solely from the farm.

Now, first, Senator, I would like to read to you the statements that have been prepared by the Florida Farm Bureau Federation Tobacco Committee and after that is done I would like to have the privilege, please, sir, of making a few personal remarks.

The first statement that I have here does not pertain to the bill in question, it has to do with a slightly different matter but I would like to get that off my hands, if you don't mind.

Senator SCOTT. Go right ahead.

Mr. MUGGE. All right, sir; thank you.

(The letter from the Florida Farm Bureau Federation Tobacco Committee, referred to, is as follows:)

Hon. KERR SCOTT,

MARCH 23, 1957.

Chairman, Special Subcommittee of the United States Senate Committee on Agriculture and Forestry, Washington, D. C.

DEAR SENATOR SCOTT: We respectfully submit for the record the following statement relative to Senate bill No. 382:

"It is our sincere and earnest belief that flue-cured tobacco of the so-called neutral classification, classed LL by the USDA tobacco grading service, should not be supported at more than 50 percent of the support price on comparable tobacco which is not placed in this special class."

The above statement was approved unanimously by the 8 members of a 10man Florida Farm Bureau flue-cured tobacco committee attending a called meeting in Lake City, Fla., March 22, 1957.

Respectfully submitted.

FLORIDA FARM BUREAU FLUE-CURED TOBACCO COMMITTEE,
By T. K. MCCLANE, JR., Recording Secretary.

Senator HOLLAND. May I ask a question? Does that mean you approve of the action recently taken by the Secretary of Agriculture in reference to this particular class of flue-cured tobacco which has been found to be relatively undesirable?

Mr. MUGGE. I believe the Secretary of Agriculture specified a variety. We were a little afraid to attack the problem for the named variety. Naturally all of us know this particular statement, I believe we know would lead towards those varieties that have caused a lot of this confusion and we were afraid to use the word "variety," but actually it is in support of his thinking on that particular item. Senator HOLLAND. Thank you.

Mr. MUGGE. Gentlemen, I would like to say that this tobacco committee, if I have not already said it, is composed of tobacco growers all through the State of Florida and we met at Lake City, Fla., on March 22 of this year and we weighed this thing pretty carefully and what I am about to read to you now is what this committee came out

with. This does not necessarily mean it is the policy of the Florida Farm Bureau but it is the Florida Farm Bureau's tobacco committee's thinking.

If you will all bear with me I would like to read this to you. It is a little lengthy and I hope you won't get too bored.

Hon. KERR SCOTT,

MARCH 25, 1957.

Chairman, Subcommittee of the United States Senate Committee on Agriculture and Forestry, Washington, D. C.

DEAR SENATOR SCOTT: We, the flue-cured tobacco committee of the Florida Farm Bureau Federation wish to submit the attached statement in opposition to Senate bill No. 1219. We wish to emphasize that we are speaking only as a committee since there has not been time for us to determine the desires of the entire membership of Farm Bureau. However, on our committee are members from each of the major flue-cured tobacco-producing counties in Florida and we believe our sentiments are those of the majority of the flue-cured tobacco producers in our State.

Respectfully,

EUGENE MUGGE,

Member and Spokesman for the Committee.

I will pass that over to you gentlemen later.

The flue-cured tobacco committee of the Florida Farm Bureau Federation meeting at Lake City, Fla., March 22, 1957, with 8 members of a 10-man committee present, drafted and approved the following statement to be presented to a special subcommittee of the United States Senate Committee on Agriculture and Forestry of which the Honorable Kerr Scott of North Carolina is chairman :

STATEMENT

We, whose names appear at the close of this statement comprise 8 of the 10 members of the flue-cured tobacco committee of the Florida Farm Bureau Federation. We are all long-time growers of flue-cured tobacco, and represent our county farm bureau on this committee.

This statement says that we represent the county farm bureau. Well, we do in a sense. I do not know that we actually represent the entire thinking of each individual county farm bureau on this actual matter, but we are supposed to represent them in that particular.

We are vitally interested, and have been for several years, in finding an answer to the distressing problem of the surplus flue-cured tobacco. However, after careful study of the proposed acreage-poundage allotment control as suggested in Senate bill No. 1219, we have agreed that we very much oppose this proposed legislation for the following reasons:

Using the farm yield per acre established under the Soil Bank Act as the base yield is most unrealistic and discriminatory in that the farm yield cannot be lower than 80 percent of the county average or higher than 125 percent of that figure. This rewards those producing conisderably less than the county average and penalizes those who produce conisderably more than the county average. This is simply taking part of a high producers allotment and giving it to another. Low-producing farms are brought up above their actual average yields and high-producing farms are brought down as much as 500 and 600 pounds below their actual average yields. This can be shown to be true from the records of any flue-cured tobacco-producing county in Florida.

2. In some cases where farm work sheets have been combined and separated several times, a purely mythical, guessed-at figure has been used as the base yield under the Soil Bank Act.

3. Even if actual yields were used, certain farms would be severely penalized due to almost total destruction of one or more year's crop by hail, wind, barn, or even in some remote instances, packinghouse fire, etc.

Little or no incentive would be left to encourage farmers to grow better quality tobacco or to increase his yield thereby reducing unit cost. This is particularly true in many Florida counties where the county yield under the Soil Bank Act are established at such low levels. Where the best varities and the right cultural practices are used—