As you know, peanuts is one of the most important crops in the Southeastern United States.

I urge approval of H.R. 6383. Thank you.

(The following petition, dated June 6, 1967, signed by 34 persons from Cairo, Ga., may be found in the files of the committee:)

We, the following farmers and residents of Grady County, would like to go on record as supporting bill HR 6383. We would like our desires to be expressed at the hearing of June 22 and 23.

STATEMENT BY JOE S. SUGG, EXECUTIVE SECRETARY, NORTH CAROLINA
PEANUT GROWERS ASSOCIATION

I am Joe S. Sugg, Executive Secretary of the North Carolina Peanut Growers Association, with headquarters at 109 S.E. Main Street, Rocky Mount, North Carolina, with approximately 35,000 members located in 43 Eastern North Carolina counties having commercial peanut allotments.

We appreciate the opportunity of being able to present to this Committee our views on the most important subject of the lease, transfer and sale of peanut allotments.

The position of the North Carolina Peanut Growers Association with respect to this subject, as taken in 1964 and reaffirmed at our annual meeting in September, 1966 and reaffirmed by the Board of Directors in March, 1967, is that we favor the lease, transfer and sale of peanut allotments within the county boundaries. We vigorously oppose any transfer of allotments by any method across county or state lines. We feel that transfers within county lines would add to the flexibility of the peanut program, would give growers of peanuts and other commodities the privilege of consolidating their farming operations to the point of being more specialized and more efficient.

In determining the position of our association a mail survey was conducted in the state among the peanut growers, and the result of this survey was that the growers having allotments favored lease, transfer and sale within the county boundaries by a four to one majority. This is our position and we request a favorable report as we believe it is in the best interest of the peanut grower and the industry.

Respectfully submitted,

JOE S. SUGG, Executive Secretary.

Mr. O'NEAL. The Chair has a list of witnesses prepared by the clerk of the committee, Mrs. Gallagher, based upon requests made in advance of the meeting. We will abide by the order that Mrs. Gallagher is proposing.

We have some additional witnesses in the room who have come in this morning. We will be delighted to hear from them but I feel that it is only fair to keep the order prepared by the clerk of the committee in fairness to those who did make arrangements in advance. We hope and we expect to give everybody an opportunity to be heard this morning in the way that they would like to be heard.

The first witness on the list is Mr. Charles M. Cox, Assistant Deputy Administrator, State and County Operations, who is accompanied by Mr. J. E. Thigpen, who is Director of the Oils and Peanut Policy Staff, U.S. Department of Agriculture.

I might add that he is an old friend of mine, a constituent. I think that he has a farm in my district. His ancestral home is in my district. And it is with particular pride that I welcome Mr. Cox to the stand. You may proceed, Mr. Cox.

Mr. Cox. Thank you very much, Mr. Chairman, for your fine remarks. I am pleased to be here. I have with me this morning Mr. James Thigpen, who is Director of the Oils and Peanut Policy Staff. ¡Mr. O'NEAL. I see Mr. Thigpen. I want to express to you a welcome.

81-406-67- -2

STATEMENT OF CHARLES M. COX, ASSISTANT DEPUTY ADMINISTRATOR, STATE AND COUNTY OPERATIONS, AGRICULTURAL STABILIZATION AND CONSERVATION SERVICE; ACCOMPANIED BY J. E. THIGPEN, DIRECTOR, OILS AND PEANUT POLICY STAFF, U.S. DEPARTMENT OF AGRICULTURE

Mr. Cox. Mr. Chairman and members of the committee, I am Charles M. Cox, Assistant Deputy Administrator, State and County Operations, Agricultural Stabilization and Conservation Service, U.S. Department of Agriculture.

I am glad to appear before the committee to present the Department's views with respect to three bills; H.R. 2557, H.R. 6383, and H.R. 6930.

While there are some variations, the primary objective of these bills is to provide authority for transfer of peanut allotments by lease, sale, or by owner.

On April 27, 1967, the Department reported favorably on one of these bills, namely, H.R. 6383 by Mr. O'Neal. Of the three bills under consideration, we still favor H.R. 6383, although the bill that Congressman Hagan has introduced is substantially the same.

I would like to comment first on the provisions of H.R. 6383; then on certain provisions of the other two bills.

H.R. 6383 would authorize the Secretary to permit the transfer by sale or lease by owner of peanut acreage allotments provided he determines the effective operation of the program would not be impaired.

No transfer of allotment would be permitted (a) outside the State, (b) from a farm subject to a mortgage or other lien, unless agreed to by the lienholder, (c) from a farm to which a peanut allotment was transferred during the 3 immediately preceding years, or (d) until a record of the transfer had been filed with the county committee of the county to which transferred and such committee determined that it complied with provisions of law.

The bill, H.R. 6383, does not provide any restriction on transfers across county lines. Based upon our experience with the transfer of cotton allotments, we think it wise to restrict transfers by lease or sale to other farms within the county, except when the producers approve transfers outside the county by voting in a referendum. If H.R. 6383 is enacted, we would favor adding provision for such a referendum.

The Secretary is directed by H.R. 6383 to prescribe regulations to implement the legislation, including provisions for limiting the size of the resulting allotment on the receiving farm. We assume this would permit the Secretary to provide for adjustment of acreage transferred when the productivity of the receiving farm is substantially higher than that of the farm from which the allotment is transferred.

The Department has, on several occasions, recommended legislation to authorize the transfer, by lease or sale, of acreage allotments, base acreages and quotas for all commodities. The most recent recommendation was submitted April 17, 1967. The Department reached this position only after extensive study of the pros and cons of the question. We are convinced that transfer authority will permit the establishment of more economic-sized units of production, and will result in more efficient production. Small but capable and efficient farmers could

increase their crop acreage without incurring the heavy costs of buying additional and often unneeded land. Those who wish to discontinue growing the allotment crop could transfer their resources to other endeavors. While we still favor action to authorize lease and sale of all commodity allotments, base acreages and quotas, we have no objection to the authorization on a commodity-by-commodity basis.

Now, to the other bills, H.R. 2557 and H.R. 6930.

H.R. 2557 contains two provisions which we believe could best be covered by the Secretary in his regulations. One of these provisions specifies that the resulting allotment on the receiving farm cannot exceed the 1966 farm allotment by more than 100 acres. This leaves no flexibility to adjust through the years as changes in farming practices come about. The other provision prescribes June 1 through December 31 as the period for filing a record of any transfer with the county committee. Again we think it would be wise to leave this for determination by the Secretary, so that adjustments could be readily made when circumstances clearly indicate a need for change.

The provisions of H.R. 6930, as I have already indicated, are substantially the same as those of H.R. 6383, the bill on which the Department has already reported favorably. Like H.R. 6383, this bill does not restrict transfers across county lines. As stated previously, we think it wise to include a provision calling for producer approval by referendum before permitting transfers outside the county.

Mr. Chairman, I appreciate the opportunity of appearing before this committee.

I shall be glad to respond to any questions.

Thank you.

Mr. O'NEAL. Thank you, Mr. Cox. I wonder if you have any contribution, Mr. Thigpen, that you would like to make at this point. Mr. THIGPEN. Not at this time, Mr. Chairman.

Mr. O'NEAL. Thank you.

Mr. Cox, as I understand it, the Department favors the legislation, but the principal suggestion is that, inasmuch as the bill does not call for the crossing of county lines, you recommend that it also provide for a referendum, as in the cotton situation.

Mr. Cox. This is correct.

Mr. O'NEAL. Is cotton the only commodity that provides for the lease and sale across county lines?

Mr. Cox. We have limited authority, Mr. Chairman, to transfer producer rice allotments in States where alloments are determined on a producer basis. This authority is confined primarily to situations where a producer is going out of business completely. Otherwise the transfer is limited to the immediate members of the family.

We also have some limited authority for the lease of tobacco allotments, but not for sale.

Mr. O'NEAL. Not sale?

Mr. Cox. No, sir.

Mr. O'NEAL. Would you care to comment on how the cotton provision is working?

Mr. Cox. Mr. Chairman, notwithstanding some misgivings on the part of many people with regard to how the authorization for the transfer and sale of cotton allotments might work out, we have been extremely pleased with the ease with which we have been able to ad

minister this authorization, and with the ready acceptance of it by the farmers involved in it. We believe it is working extremely well.

Mr. O'NEAL. I was just wondering if you you had any statistics that would show how many counties are approving the referendum, and how many are opposing it.

Mr. Cox. I will be glad to supply this for the record. My recollection is that about one-half of them have approved the transfer across county lines.

Mr. O'NEAL. Of course, it takes a two-thirds vote for approval. Mr. Cox. This is right.

Mr. O'NEAL. So that many of them are approving it by a majority vote, which is not sufficient to bring it about.

Mr. Cox. This is correct, Mr. Chairman.

Mr. O'NEAL. If you would provide that information for us-that is, provide us with those statistics-I think that it would add something to the record and would be of great interest to us.

Mr. Cox. We will be delighed to do so.

(The information follows:)

Upland cotton: Number of counties voting to permit transfers of farm allotments by sale or lease across county lines

1 Benton County voted in November 1965 referendum; does not have a 1967 allotment.

2 Cumberland County voted in November 1965 referendum; does not have a 1967 allotment.

Mr. O'NEAL. Are there any questions from committee members?
Mr. Purcell.

Mr. PURCELL. Mr. Cox, I want to say that I think that your reason is a good one, that the sale or transfer of these allotments should be limited to the county lines unless the county approves it by referendum which is based primarily on a concern of disintegrating farm communities in the counties. As you realize, if there is a spreading out of these communities too much it will tend to take away from many of them the last vestige of hope of maintaining a sound agricultural

community. At least in my district it would have that effect. Some of the areas are primarily peanut-growing areas now and they really have that as about the last cash crop they are producing.

And my view is from what I have heard about it-I will agree with you-that if anything at all, to a lot of the older people in the county, it would give an additional reason to them to get the price of their allotment on top of the price of their land in trying to get out of the business. And in Texas this would be a real drastic action. I am sayingno more than to agree with you, but I believe that it will prevent some of that, which you have in mind.

Mr. Cox. We would be inclined to agree wholeheartedly with what you have said. It has been our experience in observing the operations of the cotton law that in those counties where it is evident that producers want to continue the production of cotton, the farmers who wish to sell or to lease find a ready market for their allotments. In those counties where farmers are going out of cotton production, it has been evident for a long time that the farmers are inclined to vote in the referendum to permit sale and lease across county lines in order that the farmers who have allotments for sale can find a decent price for the allotments that they would like to dispose of.

Mr. PURCELL. Thank you. That is all.

Mr. O'NEAL. Any questions, Mr. Hansen?

Mr. HANSEN. Mr. Cox, you state on page 2 of your testimony, "While we still favor action to authorize lease and sale of all commodity allotments, base acreages, and quotas, we have no objection to the authorization on a commodity-by-commodity basis."

Is this the problem of H.R. 6383?

Mr. Cox. This is correct.

Mr. HANSEN. You would still then like to have your "druthers" but you will go along with this type of approach?

Mr. Cox. Yes. We have taken this position previously.

Mr. HANSEN. Thank you. And on the last page of your statement we note you state that "One of the provisions specifies that the resulting allotment on the receiving farm cannot exceed the 1966 farm allotment by more than 100 acres which leaves no flexibility to adjust through the years as changes in farming practices come about." Would you like to elaborate on that a bit?

Mr. Cox. I believe that the statement speaks for itself. All we are saying is that this is permanent legislation, and we believe that matters of this kind might be left to the discretion of the Secretary, so that we could regularly make changes based on experience.

Mr. HANSEN. Your objection is to the limitation of 100 acres?
Mr. Cox. Yes.

Mr. HANSEN. And this would also apply to the next statement in regard to the States specified where you say, "Again we think it would be wise to leave this for determination by the Secretary so that adjustments could be readily made when circumstances clearly indicate a need for change"?

Mr. Cox. This is correct, sir.

Mr. HANSEN. Is there any real reason why this could not be set by

law?

Mr Cov. These are not insuperable objections, Mr. Congressman. These are our suggestions. We believe that they would provide more