"(b) Transfers under this section shall be subject to the following conditions: (1) no allotment or quota shall be transferred to a farm in another State; (2) no transfer of an allotment or quota from a farm subject to a mortgage or other lien shall be permitted unless the transfer is agreed to by the lienholders; (3) no sale of a farm allotment or quota shall be permitted if any sale of allotment or quota to the same farm has been made within the three immediately preceding crop years; and (4) no transfer of allotment or quota shall be effective until a record thereof is filed with the county committee of the county to which such transfer is made and such committee determines that the transfer complies with the provisions of this section.

"(c) The transfer of an allotment or quota shall have the effect of transferring also the acreage history and marketing quota attributable to such allotment or quota and if the transfer is made prior to the determination of the allotment or quota for any year the transfer shall include the right of the owner or operator to have an allotment or quota determined for the farm for such year: Provided, That in the case of a transfer by lease the amount of the allotment or quota shall be considered for purposes of determining allotments or quotas after the expiration of the lease to have been planted on the farm from which such allotment is transferred.

"(d) The land in the farm from which the entire tobacco allotment or quota has been transferred shall not be eligible for a new farm tobacco allotment or quota during the five years following the year in which such transfer is made.

"(e) The transfer of a portion of the farm allotment or quota which was established under minimum farm allotment or quota provisions for tobacco or which operates to bring the farm within the minimum farm allotment or quota provisions for tobacco shall cause the minimum farm allotment or quota to be reduced to an amount equal to the allotment or quota remaining on the farm after such transfer.

"(f) If the normal yield established by the county committee for the farm to which the allotment is transferred does not exceed the normal established by the county committee for the farm from which the allotment is transferred by more than 10 per centum, the transfer shall be approved acre for acre. If the normal yield for the farm to which the allotment is transferred exceeds the normal yield for the farm from which the allotment is transferred by more than 10 per centum, the county committee shall make a downward adjustment in the amount of the acreage allotment transferred by multiplying the normal yield established for the farm from which the allotment is transferred by the acreage being transferred and dividing the result by the normal yield established for the farm to which the allotment is transferred.

"(g) Any lease may be made for such term of years not to exceed five as the parties thereto agree, and on such other terms and conditions except as otherwise provided in this section as the parties thereto agree.

"(h) The lease of any part of a tobacco acreage allotment or acreage-poundage quota determined for a farm shall not affect the allotment or quota for the farm from which such allotment or quota is transferred or the farm to which it is transferred, except with respect to the crop year or years specified in the lease. The amount of the acreage allotment and acreage-poundage quota which is leased from a farm shall be considered for purposes of determining future allotments and quotas to have been planted to tobacco on the farm from which such allotment or quota is leased and the production pursuant to the lease shall not be taken into account in establishing allotments or quotas for subsequent years for the farm to which such allotment is leased. The lessor shall be considered to have been engaged in the production of tobacco for purposes of eligibility to vote in the referendum.

"(i) The Secretary shall prescribe regulations for the administration of this section.

"(j). If the sale or transfer occurs during a period in which the farm is covered by a conservation reserve contract, cropland conversion agreement, or other similar land utilization agreement the rates of payment provided for in the contract or agreement of the farm from which the transfer is made shall be subject to an appropriate adjustment, but no adjustment shall be made in the contract or agreement of the farm to which the transfer is made."

[H.R. 10671, 90th Cong., first sess.]

A BILL To amend the Agricultural Adjustment Act of 1938, as amended, to authorize the transfer of flue-cured tobacco acreage allotments and acreage-poundage quotas

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the Agricultural Adjustment Act of 1938, as amended, is amended by adding the following new section:

"318. (a) Notwithstanding any other provision of law, the Secretary, if he determines that it will not impair the effective operation of the flue-cured tobacco marketing quota or price-support program, (1) may permit the owner and operator of any farm for which a flue-cured tobacco acreage allotment or acreage-poundage quota is established under this Act to sell or lease all or any part or the right to all or any part of such allotment or quota to any other owner or operator of a farm for transfer to such farm; and (2) may permit the owner of a farm to transfer all or any part of such allotment or quota to any other farm owned or controlled by him.

"(b) Transfers under this section shall be subject to the following conditions: (1) no allotment or quota shall be transferred to a farm in another State; (2) no allotment or quota shall be transferred, except by lease, to a farm in another county; (3) a transfer of allotment or quota by lease may be made to a farm in another county only if that county is contiguous to the county from which the transfer is made; (4) no transfer of an allotment or quota from a farm subject to a mortgage or other lien shall be permitted unless the transfer is agreed to by the lienholders; (5) no sale of a farm allotment or quota from a farm shall be permitted if any sale of allotment or quota to the same farm has been made within the three immediately preceding crop years; and (6) no transfer of allotment or quota shall be effective until a record thereof is filed with the county committee of the county to which such transfer is made and such committee determines that the transfer complies with the provisions of this section.

"(c) The transfer of an allotment or quota shall have the effect of transferring also the acreage history and marketing quota attributable to such allotment or quota and if the trtnsfer is made prior to the determination of the allotment or quota for any year the transfer shall include the right of the owner or operator to have an allotment or quota determined for the farm for such year: Provided, That in the case of a transfer by lease the amount of the allotment or quota shall be considered for purposes of determining allotments or quotas after the expiration of the lease to have been planted on the farm from which such allotment is transferred.

"(d) The land in the farm from which the entire tobacco allotment or quota has been transferred shall not be eligible for a new farm tobacco allotment or quota during the five years following the year in which such transfer is made. "(e) Marketing quota, pound for pound, shall be the basis for transfer under an acreage-poundage program, with the acreage allotment for both farms being adjusted on the basis of the farm yields. When an acreage program rather than an acreage-poundage program is in effect, if the normal yield established by the county committee for the farm to which the allotment is transferred does not exceed the normal yield established by the county committee for the farm from which the allotment is transferred by more than 10 per centum, the transfer shall be approved acre for acre, and if the normal yield for the farm to which the allotment is transferred exceeds the normal yield for the farm from which the allotment is transferred by more than 10 per centum, the county committee shall make a downward adjustment in the amount of the acreage allotment transferred by multiplying the normal yield established for the farm from which the allotment is transferred by the acreage being transferred and dividing the result by the normal yield established for the farm to which the allotment is transferred.

"(f) Any lease may be made for such term of years not to exceed three as the parties thereto agree, and on such other terms and conditions except as otherwise provided in this section as the parties thereto agree.

"(g) The lease of any part of a flue-cured tobacco acreage allotment or acreagepoundage quota determined for a farm shall not affect the allotment or quota for the farm from which such allotment or quota is transferred or the farm to which it is transferred, except with respect to the crop year or years specified in the lease. The amount of the acreage allotment and acreage-poundage quota which is leased from a farm shall be considered for purposes of determining future allotments and quotas to have been planted to tobacco on the farm from which such allotment or quota is leased and the production pursuant to the lease shall not be taken

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into account in establishing allotments or quotas for subsequent years for the farm to which such allotment is leased. The lessor shall be considered to have been engaged in the production of tobacco for purposes of eligibility to vote in the referendum.

"(h) The total acreage alloted to any farm after the transfer of tobacco acreage allotment to the farm under the provisions of this section shall not exceed 50 per centum of the acreage of cropland in the farm.

"(i) If the sale or transfer occurs during a period in which the farm is covered by a conservation reserve contract, cropland conversion agreement, or other similar land utilization agreement the rates of payment provided for in the contract or agreement of the farm from which the transfer is made shall be subject to an appropriate adjustment, but no adjustment shall be made in the contract or agreement of the farm to which the transfer is made."

[H.R. 11883, 90th Cong., first sess.]

A BILL To amend the Agricultural Adjustment Act of 1938, as amended, to authorize the transfer of fluecured tobacco acreage allotments and acreage-poundage quotas

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That subsection (a) of section 318 of the Agricultural Adjustment Act of 1938, as amended, is amended to read as follows:

"(a) Notwithstanding any other provision of law, the Secretary, if he determines that it will not impair the effective operation of the tobacco marketing quota or price-support programs, (1) may permit the owner and operator of any farm for which a flue-cured, fire-cured, dark air-cured, or Virginia sun-cured tobacco acreage allotment or acreage-poundage quota is established under this Act to sell or lease all or any part or the right to all or any part of such allotment or quota to any other owner or operator of a farm for transfer to such farm; and (2) may permit the owner of a farm to transfer all or any part of such allotment or quota to any other farm owned or controlled by him."

SEC. 2. Subsection (e) of section 318 of the Agricultural Adjustment Act of 1938, as amended, is amended by changing the period at the end thereof to a colon and adding the following: "Provided, That, notwithstanding the provisions of section 316(c) and section 317(f) relating to lease and transfer of allotments and acreage-poundage quotas, whenever acreage-poundage quotas are in effect for any kind of tobacco as provided in section 317 of the Act (except in the case of burley and other kinds of tobacco not subject to section 316), the transfer shall be on a pound-for-pound basis and the acreage allotment for the transferee farm shall be increased by an amount determined by dividing the number of pounds transferred by the farm yield for the transferee farm, and the acreage allotment for the transferor farm shall be reduced by an amount determined by dividing the number of pounds transferred by the farm yield for the transferor farm."

SEC. 3. Subsection (g) of section 318 of the Agricultural Adjustment Act of 1938, as amended, is amended to read as follows:

"(g) Under the provisions of this section not more than ten acres of fire-cured, dark air-cured, or Virginia sun-cured tobacco allotment may be transferred to any farm and the total acreage of all kinds of tobacco allotted to any farm after transfer shall not exceed 50 per centum of acreage of cropland in the farm."

Hon. W. R. POAGE,

Chairman, Committee on Agriculture,
House of Representatives, Washington, D.C.

DEPARTMENT OF AGRICULTURE,
Washington, D.C., August 16, 1967.

DEAR MR. CHAIRMAN: This is in reply to your request for a report on H.R. 11883, a bill to amend the Agricultural Adjustment Act of 1938, as amended, to authorize the transfer of flue-cured tobacco acreage allotments and acreagepoundage quotas.

This Department recommends that the bill be passed.

Public Law 90-51, approved July 7, 1967, further amended the Agricultural Adjustment Act of 1938, as amended, by adding a new section 318, which authorizes leases for a period not to exceed five years and the sale and transfer of farm

acreage allotments and acreage-poundage quotas for fire-cured, dark air-cured, or Virginia sun-cured tobacco. H.R. 11883 amends this section to include fluecured tobacco along with these other types. It also changes slightly the general provisions regulating the lease and sales of all four of the tobaccos covered. Henceforth transfers would be on a pound-for-pound basis when acreage-poundage quotas are in effect, as they are now for flue-cured tobacco only. Flue-cured tobacco would be treated differently from the other three types covered only in one respect. Transfers of flue-cured tobacco would be subject to the 50 percent of cropland limitation applicable to the other three, but not to the 10-acre limitation also applicable to them.

In its report of April 17, 1967, the Department recommended that H.R. 6339, which would authorize the transfer of acreage allotments and acreage-poundage quotas for all kinds of tobacco, be passed. In testimony before the Subcommittee on Tobacco on April 18, 1967. in connection with bills (H.R. 6496 and H.R. 7256) authorizing the sale and transfer of farm acreage allotments and acreagepoundage quotas for fire-cured, dark air-cured, and Virginia sun-cured tobacco, the Department recommended that the words "Fire-cured, dark air-cured or Virginia sun-cured" be deleted so that the authority would apply to all kinds of tobacco.

This Department has, on a number of occasions, recommended legislation to authorize the transfer by lease or sale of acreage allotments, base acreages and quotas for all commodities. Although we still favor authority to lease and sell all commodity allotments, base acreages and quotas, we have no objection to such authority being considered on a commodity-by-commodity basis. For 1967, tobacco acreage allotment have been established for 543,930 farms. The total acreage allotted is 965-544 acres. This represents an average of 1.78 acres per farm. It is apparent that many of these allotments do not constitute efficient operating units. Transferability of allotments will reduce production costs and improve the incomes of small producers who desire to continue to produce by permitting them to acquire additional alotments without the heavy costs involved in buying additional land. At the same time, it will make it easier for those who do not wish to continue the production of the commodity to transfer their resources into other enterprises.

Enactment of H.R. 11883 would not require additional funds.

The Bureau of the Budget advises that there is no objection to the presentation of this report from the standpoint of the Administration's program.

Sincerely yours,

JOHN A. SCHNITTKER,
Acting Secretary.

[H.R. 11990, 90th Cong., first sess.]

A BILL To amend the marketing quota provisions of the Agricultural Adjustment Act of 1938, as amended Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the first sentence of section 313(g) of the Agricultural Adjustment Act of 1938, as amended, is amended to read as follows: "Notwithstanding any other provision of this section, the Secretary may convert the national marketing quota into a national acreage allotment by dividing the national marketing quota by the national average yield for the five years immediately preceding the year in which the national marketing quota is proclaimed and may apportion the national acreage allotment, less a reserve of not to exceed 1 per centum thereof for new farms, for making corrections in old farm acreage allotments, and for adjusting inequities in old farm acreage allotments, through the local committees among farms on the basis of the factors set forth in subsection (b), using past farm acreage and past farm acreage allotments for tobacco in lieu of past marketing of tobacco; and the Secretary, on the basis of the factors set forth in subsection (c) and the past tobacco experience of the farm operator, shall through the local committees allot that portion of the national acreage allotment reserved for new farms among farms on which no tobacco was produced or considered produced during the last five years.'

Mr. ABBITT. It is customary to hear the Department first, but there are two Members of the House here that have an important meeting they want to get to. Without objection, we would like to hear from those first. Mr. O'Neal has to make a quorum. We appre

ciate your being here. We know your vital interest, and we will be glad to hear from you at this time.

STATEMENT of Hon. MASTON O'NEAL, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF GEORGIA

Mr. O'NEAL. Thank you, Mr. Chairman. I did not have a statement to make. I did want to express my interest by my presence, and also I have handed you a statement of the Honorable Phil Campbell, our commissioner of agriculture, State of Georgia, which I would request be made a part of the record.

Mr. ABBITT. Without objection, that statement will be made a part of the record, and I herewith hand it to the clerk.

(The statement of Commissioner Campbell follows:)

STATEMENT OF PHIL CAMPBELL, COMMISSIONER OF AGRICULTURE, STATE OF

GEORGIA

With the increasing labor shortage on Georgia farms, and small tobacco allotments, Georgia tobacco farmers are facing crucial times.

The diminishing supply and increasing costs of farm labor is making mechanization a must in the production, harvesting, and curing of tobacco; small operators must increase the size of their operations if they are to survive as tobacco producers.

The capital investment necessary to mechanize makes it necessary for a producer to be able to obtain a larger acreage-poundage allotment to maintain an economical unit.

House Resolution 6382 provides a means whereby tobacco farmers may establish and maintain economical units.

Similar legislation for cotton has proven to be beneficial to all segments of the cotton industry and the entire economy in cotton producing areas.

Therefore, I respectfully request that the Tobacco Subcommittee recommend passage of House Resolution 6382 for the benefit of the tobacco industry in Georgia and other tobacco producing areas.

Thank you for the opportunity of being able to present my views in support of this resolution.

Mr. ABBITT. Now, Mr. Horace Kornegay, who is vitally interested in our tobacco programs, and always attended our meetings. I know he has an important meeting waiting for him. We appreciate your being here. We will be pleased to hear from you at this time. STATEMENT OF HON. HORACE R. KORNEGAY, A REPRESENTATIVE

IN CONGRESS FROM THE STATE OF NORTH CAROLINA Mr. KORNEGAY. Thank you very much, Mr. Chairman. First, I would like to express my appreciation to you, Mr. Chairman, and members of the subcommittee for calling and holding these hearings on a subject that is of great interest and I think vital to the health and prosperity of the Flue-cured tobacco farmers.

For the record, my name is Horace Kornegay and I am a Member of Congress representing the Sixth District of North Carolina. Now, as the chairman and members of the subcommittee know, I am the sponsor of legislation which would provide for the sale and transfer of tobacco acreage allotments. My bill, H.R. 6508, was introduced into the House of Representatives on March 2, 1967. The provisions of my bill, Mr. Chairman, as well as those of several other Members that have been introduced into the House and are now pending before this body, in my opinion, will prove beneficial to a vast number of farmers.