I want to make one point here that I think is pertinent to your previous question about feed and that is, as I understand this program, it has a $5 certificate requirement on brewers rice after it is milled. And we assume that would be rebated when it was exported. If this was the case, then the rice could go out for export at the $5 rebate. And in addition, it would earn about $3 export brewers. So it would have $8.50 value.

Mr. JONES of Missouri. Thank you. Mr. Gathings.

Mr. GATHINGS. I just want to thank you for bringing these fine statements to us.

That is all.

Mr. JONES of Missouri. Mr. Findley.

Mr. FINDLEY. Mr. Chairman, I would like to clarify, if I can, what the cost of the certificate is expected to be. In the material on page 4 of Mr. Coors' statement he states that the certificate cost would be about $4 a hundredweight. Is that correct?

Mr. COORS. Mr. Findley, that is what we have been given to understand by our suppliers; yes, sir.

Mr. FINDLEY. Do you presently have access to rice grown outside of the United States-you cannot buy it because of import quotas; am I correct there?

Mr. COORS. No, you are not correct. There is quite a bit of rice actually imported into this country. There is a provision whereby if this rice is granulated it may be brought in at a duty that enables a brewery to buy that rice.

Mr. WELISCH. I believe the duty on that is approximately 32 cents a hundredweight for the import duty.

Mr. FINDLEY. It would be a lot less than the certificate cost that you have referred to. Have you estimated what it would cost you per hundredweight to put foreign-produced rice into your plant in Colorado?

Mr. COORS. Under title III our understanding is that the certificates would have to be purchased on rice imported into this country.

Mr. FINDLEY. Assuming that you did not have to buy the certificates, what would be the cost?

Mr. COORS. About $5.50 plus, approximately, 80 cents per hundredweight freight from a port of debarkation, which would be San Francisco.

Mr. FINDLEY. That is about what you are paying for the domestic rice now?

Mr. COORS. That is right, sir, that is right.

Mr. FINDLEY. Thank you. That is all.
Mr. JONES of Missouri. Mr. O'Neal.

Mr. O'NEAL. No questions.

Mr. JONES of Missouri. Mr. Belcher.

Mr. BELCHER. My mother was born in 1873 in Golden, Colo. I just wanted to make that comment. That is all.

Mr. JONES of Missouri. Mr. Stalbaum.

Mr. STALBAUM. No questions.

Mr. JONES of Missouri. Mr. Walker.

Mr. WALKER. No questions.

Mr. JONES of Missouri. Mr. Bandstra.

Mr. BANDSTRA. No questions.

Mr. JONES of Missouri. We want to thank you for appearing here this morning.

Mr. HESTER. Thank you, Mr. Chairman.

Mr. JONES of Missouri. We will next hear from the Rice Millers Association, Mr. Broussard, Mr. Goff, Mr. Holland, Mr. Dore, and Mr. Gaines.

Mr. GAINES. The way you talked we were on the list to appear on Thursday.

Mr. JONES of Missouri. These witnesses will appear Thursday morning then.

We will next hear from Mr. Alderson, secretary-treasurer of the Producers Rice Mill, Inc., Stuttgart, Ark.

STATEMENT OF H. M. ALDERSON, SECRETARY-TREASURER,

PRODUCERS RICE MILL, INC., STUTTGART, ARK.

Mr. ALDERSON. Mr. Chairman and members of the subcommittee, I am H. M. Alderson, and I am secretary-treasurer of the Producers Rice Mill, Inc., Stuttgart, Ark. The Producers Rice Mill is a wholly owned cooperative drying, milling, and marketing association, owned and operated by over 500 rice farmers who live in the Grand Prairie region of Arkansas. We are currently handling 10 percent of the Arkansas rice crop.

I am a technical adviser-I believe that is the term-to the National Advisory Rice Committee. And now before someone in the background throws a rock at me, I want to hastily add that this proposed program was written without the dubious benefit of my advice.

One of the penalties of appearing late in a hearing of this kind is that everything that you had lined up to say had been said many, many times. And not to belabor things that have already been worn out I would like to abandon the prepared statement that I have and make a few quick personal observations that I think are the crucial points in this proposed program.

I have been in the rice business for 47 years. At no point in all of those years have I ever seen the rice industry, growers, miller, dealers, and everyone else solidly united for anything, either for or against. We have always been split off and have splinter groups. I can explain that this to me is a miracle, because this bill has literally scared everybody to death.

In my opinion it is going to be a deathblow to the rice industry. I believe that this bill will seriously affect the domestic consumption of rice, because I do not believe that you can put an artificial price increase of, approximately, 40 percent on the domestic consumers of rice and keep them from going to competitive products. They can eat beans and cornbread and many other things. There are many other starchy foods that rice is in competition with. And this is particularly true when you realize that rice is, by and large, consumed by the poor people in the United States. You show me the poorest man in the United States and I will nearly guarantee you that he is eating more rice than any other man in the United States.

The domestic consumption figures by States are very misleading. I think that you will find that South Carolina, for instance, the per capita consumption in South Carolina, I believe, is 27 pounds per

person. But that does not really mean that everybody in South Carolina eats 27 pounds of rice. There are people in South Carolina who eat 150 pounds of rice. And if you will go around the United States around the perimeter, 200 miles inland, that is where it is. I do not think that you can raise the price of rice as much as this bill does without losing a great deal of the domestic consumption of rice. And no one knows really how much.

We are, certainly, going to lose the cereal business, not 100 percent, but most of it. We could not expect people who are manufacturing cereals to keep on promoting the use of rice, spending money to advertise rice when they have competitive products they can buy much cheaper, such as corn and oats and wheat.

We will lose a part of that business-maybe all of it.

We are going to lose all of the brewers business and I will make that as a positive statement, but for a different reason that you heard the brewers testify to. They are talking about the price and what they may not realize is that once rice has its artificial price support on the poor people in the United States, they are going to start eating broken rice. It has happened before. Mills have packages that they use to package broken rice in the wartime, when it was difficult to get. When this price goes up on the whole grain, what we call the whole grain or the table grade rice, then you will get a demand and I will from my customers to sell chipped and broken rice. It will be cheaper.

Over one half of the brewers supplies is made up of screenings and second heads. And when this bill is effected the whole grain rice is going to be so high in price that gradually that supply will come out of the brewers side. I think it will rapidly force the brewers, that and the price together, force them to abandon all attempts to stay in the rice business.

We will lose, roughly, 4 million pockets there, and up to 3 million pockets in the cannery trade. And how much domestically nobody knows. I think we are faced with a certainty of a 6 to 9 million pocket loss of business.

Once that business is lost it will be very difficult to ever get it back. We will never recover the brewers business.

And as we lose that business it will throw more and more rice on the export side where we will have to export it with the Government subsidy and it will increase the cost of the rice program.

This is going to be a very difficult measure to administer. As a starter you will have to go back to the farm and try to find out how many acres the farmer grew for the last 5 years. He does not have adequate records. And your past experience in trying to determine that has taught farmers that they had not better tell the truth about it. Mr. JONES of Missouri. Pardon. Do you not think that they, certainly, the Department, have a record of that?

Mr. ALDERSON. They have acres, sure, but not bushels. You have to establish a special quota under this plan.

Mr. JONES of Missouri. That is right.

Mr. ALDERSON. History has told farmers that if they told the truth about their production-a certain percent of them do not tell the truth-when all of the figures are compiled, they come up to a total and they realize that it is too much, that somebody is lying, so that they give a percentage which is cut clear across the board, and the man who told the truth takes the cut. You will have that.

On the processing side you have got a very, very difficult situation. You are going to have to be concerned with what rice weight, dry rice weight, milling yields, and a lot of other things that lend themselves to violations.

Again, past history has proven in other programs which were not nearly as complicated as this that a few unscrupulous processors will jump at the chance to cheat the Government and take advantage of it to get a competitive advantage on their competitors. It is full of loopholes.

One more frightening thing to me about this program is that the bill gives the Secretary of Agriculture an unprecedented control over an industry. I think he is getting privileges and authority. That should still be in the hands of Congress. It should not be in any one man's hands. He has a rice industry in the palm of his hand.

The old law had minimums that he could not go below. This law has a very minimum minimum. At the worst he could give the rice farmer a loan, 65 percent of parity on his domestic part of the business which they say today is 40 percent. If all of these things happen that are going to happen or I feel could happen, it could rapidly go down to 30, 35 percent, or some other percentage. And that loan, if we went to the minimum, would break every farmer in the United States very quickly.

I know what we are talking about. I hear it talked about more than any other thing. And that is that the maximum that a farmer could get under this program. My experience would teach me-I would hope for the maximum-but I am prepared to live with minimums.

The only reason that has ever been offered us to open this Pandora's box of trouble is the cost of the rice program. I do not think that the cost as exhibited by the Department of Agriculture will stand a close scrutiny. I have here a balance sheet of the Commodity Credit Corporation, taken from one of their publications, that says that the rice industry is costing the Department $179.7 million. And $123.8 million of that cost is the domestic donation program.

Now when you come down to Public Law 480, it is not a very detailed program, so I have to lump it off as $125.8 million. That is a total of $149.6 million that I do not believe should be charged to the rice industry.

Certainly, the domestic giveaway program to the poor people of the United States should not be charged to the rice industry.

On the Public Law 480 side, I have the personal belief that Congress should know this-I think that we are committed all over the world that we are going to help India and Okinawa and a lot of other poor countries to supplement their diet in any way that we can. Those countries want rice. They do not want wheat. They do not want corn. And if we do not give them our rice we are going to give them money, and they will go to Burma or somewhere else and buy rice.

I do not think in equity that either of these costs should be charged to the rice industry. And if you remove these costs, then the rice industry is costing the Government $30 million.

There are some questionable items that I have left in there, such as transportation expense-I do not know what that means.

I do not want to argue with the testimony of the Department of Agriculture. They are all friends of mine. I heard some testimony

here yesterday that this bill would raise the farmer's income, lower the cost to the Government, et cetera. Down in Arkansas we call that nimble arithmetic. That is, obviously, an impossibility.

I think what they do not want to talk about is the other leg to that mathematical formula; that is, the taxes. It is pretty obvious if you are going to raise the farmers' income and reduce the cost to the Government, somebody has got to put up the balance of that money. I do not think that they want to talk about that.

You strip this bill of all of its high-sounding titles and get down to the bare bones, you will find that it is a tax program, pure and simple. It is an attempt to transfer the cost of our domestic and foreign welfare programs from the taxpayers as a whole to a selected group of taxpayers who, unfortunately, happen to be the poorest people in the United States. And I cannot believe that the same Congress that is now seriously considering the elimination of excise taxes can seriously consider a bill of this kind. I think this is an ill-conceived, quickly born, hastily written bill that has a serious threat to an important industry. I hope that you will see it my way and remove title III from the agricultural bill.

I thank you.

Mr. JONES of Missouri. Thank you, Mr. Alderson, for a very fine statement. You have given us some information, sir, which is useful. We are always glad to have people who have the background to present such to us as you appear to have.

Mr. GATHINGS. Mr. Chairman, you brought out a point there this morning that I would like to comment on and, that is, the difficulty of arriving at a farmer's production on a given amount of acreage. We have had that same situation in other crops. You said that it is hard to make a determination as to what the production is. You will have to go to the drier-you will have to get his receipts-and that will entail much difficulty. It will be added expense on the part of the Government in administering this program.

Mr. ALDERSON. When you get into that and on the mill controls, particularly, it will take an army of inspectors. If I wanted to cheat on this program, they would have to have a man on top of me day and night in the mill.

Mr. GATHINGS. I did not understand.

Mr. ALDERSON. I say that when you get into the administrative end of this program it will take an army of inspectors on the mill part of it on the processing side-if I wanted to cheat on it, they would have to keep a man with me 24 hours a day to keep me from doing it, and then I think that I could do it.

Mr. GATHINGS. It would take almost as many people as you have members of your organization.

Mr. ALDERSON. That is right.

Mr. GATHINGS. And it would require additional administrative effort it would require more people to be on the payroll to do this job, would it not?

Mr. ALDERSON. We have had administrative problems in the rice program in the past. And this is a much more complicated program than any of the others.

Mr. GATHINGS. Thank you.

Mr. JONES of Missouri. Mr. Findley.