the Farm Bureau recommendations, the recommendations of the producer group that you referred to, plus any communication that the Department has sent to the Senate in connection with this effort to find some solution in the cotton area.

Now I believe that information will cover what we have in mind at this point in the record.

(The information referred to follows:)

[H.R. 6196, 88th Cong., 2d sess.]

AN ACT To encourage increased consumption of cotton, to maintain the income of cotton producers, to provide a special research program designed to lower costs of production, and for other purposes

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:

"See. 348. In order to maintain and expand domestie consumption of Upland cotton produced in the United States and to prevent discrimination against the domestie users of such cotton, notwithstanding any other provision of law, the Commodity Credit Corporation, under such rules and regulations as the Seeretary may prescribe, is authorized and directed for the period beginning with the date of enactment of this section and ending July 31, 1967, to make payments through the issuance of payment-in-kind eertificates to persons other than producers in such amounts and subject to such terms and conditions as the Secretary determines will eliminate inequities due to differences in the cost of raw cotton between domestic and foreign users of such cotton; ineluding such payments as may be necessary to make raw cotton in inventory on the date of enactment of this section available for consumption at prices consistent with the purposes of this section."

Ste. 2. Section 385 of the Agricultural Adjustment Act of 1938, as amended, is amended by adding at the end thereof the following; "This section also shall be applicable to payments provided for under section 348 of this title:"

See. 3. Section 104 of the Agricultural Act of 1949, as amended, is amended by adding the following new subsections:

(e) The Secretary of Agriculture is hereby authorized and directed to eonduet a special cotton research program designed to reduce the cost of producing upland cotton in the United States at the earliest practicable date: There are hereby authorized to be appropriated such sums, not to exceed $10,000,000 annually, as may be necessary for the Secretary to carry out this special research program. The Secretary shall report annually to the Committee on Agriculture of the House of Representatives and to the Committee on Agriculture and Forestry of the Senate with respect to the results of such research:

(d) In establishing the level of price support to cooperators for each erop of upland cotton beginning with the 1965 erop of such cotton, the Secretary, notwithstanding the provisions of section 103, shall make such reductions in the price support level as will reflect reductions in the costs of producing cotton. The level of price support for the 1964 erop of upland cotton shall be the national average support price which refleets 30 cents per pound for Middling inch. For 1965 and subsequent years, the level of price support shall be the level in effect for the preceding erop adjusted as provided in this section to reflect reductions in the costs of producing cotton; Provided; That the maximum level of price support shall be the national average support price which refleets for Middling inch 2911⁄2 cents per pound for the 1965 erop and 29 cents per pound for the 1966 erop:” Sne. 4. Section 407 of the Agricultural Act of 1949, as amended, is amended by inserting after the first proviso in the third sentence thereof the following! "Provided further, That beginning August 1, 1964, the Commodity Credit Cor poration may sell upland cotton for unrestricted use at not less than 105 per eentum of the current loan rate for such cotton under section 103(a) plus reasonable carrying charges:"

See: 5. Section 103 of the Agricultural Act of 1949, as amended, is amended by inserting (a)" before the first sentence thereof and by adding at the end of such section the following new subsections:

(b) For the 1964, 1965, and 1966 crops of cotton, the Secretary, notwithstanding any other provision of law, may provide to cooperators price support on not to exceed fifteen bales (standard five hundred pounds gross weight) of the production from their allotments at a level up to 10 per centum in excess of the

basie level of price support established under subsection (a) hereof but not in excess of the level of price support for the 1963 erop.

e) Notwithstanding any other provision of law, in order to keep eotton to the maximum extent practicable in the normal channels of trade, if the level of price support to cooperators for the 1964, 1965, or 1966 erop is increased under subsection (b), price support for cotton at the level established under subsection (b) shall be carried out through the simultaneous purchase of cotton at the support price therefor under subsection (b) and sale of such cotton at the support price therefor under subsection (a) or similar operations, including loans under which the cotton would be redeemable by payment of the amount for which the cotton would be redeemable if the loan thereon had been made at the support price for such cotton under subsection (a):"

SEE. 6. The Agricultural Adjustment Act of 1938, as amended, is amended as follows:

The following new sections are added to the Aet:

"See. 349: If the national aereage allotment established under section 344(a) for the years 1964, 1965, or 1966 exceeds seventeen million aeres (exclusive of the national acreage reserve established under section 344(b)), the amount of such aereage allotment in excess of seventeen million acres shall, notwithstanding any other provision of this part, be allotted as follows: One-half of such excess shall be allotted pursuant to the provisions of section 344. The remaining half of such excess shall, subject to the provisions of this section and section 350 be allotted by the Secretary as export market acreage directly to farms eligible to receive allotments under the provisions of section 350 to the extent that he determines that such allotments will not increase the earryover of cotton at the beginning of the marketing year for the next succeeding erop above the earryover on the same date one year earlier, except that no turm may receive an allotment of export market aereage in excess of 20 per centum of the acreage allotment for the farm established under the provisions of section 344: Any acreage available for allotment as export market aereage which the Secretary determines will not be used shall be allotted pursuant to the provisions of section 344. Any aereage allotted to a farm as export market aereage and planted to cotton shall be in addition to the county or State aereage allotments and shall not be taken inte account in establishing future State, county, and farm acreage allotments: Notice of the maximum export acreage for a farm shall be included in the notices of farm acreage allotments and marketing quotas: The provisions of this section shall not apply to extra long staple cotton:

"SEC. 350. The producers on any farm on which there is export market aereage or the purchasers of cotton produced thereon shall, under regulations issued by the Secretary, furnish a bond or other undertaking prescribed by the Secretary providing for the exportation, without benefit of any Government cotton export subsidy and within such period of time as the Secretary may specify, of a quantity of cotton equal to the actual production of the export market aereage as deter mined pursuant to regulations issued by the Secretary. The bond or other undertaking given pursuant to this section shall provide that, upon failure to comply with the terms and conditions thereof, the person furnishing such bond or other undertaking shall be liable for liquidated damages in an amount which the Seeretary deter nines and specifies in such undertaking will approximate the export subsidy on such quantity of cotton. The Secretary may, in lieu of the furnishing of a bond or other undertaking, provide for the payment of an amount equal to that which would be payable as liquidated damages under such bond or other undertaking. If such bond or other undertaking is not furnished, or if payment in lieu thereof is not made as provided herein; at such time and in the manner required by regulations of the Secretary, or if the acreage planted to cotton on the farm exceeds the farm acreage allotment established under the provisions of section 344 by more than the maximum export market acreage, the farm acreage allotment shall be the acreage so established under section 344: Amounts eelleeted by the Secretary under this section shall be remitted to the Commodity Credit Corporation and used by the Corporation to defray costs of encouraging exports sales of cotton under section 203 of the Agricultural Act of 1956, as amended."

(2) Section 376 of the Act is amended by adding at the end thereof the following: "This section also shall be applicable to liquidated damages provided for pursuant to section 350 of this title:"

That this Act may be cited as the "Agricultural Act of 1964”.

TITLE I-COTTON

SEC. 101. The Agricultural Adjustment Act of 1938, as amended, is amended by adding the following new section:

"SEC. 348. In order to maintain and expand domestic consumption of upland cotton produced in the United States and to prevent discrimination against the domestic users of such cotton, notwithstanding any other provision of law, the Commodity Credit Corporation, under such rules and regulations as the Secretary may prescribe, is authorized and directed for the period beginning with the date of enactment of this section and ending July 31, 1966, to make payments through the issuance of payment-in-kind certificates to persons other than producers in such amounts and subject to such terms and conditions as the Secretary determines will eliminate inequities due to differences in the cost of raw cotton between domestic and foreign users of such cotton, including such payments as may be necessary to make raw cotton in inventory on the date of enactment of this section available for consumption of prices consistent with the purposes of this section: Provided, That for the period beginning August 1 of the marketing year for the first crop for which price support is made available under section 103(b) of the Agricultural Act of 1949, as amended, and ending July 31, 1968, such payments shall be made in an amount which will make upland cotton produced in the United States available for domestic use at a price which is not in excess of the price at which such cotton is made available for export."

SEC. 102. Section 385 of the Agricultural Adjustment Act of 1938, as amended, is amended by adding at the end thereof the following: "This section also shall be applicable to payments provided for under section 348 of this title."

SEC. 103. (a) Section 104 of the Agricultural Act of 1949, as amended, is amended by adding the following new subsection:

"(c) The Secretary of Agriculture is hereby authorized and directed to conduct a special cotton research program designed to reduce the cost of producing upland cotton in the United States at the earliest practicable date. There are hereby authorized to be appropriated such sums, not to exceed $10,000,000 annually, as may be necesary for the Secretary to carry out this special research program. The Secretary shall report annually to the Committee on Agriculture of the House of Representatives and to the Committee on Agriculture and Forestry of the Senate with respect to the results of such research."

(b) Section 103 of the Agricultural Act of 1949, as amended, is amended (1) by inserting "(a)" before the first sentence thereof; (2) by changing the period at the end of the second sentence thereof to a colon and adding the following: "Provided, That the price support for the 1964 crop shall be a national average support price which reflects 30 cents per pound for Middling one-inch cotton."; and (3) by adding at the end of such section the following new subsections:

(b) If producers have not disapproved marketing quotas, the Secretary shall provide additional price support on the 1964 and 1965 crops of upland cotton to cooperators on whose farms the acreage planted to upland cotton for harvest does not exceed the farm domestic allotment established under section 350 of the Agricultural Adjustment Act of 1938, as amended. Such additional support shall be at a level up to 15 per centum in excess of the basic level of support established under subsection (a) and shall be provided on the normal yield of the acreage planted for harvest within the farm domestic allotment.

"(c) In order to keep upland cotton to the maximum extent practicable in the normal channels of trade, any additional price support under subsection (b) of this section may be carried out through the simultaneous purchase of cotton at the support price therefor under subsection (b) and the sale of such cotton at the support price therefor under subsection (a) or similar operations, including loans under which the cotton would be redeemable by payment of the amount for which the cotton would be redeemable if the loan thereon had been made at the support price for such cotton under subsection (a), or payments-in-kind through the issuance of certificates which the Commodity Credit Corporation shall redeem for cotton under regulations issued by the Secretary. If such additional support is provided through the issuance of payment-in-kind certificates, such certificates shall have a value per pound of cotton equal to the difference between the level of support established under subsection (a) and the level of support established under subsection (b). The corporation may, under regulations prescribed by the Secretary, assist the producers and persons receiving paymentin-kind certificates under this section and section 348 of the Agricultural Adjustment Act of 1938, as amended, in the marketing of such certificates at such time and in such manner as the Secretary determines will best effectuate the purposes of the program authorized by this section and such section 348. In the case of any certificate not presented for redemption within thirty days of the date of its issuance, reasonable

costs of storage and other carrying charges as determined by the Secretary for the period beginning thirty days after its issuance and ending with the date of its presentation for redemption shall be deducted from the value of the certificate."

(c) Section 401(b) of the Agricultural Act of 1949, as amended, is amended by striking in the second sentence thereof before "(8)" the word "and", changing the period at the end thereof to a comma and adding the following: "and (9), in the case of upland cotton, changes in the cost of producing such cotton".

SEC. 104. Section 407 of the Agricultural Act of 1949, as amended, is amended by inserting after the first proviso in the third sentence thereof the following: "Provided further, That beginning August 1, 1964, the Commodity Credit Corporation may sell upland cotton for unrestricted use at not less than 105 per centum of the current loan rate for such cotton under section 103(a) plus reasonable carrying charges:"

SEC. 105. The Agricultural Adjustment Act of 1938, as amended, is amended by adding a new section as follows:

"SEC. 350. In order to provide producers with a choice program of reduced acreage and higher price support, the Secretary shall establish for each farm for the 1964 and 1965 crops of upland cotton a farm domestic allotment in acres. The farm domestic allotment shall be the percentage which the national domestic allotment is of the national acreage allotment established under section 344(a) applied as a percentage of the smaller of (1) the farm acreage allotment established under section 344, or (2) the higher acreage actually planted or regarded as planted on the farm (excluding acreage regarded as planted under sections 344(m) (2) and 377) in the two years preceding the year for which such allotment is established: Provided, That any farm planting 90 per centum or more of the allotment shall, for the purpose of (2) above, be considered as having planted the entire farm allotment: Provided further, That, except for farms the acreage allotments of which are reduced under section 344(m), the farm domestic allotment shall not be less than the smaller of 15 acres or the farm acreage allotment established under section 344, but this proviso shall be applicable to the 1964 crop without regard to the exception stated herein. The national domestic acreage allotment for any crop shall be that acreage, based upon the national average yield per acre of cotton for the four years immediately preceding the calendar year in which the national acreage allotment is proclaimed, required to make available from such crop an amount of upland cotton equal to the estimated domestic consumption for the marketing year for such crop. The Secretary shall proclaim the national domestic acreage allotment for the 1964 crop not later than April 1, 1964, and for each subsequent crop not later than December 15 of the calendar year preceding the year in which the crop is to be produced."

SEC. 106. The Agricultural Adjustment Act of 1938, as amended, is amended as follows:

(1) The following new section is added to the Act:

"SEC. 349. (a) The acreage allotment established under the provisions of section 344 of this Act for each farm for the 1964 crop may be supplemented by the Secretary by an acreage equal to such percentage, but not more than 10 per centum, of such acreage allotment as he determines will not increase the carryover of upland cotton at the beginning of the marketing year for the next succeeding crop above one million bales less than the carryover on the same date one year earlier, if the carryover on such earlier date exceeds eight million bales. For the 1965 crop, the Secretary may, after such hearing and investigation as he finds necessary, announce an export market acreage which he finds will not increase the carryover of upland cotton at the beginning of the marketing year for the next succeeding crop above one million bales less than the carryover on the same date one year earlier, if the carryover on such earlier date exceeds eight million bales. Such export market acreage shall be apportioned to the States on the basis of the State acreage allotments established under section 344 and apportioned by the States to farms receiving allotments under section 344, pursuant to regulations issued by the Secretary, after considering applications for such acreage filed with the county Committee of the county in which the farm is located. The 'export market acreage' on any farm shall be the number of acres, not exceeding the maximum export market acreage for the farm established pursuant to this subsection, by which the acreage planted to cotton on the farm exceeds the farm acreage allotment. For purposes of sections 345 and 374 of this Act and the provisions of any law requiring compliance with a farm acreage allotment as a condition of eligibility for price support or payments under any farm program, the farm acreage allotment for farms with export market acreage shall be the sum of the farm acreage allotment established under section 344 and the maximum export market acreage. Export market acreage shall be in addition to the county, State, and National acreage allotments and shall not be taken into account in establishing future State, county, and farm acreage allotments.

The provisions of this section shall not apply to extra-long-staple cotton or to any farm which receives price support under section 103(b) of the Agricultural Act of 1949, as amended.

"(b) The producers on any farm on which there is export market acreage or the purchasers of cotton produced thereon shall, under regulations issued by the Secretary, furnish a bond or other undertaking prescribed by the Secretary providing for the exportation, without benefit of any Government cotton export subsidy and within such period of time as the Secretary may specify, of a quantity of cotton produced on the farm equal to the average yield for the farm multiplied by the export market acreage as determined pursuant to regulations issued by the Secretary. The bond or other undertaking given pursuant to this section shall provide that, upon failure to comply with the terms and conditions thereof, the person furnishing such bond or other undertaking shall be liable for liquidated aamages in an amount which the Secretary determines and specifies in such undertaking will approximate the amount payable on excess cotton under section 346(a). The Secretary may, in lieu of the furnishing of a bond or other undertaking, provide for the payment of an amount equal to that which would be payable as liquidated damages under such bond or other undertaking. If such bond or other undertaking is not furnished, or if payment in lieu thereof is not made as provided herein, at such time and in the manner required by regulations of the Secretary, or if the acreage planted to cotton on the farm exceeds the farm acreage allotment established under the provisions of section 344 by more than the maximum export market acreage, the farm acreage allotment shall be the acreage so established under section 344. Amounts collected by the Secretary under this section shall be remitted to the Commodity Credit Corporation and used by the Corporation to defray costs of encouraging export sales of cotton under section 203 of the Agricultural Act of 1956, as amended."

(2) Section 376 of the Act is amended by adding at the end thereof the following: "This section also shall be applicable to liquidated damages provided for pursuant to section 349 of this title."

(3) Subsection (f) (8) of section 344 of the Act is amended by inserting after the language "75 per centum of the farm allotment for such year" the following: "or, in the case of a farm which qualified for price support on the crop produced in such year under section 103(b) of the Agricultural Act of 1949, as amended, 75 per centum of the farm domestic allotment established under section 350 for such year, whichever is smaller".

(4) Section 377 of the Act is amended by inserting in the first proviso after the language "75 per centum or more of the farm acreage allotment for such year" the following: "or, in the case of upland cotton on a farm which qualified for price support on the crop produced in any such year under section 103(b) of the Agricultural Act of 1949, as amended, 75 per centum of the farm domestic allotment established under section 350 for any such year, whichever is smaller".

(5) Subsection (b) (13) (B) of section 301 of the Act is amended by deleting the words "cotton or".

(6) Subsection (b) (13) (G) of section 301 of the Act is amended by deleting ", cotton," wherever it appears.

(7) Subsection (b)(13) of section 301 of the Act is amended by adding after subparagraph (G) new subparagraphs as follows:

66

(H) 'Normal yield' for any county, for any crop of cotton, shall be the average yield per acre of cotton for the county, adjusted for abnormal weather conditions and any significant changes in production practices during the five calendar years immediately preceding the year in which the national marketing quota for such crop is proclaimed. If for any such year the data are not available, or there is no actual yield, an appraised yield for such year, determined in accordance with regulations issued by the Secretary, shall be used as the actual yield for such year. "(I) Normal yield' for any farm, for any crop of cotton, shall be the average yield per acre of cotton for the farm, adjusted for abnormal weather conditions and any significant changes in production practices during the three calendar years immediately preceding the year in which such normal yield is determined. If for any such year the data are not available, or there is no actual yield, then the normal yield for the farm shall be appraised in accordance with regulations of the Secretary, taking into consideration abnormal weather conditions, the normal yield for the county, changes in production practices, and the yield in years for which data are available.

(8) Subsection (n) of section 344 of the Act is amended

(A) by striking out the first sentence of such subsection and inserting in lieu thereof the following: "Notwithstanding any other provision of this Act, if the Secretary determines for any year that because of a natural disaster a portion of