my gratitude and the gratitude of the farmers of Virginia for your courteous hearing this morning. My main purpose is to present to you gentlemen a recommendation agreed upon by all types of tobacco representatives in this group. We recommend that legislation provide for marketing quotas on Flue-Cured, burley, Fire-Cured, Dark Air-Cured, and Virginia SunCured tobacco-and that one is being added; at the present time it has no quotas-even though the total supply may not exceed the reserve supply level. Such legislation has heretofore been provided by Public Laws Nos. 118, 276, and 163. The provisions of the Agricultural Adjustment Act of 1938 relating to marketing quotas on peanuts do not require that the total supply be in excess of the reserve supply level before quotas can be proclaimed and growers be afforded an opportunity to approve or disapprove marketing quotas. This can be accomplished by adding the following proviso at the end of the first sentence: Provided, That the Secretary shall, notwithstanding the total supply or the reserve supply level, proclaim a national marketing quota for any kind of tobacco for which a national marketing quota was proclaimed for the immediate preceding marketing year, and shall proclaim a national marketing quota for Virginia Sun-Cured tobacco for any marketing year in which a quota is proclaimed for Fire-Cured tobacco, and, beginning on the first day of the marketing year next following and continuing throughout such year, a national marketing quota shall be in effect for the tobacco marketed during such marketing year. I thank you. The CHAIRMAN. Thank you, Mr. Hall. Representative CHAPMAN. Our next witness will be Mr. J. Mott Robertson, vice president and secretary-treasurer of the Virginia Dark Tobacco Warehouse Association of Lynchburg, Va. Mr. HALL. Mr. Robertson, I might say, had to leave. Representative CHAPMAN. Then the next witness will be Mr. R. W. Benson, of Springfield, Tenn., president of the Robertson County Farm Bureau. STATEMENT OF R. W. BENSON, PRESIDENT, ROBERTSON COUNTY FARM BUREAU, SPRINGFIELD, TENN. Mr. BENSON. Mr. Chairman, my home is in Robertson County, Tenn. Senator AIKEN. Did you not come before the committee in Memphis? Mr. BENSON. I am a farmer and producer of tobacco. I came here representing the Farm Bureau of Robertson County. We have more than a thousand Farm Bureau members and all producers of tobacco. The CHAIRMAN. What percent of the total farm population would that be? Mr. BENSON. Of the total we have a population of about 30,000 people in the county. That is approximately one-half of the farming industry of the county. The CHAIRMAN. Who belong to the Farm Bureau? Mr. BENSON. Yes. The CHAIRMAN. That is pretty good. Mr. BENSON. Yes, sir. I would like to say that I personally have talked to each of these Farm Bureau members and those who are not members of the Farm Bureau and I would also like to speak for the tenant class of people in my county. It has been circulated that maybe the Farm Bureau only played up to the big shots in agriculture, but all of the tenant class of people in my county, and I have talked to hundreds of them, are highly in favor of the program that has been in effect on our types of tobacco. They sent me to Washington to tell you gentlemen that we would like to keep the present program, or something similar to it, in effect. As one gentleman stated, "Maybe the congressman may find a few wrinkles in it, but let us not find too many wrinkles because we like the program as it is." It has increased our standard of living down there, not only for the landowner but for the tenant farmer and for everybody concerned. We would like to ask you gentlemen to hue as closely to the line as you can and keep our old program in effect because it has been 100 percent satisfactory. Senator AIKEN. I believe you told us at Memphis that your area produces a good share of the tobacco that goes into snuff, did you not? Mr. BENSON. Yes, sir. In fact, I come from the county in Tenneesee that produces the finest dark-fired tobacco in the world. These other gentlemen want to brag a little and I do, too. Thank you, gentlemen. The CHAIRMAN. Thank you, Mr. Benson. Representative CHAPMAN. Mr. Chairman, Mr. H. B. Caldwell of Greensboro, N. C., master of the North Carolina State Grange was here until a few minutes ago. He asked that Dr. Lloyd Halvorson, Washington, D. C., representing the National Grange, take his time on this program. STATEMENT OF DR. LLOYD C. HALVORSON, ECONOMIST, THE NATIONAL GRANGE, WASHINGTON, D. C. Mr. HALVORSON. Mr. Chairman and gentlemen of the committee. Mr. Caldwell asked that I read his statement but because time is short I shall not do so. I will ask in his behalf that the statement which he has prepared be made available to the Senators and inserted in the record. I would like to summarize briefly three points here. I see in his statement that he endorses the use of quotas more or less as they are now set up. He endorses a sound method for determining normal supply and prefers the present method. Third, he says that his people want price support and not less than 90 percent of parity. At the end of Mr. Caldwell's statement, J. T. Sanders, legislative counsel of the National Grange, has added a statement saying that he endorses the statement of Mr. Caldwell and finds it in accord with the programs and policies of the National Grange. There are some tables in this statement that I believe you might find interesting. One table shows, for example, that the average tobacco acreage is only 3.3 acres per farm in the United States. I should add that that is 3.3 acres average for farms producing tobacco in the United States. There are tables showing the exports and production of tobacco by types. There is another table showing the relationship of the manufactured tobacco product wholesale price to the price received by farmers. It is evident there that the price of cigarettes, for example, even at the wholesale level, is not greatly affected by the price the farmers receive. Table (a) IV (a), gives a schedule of Federal taxes on tobacco products and table IV (b) gives the State taxes on selected tobacco products. It was amazing to me when I found out that the Federal Government collects more in taxes from tobacco produced on an acre than the producer collects from the sale of such tobacco. Thank you, gentlemen of the committee. The CHAIRMAN. We thank you, Mr. Halvorson, and Mr. Caldwell's complete statement will be inserted in the record at this point. (The statement referred to is as follows:) STATEMENT FILED BY HARRY B. CALDWELL, MASTER, NORTH CAROLINA STATE GRANGE, GREENSBORO, N. C. Mr. Chairman and members of the committee, I am Harry B. Caldwell of Greensboro, N. C. I am master of the North Carolina State Grange and speak for that organization here today. We appreciate the support given our farmers by the members of this committee and the Congress during these past years. While the farm programs have not been perfect, they have contributed much to the building of better soil, better marketing, better farm management, better methods, and, in general, they have given us security. We commend you for the comprehensive study of the farm problem now in progress. It is our hope that an adequate program will be maintained to meet the needs of our farm people. We have studied S. 2318 and like many of its objectives. We are not prepared to make a detailed statement relative to the bill at this time. Some of its features need much more careful study than we have been able to give. Mr. Albert S. Goss, master of the National Grange, gave you a general analysis of the bill when he appeared before you on April 16, 1948. I shall not duplicate his testimony. Permit me to say that our State Grange is in general agreement with that statement. I shall confine my remarks to tobacco since Mr. Goss covered the general aspects of the bill in his testimony before this committee. I do this since tobacco is a specialty crop, and returns a substantial income to farmers and the Government each year. It is produced on about 500,000 farms in 31 States and the total farm income from tobacco in 1946 was about $1,000,000,000. More than 70 percent of the tobacco production occurs in the four States of North Carolina, Kentucky, Virginia, and Tennessee. The major cash farm income in some areas is dependent upon this crop. That is true of my State where more than 57 percent of our cash farm receipts in 1946 came from tobacco. (See table I.) Tobacco is also one of the major export crops of the United States. In the 13-year period 1930-41 tobacco exports accounted for 14.2 percent of the total value of domestic agricultural exports. Export markets consumed about 33.4 percent of the total tobacco crop during this prewar period. The export market is especially important to the producers of flue-cured tobacco. (See table II.) Many foreign countries subject tobacco to heavy import duties, quotas, and some of them are giving preferential advantages to certain nations. Tobacco growers are interested in the restoration of international trade for economic reasons, and also because tobacco products help maintain morale and incentive. Tobacco taxes are an important source of national revenues. Federal taxes on tobacco products averaged about $595 per acre in 1946, whereas the grower received only about $510 gross per acre at present prices. Growers do not want any tax schedule adopted or maintained which may affect their income from the production and marketing of tobacco in a biased manner. (See table IV.) The present tobacco program is quite satisfactory to growers in North Carolina. It enables them to maintain adequate supplies without excessive surpluses. It provides price supports and thus assures the grower of a reasonable return. Our tobacco growers want to see the following provisions included in any farm program: 1. They want authority to use quotas when approved by growers voting in a referendum. This authority should provide for marketing quotas even though the total supply may not exceed the reserve supply level. Such a provision has been previously approved by Congress for peanuts. We can and will meet all needs for tobacco under such a program. 2. A sound method for determining normal supply. In general, our members prefer the present method for determining normal supply to anything yet proposed for tobacco. 3. They want price supports at not less than 90 percent of parity, so long as marketing quotas are used to maintain balanced abundance. There can be no danger of loss to the Government under these conditions. There is no reason for using flexible floors under tobacco or any commodity that is maintaining balanced abundance by the use of quotas. This program will enable tobacco growers to maintain adequate stocks for manufacturers with a reasonable margin for safety. Farmers should not be penalized with low prices under these conditions. There is no danger of accumulating excessive stocks of tobacco under the quota program. Wild fluctuation in growers' prices for tobacco has little or no effect on prices for the manufactured consumer product. table III.) (See To the Senate Committee on Agriculture and Forestry: APRIL 24, 1948. I have carefully read the above statement of Harry B. Caldwell on the stand of the North Carolina Grange on the provisions of S. 2318 as they apply to the tobacco, and find that the statements agree fully with the policies and programs of the National Grange. I therefore fully endorse Mr. Caldwell's statements. J. T. SANDERS, Legislative Counsel, the National Grange. TABLE I.—Tobacco production data and cash receipts from tobacco marketing, by States and types |