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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. (See table III.)
APRIL 24, 1948. To the Senate Committee on Agriculture and Forestry:
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
23, 500 20, 400
TABLE I.-Tobacco production data and cash receipts from tobacco marketing, by
States and types-Continued
TABLE II.—Exports and production of tobacco, by type, 1930–46 crop years
Total, flue-cured, types 11-14:
614, 004 49, 861
TABLE II.-Exports and production of tobacco, by type, 1930–46 crop years—Con.
Total, dark-air-cured, types 35–37:
70, 856 2, 799 3. 95
production.. Total, all tobacco:
1,455, 806 1,408, 324
10,020 11, 290 1, 406, 040 1,954, 490 388, 598 340, 328 27.6
2,319, 259 655, 685
1 No exports.
TABLE III.-Tobacco prices: Average price received by farmers and price of
manufactured tobacco products
Manufactured tobacco products
wholesale prices 1
Seasonal average price per
pound received by farmers
Smoking tobacco, 2 ounces per dozen packages
1926 1927 1928. 1929. 1930. 1931 1932 1933. 1934. 1935. 1936 1937 1938 1939 1940. 1941. 1942 1943. 1944. 1945 1946. 1947 2
17.9 20.7 20.0 18.3 12.8
8.2 10.5 13.0 21.3 18.4 23.6 20.4 19.6 15.4 16.0 26.4 36.9 40.5 42.0 42.6 45.0 43.4
1 F. o. b. prices. Price includes Federal excise tax. On cigarettes the tax from 1926-42 was $3.25 per thousand (for cigarettes weighing less than 3 pounds per 1,000). In the Revenue Act of 1942 this tax was raised to $3.50. The Federal tax on 8. to 15-cent gars was $5 per thousand from 1926-42 and then was raised to $10. The Federal tax on smoking tobacco was 18 cents per pound throughout the period.
TABLE IV (a).-Rates of Federal tax on tobacco products in the United States,
as imposed by the Internal Revenue Act of 1942 Product:
Cigars weighing more than 3 pounds for 1,000,
Rate of tax
$2.50 per thousand.
$20 per thousand.
12 cent for each 50 or frac
tion thereof. Tubes--
1 cent for each 50 or frac
tion thereof. Smoking and chewing tobacco and snuff - 18 cents per pound. 1 Cigarettes weighing more than 3 pounds per 1.000 which are more than 642 inches in length are taxable at the rate imposed on cigarettes weighing less than 3 pounds per 1,000, counting each 234 inches or fraction thereof of the length of each as 1 cigarette. This provision was first imposed by the Revenue Act of May 10, 1934, amending the Revenue Act of February 26, 1926.
TABLE IV (b).-State taxes on selected tobacco products 1
20 percent of retail price. Arizona
2 $10 per thousand
1 cent per ounce. Arkansas. Connecticut.
3 $5 per thousand Idaho.
5 $5 per thousand
7-20 percent of retail price. Maine
4 20 percent of retail price 20 percent of retail price. Massachusetts
20 percent of retail price.
2 New Hampshire
292 15 percent of retail price 15 percent of retail price. New Mexico
3 $10 per thousand New York
2 North Dakota
5 $10 per thousand
20 percent of factory price. Oregon
4 Rhode Island
3 1 This table does not include the entire tobacco ta: schedule of the States, and for reasons of simplification tax rates as presented may not be entirely accurate.