1st Session No. 1027 PRICE SUPPORT FOR TUNG NUTS AND HONEY JULY 12, 1949.-Committed to the Committee of the Whole House on the State of the Union and ordered to be printed Mr. COOLEY, from the Committee on Agriculture, submitted the following REPORT [To accompany H. R. 29) The Committee on Agriculture, to whom was referred the bill (H. R. 29) to amend the Agricultural Adjustment Act of 1938, as amended, to provide parity for tung nuts, and for other purposes, having considered the same, report favorably thereon with an amendment and recommend that the bill as amended do pass. The amendment is as follows: Page 1, line 3, strike out everything after the enacting clause and substitute in lieu thereof the following: That, notwithstanding any other provision of law, the Secretary of Agriculture, through the Commodity Credit Corporation and other means available to him, is authorized and directed through loans, purchases, or other operations to support the price of honey, and of tung nuts produced on the acreage of tung-nut trees planted prior to the date of the enactment of this Act, at not less than 60 nor more than 90 per centum of the parity price as calculated pursuant to section 301 (a) of the Agricultural Adjustment Act of 1938, as amended by the Agricultural Act of 1949. Appropriate adjustments may be made in the support price of honey or tung nuts for differences in grade, type, quality, location, and other factors. In carrying out the provisions of this Act, compliance by the producer with production goals and marketing practices (including appropriate marketing agreements and orders under the Agricultural Marketing Agreement Act of 1937), as prescribed by the Secretary, may be required as a condition of eligibility for price support. Amend the title to read as follows: A bill to provide price support for tung nuts and honey, and for other purposes. STATEMENT The purpose of this bill is to provide a price-support program for two highly specialized agricultural commodities, both of which are of great importance to the national welfare. The two commodities are tung nuts and honey. Although the commodities are entirely unrelated, they are in their present situation alike in several respects. Both commodities appear relatively minor compared to the total annual agricultural production in the United States, but both have an importance to our economy far greater than their annual output would indicate, and both the growers of tung nuts and the beekeepers are in serious difficulties because of unusually sharp declines in the prices of their products. Both industries are in grave danger unless relief is made available. The bill establishes a price-support program for these two commodities at levels between 60 and 90 percent of the parity price. The support for tung nuts is limited to the output from the acreage of tung-nut trees planted prior to the time of the enactment of this bill. The bill also provides that as to each commodity the Secretary may require compliance with production goals and marketing practices (including marketing agreements and orders) as a prerequisite to price support. TUNG NUTS Tung trees are native to China, and in the years prior to the recent war virtually the entire supply of tung oil used in the United States came from China. Efforts have been made, however, from about 1902 to grow tung trees successfully in this country, and by the time World War II appeared on the horizon the techniques of growing tung trees and producing tung nuts had been reasonably well developed, although the actual acreage of trees was not large. The trees require specialized soil and climatic conditions that are found only in a very limited area of the United States. They require a sandy, well-drained soil of an acid type and a uniformly warm climate. Although they must have about 60 inches of rainfall a year, they will not grow properly where the ground-water table is closer than 22 feet to the surface. These highly specialized requirements limit the growth of tung trees to a belt about 100 miles wide extending along the Gulf of Mexico roughly from the vicinity of Ocala, Fla., to that of Beaumont, Tex. Tung nuts are the source of tung oil (sometimes called China-wood oil), an almost indispensable ingredient of many important industrial products, including paint, electrical insulation, and other commercial products. Tung oil is a strategic and critical war material and was designated as such in the President's list of critical war materials. During the war, conservation of tung nuts and the maintenance of maximum production of tung oil was considered vital for essential war and civilian needs. So important was tung oil to our economy that our Government found it to be in the national interest to acquire the total domestic production and to channel it into the most essential war uses. During this time eight experiment and demonstration stations were established in the area adapted to the growth of tung trees, and every assistance was given to farmers to maximize production. To further assure maximum production of tung nuts, an agricultural conservation program was established under which farmers were paid a payment of $5 per acre for each acre in bearing tung-nut trees, for carrying out approved conservation practices. In 1945 the Government put into effect a program for the purchase of tung oil from the 1945 tung crop which reflected approximately 37 cents per pound for the oil. This was the approximate f. o. b. mill ceiling price established by the Office of Price Administration. No tung oil had to be purchased by the Government under this program. In 1947 a tung-oil price-support program was put into effect which reflected 25 cents per pound f. o. b. mills. No support program has been in effect since 1947. The following table shows the production of tung nuts by States for the years 1943 through 1948: 'Includes small quantities of tung nuts produced in Texas. At the present time there are about 275,000 acres of tung orchards in the United States containing approximately 14,000,000 trees. The normal use of tung oil in the United States is approximately 125 to 150 million pounds per year, so that only about 10 percent of our requirements can be produced in the United States from present acreages. Although this would by no means meet wartime needs, the present acreage does provide a strategic backstop of this essential material in the event our supplies from China were cut off at any future time. Only a few years have elapsed since we had the experience of having our foreign supply of tung oil virtually cut off. At that time our domestic production was so small that we had to allocate virtually every ounce so that essential war users could obtain some tung oil. Our present production, while substantially in excess of prewar production, is still only a fraction of our normal needs. Since the close of the war, imports of tung oil have been imported in greatly increased quantities, and the domestic price has been driven down to a point where producers state that, unless they receive assistance in the form of price support, virtually all of the tung orchards in the United States will have to be abandoned, and our ability to produce a strategic and critical war material would be lost. The table set forth below clearly shows the extent and the effect of greatly increased imports of tung oil since the war. Imports have increased from a low of 68,000 pounds in 1943 to 133,282,000 pounds in 1948, and the price has declined from 39 cents per pound to 24.6 cents a pound in 1948. The current price is about 20 cents per pound. Tung oil-United States supply, disposition, and average annual price in drums, New York by calendar years 1 1 Compiled from reports of the Bureau of the Census and the Bureau of Agricultural Economics. Calculated in the Fats and Oils Branch. Tung nuts. United States production 1939-48. Reported factory consumption. Unofficial; from a report prepared by Bureau of Agricultural and Industrial Chemistry The present bill is designed to provide price support only for the acreage of trees which have already been planted. It is not the intent of the committee to encourage production above present levels. Thus this bill merely provides support for the acreage of tung-nut trees which were largely brought into existence as a result of the war when we were cut off from supplies from China. The bill will protect tung-nut growers from disaster caused by the large postwar imports from China, and will assure the production of a small and essential supply of a critical war material in the event our supplies from China are again cut off. Summarizing the tung-nut price situation, the committee hearing discloses: (1) Tung oil is a strategic material, vitally necessary to many industrial and commercial products that are essential either in peacetime or in wartime. (2) During the recent war, production of tung oil in the United States was increased approximately 700 percent to take the place of supplies from China which were unavailable during the war. (3) Following the conclusion of the war, supplies from China have been imported in greatly increased quantities, and the price of tung oil on the open market in the United States has dropped to a point where domestic producers are facing disaster. (4) Since 1947, when supplies from China became available, no price-support operations have been in effect for tung nuts. (5) As the direct result of the price situation, the tung industry in the United States faces complete collapse, with the resulting loss not only of the funds which tung producers have invested but of the safeguard to the Nation provided by this domestic production of tung oil. HONEY Honey is only a small part of the valuable contribution that honeybees make to the agricultural economy of the United States. Far more important than the value of the honey is the part the bees play in pollinating many crops. Some crops are self-pollinating, but many others are incapable of pollinating themselves and require the activity of bees and other insects for the pollination that is necessary before fruit or seed can be produced. It is estimated that about 50 important agricultural crops require insect pollination, and that bees are responsible for approximately 80 percent of the pollination activity. Among the crops which are dependent upon pollinating insects for full production of fruit or seed are the following: Apples, apricots, blackberries, cherries, cucumbers, grapes, muskmelons, peaches, strawberries, tung nuts, watermelons, alfalfa, beans, cauliflower, clover (alsike, crimson, red, white, Ladino), cotton, sweetclover, and vetch. The operators of commercial orchards have long been aware of the value of honeybees in the production of fruit, and the propagation of bees by orchardists for this purpose has long been standard practice. The producers of some other crops, however, have not been so quick to recognize the part played by the honeybee in the production of seed and fruit crops. Only in the past few years, with the gradual disappearance of wild bees due to the destruction of their nesting places and the much more widespread and general use of powerful insecticides, have many farmers become aware that bees play a tremendously important part in the production of clover and other legume seeds and many other farm commodities. During the past 23 years, the average yield of alfalfa sced in the United States has decreased from 3.59 bushels per acre in 1925 to 1.61 bushels per acre in 1948. During the same period, average yields for red-clover seed decreased from 1.35 bushels to 0.97 bushels per acre. One of the most important factors in this decrease, it is believed, is the decrease in the wild bee population in the United States. In many parts of the United States the wild honeybee has almost disappeared, and the widespread use of DDT and other powerful insecticides is hastening its destruction. The familiar hive of domestic bees that once was a part of almost every farm homestead is also disappearing, as farmers in general find it more convenient to buy the honey they want at the neighborhood grocer than to go to the trouble of producing it themselves. In many parts of the country, therefore, the hives of honeybees kept by farmers in the business of producing honey are almost the only solution to the problem of the necessary crosspollination of our perennial legumes and other seed crops. |