act will be fairly and accurately determined and properly credited to the farms and to the areas entitled under the law to receive such credits. The committee by this provision intends to resolve finally all questions relative to the manner in which Public Law 12 is to be applied. This provision was adopted after extensive hearings and investigations by the committee. It has the full approval of the representatives of all the various cotton-producing areas. It is believed that this provision will remove the fears which have existed in the minds of farmers concerning their rights under Public Law 12.

An eligible farm to receive war-crop credit is a farm which had a 1942 cotton-acreage allotment and on which (1) the cotton acreage on the farm in 1945, 1946, or 1947 was reduced below the cotton acreage planted on the farm in 1941, and (2) the war-crop acreage on the farm in 1945, 1946, or 1947 was increased above the war-crop acreage on the farm in 1941.

A farmer is to be regarded as having planted cotton (in addition to the actual acreage planted to cotton) to the extent of the lesser of (1) the reduction in cotton acreage for each of the years 1945, 1946, and 1947 below the acreage planted to cotton in 1941, or (2) the increase in war crops for each of the years 1945, 1946, and 1947 above that planted to war crops in 1941. Provision is made under which the county committee in its discretion may, under certain circumstances, adjust the war-crop credit for any farm whenever the county committee determines that the reduction in cotton acreage on such farm was not related to an increase in war crops. Such adjustment, however, is authorized to be made only after notice has been given to the producer concerned of the proposed adjustment and after the county committee has consulted with the producer and satisfied itself that the adjustment is proper. Any county committee making downward adjustment should provide the farmer concerned with a statement showing the extent of, and the basis for, such adjustment. In providing this authority, it is not the intent of the committee to indicate that any such adjustments are required to be made or that any should be made. This authority is provided so that it will be available in the event that cases may arise where it would be clear beyond doubt to the county committee that the reduction in cotton acreage was wholly unrelated to increased war crop production. The burden of showing that the reduced cotton acreage bears no relation to increased war-crop production rests upon the county committee and any doubt should be resolved in favor of the grower if the cotton acreage on the farm was reduced and the war-crop acreage was increased. It is not the intent of the committee in granting this authority that a county committee should employ any subjective standard or test or try to probe the mind of the farmer to ascertain the motive of the farmer in reducing his cotton acreage and in increasing his war-crop acreage. The motive of the farmer in decreasing his cotton acreage and in increasing his war-crop acreage is immaterial.

In order to obtain the information necessary to enable a proper determination of war-crop credits to be made, the bill directs the Secretary to use the information obtained from the survey which is now being made of every farm which had a 1942 cotton-acreage allotment, and to thus obtain for each farm the most accurate information possible as to the total acreage in cultivation and the acreage of

individual crops planted on each such farm in the years 1941, 1945, 1946, and 1947. The information obtained from this survey is absolutely necessary because, in the course of its investigation, it has been demonstrated to the satisfaction of the committee that there is no other adequate information presently available (statistically or otherwise) which would enable a true and proper determination to be made with respect to war-crop credits due the farms and the areas in which such farms are located, except in those cases where the acreage of a war crop has been actually measured or adjusted for use in the determination of acreage allotments. The records of such measured or adjusted war-crop acreage would, of course, be the most accurate information possible. After obtaining the required information through the survey, the Secretary is authorized to work through and with the State and county committees and, using the information then available from this source, is directed to make as accurate a determination as is possible of the credits due each individual farm. This provision will have the effect of freeing the Secretary from any restrictions with respect to the use of statistics which might otherwise be construed as limiting the character or kind of information which the Secretary might use in making war-crop-credit determinations.

Under the provisions of the bill the Secretary is directed to use the information obtained through surveys and investigations in order that proper war-crop determinations may be made. It is the position of the committee that since the statistical estimates of war-crop credits presently available in the Department of Agriculture are not adequate, the Secretary in making war-crop determinations should not be bound or required to adjust his determinations to coincide with any statistics. On the contrary, this bill will require the Secretary to obtain and use the most accurate information available from any source to the end that true and proper war-crop determinations may be made.

The war-crop credits due each individual farm in each county are to be added to the county and the total war-crop credits due all of the counties in the State are to be added to the State. The acreages thus credited to the States, counties, and farms for the years 1945, 1946, and 1947 shall be taken into full account in the determination and distribution of cotton acreage allotments on a National. State. county, and farm basis.

This provision of the bill in no way affects the allotments required to be established for veterans under the provisions of Public Law 12, Seventy-ninth Congress.

Section 345-Farm marketing quotas

The farm marketing quota under the bill is the actual production of the acreage planted to cotton on the farm less the "farm marketing excess." The farm marketing excess is the normal production of that acreage planted to cotton on the farm which is in excess of the farm acreage allotment. The bill provides, however, that the farm marketing excess shall not be larger than the amount by which the actual production on the farm exceeds the normal production of the farm acreage allotment, if the farmer establishes such actual production to the satisfaction of the Secretary.

Under the provisions of the bill any farmer who plants within his farm acreage allotment would be entitled to market his entire production free of penalty. If the cotton acreage on the farm exceeds the

farm acreage allotment, the penalty would be calculated on the normal production of the excess acreage subject to adjustment if the farm marketing excess should be reduced because the farm yield is less than normal. If the farm is overplanted and the farmer can establish that the entire production on the farm does not exceed the normal production of his farm acreage allotment, the farm marketing excess would be reduced to zero and no penalty would be involved.

This provision of the bill differs from the 1938 act as it relates to cotton, but is similar to that act as it relates to corn and wheat. Under the 1938 act suit for the collection of cotton penalties involved the matter of proof that the farmer had actually marketed more cotton than permitted by his farm quota. In numerous cases the Department was unable, after investigation, to obtain sufficient evidence of such marketing, although it was common knowledge in the community that the cotton had been marketed. Under the bill, the penalty on the farm marketing excess is due and payable even though such excess is not actually marketed. Consequently, the bill avoids one of the difficulties experienced under the 1938 act, and will enable the Department to deal more effectively with the noncooperator, thereby assuring cooperators the full benefits of the adjustment program. Section 346-Penalties

The bill provides that the producer shall be subject to a penalty on the "farm marketing excess" at a rate per pound equal to 50 percent of the parity price of cotton. The penalty rate under the 1938 act was 50 percent of the loan rate which, over the years, has been a varying percentage of the parity price of cotton. The penalty is required to be paid by the producer and collected by the buyer. The penalty would be computed upon the normal production of the acreage planted to cotton in excess of the farm acreage allotment, and would be due and payable in accordance with the regulations to be issued by the Secretary of Agriculture.

Section 347-Reductions in stored cotton

The bill provides that the penalty may be avoided or postponed by storage of the excess cotton. If the excess cotton is not so stored or the penalty paid, all cotton marketed from the farm would be subject. to penalty. Where cotton is stored to avoid payment of penalty, reductions in storage are authorized if the acreage allotment for a future crop is underplanted or if the production for a future year is less than the normal production of the farm-acreage allotment. The provisions relating to penalties and storage are similar to the penalty and storage provisions of the 1938 act as it relates to wheat and corn. Section 348-Long-staple cotton

This bill exempts long-staple cotton of 11⁄2 inches or more in length from marketing quotas, unless the Secretary determines a separate national marketing quota for such cotton. The bill provides that the Secretary shall proclaim a national marketing quota for long-staple cotton whenever the total supply exceeds the normal supply by more than 8 percent. The Secretary is authorized to exempt from such quota any variety or kind of cotton if the total supply therefor is less than 8 percent above the normal supply. If a national marketing quota is proclaimed for long-staple cotton, the other provisions of the bill would apply in determining the amount of the national quota and

acreage allotment, the referendum, the division of the national acreage allotment among States, counties, and farms, etc.

The 1938 act exempts long-staple cotton of 11⁄2 inches or more in length from all quotas.

Section 2 (of the bill)-Definitions, measurements, and notice

Section 2 of the bill would amend certain definitions with respect to cotton. The "carry-over" for any marketing year would be the quantity of cotton on hand in the United States at the beginning of such marketing year, not including any part of the crop which was produced in the United States during the current calendar year. This differs from the 1938 act in that it excludes United States cotton on hand outside the United States.

The "normal supply" of cotton for any marketing year would be the estimated domestic consumption of cotton for the marketing year for which the normal supply is being determined, plus the estimated exports of cotton for such year, plus 30 percent thereof as a carryover allowance. This differs from the 1938 act in two respects: (1) Under the 1938 act the estimate of the amount of cotton needed for domestic consumption and export is based on a 10-year average use for those purposes; and (2) the allowance for carry-over under the 1938 act is 40 percent of such consumption and exports instead of 30 percent as in the bill.

The "total supply" of cotton for any marketing year would be the carry-over at the beginning of such marketing year, plus the estimated production of cotton in the United States during the calendar year in which such marketing year begins, and the estimated imports during such marketing year. This definition differs from the 1938 act in that imports are included in the determination of the total supply.

À provision has been added to the bill to enable any farmer to obtain a measurement of his allotted acreage prior to planting. Also, any farmer who is dissatisfied with his acreage measurement which shows him out of compliance, may obtain a second measurement upon request. If the second measurement shows that the planted acreage is in excess of the allotment, the expense of remeasurement would be borne by the farmer. The farmer on any overplanted farm is given a reasonable time after measurement to adjust his planted acreage to his farm allotment.

Notice of the farm acreage allotment is required, insofar as practicable, to be mailed to the farm operator prior to the date of the referendum. The committee feels that this provision in the bill will assure the farmer of notice of his acreage allotment prior to the date of the referendum.

Section 3 (of the bill)-Standard grade

Section 3 of the bill, making Middling %-inch cotton the standard grade for purposes of parity and price support, continues the policy which has heretofore prevailed with respect to cotton.

Section 4 (of the bill)-Amendment to peanut-quota law

This bill amends the peanut-marketing-quota provisions of the 1938 act to provide that the acreage allotment for any State after 1949 shall not be less than 60 percent of the acreage of peanuts harvested for nuts in the State in 1948. The additional acreage required to establish such minimum State allotments would be in addition to the

H. Repts., 81-1, vol. 5-71

national acreage allotments and the production therefrom in addition to the national marketing quota. This provision has been included to afford a measure of relief to those States faced with the necessity of severe acreage reductions for more than one crop due to the resumption of marketing-quota programs.

Section 5 (of the bill)—Amendment to wheat-quota law

The bill also contains a provision which establishes minimum farm acreage allotments for wheat. This provision is applicable only to the 1950 crop. It provides for a minimum farm acreage base equal to the larger of (a) 50 percent of the acreage on the farm seeded for the production of wheat in 1949 and any other acreage on the farm seeded for the production of wheat in 1948 which was followed and from which no crop was harvested in 1949; or (b) 50 percent of the acreage on the farm seeded for the production of wheat in 1948 and any other acreage on the farm seeded for the production of wheat in 1947 which was followed and from which no crop was harvested in the calendar year 1948. In determining the 1950 farm allotment, such minimum base would be adjusted in the same ratio as the national average seedings for the production of wheat during the years 1939-48 (as adjusted under the 1938 act) bears to the national acreage allotment for wheat for the 1950 crop. The acreage required by this amendment would be in addition to the county, State, and National acreage allotments otherwise provided for under the 1938 act.

This provision gives recognition to good farming practices by taking into account summer fallowed wheatland in establishing base acreage and will tend to place those farms upon which good farming practices have been followed upon an equal footing with farms which have been fully cropped. It will also afford relief to farms in areas which in the last year or two have greatly expanded their wheat acreages and, but for the relief afforded under this provision, would be required to bear acreage reductions for the 1950 crop greatly out of proportion to the reductions required of wheat farms generally. The bill directs the Secretary in making the adjustments authorized under this provision to exclude any acreage which he determines will become an undue erosion hazard under continued farming.

CHANGES IN EXISTING LAW

In compliance with clause 2a of rule XIII of the House of Representatives, changes in existing law made by this bill are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is italicized, and existing law in which no change is proposed is shown in roman):

AGRICULTURAL ADJUSTMENT ACT OF 1938, AS AMENDED

SEC. 301. (b) (3) (B) “Carry-over" of cotton for any marketing year shall be the quantity of cotton on hand [either within or without] in the United States at the beginning of such marketing year, not including any part of the crop which was produced in the United States [prior to the beginning of] during the calendar year then current.

SEC. 301. (b) (10) (A) “Normal supply" in the case of corn, [cotton,] rice, and wheat shall be a normal year's domestic consumption and exports of the commodity, plus 7 per centum in the case of corn, [40 per centum in the case of cotton, 10 per centum in the case of rice, and 15 per centum in the case of wheat, of a normal year's domestic consumption and exports, as an allowance for a normal carry-over.