Under this plan rental payments will equal 31⁄2 cents per pound of the 1928-32 yield per acre on the land to be left out of cotton production and a benefit payment of not less than 1 cent per pound is to be made on the domestic consumption percentage of the crop of each farmer who cooperates. Also, the contract designates the acreage that may be planted to cotton on each farm as well as the acreage to be left out of cotton production. In no case will farmers be permitted to increase their production of other crops for sale on the land rented to the Government. Lands left out of cotton may be used for the growing of food and feed crops for home consumption and for soil-improvement and erosion-preventing crops. One half, or approximately $50,000,000, of the rental payments are to be made in the spring of 1934 in order to eliminate as far as possible the demand for production. credit. The other half will be made at or about picking time so as to help meet the needs for ready cash at that time. (See exhibit 20 of appendix I.) Reports indicate that farmers throughout the Cotton Belt are ready to cooperate fully. The success of the program of 1933 has given them, as well as the entire citizenship of the belt, confidence in whatever further effort the Government may make to restore sound economic conditions. It is expected that under this program approximately 15,000,000 acres of cotton land will be left out of cotton production in 1934. The world supply of American cotton for 1933-34 has been determined to be 24,800,000 bales; 1,200,000 bales less than the record supplies of the 2 previous years. Should the acreage of the coming season be restricted to 25,000,000 acres and with production on this acreage somewhat higher than the average of the past 5 years, a more normal situation is in prospect. World consumption of American cotton is likely to approximate 14,000,000 bales during the current season. This would mean that the carryover on next August 1 would be in excess of 10,000,000 bales. But a crop of around 10,000,000 bales on the 25,000,000 acres planted added to this carryover would result in a world supply for the year 1934-35 of around 20,000,000 bales. This would be near the balanced statistical position at which the reduction programs are directed. A normal supply of American cotton for a single year is considered to be around 18,000,000 bales. However, if yields should be excessive in 1934 as they were in 1933, it will be possible and perhaps necessary to require a reduction in 1935 acreage in order to achieve the desired balance between supply and demand. In any event, it will be possible to restrict production in 1935 so as to prevent excessive plantings if a surplus is in prospect. This perhaps is as important as any other fact that may have to do with the future stabilization of the cotton-producing industry. The estimated collections and expenditures for the cotton program over the entire marketing period from August 1, 1933, to July 31, 1935, are given in table 5. In addition to the cotton adjustment program of 1933, the Agricultural Adjustment Administration has sponsored a cotton ginners' marketing agreement, tentatively approved and now in the field for execution. The general objectives of this agreement are to improve prices farmers receive for their cotton and cottonseed, and to reduce ginning charges. It is recognized that a large amount of cotton is damaged annually in ginning. This is due to many factors, chief among them indifferent operation and inadequate equipment. Accordingly the agreement provides minimum standards for ginning equipment and for quality of ginning service. It is also recognized that there is an excess of ginning capacity in the Cotton Belt and that ginning charges can be reduced if this excess capacity is eliminated. There are some 16,000 gins all told. Two thousand of these are inoperative. Of the remaining 14,000, many are only partly operating. However, it is necessary that gins be available to all producers. This required that such factors as distance between gins, and present and prospective production of cotton within each locality be duly considered. In the future the Secretary's approval will have to be obtained before new gins can be established or before old gins can be eliminated. GINNING CHARGES LIMITED The agreement fixes maximum rates beyond which charges cannot go anywhere in the Cotton Belt. Charges are to be set within each ginning area. The Secretary holds the right to disapprove any or all rates. All seed must be bought and sold by grade; a community grade is established at definite intervals which aims to strike an average for each ginning community. Ginners must pay 90 percent of the car-lot price for seed, although in no case shall the difference between the price paid producers and the price received exceed $3 per ton for seed of average or better-than-average grade, nor shall the difference exceed $4 per ton for seed of less than average grade. Unfair trade practices, such as the extending of credit without security, the payment of rebates or bonuses for the purpose of injuring competitors, or the use of subterfuges for similar purposes are prohibited. The agreement will also end the practice of buying cotton in the seed, except in the case of remnants. A system of cost accounting involving the keeping of adequate records will be installed. The information thus secured will be helpful, not only for purposes of regulation but for carrying out future programs for production control and for the improvement of production, as will be the case with all information secured in the application of the agreement. A number of other proposed marketing agreements concerning cotton, cottonseed and its products, and allied commodities and their products have been filed with the Administration and are under consideration. It has been necessary to make a careful study of the conditions of the respective industries in order to arrive at provisions that will be in keeping with the requirements of marketing agreements and will assist in improving the position of cotton producers. GENERAL OBJECTIVES OF AGREEMENTS In general it is considered that these agreements must facilitate adjustment of supplies of agricultural products; raising of producers' prices toward parity; reduction in the cost of handling and processing agricultural products through the elimination of wasteful practices; and improvement in the availability and quality of the services of processors and other handlers of agricultural products. It is also necessary that the marketing agreements concerning various phases of the marketing of an agricultural commodity, or group of agricultural commodities, be considered together so that they constitute a correlated program with respect to the commodities involved. Accordingly, the various proposed agreements with respect to vegetable oils are being considered in relation to each other in order that the actions taken with reference to the several agreements may be consistent. Also, as in the case of the marketing agreements with respect to cottonseed and its products, it is necessary to include provisions which will insure that producers will receive benefits from more efficient practices which will make possible reductions in processing and handling costs. The marketing agreements now under consideration are as follows: 1. Cottonseed crushing industry 2. Cottonseed oil refining industry 4. Linseed oil crushing industry 5. Cotton compress and warehouse industry A number of codes with respect to cotton, cottonseed and its products, and allied commodities and their products, filed under the National Industrial Recovery Act, are also being studied with a view to correlating them with existing or proposed marketing agreements for the respective industries and with the general program under the Agricultural Adjustment Act, as well as with the general program under the National Industrial Recovery Act. The codes which have been under consideration are: 1. Cotton ginning industry 2. Cottonseed crushing industry 3. Cottonseed oil refining industry 5. Linseed oil crushing industry 6. Vegetable oil crushing industry-Pacific Southwest 7. Cocoanut oil refining industry 8. Cotton compress and warehouse industry 9. Raw cotton trade 10. New York Cotton Exchange 11. New Orleans Cotton Exchange 12. Cotton pickeries industry CHAPTER 4 WHEAT SALIENT FACTS OF WHEAT PROGRAM 1. Number of wheat growers who signed applications for 1933-34 adjustment contracts. 2. Total average acreage planted to wheat by all United States farmers for base years 1930 to 1932, inclusive.. 3. Total average acreage planted to wheat by contracting producers in base years 1930-32_. 4. Percentage of indicated total base acreage (given in item 2 above) signed up under contract (item 3) _ _ _ --percent__ 5. Estimated acreage that will be taken out of production during 1933-34 season by contracting producers (15 percent of item 3). 6. Estimated net receipts from processing tax of 30 cents per bushel during 1933-34 marketing year 7. Total benefit payments made to contracting producers in 1933–34 marketing year (28 cents a bushel on domestic allotment). 8. Available from processing tax for surplus wheat removal____ 9. Bushels of wheat to be purchased for export by the Pacific Emergency Export Association___. 10. Carry-over on July 1, 1933, in bushels.... 11. Probable carry-over July 1, 1934, in bushels 12. Estimated income from 1933-34 wheat crop, including benefit payments... 13. Income from 1932-33 wheat crop-- 14. Maximum seeded acreage for United States under World Wheat Agreement. 550,000 65, 958, 000 50, 600, 000 77 7, 595, 000 $108, 000, 000 $95, 000, 000 $8, 000, 000 35, 000, 000 389, 000, 000 300, 000, 000 $376, 000, 000 $169, 000, 000 55, 859, 000 The wheat production control plan now operating throughout the United States in accord with world agreement is the outgrowth of a long chain of circumstances and more than 5 years' preparatory thought and effort. In essence it is the voluntary domestic allotment plan, first proposed by the late W. J. Spillman, of the United States Department of Agriculture, in 1927, and afterward refined and developed especially in terms of wheat by M. L. Wilson, of Montana, and others. In varying degrees, the voluntary domestic allotment technique, authorized with accessory devices by the Agricultural Adjustment Act of May 12, 1933, is being applied to all present efforts of crop adjustment in the United States, but in the main the wheat plan accords most closely with the original domestic allotment design, |