Business meetings on Rice production act of 1975

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Title:
Business meetings on Rice production act of 1975 H.R. 8529 ... Public Law 94-214
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iii, 160 p. : ; 23 cm.
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United States -- Congress. -- House. -- Committee on Agriculture
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Rice -- Law and legislation -- United States   ( lcsh )
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non-fiction   ( marcgt )

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Committee on Agriculture, U.S. House of Representatives, Ninety-fourth Congress, second session.
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Meetings held June 24-Oct. 29, 1975.
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CIS Microfiche Accession Numbers: CIS 77 H162-3
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"December 1976."
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At head of title: 94th Congress, 2d session. Committee print.

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Full Text



94th Congress COXYLITTEE PRINT
2d Sessions





BUSINESS MEETINGS


RICE PRODUCTION ACT OF. 1975




H.R. 8529
Jun~e 24 and 2,July 16, October 21, 22, 23, 28, and 29, 1975.

Public Law 94-214




COMMITTEE ON AGRICULTURE
U.S. HOUSE OF REPRESENTATIVES
NINETY-FOURTH CONGRESS
SECOND SESSION







DECEMBE~R 1976


Printed for the use of the Committee on Agricultup.r

U.S. GOENETPRINTING OFFICE 80-728 0 WASHINGTON : 1976



















%COMMITTEE ON AGRICULTURE THOMAS S. FOLEY, Washington, Chairman
W. R. POAGE, Texas, Vice Chairman WILLIAM C. WAMPLER, Virginia, E DI LA GARZA, Texas Ranking Minority Member
JOSEPH P. VIGORITO, Pennsylvania KEITH G. SEBELIUS, Kansas WALTER B. JONES, North Carolina PAUL FINDLEY, Illinois
ED JONES, Tennessee CHARLES THONE, Nebraska
JOHN MELOHER, Montana STEVEN D. SYMMS, Idaho
DAWSON MATHIS, Georgia JAMIES P. JOHNSON, Colorado
BOB BERGLAND, Minnesota EDWARD R. MADIGAN, Illinois
GEORGE E. BROWN, JR., California PETER A. PEYSER, New York DAVID R. BOWEN, Mississippi MARGARET M. HECKLER, Massachusetts
CHARLES ROSE, North Carolina JAMES M. JEFFORDS, Vermont
JERRY LITTON, Missouri I RICHARD KELLY, Florida
JOHN BRECKINRIDGE, Kentucky CHARLES E. GRASSLEY, Iowa
FREDERICK W. RICHMOND, New York TOM HAGEDORN, Minnesota
RICHARD NOLAN, Minnesota W. HENSON MOORE, Louisiana
JAMES WEAVER, Oregon ALVIN BALDUS, Wisconsin JOHN KREBS, California TOM HARKIN, Iowa JACK HIGHTOWER, Texas BERKLEY BEDELL, Iowa MATTHEW F. McHUGH, New York GLENN ENGLISH, Oklahoma FLOYD J. FITHIAN, Indiana JOHN W. JENRETTE, JR., South Carolina NORMAN E. D'AMOURS, New Hampshire 2 RAY THORNTON, Arkansas 3 Professional gtaff
FOWLER C. WEST, Staff Director ROBERT M. Bot, Counsel HYDE H. MURRAY, Counsel JOHN R. KRAMER, Special Couns|e L. T. EASLEY, Press Assistant

Deceased August 3, 1976.
2 Resigned from Committee April 8, 1978. $Assigned December 17, 1975.
(Ut)













CONTENTS



RR. 8137, a bill to establish improved programs for the benefit of pro- Page ducers and consumers of rice --------------------------------------- 3
H.R. 8529, a bill to establish improved programs for the benefit of producers and consumers of rice -------------------------------------- 48
Report from U.S. Department of Agriculture ----------------------- 66

STATEMENTS
Alexander, Hon. Bill, a Representative in Congress from the State of
Arkansas --------------------------------------------------------- 107
Breaux, Hon. John, a Representative in Congress from the State of Louisiana --------------------------------------------------------- 10-01
Burlison, Hon. Bill D., a Representative in Congress from the State of Missouri ---------------------------------------------------------- 106
Leggett, Hon. Robert L., a Representative in Congress from the State of California --------------------------------------------------------- 97
Pickle, Hon. J. J., a Representative in Congress from the State of Texas --- 1015


















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http://archive.org/detaiIs/busngsOOunit












RICE PRODUCTION ACT OF 1975


TUESDAY, JUNE 24, 1975
HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ONV OILSEEDS AND RICE
OF THE COMMITTEE ON AGRICULTURE, Wamhington, D.C.
The subcommittee met, pursuant to call, at 2:30 p.m., in room 1301, Longworth House Office Building, Hon. Dawson Mathis (chairman of the subcommittee) presiding.
Present: Representatives Mathis, Jones of North Carolina, Jones of Tennessee, Bowen, Rose, Fithian, Findley, Johnson, and Moore.
Staff present: Robert M. Bor, counsel; Steve Pringle, staff consultant; Anita Brown, Perry Shaw, and Susan Bell, staff assistants.
Mr. MATHIS. The subcommittee will come to order.
The Subcommittee on Oilseeds and Rice has before it a series of bills relating to the rice program. We are convened this afternoon for the purpose of moving toward the passage of some legislation.
Mr. BowEN. I would like to move that the subcommittee put itself into executive session for consideration of H.R. 8137 and other bills relating to the rice program.
Mr. MATHIS. The Chair would advise the subcommittee that H.R. 8137 is not yet before the subcommittee.
Is there objection to the motion?'
Mr. FiNDLEY. Is there some particular reason why we should be in executive session? Generally, as a matter of policy I think it is wrong for deliberations to be carried on in such a fashion.
Mr. BOWEN. There was sentiment expressed by some of our colleagues that we might proceed more expeditiously if we were in executive session.
Mr. MOORE. I object.
Mr. BOW-EN. I again make my motion, Mr. Chairman.
Mr. MATHIS. The question is to dissolve into executive session to consider various rice-related bills which are before us.
Mr. BOR. When this kind of motion is before us, it requires a rollcall vote. It can pass if a majority of those present, assuming a quorum is present, vote in favor of it.
Mr. MATHIS. The clerk will call the roll.
(The roleall follows:)
Ayes: Representatives Bowen, Rose, F'ithian, and Mathis. Nays: Representatives F'indley and Moore. Present: Representative Johnson.





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The CLERK. The vote is four ayes, two nays, and one present.
Mr. ,4ATHis. Accordingly, the subcommittee will at this time go into executive session.
The Chair will request that all persons other than members and staff leave the room.
[Whereupon, the subcommittee went into executive session.]
[The subcommittee returned to open session.]
Mr. MATHis. The bill H.R-0 8137 will be entered.
[The bill H.R. 8137 follows:]





3

9T4n CONGRESS W V

,Hl I 8..137


IN THE HOUSE OF REPRESENTATIVES Ju-N- 23, 1975
Mr. BowEN introduced the following bill; which was referred to the Committee on Agriculture




-A BJILL

To establish improved programs for the 'benefit of producers and consumers of rice.

1 Be it enacted by the Senate and House of Representa2 ties of the United States of America in Congress assembled,
3 SHORT TITLE
4 SECTION 1. This Act may be cited as the "Rice Pro5 duction Act of 1975".

6 TITLE I-RICE ALLOTMENTS AND
7 PRICE SUPPORT

8 NATIONAL ACREAGE ALLOTMENT AND ALLOCATION

9 SEC. 101. Effective for the 1976 and 1977 crops of rice,

10 section 352 of the Agricultural Adjustment Act of 1938 11 is amended to read as follows:





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2
I "SEc. 352. (a) The Secretary siall establish for each
2 of the 1976 and 1977 crops of rice a national acreage allot3 ment in the amount of 1,800,000 acres.
4 "(b) The national acreage allotment for each such crop
5 of rice shall be apportioned by the Secretary to farms, and in 6 producer States and administrative areas, to producers on the 7 basis of the rice allotments established for the 1,975 crop 8 as adjusted in accordance with subsection (c) of this sec9 tion: Provided, That not to exceed 1 per centum of the 10 national acreage allotment may be reserved for (1) appor11 tionment to new rice farms and new rice producers on the 12 basis of the following factors: suitability of the land for the 13 production of rice, the extent to which the farm operator 14 (or producer in the case of a producer allotment) is de15 pendent on income from farming for his livelihood, the
16 production of rice on other farms owned, operated, or con17 trolled by 'such person, and such other factors as the Secre18 tary determines should be considered for the purpose of 19 establishing fair and equitable rice'allotments; (2) making 20 adjustments in farm allotments to correct inequities or to 21 prevent hardships; and (3) making corrections in farm 22 or producer allotments.
23 "(c) (1) If for 'any crop the total acreage planted to
24 rice on a farm is less than the rice allotment for the farm (or





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1 in producer administrative areas, the producer allotments 2 allocated to the farm), the farm or producer allotment used 3 as a base for the succeeding crop hall be reduced by the 4 percentage by which such planted acreage was less than the 5 allotment for the farm, but such reduction shall not exceed 6 20 per centum of the farm or producer allotment for the pre7 ceding crop; except that if not less than 90 per centam of the 8 farm acreage allotment is planted to rice, the farm shall be 9 consklered to have an acreage planted to rice equal to 100 10 per centum of such allotment. For purposes of this para1i graph, an acreage on the farm which the Secretary deter12 mines was not planted to rice because of drought, flood, other 13 natural disaster, or a condition beyond the control of the pro14 ducer shall be considered to be an acreage planted to rice. 15 For the purpose of this paragraph, the Secretary may permit 16 producers of rice to have acreage devoted, to soybeans, 17 wheat, feed grains, sugar, castor beans, triticae, oats, cot18 ton, rye, or such other crops as the Secretary may deem 19 appropriate, considered as devoted to the production of rice 20 to such extent and subject to such terms and conditions as 21 the Secretary determines will not impair the effective opera22 tion of the rice program.
23 "(2) If no acreage is planted (or regarded as planted)
24 to rice for two consecutive crop years on any farm which




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4
1 had a farm acreage allotment for such years or for any 2 producer which bad a producer allotment for such years,
3 such farm or producer shall lose its allotment.
(3) Notwithstanding the provisionsof paragraphs (1) 5 and (2) of this subsection, no farm or producer allotment 6 shall be reduced or lost through failure to plant, if the 7, cooperator elects not to receive payments for the portion of 8 the farm or producer allotment not planted to which he 9 would otherwise be entitled under the provisions of section jo 10 1, (g) of the Agricultural Act of .1940 11 (d) Notwithstanding any other provision of this Act,
12 if-, the Secretary determines for any year that, because of 13 drought, flood, other natural disaster, or a condition beyond 14 the control of the person involved in the production of rice, 15 none or only paxt of the acres of an allotment can be timely 16 planted or replanted by or for such person in such year, 17 the Secretary may authorize for such year the transfer 18, of the total number of such acres which axe so affected to 19 another farm in, the same or any nearby county, but within 20 the same administrative area, on which one or more persons 21 on the farm from which the transfer is made will be engaged, 22 in the production of rice and will share in the proceeds 23 thereof, in accordance with such regulations as the SecreZ4 tary may prescribe. Any aotment, or portion thereof; 25 transferred under this subsection shall be regarded as planted






7



.I torie o hefarmfrwhichthetransfer ismade for 2 purposes of establishing future farma allotnqents. For the 3 purpose of determining t~he amount of payments and loans 4 made under section 101 (g of the Agricultural Act of 1949 5 with regard to farms to which allotments, or portions there6 of, are transferred under this subsection, the Secretary shall 7 establish a farm yield for any such farm for which there is

8 no established yield.

9 41(e) (1) The Secretary shall permit the owner and

10 operator of any farm for which a farm acreage allotment 11 has been established to sell or lease all or any part, or the 12 right to all or any part of such allotment, to any other 13 owner or operator of a farm in the same administrative 1-4 area, or to transfer all or any part of such allotment to any 15 other farm owned or controlled by him in the same admin16 istrative area. The Secretary shall also permit the person 47 for whom a producer allotment has been established to sell 18 or lease all or any part of such allotment to any other person 19 in the same admiinistrative area.. 20 (2) (A) If a producer in a State in which farm rice

21 acreage allotments are determined on the basis of past 22 production of rice by the producer on the farm dies, his 23 history of rice production shall be apportioned ini the whole

24or in part among his heirs or devisees according to the ex25 tent to which they may continue, or have continued, his





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1 farming operations, if satisfactory proof of such succession of

2 farming operations is furnished the Secretary.
3 "(B) If a producer in a State in which farm rice acreage
4 allotments are determined on the basis of past production 5 of rice by the producer on the farm withdraws in whole 6 or in part from rice production in favor of a member or 7 members of his family who will succeed to his farming opera8 tions, that portion of his rice history acreage as may be 9 ascribed to such withdrawal may be transferred to such fainl0 ily member or members, as the case may be, if satisfactory 11 proof of such relationship and succession of farming opera12 tions by such family member or members is furnished the 13 Secretaxy.

14 "(C) If a producer in a 'State in which farm rice
15 acreage allotments are determined on the basis of past 16 production 'of rice by the producer on the farm permanently 17 withdraws from rice production, his rice history acreage may 18 be transferred to another producer or producers who have 19 had previous rice-producing experience, provided the fol20 lowing conditions are met21 "(i) the transferee must acquire, except for land,
22 the entire farming operation pertaining to rice, includ23 ing -all production and harvesting equipment and any
,24 irrigation equipment not permanently attached to the
land; and





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1 "( ) he transferee must actually plant at least 90
2 per centum of his total producer rice acreage allotment,
3 including the allotment determined on the basis of the
4 rice history acreage acquired from the transferor, for at

5 least three. out of the next four years following the

6 transfer,
7 Failue by the transferee to comply with clause (ii) of this 8 subparagraiph shall result in cancellation of the transfer of 9 the rice bistory acreage. The transferor of ice acreage history 10 under this paragr ph shall not be eligible for a producer rice 11 acreage allotment for any year subsequent to such transfer, 12 except to the extent that such allotment may be based on 13 rice history acquired in a year (subsequent to the transfer) 14 for whih rice acreage allotments are not in effect. 15 (D) Upon dissolution of a partnership in a State Mi
16 whilh farm rice acreage allotments are detennined on tile 17 basis of past production of rice by the producer on the 18 farm, the partnership's history of rice production- shall be 19 divided among the partners in such proportion as agreed 20 upon in writing by the partners, except that if a partnership 21 was formed in a year in which allotments were in effect and 22 is dissoved in less than three consecutive crop years after 23 the partnership became effective, the rice acreage allotment 24 established 'or the partnership mid rce history acreages 25 credited to the partnership for each of the years during its ez;-








$
1 istenee hall be divided among the partners in the same pro2 portion that each partner contributed to the allotment estab3 lished for the partnership at the time such partnership was 4 formed. The rice history acreage credited to each of the 5 partners for the years prior to the time the partnership was 6 formed shall revert to the person to whom it was originally
7 credited.
$ "(E) Any part of the farmn rice acreage allotment on 9 which rice will not be planted and which is voluntarily sur10' rendered to the county committee shall be deducted from 11 the allotment to such farm and may be reapportioned by 12 the county committee t'o other farms in the same oounty 13 receiving allotments in amounts determined by the county 4li committee to be fair and reasonable on the basis of the 15 following factors:
16 "(i) the past production of rice by the producers
17 on the farm or the past production of rice on the farm,
18 as the case may be;
19 "(ii) acreage allotments previously established for
20 the farm or for the producers on the farm, as the case
21 may be;
22 "(iii) abnormal conditions affecting acreage;
23 "(iv) land, labor, water, and equipment available
24 for the production of rice;
2 (v) orop-rotation practice; and








9
"(vi) the soil and other physical factors affecting

2 the production of rice.
3 Any allotnent surrendered- under this subparagraph shall 4 be regarded for purposes of this subsection as having been 5 planted on the farm from which it was surrendered, except 6 that this shall not operate to iake the fuarm from which tho 7 allotment was surrounded eligible forian allotment as having 8 ree planted thereon, or to make any prodiacer thereon eligi ble for an allotment as having poduced rice, during the 1975 10 base period.
11 "' (f) Any acreage planted to rice im excess of the farm
12 or producer acreage allotment in the crop *years 1975 and 13 1977 shall not be taken into account in establishing farm, or 14 producer acreage allotments in any year following suh 15 period.".
16 PAYMENTS. AND LOANS
17 SEc. 102. Effective for the 1976 and 1977 crops of
18 rice, section 101 of the Agricultural Act-of 1949 is amended 19 by adding the following new subsection at the end thereof: 20 "(g) Notwithstanding any other provision of law21 "(1) The established price for the purpose of making
22 payments on rice under this subsection shall be $8 per 23 hundredweight in the case of the 1976 crop, adjusted to 24 reflect any changes in the index of prices paid by farmers 2 for production items, interest, taxes, and wage rates during-






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to

1 'the period beginning on the date of enactment of the Rice 2 Production Act of 1975, and ending July 31, 1976; for 8 'the 1977 crop the established price shall be the established 4 price for the 1976 crop adjusted to reflect any changes In 5 the index of -prices paid, by -farmers for -production -items, 6 interest, taxes, and wage rates during the twelve-month 7 period immediately preceding July 31, 1977: Provided, 8 'That any increase that would otherwise be made in the 9' established -price for the 1976 and 1977 crops to. reflect 10 a change in the index of prices paid. by farmers may be 11 -further -adjusted to reflect'any change in (i) the national 12 average yield per acre of rice for the three calendar years 13 preceding the year for which the determination is made, 14 over (ii) the national average yield per acre for the three 15 calendar years preceding the year previous to the one 16 for which the determination is made. 17 (2) 'The Secretary shall m ake available, to cooperators

18 in the 'several States of the United States, loans and pur19 chases on the 1976 crop of rice at a rate equal to $6 per 20- hundredweight, adjusted to reflect any changes in the index 21 of prices paid by farmers for production items, interest, taxes, 22 and wage rates daring the period beginning on the date of 23 enactment of the Rice Production Act of 1975 and ending 24 July 31, 1976: Provided, That any increase in the rate of 25 loans and purchases for the 1976 crop to reflect a change in





13



i. the index of primc paid by iaim~ers may be lfuffer adjusted

2 to -relet the 'chkge, &scribed in, the pr *viso inpagah
3(1) -of -thlis. subeetinu Loan& aM purchawes for- the 971
4 crop shl1e established -at such mMte.As beans the awuno rat4 5 to the loan rte for the 1976 crop as the es1aiblioed prioefof 6- the 1977 crop hearIs to the *established -price for the A-976 7 crop. The loans and pmraees for the 11976 aMd 1977 ciop'
8 RhaII be -ae -available to each~ oooperatrwtse~t

9 quAntity of rice 4etermiued by multiplying lalh LotUwnt If 10 the cooperator for the crop by the yield. -esta~blish~ed for the, 11 fwnm, as determined in the mauner deerile -in thie .econd 12 sentence of paagap (4) 'f _this -subseetion. 13 "(3 ) The Secretary shall umke avaiIajk to epereatorm 14 -payments for each of tke 1976 and 1977 vrops of rice growing 15 'i h eea ttso h nt&Sae tc-rt'qWt
16, the amount by which~ the estaliise4 price. for tbo- crop of 17 rice exc~eods the hightt 4:18"(A) the nationalI average Market piie received byT 19- farmers during thv fArst five monthig of-t wareting

20) year for- such crop, as dtiermiined by the Seoretary; oe'. 21 "(B) the loanlvel deerined uder pa ph'-:
22 (2) for suoh cq.
23 "(4). The payments for the 1976 and 1977 crops shall 24 b6 made available to each cooperator with respet to quan2,5 tity of -rie eemnd by mRultiplyi4 the Wotmnt, the



80-726 0 76 2





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1 cooerator for the crop by the yield established for the farm. 2 The. yield for the farm for any year shall be determined on 3 the -basis of the actual yields per harvestedacre for the three 4 preceding years: Provided,. That the actual yields shall be 5, adjusted, by the- Secretary for abnormal yields- in any year 6 caused by drought, flood, other natural disaster, or condition 7 beyond the control of the cooperator. If the Secretary de8 termines that the persons involved in producing rice on 9 a farm are prevented from planting all or any portion of 10 the acres of the producer or farm acreage allotment to 11: rice or other nonconserving crop, because of droughts, flood, 12 or other natural disaster or condition beyond the control 13 of the producer, the rate of payment' with regard to such 14 acres so affected shall be the larger of (A) the foregoing 15 rate, or (B) one-third of the established price, except that 16 the Secretary shall make no payment pursuant to this 17 sentence with regard to acres wih were transferred under 18 section 352 (d) of the Agricultural Adjustment Act of 1938 19 and on which rice was planted on the farm to which such 20 acres were transferred. If the Secretary determines that, 21 because of sueh disaster or condition, the total quantity of rice 22 which the persons involved in proi rie are able to
23 harvest on any farm is less than 66* per centum of the farm 24 acreage allotment times the yield of rice established for the 25 farm, the rate of payment for the deficiency in production





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1 below 100 per centum shall be the larger of (A) the fore2 going rate, or (B) one-third of the established price. Any 3 payment made under the previous two sentences with regard 4 to acres transferred under section 352 (d) of the Agricul5 tural Adjastment Act of 1938 shall be calculated with respect 6 to the farm yield on the farm to which such acres were

7 iransferred.
8 "(5) (A) The Secretary shall provide for a set-aside
9 of croplad for a crop of rice if he estimates (without tak10 ing into consideration the effect of a set-aside), prior to the 11 beginning of the calendar year in which such crop will be 12 grown, that the canyover of rice for the marketing year 13 beginning i the calendar year immediately following the 14 calendar year in whkdh such crop will be grown will exceed 15 15 per centum of the total supply of rice for tVhe marketing 16 year beginning in the calendar year in which such crop will 17 be grown. If a set-aside of cropland is in effect under this 18 paragraph then, as a condition of eligibility for payments 19 under paragraph (3) of this sdbseotion, the coperMors must 20 set aside and devote to conservation uses an acreage of crop21 land equal to (i) such percentage of the farm acreage allot22 meant as may be specified by the Secretary, plus, if required 23 by the Secretary, (K) the acreage of cropland on the farm 24 devoted in preceding years to soil conserving uses, as deter25 _miIiby the Secretary. The Secretary shall permit cooper.





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1 tors to plant and graze sweet sorghum on set-aside acreage. 2 The Secretary may permit, subject to such terms and condi3 tions as he may prescribe, 'all or any part of the set-aside 4 acreage to be devoted to hay and grazing 'or the production 5 of guar, sesame, safflower, sunflower, castor beans, mustard 6 seed, cranbe, plantago ovato, flaxseed, triticale, oats, rye, or 7 other commodity, if he determines that such production is 8 needed to provide an adequate supply of such commodities, 9 is not likely to increase the cost of the price support program, 10 and will not adversely affect farm income. 11 "(B) To assist in adjusting the acreage of commodities
12 to deirable goals, the Secretary 'may make and diversion 13 payments, in addition to the payments authorized in para14 graph (3) of this subsection, to cooperators on a farm who, 15 to the extent prescribed by the Secretary, devote to approved 16 conservation uses an acreage of cropland on the farm in addi17 tion to that required -t be devoted under subparagraph (A) 18 of this paragraph. The ,land diversion payments for a farm 19 shall be at such rate or rates as the Secretary determines 20 to 'be fair and reasonable taking into consideration the diver21 sion undertaken by the cooperator and the productivity of 22 the acreage diverted. The Secretary shall limit the total 23 acreage to be diverted under agreements in any county 24 or local community so as not to adversely affect the economy 25 of the county or local community.,





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:15

1 "(6) The rice program formulated under this sub2 section shall require the cooplerators to take such measures 3 as the Secretary may deem appropriate to protect the set4 ~aside acreage and the additional diverted acreage from ero.5 sion, insects, weeds, and rodents,. Such acreage may be 6 devoted to wildlife food plots or wildlife habitat in conform7 ity with standards established by the Secretaxy in oonsulta8 tion with wildlife agencies. The Secretary nay pay an ap9 propriate share of the cost of practices designed to carry out 10 the purposes of the foregoing sentences. The Secretary may 11 provide -for an additional payment on such acreage in the 12 amount determined by the 'Secretary to be appropriate in 13 relation to the benefit to the general public if the cooperator 14 agrees to permit, without other compensation, access to all 15 or such portion of the farm as the Secretary may prescribe 16 by the general public, for hunting, trapping, fishing, and 17 hiking, subject to applicable State and Federal regulations. 18 "(7) If the operator of the farm desires to participate
19 in the program formulated under this subsection, he shall 20 file his agreement to do so no later than such date as the 21 Secretary may prescribe. Payments under this subsection 22 shall be made available to the cooperator on such farm only 23 if such cooperator sets aside and devotes to approved soil 24 conserving uses an acreage on the farm equal to the number 25 of acres which the operator of the farm agrees to set aside"





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16
1 and devote to approved soil conserving uses, and the agree2 ment shall so provide. The Secretary may, by mutual agree3 ment with any cooperator, terminate or modify any such 4 agreement entered into pursuant to this subsection if he 5 determines such action necessary because of any emergency 6 created by drought or other disaster, or in order to alleviate
7 a shortage in the supply of rice.

8 "(8) The Secretary shall provide adequate safeguards
9 to protect the interests of tenants and sharecroppers including 10 provision for sharing, on a fair and equitable basis, in pay11 ments under this subsection.

12 "(9) In the case in which the failure of a cooperator
13 ito comply fully with the terms and conditions of the pro14 gram formulated under this subsection precludes the making 15 of loans, purchases, and payments, the Secreta.ry may, never16 theless, make such loans, purchases, and payments in such 17 amounts as he determines to be equitable in relation to the 18 seriousness of the default.

19 "(10) The Secretary is authorized to issue such regu20 nations as he determines necessary-to carry out the provisions 21 of this subsection.
22 "(11) The ,Secretary shall canrry out the program
23 authorized by this subsection through the Commodity Credit 24 Corporation.
25 "(12) The provisions of subsection 8(g) of the Soil





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17

1 Conservaion and Domnestic Allotment Act (re kiting to as2 signment -of payments) shiall apply to payments under this

3 subseton."

4 SUSPENSION OF MARKETING QUJOTAS AND OTHER

5 RPROISIONS

6 ~SEc. 103. 8ections 353, 354, -355, 'and .356 -of the Agri.7 cultural Adjustment "Act of 193,8 shall not be applicable to

8 -the 1976 and 1977 woops oif rice.

9 TLE ll-RKCE -RESEARCHI

10 SEc. 201.'(a) The Secretary -of Agrioulture may, under

11rules prescrib~ed by su-h Secretary, carry out regional and 12 national research programs~ with regarld to rice for the fob13 lowing purposes:

14.(1) to reduce fertilizer and herbiide tvag'e in excess 15- of production needs;16 (2) to develop varitties Af nie more susceptible to

17 complete fertilizer utilization;

1s ( 3) Ito improve the resistance of rice plants to di&19 ease and -to enhance their conservation and environ20a mental qualities;

21 -(4) to increase the usage of rice and'its processing

2 i" hyprodticts;

23 (5) to develop better bhanudiry practices in pro24 auction an conservation of -rice;

25 (6) tod4eveIop UTere effiit Tice storage praictces;





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18

1 (7) to improve domestic and international market2 iug of rice; and
3 (8) to benefit the general welfare.
4 (b) The Secretary shall, in implementing the program
5 authorized in subsection (a), utilize the technical and re6 lated services of appropriate Federal, State, lacal govern7 mental and private agencies.

8 (c) There is authorized to be appropriated not more
9 than $1,000,000 for any fiscal year to carry out the pro10 y1sions of this section.
11 TITLE III-MISCELLANEOUS

12 UIWUSE ACREAGE ALLOTfMENTS
13 SEc. 301. Section 377 of the Agricultural Adjustent
14 Act of 1938 shall not be applicable to the 1976 and 1977 15 crops of rice.
16 FINALITY OF FARMES' PAYMENTS AND LOANS
17 Smc. 302. Effective only with respect to the 1976 and
18 1977 crops of rice, section 385 of the Agricultural Adjust19 meant Act of 1938 is amended in the fist sentence thereof 20 by inserting immediately after "cotton set-aside program," 21 the following: "payments under the rice program author22 ized by section 101 (g) of the Agricultural Act of 1949,". 23 DEFINITION OF COOPERATOR
24 SEc. 303. Section 408 (b) of the Agricultural Act of

25 1949 is amended by striking out the period at the end of






21


19

1the first sentence and inserting in lieu thereof the follow2 Ing: ":Provided further, That for t~he 1976 -and 1977 3 crops of rice, -a cooperator shall be a person who -has a rice 4 acreage allotment and, if a iset-aside, is. in effect, who has set

5 aside any acreage required under section 101(g "

6 CONFORMING kMBNDMENT
7 SEiC. 304. Effective only with respect to the 1976 and 8 1977 crops of rice, section 408 of the Agricultural Act of 9 1949 is amen-ded by adding at the end thereof' the follow10 ing new subsection:

11 "Reference-to Terms Made Applicable to Rice

12 "(in) Reference made in sections 402, 403, 406, 407, 13 and 416 to terms 'support price', 'level of support', and 'level 14 of price -support' shall be considered to apply as well to the 15 level of loans and purchases for rice under this Act, and 16 references made to the terms 'price support', 'price support 17 operation', -and 'price support program' in such sections and 18 in section 401 (a) shall be considered as applying as well 19 to the loan and purchase operations for -such rice in this 20 Act.".






22

Mr. MATHIS. The. gentleman from Illinois has served notice that he has an amendment which he wants to offer. Even though it doesn't appear in the first title of the bill. without objection. we will allow the gentleman from Illinois to offer his amendment. Then, we will proceed to an examiniation of the bill on a page-by-page basis.
Mr. FINDLEY. I have an amendment which I believe should appear on page 19 just above the subtitle "Suspension of Marketing Quotas and Other Provisions."I
It is a payment to limit the provisions which reads as follows: "Notwithstanding any other provision of law the total amount of payments which a person shall be entitled to receive during a crop year under the rice program shall not exceed $55,000."
Then, there will be other provisions which are identical to the language in the Agricultural Act of 1970 and 1973 which I would be glad to read at this point, if you like.
Mr. MATHIS. It is identical language to the 1973 Act?
Mr. FINDLEY. Yes. Except for the first line which restricts it to the rice program.A
Mr. BOWEN. In principle I am opposed to payments limitations because I think they have tended to weaken the rice program. It has tended to negate the effectiveness of the target price, and it has made the entire attention focused on the loan provision; but I am realistic enough to realize that there are votes on the Floor of the House adequate to place some limitation on this legislation.
I wish we had the power and the persuasive skill to persuade the majority of the House that if we are going to try to administer a target price concept program as opposed to some of the old ones that we have had in this country, then we are not going to need a payments limitation and that tends to negate the effectiveness of the legislation.
But, in the absence of a bill to do that, I realize that some limitation is likely to be placed on the Floor, and I frankly feel that the committee would be better advised to support a $55,000 limitation than a $20,000 limitation.
'With the support of the gentleman from Illinois and his colleagues
-from other States, such as Massachusetts and other States which have taken ani active interest in payments limitations over the years, I think there is a real likelihood that we will be able to hold that $505,0 limitation on the House Floor. -I would rather not cut down to the $20,000 limitation.
Mr. FINDLEY. I want to assure the gentleman that even though I believe a sound case can be made for the payment limitation concept and even though I think a sound case can be made for a lower level payment limitation, if the subcommittee does see fit to accept this amendment, then I will defend this limitation against any efforts to establish a lower payment in the course of the consideration of the bill.
Mr. BOWEN. I am very grateful for the gentleman's consideration.
Mr. MATHIS. Is there further consideration of the amendment?
If not, the question occurs.
Those in favor, say "aye." Those opposed say "n.
Trhe ayes have it.
.Mr. Bowen, I think for the purposes of discussion it might be well if you would simply take the bill title-by-title with the assistance of






23

staff and explain to the subcommittee exactly what each section does; and if possible the difference between that and previous legislation.
-AMIr. BOWE-. We might want to ask one of the staff people to simply read it and stop periodically to answer any questions.
Is there anyone who would like to do that?2
Mr. MATHInS. I think it is the intention of all of us not to go through a line-by-line reading but a section -by-section analysis with a possible explanation from the staff as to how that section differs from the current law and exactly what it does.
Mr. BowE-N. I will start out, then, and we can supplement what I do.
Section 101 simply makes it a 2-year act from 1976 to 1977.
It also spells out the 1.8 million acres. That, of course, is the amount of allotted acreage which would be subject to the loan provisions and to target price payments. As I say, that is a compromise figure which does not make anybody completely happy.
Mr. RosE. What is the allotment under the current rice program?
Mr. BO-wEN_,.. What is the present figure, staff ?
UNnFENT1FIED STAFF PEIRSON- It is exactly 1,65-2,596 acres. Generally speaking, the growers preferred a higher figure getting up to 2 million; inasmuch as they would be the beneficiaries, the newer growers preferred the lower figure. That is a compromise in the middle.
I don't think it is a very controversial point.
Mr. ROSE. My question is how has the rice acreage allotment fluctuated over the past several years; or has it been the same?
Mr. BowE-N. Let me ask the staff how the USDA has handled this. What kind of fluctuations have there been in the last several years?
Mr. HENRY. It is based on a rather complicated formula.
Mr. ROSE. I am not interested in the f ornrnla as much as I am interested in what the actual acreage allotment was for the last several years.
Mr. HE-N-RY. It has gone between 1.7 and 2 million acres. But, it is based on 1956 allotments which was 1.695,000 acres.
To the best of my knowledge, it has run between 1.7 and 2 million acres. It has not gone over 2 million, I don't think. I am sorry, it was
2.1 million in 1973.
Mr. BowEN. The old growers we have -worked with to try to work up this compromise have agreed that that would be a fair figure, that is, both the new and the old growers are in agreement that that is the fairest figure that we can come up with.
Am I not correct in saying on page 3 that that is the original language of the present legislation?
Mr. HOuiLAN-D There is one change.
Mr. BOWEN,_ What is that!
Mr. H~OLLAND. Three percent is reserved for new growers who come under the new allotment. This bill reduces it from 3 percent to 1 percent.
Mr. BowvEx-. Will you give us a comment on that?
Mr. HoLL-3M This was part of the arrangement when they were coming together to protect the existing allotment holders.
As an example, California, Arkansas, and Texas, and Louisiana, have the problem of going to extra production where we would get an





OA
AO=

excess in the supplies of rice and also this would hurt the people who held the historical allotments. So, one of the arrangements that we came up with was that even though we were going to go with excess production, the people who held the allotments could still produce over them without penalty and they would hold the reserve of the percentage of the allotment for new growers to one percent.
I have some figures somewhere which show the exact numbers of new allotment holders who would come in, but I don't have them in front oi me.
Mr. BOWEN.In effect, that represents a compromise. It is an attempt to gain support of rice growers in Louisiana, Texas, and California and those areas where there is the strongest support of the traditional growers.
Mr. MATHIS. Is the I-percent figure the only change in this from the traditional language in that section?
Mr. BOWEN. Apparently, yes; except there are grammatical insertions and deletions.
Mr. HOLLAND. One of the percentage factors in the 3 to 1 percent would be used up primarily, as you n4 tice at the bottom of that page, to make adjustments in farm allotments to correct hardships. This is where a iot of this percentage factor would go.
Mr. MATHIS. This is left to the discretion of the States?
Mr. JOHNSON. You are only talking about 10,000 acres, anyway.
Mr. HOLLAND. 18,000 acres.
Mr. BOR. Is the language on page the same language, except the differeme you mentioned, contained in current legislation? Or is it rather the same language that was contained in the target pr:icebill that was considered last year?
Mr. HOLLAND. It was in the target price legislation from last year.
Mr. BOR. If I recall correctly in the current legislation, when you have a national acreage allotment and you are. apportioning it in farm States it first is apportioned to the States and the State allotments are in turn apportioned to the counties and to the farms, then you have the difference between the 3 and 1 percent.
I think that this language is akin to language that was in the target price bill of last year where the na-tional allotment is apportioned directly to the farms.
Mr. MATHis. How then does this cx) mpare with the current law of other programs, like the feed grain programs? Do you know whether it is a I-percent or 3-percent figure? What does the current rice law provide
Mr. BOR. The current rice law provides that you can withhold up to I percent of the national acreage allotment when you make the apportionment to States, and you can withhold up to 3 percent of the State allotments when you make the apportionment of the State allotments to the counties and the farms.
Mr. JOHNSON. That is the current rice program.
Mr. MATHIS. In essence we are making no change in that provision of the law.
Mr. BoR. The one change that you are making is that the allotment is going to be apportioned by the Secretary directly to' farms rather than having it go first to States and then from the States to the farms.
The reason that there is a slight difference is that in some of the States in the past the determination of the allocation was made by the





25

State committees rather than in Washington. Last year, as an administrative matter, I think it was done through the Washington office.
Mr. MATIS. I apologize for holding the subcommittee up, but I am still not clear on this. What we are saying about this subsection is that we are bypassing the State allocation process.
Mr. BOR. That is correct.
Mr. MATHFIS. These allotments shall be handed out directly from the Secretary's office here.
Mr. BOR. By the Secretary to the f arm.
Mr. BOWEN. Then, the reservation of the 1 percent is under the control of the Secretary.
Let me ask the staff if, in the preparation of this draft language, they considered an alternative to this, that is, to have a State-level reallocation rather than a Secretary-level.
What was the objection?
Mr. JOHNSON. Is there a representative of the Department here? As a practical matter wouldn't they go through the State offices in making these determinations? The Secretary is not going to sit down to figure it out ?
Mr. WELLS. From a practical standpoint I would suppose that they would prefer to have it referred back to the States and then the States can refer it to the counties.
It seems to me that that was what it was under the peanut allotment, for example.
Mr. MATHIS. I don't have an amendment now but I would like to move this to the States as much as possible.
Mr. BOWEN. I would agree. We might want to suggest, inasmuch as we are not going to report the bill out today, we might want to ask the staff if they could develop appropriate language to address itself to that issue and we could review it later.
Mr. JONES of Tennessee. It seems to me that the absence of somebody from the Department of Agriculture is one of our problems. When we are discussing this, we ought to have someone here who has something to do with the handling of this type of allotments.
I understood counsel to say that the Secretary's office was making these allocations now on some of the other crops, is that right, Mr. Bor?
Mr. BOR. This year the issue came up as to the amount of acreage that would be withheld from new farms. The determination was made by the Washington office as to what portion of the State allotment would be reserved for new farms in each of the States. I think in prior years that determination was left to the State committee to make. They determined what portion of the 3 percent should be allocated to new farms.
That may not be so important anymore because this bill wipes out that additional 3 percent which could be reserved for new farms and only preserves the 1 percent which would be taken out of the nation allotment for new farms which has been the case in the past.
Mr. MATHIS. That is the question I have: why are we doing this? I have not received an answer to that question yet. That is, why we should be taking the 3-percent figure away from the States?
Mr. BOWEN. The issue is not on the percentage amount as much as on the method of allocation.





26

Mr.. MNATHis. As I understand it, what we are doing in this bill, H.R. 8137, is removing the flexibility of the State to allocate this 3 percent within the State to new farms.
Isn't that correct,?
Mr. BOR. It is a little more complicated than that, sir.
Under current legislation you could reserve 1 percent of the national allotment and the determination in the past -has always been made by the Washington office.
In addition to that, the current legislation provides that up to 3 percent of the State -allotment could be reserved f or new f armis. That determination in years -prior to the current year was left to the State committees to make. This year, for the first time in many years the national office decided that they would utilize the full amount of the 3 percent for apportionment to new farms.
So, there is discretion in the current legislation -as to who makes the determination but, -as a practical matter in the prior years when you get to the 3-percent reserve, that determination was made by the State committees.
Mr. MATHIS. But in the bill that we have
M r. B OR. In the bill that we have now there is no longer the 3-percent allocation to new farms. The only -amount reserved for new farms is the 1 percent of the national allotment. That under the current legislation is reserved to 'the Washington office.
Mr. MATHIS. My question is still whether there is a practical reason why we have taken the 3-percent figure away from the States?2
Mr. BOR. I cannot answer that.
Mr. JOHNSON. Let us go back to the acreage allotment.
If you have not established an acreage allotment, does that pretty well establish a law for the established allotments? Are they all taken care of, that is, that percent that they recently have been given, isn't that the answer?
There wasn't any reason to give an additional 3 percent discretion to the States because we are Setting the amount of allotment holders acreage in the previous section, 252. Anything else that is given is in addition to the 1 percent which Would be given to the Washington office.
Mr. BoR. You really have a policy choice to make. That is, whether you want to leave in fact as much as 3 percent of the allotment to be apportioned to new farms or whether you want to reduce it as you have in this bill f rom, 3 percent to 1 percent. The way the bill has been drafted, that would be- the total amount of the national allotment which could be reserved for apportionment to new farms.
Mr. JOHNSON. That would depend on the amount of allotment. If it were 2 million acres instead of 1.8 then you could have that discretion of 3 percent within the States.
Mr. BoR. The way the bill is drafted nowv, you don't have 3 percent.
Mr. JOHNxSON. That is what I am saying. It relates. These two sections interrelate with the,1.8 million set allotment of existing producers and the 1 percent which is going to new producers. That is the reason why we settled down to the 1.8; so, it does not seem to me that there is any necessity to allow 3 percent discretion because we have set that allotment.
Mfr. BOR. There is another reason and that is that in the past you could not grow rice without an allotment. It was important to many





C07
4Q 0

people to be able to have as large a reserve for apportionment to new f arms, whereas under this bill people who don't have allotments w ould be able to grow as much rice as they pleased. Perhaps there is not the same need to have a 'Large percentage.
Mr. MATHIS. I think we should put out for the record that the new rice that will be grown under this law, if the subcommittee passes the bill and it becomes law, will not be supported by the, target price. Therefore, the allotments will still have a certain amount of value and you still have a certain number of growers who want to grow rice under the allotment system.
.11y concern is that you are taking away from the States additional flexibilltv of being able to apportion 3 percent of this as they have in the past io new growers.
I would simply like to ask the staff to draw up the appropriate amendment so that, at the proper time, we might consider it.
Mr. BOWEN. The percentage f actor, as I say, is one of those areas of negotiations between the two sides of the rice-growing world.
I understand that the older growers would like to hold that percentage to a lower figure and I understand that those who would like to grow rice who did not grow it before would like to see it at a, higher figure. That is something the committee can workon, but those are, the two sides which are involved.
In terms of the decision of who makes the allocations, that is something that might not be very debatable. We might easily be able to look at that in the States. But the issue of how much is involved is an issue which is a part of the whole compromise package.
Inasmuch as everybody can grow rice at once who wants to, it reduces the importance of this issue dramatically although I should point out that it does have some value. It would determine who would get some payments.
Mr. JoH.-sow. Doesn't that get back to the critical issue that divided the rice growing industry on the whole thing? That is., do the new rice growers qualify for allotments? This, in effect, stops them at the 1.8 level. There is no reason to expand the allotment to these new growers. I don't see the problem. It sounds all right if you let the States allocate their I percent.
Mr. HoLLAND. We might explain how we came up with the 1 percent figure.
Mr. CARLSON. There are two provisions in the present act. One is for a 1-percent reserve for hardship cases, then there is a 3-percent reserve for new growers which has not been exercised in prior years.
In an effort to come to an agreement on some provision for new growers while, at the same time., allowing a provision for hardship cases, the reserve in the proposed bill is not to exceed 1 percent and it may be used by the Secretary.
My understanding from the input from the USDA is that a certain portion f rom the national acreage allotment is needed for hardship cases. How much? I don't know. There are, some settlements that have, to be. honored, and so forth. So, there has to be some amount of the national acreage set aside.
The 3 percent caused some problems last year, so, it was decided to put in the 1 percent to satisfy both provisions of the, present act-1 percent for the hardship cases, 3 percent for the new growers. The





28

amount remaining from the 18,000 acres, which would be the maximum under the proposed bill and how much would be left after you got through satisfying hardship cases could be apportioned by the Secretary to new growers.
Mr. MA TIS. That explains it to my satisfaction. I have no objections, then on that basis.
Mr. BOWEN. Our effort has been all along to have both sides of the rice industry represented; that is what we have been attempting to do, that is, to reconcile the two factions.
Mr. MATLHIS. Let us move along.
Mr. BOWEN. On page 4Mr. MATHIS. I assume this was the language taken from the target price language of last year?
Mr. HENRY. Yes.
Mr. BowEN. Could you explain this to us, Mr. Henry?
Mr. HENRY. This is just a detailed analysis of the whole business of allotments and how they would be apportioned.
Mr. JOHNSOiN. It relates as to how you move your allotment. If you plant less than 90 percent of your allotment for no good reason, then you lose up to 20 percent, isn't that so?
Mr. HENRY. Yes. This is all standard language.
Mr. JoHNSON. That is what we have in the present 1973 Farm Act.
Mr. HENRY. Yes. It is all standard language until we get to section 102 on page 12.
Mr. BOWEgN. There is nothing new on page 4 and on page 5 that needs to be commented on?
Mr. HENRY. No.
Mr. JOHNsoN. If you don't plant for 2 years, you lose your allotment, is that right?
Mr. HENRY. Yes.
Mr. BowEN. How about moving to page 6?
Can you tell us anythin g that is located there which involves a change from the present legislation and tell us what that might be?
Mr. HENRY. To the best of my knowledge, there is nothing new on page 6. Page 6 through page 11 is all standard language. Until we get to section 102 on page 12, that is the payments and loansrMr. JOHNSON. If you don't mind, I would like to read through them. We are retaining that provision which allows the sale of allotments? 1A
Mr. BowEN. The value of that would be drastically reduced because of the fact that the production is being opened up. It has a relatively low value now in cotton.
Mr. JOHNSON..On page 8, is it consistent on the fifth line where it talks about "if the producer sells his allotment, his rice history acreage may be transferred to another producer who has had previous rice producing experience," 'is it consistent to limit that in those States that presently, have the allotments?
Mr. BOWEN. That question was raised earlier. I can see no particular reason, specially given the restrictive value placed on these allotments at this time.
I would like to ask the staff if they know any reasons -why we should not delete that section from it. inasmuch as Vit would prejudice the transfer to, someone who had not had previous rice producing experience?





29

Mr. HoLt.&-. That was picked up right out of the present law. Mr. BowEN. Maybe it does not need to be there? Mr. JoNso-N. That is my point. It seems to be inconsistent with the idea of expanding production.
Mr. BowEN. I would certainly be willing to see us delete that.
Mr. TOLIAND. As long as we have the same administrative areas, I think it would be consistent.
Mr. Joa-NsoN-. I move that we strike out that language: "who have had previous rice producing experience" on page 8.
Mr. JoEs of Tennessee. That is on lines 5 and 6. Do you agree with that, Mr. Bowen?
Mr. BOWEx. I agree with that. On page 8 lines 5 and 6 "may be transferred to another producer, or producers, provided the following conditions are met." That is how it would read now.
Mr. HERR. We have no problem with the amendment.
I just want to comment on one point. It is my understanding that the reason why it has been written into the law earlier is so that no one would buy rice allotments for speculative purposes. That was the reason for the provision in the current law. I just wanted to clarify that point.
Mr. BowEx. There is not likely to be much speculation on this, given the nature of this legislation. I don't think there would be any problem.
Mr. Joxs of Tennessee. We would delete lines 5 and 6 on page 8. Let us have the clerk read it.
The C ii. On page 8, delete lines 5 and 6 beginning with "rice history acreage may be transferred to another producer, or producers, who have had previous rice producing experience providing the following conditions are met."
Mr. BowEN-. No. The words to be deleted would be "who have had previous rice-producing experience."
Mr. JoNEs of Tennessee. Without objection, it will be done.
Mr. BoWEX. It was perhaps more appropriate at the stage where rice allotments were very carefully guarded commodities and perhaps it does not merit this much space in the legislation now but, inasmuch as this is the language from the statute and inasmuch as there would be limited value to the allotments we thought it would be better to put it in.
Mr. HEXRY. We had discussed this matter at length with some of the rice officials in the Department and we felt that the language should be included in the bill so that everything would be actually spelled out so as not to give the Department too much discretion.
Mr. JOHNSON. Referring to page 10, section (E) talks about any part of the farm rice acreage allotment on which rice may not be planted and which is voluntarily surrendered shall be deducted from the allotment to such farm and may be reapportioned by the county committee to other farms in the same county receiving allotments in amounts determined by the county committee, to be fair and reasonable on the basis of the following factors.
Subparagraphs (i) and (ii) relates once again to the previously existing allotment holders and why it is going again to the old
producers.
That seems inconsistent with this bill.
Mr. BowEN. I don't suppose it does any harm to be in here.
80-726---76 3





30

Mr. JOHNisON. It seems to me that, while protecting the old growers and giving them the loan protection and the protection of the target price, that we are trying to care for their interest but I don't see the justification of giving the abandoned allotments to those individuals. We are not extending loan coverage to the new growers. We are not giving them target price. Why should we, in fact, give the additional protection of the allotment to the existing holders
Mr. BOWEN. Is that what it says?
For example, is there anything there that says that only allotment holders could get that?
Mr. JOHNSON. It says the past production of rice by producers.
Mr. BOWEN. There are a lot of people who are not allotment holders. That would be one of the factors in the formula. I don't think it would be a major issue whether we had that item (i) in there, but that is just one of about six different items in the formula to be used in reallocating something which we have already decided is of very limited value.
Mr. JOHNSON. It is of limited value in the years when you don't have target price payments but it is of significant value when the market price falls below the target price.
Mr. BOWEN. What would you prefer? Leave production in there so that someone who has grown rice, and who has shown an interest in the production of rice by growing it, that would be some consideration. Along with that it would be weighted with the other items also.
I don't have any objection. Does the staff know of any objection to that? Would anybody be concerned about leaving item (ii) under section (E) ?
Mr. BoR. If you decide to delete item (ii) then probably you would want to delete certain language that comes before the listed items; namely-"receiving allotments." The way it is now worded, it would be limited to transfer in other farmers in the same county receiving allotments.
Mr. BOWEN. That question is one of language. It is possible to interpret that language to mean something else, almost as though you have planted -a comma after "county" implying that the reallocated allotments-that the phrase "receiving allotments" there refers to the reallocated allotments rather than the other way around.
You could interpret it that way but why don't we clear that up? Could we ask the staff to rewrite that in such a manner that we delete the eligibility-to make certain that the eligibility is not just for those who are already allotment holders and make certain that that is included?
fr. HENRY. There are certain items in these four pages which need to be cleaned up. We can take care of that with the Department.
Mr. JoNms of Tennessee. If the members of the committee agree, let the staff clean this up and come back.
Mr. BROWN. Is there anything in the payments and loans section? Is there any language there with the exception of the figures-the $8 per hundredweight for the target price and the $6 for the loan, is that the same as for the present statute law ?
Mr. HENRY. There is one change. The change under the target price of $8. There is an escalator from the time of the enactment of-the bill.





31

In other words, I think that, at -least, under the present agricultural legislation, this is not in keeping with the present agricultural legislation. There is an escalator which takes effect from the time the enactment of the bill goes through. So, it could be an escalator the first year in the target price.
Mr. JOHNSON. Starting in 1976?
Mr. HENRY. Yes.
Mr. BOWEN. As opposed to having a moratorium.
Mr. HENRY. The Department is not too pleased about this provision, so it may pose a problem when we take it up with the Department.
Mr. BOWVEN. Given the criticism which has been -directed at the present legislation with the absence of that escalator, I think we certainly need one here.
Mr. JONES of Tennessee. I think it is a good argument for an escalator.
Mr. HOLLAND. We might want to add that, on page 6, we did deal with the new lease -and transfer provisions -and on the top of page 7, we allow lease and transfer allotments to any owner or operator of a farm in the same administrative area.
Mr. JOHNSON. That would be part of the amendment process that the staff is groingy to work on. I have never liked that provision at the bottom of page 12.
Mr. BowEN. I would hope, as far as possible, that we could parallel the present legislation. If we find whether there needs to be a correction, we can consider it.
,Mr. JOHNSON. It is one of those things that could pass by and the next time we go around, if we are not careful, we will have trouble. I would just strike that proviso out.
Mr. BOWEN. This is one I gather the Department would be bitterly opposed to because this would leave an escalator but without any correction factor in the escalator.
M~r. JOH-jNSO.N. For increased yield.
Mr. BOWEN. Before acting on that, maybe we ought to give it a little more thought.
Mfr. JOHNSON. If we ask them, we know what their answer is going to be.
Mr. BowEN. There may be some other considerations.
Can st.aff iv me any further observation on that as to where we might stand'and what would happen if we did that? Are there specific dollar and cents implications?
Mr. CARLSON. There is one other consideration. In the event of a very low yield or a very high yield, the grower would have the privilege of being able to equalize out an average rather than getting stuck with a low yield basis one year and a high yield basis another. This gives him a change to average out and receive more of a fair amount under the provision.
Mr. JOHNSON. That only relates to the increase.
Mr. CARLSON. You may be right. It says "to reflect any change."
Mr. JOHNSON. It says "provided that any increase that would otherwise be made." This would temper the effect of the escalation clause. I always thought that the escalation clause should have been put in in 1973 and I argued for it, but we lost it.






32

Mr. BowFNi. Would it be fair to put an asterisk there and see if we can investigate that more thoroughly? Then, when we consider it aain, we can look at it with the whole committee?
Mr. JoHNsoN. I am doing this with the idea that we cl remove that from the main bill.
Mr. Boww-. If the staff would do a little checking in this for us to see if we are getting into a quagmire in this and what the complications might be. Is this loan ,language the same as it is in the present law ? It looks as if it were the same.
Mr. HENRY. You will- note on page 13 that the loan rate escalates also as the target price escalates and you will note on the provisions of compromise rice bill No. 4, loans for the 1977 crop will be at the same ratio as the loan rates to the target price of 1976 crops. There is about a three-fourth ratio.
Mr. BowEN. I might mention for the benefit of the committee that, even though only the alloted acreage would have a loan, it would certainly be our hope, and at worst, our presumption that the price in the marketplace would be stabilized by that low level so that the new growers would also benefit from the presence of that low level although they themselves would not participate in the loan. Hopefully, the market price would stabilize around that point. That is not intended to be exclusively for the old growers with the allotments.
Let me ask the staff about this disaster payment section. Is there any major change from the present law?
This is on pages 14 and 15.
Mr. BoR. When you are talking about comparison with the present law. I think you probably realize that in the present law the loan level is not less than 65 percent of parity.
Mr. BOWEN. I meant the 1973 farm act. Our attempt is to tie it into that type of legislation. Is this then precisely the same?
Mr. HENRY. To the best of my knowledge, it is the same. I don't recall any changes.
Mr. JOHNSON. When you get in on page 14 to these disaster payments, it says, "The payments shall be the larger of (a) the foregoing rate, or (B) one-third of the established price." What is the foregoz rate?
r. BROWN. That may refer to the target price.
Mr. BoR. I think it is the deficiency payment.
Mr. BowEx. That is what I mean: the payments under the target price.
Mr. BoR. It is the deficiency payment which appears on page 13A.
M.r. JOHONsoN. It is not clear to me yet. If you have a disaster and you cannot plant for the reasons listed here, then you get a payment that is one-third of the established price that would be the 8 cents on the regular yield, that is on the established yield for that particular
farm.
Mr. BOR. Or the deficiency payments, if there happens to be deficiency payments.
Mr. JOHNSON. You mean deficiency payments between the loan level and the target price?
Mr. BoR. Yes.
Mr. JoaNsoN. Thank you.





33

What does this mean at the bottom of page 14 that, "The Secretary shall make no payment pursuant to this sentence with regard to acres which were transf erred under section 352 (d)
Mr. BOR. It is page 6 of this bill, I believe.
Mr. JOHNSON. 352 (d) is the dissolution of a partnership.
Mr. BOR.On page 6, it is the section which authorizes the transfer of allotments if there is a disaster.
Mr. JOHNSON. He transfers his allotment to another farm and he got a yield from that other farm as a result of the disaster. I see.
As an aside, how many payments were made last year by the USDA under this provision? I have never seen any figures on that.
Mr. BOWEN. Inasmuch as we don't have a target price, thenMr. JOHNSON. But we had in the 1973 act.
Mr. BOWEN. There haven't been any.
Mr. JOHNSON. There were no disasters?
Mr. WELLS. It is about $600 million.
Mr. WILLIAMS. I personally don't know of any that were made on disaster basis with. that sort of transfer. I have never heard of it.
Mr. JOHNSON. I know there have been some, mi my territory. You have had disasters in Mississippi also.
Mr. BOWEN. Yes.
I gather then that all the language here is taken out of the 1973 act ?
Mr. JOIINSO'N.On page 15 we will get into the set-aside. There is a mandatory set-aside if the crop carryover would be 15 percent. Is that in the existing law 1
Mr. BOWEN.Yes.
That does not restrict the, man's right to grow a crop.
Mr. JOHNSON. It restricts his coverage under the allotment.
Mr. JoNms of Tennessee. I judge that practically all of this language is taken from the 1973 law.
Mr. HENRY. The set-aside provisions of this bill are not taken from the 1973 act. There were some substantial changes made in the set-aside proLyram contained in this proposed legislation. It was worked out between us and the Department.
I think that for detailed explanation Mr. Carlson can be of assistance here.
Mr. BOWEN. You want to run through that for us
Mr. CARLSON. The Department objects to the word "shall" in the first paragraph because this proclaims a mandatory set-aside under certain provisions. This can get very confusing.
What happens is, for example, in determining whether a set-aside
-would be in effect for the. 1976 crop of rice, the Secretary makes a series of calculations prior to the beginning of that calendar year. He calculates what his carryover is going to be on August 1, 1977, which is the beginning of the marketing year---excuse me, it is the carryover of rice-beginning in the calendar year following the calendar year immediately in which such crop shall be grown. That is August 1, 1977. He calculates the disappearance of the 1976 crop in export and domestic consumption and comes up with the projected carryover on August 1, 1977.



80-726 0 76 4








When he gets this figure, he then estimates production from 1976 under open production, he takes the total production for 1976 and his carryover which will be in effect ton August 1, 1976, that is his total supply. He takes 15 percent of that.
If his carryover on August 1, 1977, is greater than his 15 percent of total supply then he must proclaim a set-aside.
This gives him the opportunity to project the utilization of the crop that he is making the determination for.
Mr. JOHNSON. What are the payments under the set-aside?
Mr. CARLSON. In order to be eligible for the program you have to set aside what the Secretary said to set aside. This is the discretionary thing. If the Secretary comes up and he says he needs a setaside, he can make Ia mandatory set-aside of 10 percent, for example.
'This would mean grower eligibility for the program if the grower complied.
Mr. CARLSON. Yes.
Mr. JOHNSON. There are no payments for going through the setaside or abiding by the set-aside. It just reduces your allotted acreage.
Mr. CARLSON. Right. But there are ways to get the benefits on the full allotment.
Then, there is a voluntary set-aside provision. The secretary can also come up and say that if you want a land diversion payment you can set aside an additional 5 percent or whatever, which is more of an enticement and a statement to the industry that there will be a trade-off.
Consequently, it is advantageous to cut back. It is a signal to the production industry that it would be to their advantage to go along with the voluntary set-aside 'provision in order to be eligible for the land diversion payment.
In direct answer to your question, when you comply with the mandatory set-aside, all you do is just remain within the program.
Mr. JOHNSON. Then, we are actually harming the allotment holder by making it mandatory?
Mr. CARLSON,. To that extent, you are except that he is not penalized by going beyond his allotment.
Mr. JOHNSTON. I understand that. But he is penalized if he is in a situation where he has to have deficiency payments.
Mr. CARLSON. Yes, sir.
Mr. JOHNSON. Do you want it in there?
It would seem to me that the feature should be mandatory.
In other words, if the Department comes along and projects that they are going to have more sales available, why should they have to cut down the production of the target price? That is harming the allotment holder.
Mr. CARLSON. I do want it understood that I am not speaking for Congressman Breaux. I do want it understood that I am not doing that. I am just explaining the provisions. I would say, with the permission of the subcommittee and at the direction of the subcommittee, that I would be more than happy to try to rework that language.
Mr. JOHNSON. You may just say "may."
Mr. BowEN. The Department wanted that anyway.
Mr. JOHNSON. I would like to see what the Department has to say about that.





0% Lo
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There is no reason to penalize these allotment holders.
Mr. CARLSON. That fis a very real consideration on the part of the allotment holders. This is one of the characteristics of the set-aside which no one has been clear on. They do not know how it would work under those conditions.
Mr. JOHNSON. Let us get some clarification on the Department's position. You might also contact some of the representatives of the existing allotment holders. They may want to have the discretionary feature..
Mr. JONESof Tennessee. We have got to find a passage that we have got to think about. We have got 12 minutes. What shall we do?
Shall we recess and come back?
Mr. BOWEN.We are about to finish it up. Don't you think we could come back and finish it up in another 15 minutes?
Mr. JOHNSON. There are just the three of us here. I think some of the objections that have been expressed might be intensified if we go too fast.
Mr. BOWEN. We did not get a chance to ask Chairman Mathis what his plans were for the next meeting. I wonder when he will prefer to do that,
It would be my hope that we would deal within the first few days after we return from the recessMr. JOHNSONA would like to be able to get this pretty well cleaned up so that the people who wanted to go home with it in hand could. Mr. BOWEN. If we got the minutes of the bill, we could go through it ourselves and we could prepare it at the next meeting with some of the new language that the staff could prepare for us. We could take final action maybe and reprt it to the full committee. I will speak to Chairman Mathis and urge him to have that meeting. Mr. JONESof Tennessee. Without objection, we will stand adjourned. [Whereupon, at 4:05 p.m., the subcommittee adjourned.]















RICE PRODUCTION ACT OF 1975


THURSDAY,, JUNE 26,1975
HousE OF REPRESENTATIVES,
SUBCOMMITTEE ON OILSEEDS AND RICE OF THE
COMMITTEE ON AGRICULTURE,
-Washington, D.C.
The subcommittee met at 1:30 p.m., pursuant to call, in room 1302, Longworth House Office Building, Hon. Dawson Mathis (chairman of the subcommittee) presiding.
Present: Representatives Mathis, Jones of North Carolina, Jones of Tennessee, Bowen, Fithian, Johnson and Moore.
Staff present: Robert Bor, counsel; John Hogan, associate counsel; Steve Allen and Steve Pringle, staff consultants; Norman Gay and Roxie Burris, staff consultants, Subcommittee on Oilseeds and Rice; and Glenda Temple, staff assistant.
Mr. MATHIS. The subcommittee will come to order.
At the time of our previous adjournment, on Tuesday afternoon, Chairman Jones advised me that we had proceeded down to what is now page 14, line 11, in the printed, bill which has been referred to this subcommittee, H.R. 8137.
The Chair wishes to express his appreciation to Mr. Jones for having assumed the duties of chairman the other afternoon in proceeding through this bill.
If it meets with the approval of the subcommittee, we will proceed as we did previously. We will try to go through the various provisions of the bill. Then we will ask the staff, if they will, to take the bill, over the recess, and make whatever technical amendments are necessary. We hope that at the time that we come back, several members of the subcommittee will join in re-introducing the bill in a clean version.
The Chair would hope that at that timewe could get the subcommittee back together. I understand that Mr. Moore has a substitute which he would like to offer at that time.
We will try, as soon as possible after the recess, to consider the substitute of the gentleman from Louisiana and others that might be offered.
Without objection, we will proceed.
We will go forward with a section by section reading of the bill.
Mr. Bowen, would you like to do this?
Mr. BowFN-. Thank you, Mr. Chairman. We had gotten to the setaside portion of the bill. I believe that we had actually gone through that and discussed it at some length. We felt that we needed to talk to some departmental representatives and to others to see what various points of view are on the question of mandatory set-asides.'
(3T)






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I think that we can gather some observations on this. I think we do have some representatives here.
Mr. MATHIS. Will the gentleman yield?
Mr. BOWEN. Yes.
Mr. MATHIS. We do have two represestatives from the Department here today. I apologize, gentlemen, for not recognizing your presence.
I would like to introduce Mr. Ray Voelkel, who is an economist with the Department; and Mr. George Schaefer, who is director of the rice division.
Gentlemen, we appreciate your coming up. I am sure the subcommittee will have some questions as we proceed. We would certainly like to have your opinions on this proposal that we are considering.
Mr. BOWEN. When we discussed this previously, Mr. Johnson was here. He observed that hle felt that the mandatory set-aside, as 1 recall, would weigh most heavily upon the older g rowers. So, I was interested to know if there was any strong commitment to maintaining that, since apparently the Department would prefer to have a nonmandatory set-aside.
If the Department would care to have someone make an observation on that point, at this stage, we would appreciate any comment you would have.
Would someone be able to comment on behalf of those who are already allotment holders? That might give the committee a little better perspective.
Mr. -MATHIS. Are you talking about going back to line 8 on page 13 o the printed bill? ?
Mr. BOWEN. Yes. The language is "shall provide" or "may provide". for the set-aside of crop land. That was what we were discussing when we adjourned last time.
M~r. MATIS. DO you have any comments on the set-aside provisions? Could you tell us what the Department's position would be on this?
Mr. VOELKEL. Neither one of us is in a position to say definitely. I think, certainly, the preference would be to authorize set-aside at the discretion of the Secretary. This would be consistent with other set-aside legislation.
W~e would make it discretionary rather than mandatory as far as the set-aside is concerned.
M,-r. BOWEN. Mr. Chairman.
Mr. MATHIS. Mr. Bowen.
Mr. BOWEN. I wonder if I might ask what is the reason for being opposed to mandatory set-aside? What is the Department's thinking on that?
M~r. VOELKEL. One factor, I guess, would be that in the case of the other commodities,. or as in the case of set-aside in general, set-aside is viewed as a means of reading overall aggregate of acres rather than being aimed at individual crops. In the case of feedgrains, cotton and wheat, it is viewed that if you projected having too much aggregate acreage then you Would take an amount of acreage out of production through set-aside. However, with reference to the -bill before this committee, H.R. 8137, we are talking about triggering a set-aside program specifically limited to rice.
Mr. BOWEN. What is this set-aside language in our regular documents? Is it mandatory or optional?
Mr. BOR. It is discretionary.






39

Mr. MATHIS. If the gentleman will yield, we are talking about entirely different kinds of situations.
There are very clear requirements that have -to be present before the Secretary could make a decision as to set-aside. The set-aside is based upon clear requirements. If the set-aside came into play and the Secretary were ordered by the language of this bill to do that, then we assume that it would apply not only to the -old growers, but the new growers.
If we had a marketing condition in the carryover of rice that was in excess of what was nee ded, then I would simply not find anything wrong with having the Secretary make a set-aside. This would be proper when the conditions existed.
If he were not to do so, then he might jeopardize the position of both the old growers and the new growers.
That is to say, I am talking about the allotment growers and the nonallotment, growers. The Chair finds no objection to mandatory provisions.
It seems to me that the Secretary would want to have this. He would be assured that we would not have a tremendous oversupply of rice available in any marketing year.
I am certain that most of the new growers would have no objection to this. Our consideration last time was to attempt to reach a position that would be as satisfactory as possible to the present allotment holders, the old growers.
If we seem to be in favor of keeping the mandatory language, then 1, personally, would have no objection. to the language that we already have in the bill, which is mandatory.
Would anyone else care to offer any observations on this at this time?
Mr. JONES of Tennessee.' Mr. Chairman.
Mr. NIATHIS. Mr. Jones.
Mr. JO-XEs of Tennessee. Thank you, Mr. Chairman. I -agree with you. I see no reason not to stay with the language of the bill as we now have it.
Mr. MATHIS. Mr. Moore, do you have any comment on this at this time?
Mr. MOORE. I do not. Thank you,"NMr. Chairman.
Mr. MATHIS. It is obvious that we are 'going to have this bill before us again in full committee. In fact, the opportunity will be available to us to offer amendments.
I think that if there is general agreement, then we will pass over that and go on to the next subject.
Mr. BOWENw. Will the gentleman yield, Mfr. Chairman?
Mr. MATHIS. Yes.
Mr. BOWEN. By the time we get this bill to the full committee, then if the Department has some more detailed presentation to make to us at that time, then the full committee would-be happy to entertain that presentation.
Mr. Bou. Mr. Chairman.
Mr. MATHIS. Yes.
Mr. BOR. There is a factor that the subcommittee may want to give consideration to at this time. This is whether or not the set-aside would be required, at least under this bill, based upon estimates made jon January 1.





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The subcommittee may want to give consideration as to what the situation would be if the turn of events in the subsequent 2 or 3 months throws your estimates out of gear.
When you get the new figures, more reliable figures, then the formula at that ti'me may no longer call for a set-aside.
The way that the thine is now worded you are locked into a position as of January 1, basi d upon estimates. As the year progresses and as more reliable figures come to play, you would want to be able to take account of those in judging as to whether or not a set-aside is to be decided.
Mr. MATHIS. Obviously, the subcommittee will have to stand in recess for a few minutes at this time because of the call of the bells for a vote.
When we do come back, we can continue. I would hope that the members would come directly back.
The subcommittee stands in recess at this time.
[Recess taken.]
Mr. MATHIS. The subcommittee will come to order.
Before we left we were discussing something that I now want to ask a question about.
If we were to change this word "shall" as it is now in the language of the bill to the word "may," then would the Secretary have to make a determination on January 1?
Mr. VOELKEL. Do you mean that there would be no other change than just the word "shall" to the word "may"?
Mr. MATHIS. Yes.
Mr. BoR. We could word this in such a way that it would make it abundantly clear that the estimate would have to be, made before January.
With the word "may," it is a little ambiguous. It is implicit that the estimate would have to be made. But to avoid any problems we could make it explicit.
Mr. MATHIS. I am sorry. I do not know what you mean when you say that he has the discretion to go either way at this time.
Mr. BoR. Excuse me, if we were to provide the word "may" instead of the word "shall," then it would be implicit that he would have -to make an estimate before January 1 and arrive at a judgment as to whether or not, based upon that estimate, he would want to impose set-aside.
In order to avoid ambiguity I think that it may be well to require that, if you were to put the word "may" in, he would be under an obligation before January 1 to make the estimate and publish the estimate.
Mr. MATHIS. Is it your opinion that the languagre that is now contained in the Section does not force him -to make that determination before January 1?
Mr. BoR. If you leave the word "shall" in there, then it does.
Mr. MATHIS. Then if you change it to "may", then if he makes a determination, then he still must make it prior to January'l.
That is my question. Would it be a solution to the problem?
I should direct this question, perhaps, to Mr. Shaefer.
Would it be helpful if we were to add some type of language that would allow him to make a preliminary estimate that is to be setaside by January 1, and -then at some date such as April 1 come back with a final determination about the set-aside.





41

Mr. Schaefer, would you care to comment?
Mr. SCHAEFER. I should think that the additional months are very helpful. We would have those additional months to look atthe world situation, how things are in Southeast Asia, the impact of the world crop, and the demand.
I think it would not be too late to disrupt the normal planting of rice, if we were to have the April date' We have, in past years, increased acreage allotments in April an as far as I know, everyone was able to get a crop in.
We do not see any objections to that.
Mr. MATHIS. It is the opinion of the Chair that we should retain the word "shall." I think that we need to have that in.
Mr. JOHNSON.Mr. Chairman.
Mr. MATHIS.Mr. Johnson.
Mr. JOHNSON. Thank you, Mr. Chairman. When we were discussing this the other day, we arrived at some ideas. I would like to raise some of those questions at this time. There was no vocal disagreement on the fact that this is a mandatory requirement that would work adversely against interest of the rice farmer.
Mr. BOWEN. Willthe gentleman yield?
Mr. JOHNSON. Yes.
Mr. BowFN. I thank the gentle n for yielding. In your absence a few minutes ago we had a lengthy discussion of this.
From that discussion I would say that it appears that the rice farmer is the one that wants this. The oldgrowers, or the traditional allotment holders are the ones that want it.
If they want it, then we would have no reason to oppose letting them have it.
Mr. JOHNSON. That is the point that I raised the other day.
Mr. BOWEN. You and I had the same point of view. We thought that it would be restrictive of them. But they seem to prefer that.
TMr. MOORE,. Mr. Chairman.
Mr. MATHIS. Mr. Moore.
Mr. MOORE.. I think that. this is true. 1 concur. That is the opinion of the rice growers in Louisiana. ,
Mr. MATHIS. Before you got back, Mr. Moore, I proposed for discussion retaining the word shall. This would allow the Secretary to come back on April 1, and make a final determination.
The gentlemen from the Department observed that they would have a chance to look at the world situation.
Mr. MOORE. I see.
Mr. MATHIS. If there is no objection, then we would direct counsel to make the appropriate amendments to help make a clean bill and we could then proceed.
I recognize Mr. Bowen.
Mr. BOWEN. That brings us down to the next matter. In working with Mr. Bor, the counsel, on this in the interim since our last discussion, I think that some of the language, in his opinion, might have some problems.
Are we at that section at this time Mr. BOR. This is not the language that I was discussing earlier. It was some of the earlier language.
I do, however, have a question about the section that deals with the set-aside acreage.







On page 13, at line 17, 1 find something that I would like to bring to your attention. It says:
If a set-aside of cropland is in effect under this paragraph then, as a condition of eligibility for payments under paragraph 3) of this subsection, the eooperators must set aside and devote to conservation uses an acreage of cropland, etc. that is required.
The question that I have is: Is it the intention that this be a condition only on eligibility for payments, or is this a condition of eligibility for loans, also?
Mr. MATHIS. How does that language compare with other legislation?
Mr. BoR. For feed grains, wheat and cotton, the bills say a condition of eligibility for payments, loans and purchases.
Now, another part of this bill says that to be eligible for a loan you have to be a cooperator. A cooperator is defined as someone who has set aside the required acreage. I was a little confused as to whether it was the intention that to be eligible for a loan you do have to comply with the set-aside.
Mr. BOWEN. In other words, we ought to be consistent in our language and correct one or the other of those.
Mr. BOR.Yes.
Mr. MATHIS. The other section of the bill does not interfere with this section in any way.
What you are simply saying is that we need to have the same language in both places.
Mr. BOR. Yes, if it is your intention that the person who wishes to obtain a loan must comply with the set-aside, then I think that we need to add, in lines 18 and 19, a reference to loans as well as to payments.
Mr. MATHIS.Would you prepare the proper language along those lines as well.
Mr. BOWEN.Mr. Chairman.
Mr. MATHIS.Mr. Bowen.
Mr. BOWEN. Since we have passed over this section already it would be my duty to point out to the subcommittee that Mr. Frick indicated to me today that he feels that the Department would be opposed to escalator factors in the loan rate and target price in the first year.
The subcommittee might consider that in its deliberations.
He feels that he might not object to the escalator being applied in the second year, but that he would be opposed to its applicatiGn for the first year.
That is, after the passage of this legislation, in the ensuing time until the next crop year, under the present language of this bill the escalator would take effect.
Mr. MATHIS. It would be the feeling of the Chair that we will probably face this issue when the bill reaches the full committee.
The full committee can take this up. It would be my opinion at that time to support the, position that is in the bill. I think we have enough trouble with the 1973 act that did not provide an escalator clause. I have no intention of supporting any amendment that would take away the escalator clause for one month.
We -are going to face this in the full committee. I would suggest very strongly that we leave the language intact.





43

Mr. BOWEN. I would agree with the Chairman. I would remind the committee that this works up and down. It is a de-escalator as well as an escalator.
Mr. JOHNSON. Mr. Chairman.
Mr. MATHIS. Mr. Johnson.
Mr. JOHNSON. I have been advised by the Department that the escalator relates both to the loan and to the target price. They want to be sure that any downward adjustments do stay in.
I thought that it should be made clear that that is the Department's position. It will, obviously, be enunciated in the full committee by those who agree with that position.
I do not think that there is any reason for us to try to pretend that they are not going to try to raise that issue. As you do, I feel that the loan escalator should have been in the 1973 act. I do not like that downward adjustment at all.
I do not know whether we ought to take a vote on it or whether we ought to leave it there. I would suggest that we continue. I do not want to offer the Department's amendment. If anyone else wants to, they are certainly aware of the Department's position at this time.
Mfr. MATHIS. Does anyone have anything to offer on this?
Mr. JONES of North Carolina. I wish to say that I support the Chairman's position. We have had enough experience with sadness with the 1973 act. I would hate to go through anything like that again.
Mr. MATHIS. Mr. Bowen, would-you like to proceed with the next section ?
Mr. BOWEN. .Yes. WVhat we were doing last time is just giving the members a chance to read the bill, not reading it out loud. Then we were entertaining any comments that were applicable to the various sections.
Mr. JOHNSON. Is this printed copy exactly the same as what we had before?.
Mr. BOWEN. Yes.
MNr. JOHNsoN. Does it have the amendments that we were talking about?
Mr. BOWEN*. No, it does not have anything that we took action on in subcommittee last time.
Mr. JONSN Has the staff prepared those amendments?
Mr. BOWEN. Yes, to my knowledge. At least they have discussed them and provided outlines. By the time we come back here next time, shortly after the end of the recess, for final discussion on this, we hope that we can report it out to the full committee with all of this amended language in final form.
Mr. MATHIS. This section (5) (B )-is this standard language?
MNr. BOWEN. I would like Mr. Bor to answer if he sees any Objection to the language there. Is it similar to the basic statutory language that applies?
Mr. BOR. It is very close. It is almost identical with the language that now appears in the other set-aside provisions of the law.
Mr. MATHIS. What about section (6) ?
Mr. BOR. That is also practically identical.
Mfr. MATHIs. What about (7) ?
M r. JOHNSON. Mr. Chairman.






44

Mr. MATHIS. Mr. Johnson.
Mr. JOHNSON. As we were reading through this last time we found that there were several places where we might want to make changes.
If you -do not mind I would like to take a moment to read through this carefully. I will read as quickly as I can.
Shall we go on to section 103?
Mir. MATHIS. Are there any other questions from other members at this time, before we go on?
[No response.]
Mr. MATHIS. What about (7), (8), (9), (10), (11), and (12) ? All of this language is consistent with the previous language in comparable bills?
Mr. BOR. That is right.
Mr. MATHIS. Down to section 103.
Mr. JOHNSSON. Would the staff please explain something about section 103?
Mr. BOR. Section 103 makes inapplicable the provisions of the Agricultural Adjustment Act of 1938 that are supplanted by the new bill.
In other words, the provisions relating to marketing quotas and the allocations of allotments under the old system are involved. What it
-does is to make those provisions inapplicable just for the lifetime of this bill. This is a 2-year bill.
After the 2 years elapse, then the regular and permanent provisions come back into play.
Mr. MATHIS. Would not the Findley amendment on authorization come in at the end of section 103?
Mr. BoR. I think that would appear just before 103, as perhaps paragraph 13.
Mr. MATHIS. That obviously is not in this bill. It would appear in the new bill.
Mr. BOR. Yes. The payments all come in the previous section. The payment limitation would be a paragraph h at the end of that section which would limit the payments to a total of $55,000.
Mr. MATHIS. Title 11, section 201.
Mr. JoHNsoN. Is there anything in the area of rice research that is going on at this time?
I am talking about the eight criteria that are listed under title II. Could the people from the Department tell us about that?
Mr. VOELKEL. Either the Agricultural Research Service or the Economic Research Service would be able to tell you, but I am not familiar with that.
Mr. SCHAEFER. That is correct.
Mr. MATHIS. Where does this langu age come from?asiws
,_Mr. BOWEN. This has been in several versions of the bill, si a
introduced. It was included in the bill that was introduced last year. There seems to be wide sentiment throughout the rice industry that a section on rice research be included. Rather than take the leftover bits and pieces of money left in the Department, they wanted their own rice research allocation.
They wanted some specific amount earmarked for rice research. Rice, of course, has always been a kind of poor relation in the Department of Agriculture to a certain extent.





AA
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Now that it has growing importance in our economy and in the economy of the world, there is a feeling that we ought to have a section on it.
Mr. MATHIS. Mr.Johnson, do you have any objection?
Mr. JoHwsoN. No; I have no objection. I was just wondering if there were any present programs going on and whether this amount of money was appropriate and should be increased or cut down or what.
Mr. SCHAEFER. I want to add that I know that there are grants given under the cooperative research program. Many of the grants are foreign grants. I do not know the extent of the dollars that constitute these grants.
Some of them go for 3 to 5 years or some of them go 1 or 2 years. As I recall, most of them are in foreign countries.
Mr. MATHIS. I would like the committee, staff to find out what the situation is on rice research now. I would like to have the information when we come back.
We are now referring to section 301. Mr. Bor, does that simply do what section 103 ?
Mr. Boit. That is right.
Mr. MATHIS. Section 302, what does that do?
Mr. BOR. Section 302 is a provision that is comparable to similar provisions in the rice and feed grain and cotton bill. It makes the determination of the Secretary final with respect to questions that arise on payments that are made under the program.
Mr. MATHIS. And section 303? Does that simply allow a cooperator to take part in the program ? Is that correct?
Mr. BOR. Section 303 is tied in with the loan and payment provisions. Those provisions say that, in order to receive payments and loans, you must be a cooperator.
A cooperator here -is a person who has an allotment. If there is a set-aside in effect, then it is a requirement that you comply with the set-aside.
Mr. MATHIS.What about section 304?
Mr. BOR. These are just technical provisions in section 304. It is designed to make sure that the general provisions of the 1949 act applies to rice.
Mr. MATHIS. The Chair would like to ask the staff to make the necessary amendments that we have erected and have a new bill drawn. If at all possible, I would like to have that done by the time we come back from recess. They should be prepared for introduction.
Mr. BOWEN. Mr. Chairman, would it be the Chair's intention that we make an attempt to meet perhaps the first week after the recess.
Mr. MATHIS. I believe that the 16th is the earliest that we could have a hearing, according to the committee scheduling.
Mr. BOWEN. Do you mean in terms of availability of rooms? Mr. MATHIS.Mr. Johnson.
Mr. JOHNSON.We would have to have this all ready to go because there will be people, who, I understand, will offer motions to report other bills.
Mr. BOWEN. Then what will it be?
Mr. JOHNSON. We will have plenty of time to look at this and there will be motions to report other bills to the floor.







Mr. GAY. So the committee rooms are all occupied the first week. ,Mr. JOHNsoN. It will be Wednesday of the second week when we come back.
MNfr. GAY. The full committee has it tied up the first week in caucus. Mr. MATHis. At this time the subcommittee will adjourn, subject to the call of the Chair.
[Whereupon, the subcommittee adjourned at 2:45 p.m.]










RICE PRODUCTION ACT OF 1975


WEDNESDAY, JULY 16, 1975
HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON OILSEEDS AND RICE OF THE
COMMITTEE ON AGRICULTURE, Wa~shingtom, D.C.
The subcommittee met, pursuant to notice, at 3:15 P.M., in room 1302, Longworth House Office Building, Hon. Dawson Mathis (chairman of the subcommittee) presiding.
Present: Representatives Mathis, Jones of North Carolina, Bowen, Fithian, Findley, Johnson, and Moore.
Staff present:- Robert M. Bor, counsel; John E. Hogan, associate counsel; Norman Gay, staff consultant, Subcommittee on Oilseeds and Rice; L. T. Easley, press assistant; and Anita Brown, staff assistant. Mr. MAmis. The subcommittee will be in order. Gentlemen, we have before us this afternoon H.R. 8529, introduced by myself, Mr. Jones of North Carolina, Mr. Jones of Tennessee, and Mr. Bowen.
Without objection the bill will be submitted as having been read and open for amendment at any points.
[The bill H.R. 8529 and the U.S. Department of Agriculture report follow:]
(47)





48

94ii CONGRESS
1T Szs8IoN H O *8 2




IN THE HOUSE OF REPRESENTATIVES JULY 10, 1975
Mr. MArms (for himself, Mr. JoNS of Carolina, Mr. JoNEs of Tennessee, and
Mr. BowEN) introduced the following bill; which was referred to the Committee on Agriculture




A BILL
To establish improved programs for the benefit of producers and consumers of rice.
1 Be it enacted by the Senate and House of 'Representa2 tives of the United States of America in Congress assembled,
3 SHORT TITLE
4 SECTION 1. This Act may be cited as the- "Rice Pro.

5 duction Act of 1975".
6 TITLE I-RICE ALLOTMENTS AND

7 PRICE SUPPORT
8 NATIONAL ACREAGE ALLOTMENT AND ALLOCATION

9 SE. 101. Effective for the 1976 and 1977 crops of
10 rice, section 352 of the Agricultural Adjustment Act of 11 1938 is amended to read as follows:





49


2

I "'Sftc. 352. (a.) The Secretary shall establish for each 2 of the 1976 and 1977 crops of rice a national acreage allot3 ment in the amount of one million eight hundred thousand

4 acres.

5 (b) The national acreage allotment for each such crop

6 of rice shall be apportioned by the Secretary to farms, and in 7 producer States and administrative areas, to producers on the 8 basis of the rice allotments established for the 1975 crop 9 as adjusted in accordance with subsection (c) of this sec10 tion: Provided, That not to exceed 1 per centum of the 11 national acreage allotment apportioned within each State 12 may be reserved by the State committee for (1) appor13 tionment to new rice farms and new rice producers on the 14 basis of the following factors: suitability of the land for the 15. production of rice, the extent to which the farm operator 16 (or producer in the case of a- producer allotment) is de17 pendent on income from farming for his livelihood, the 18 production of rice on other farms owned, operated, or con19 trolled by such person, and such other factors as the State 20 committee determines should be considered for the purpose of 21 establishing fair and equitable rice, allotments; (2) making 22, adjustments in farm allotments to correct inequities or to 23 prevent hardships; and (3) making corrections in farm 2A or producer allotments.

25(c) ()If for any crop the total acreage planted to



80-726 0 '76 5








3

1 rice on a farm is less than the rice allotment for the farm (or 2 -in producer administrative areas, the producer allotments 3 allocated to the farm), the farm or producer allotment used 4 as a base for the succeeding crop shall be reduced by the 5 percentage by which such planted acreage was less than the 6 allotment for the farm, but such reduction shall -not exceed 7 20 per centum of the farm or producer allotment for the pre8 ceding crop; except that if not less than 90 per centum of the 9 farm acreage allotment is -planted to rice, the farm shall be 10 considered to have an acreage planted to rice equal to 100 11 per centum of such allotment. For purposes of this para12 graph, -an acreage on the farm which the Secretary deter13 mines was not planted to rice because of drought, flood, other 14 natural disaster, or a condition beyond the control of the pro15 ducer shall be considered to be an acreage planted to rice. 16 For the purpose of -this paragraph, the iSecretary may permit 17 producers of rice to have acreage devoted to soybeans, 18 wheat, feed grains, sugar, castor beans, triticale, oats, cot19 ton, rye, or such other crops as the Secretary may deem 20 appropriate, considered as devoted to the production of rice 21 to such extent and subject to such terms and conditions as 22 the Secretary determines will -not impair the effective opera23 tion of the rice program.

24 (2) If no acreage is planted (or regarded as planted)

25 to rice -for two consecutive crop years on any farm which





51


4

1 had a farm. acreage allotment for such years or for any 2' producer which had a producer allotment for such years,
3 such farm OT producer shall lose its allotment.

4 (3) Notwithstanding the provisions of paragraphs (1)

5 and (2) of this subsection, -no farm or producer allotment 6 shall be reduced or lost through failure to plant, if the 7 coooperator elects not to receive payments for the portion of 8 the farm or producer -allotment not planted to which he 9 would otherwise be entitled under the provisions of section 10 101 (g) of the Agricultural Act of 1949. 11 "(d) Notwithstanding any -other provision of this Act, 12 if the Secretary determines for -any year that, because -of 13 drought, flood, other natural disaster, or a condition beyond 14 the control of the person involved in the production of rice, 15. none or only part of the acres of an allotment can be timely 16 planted or replanted by or for such person in such year, 17, the Secretary may authorize for such year the transfer 18* of the total number -of such acres which are so affected to 19 'another farm in the same or any nearby county, but within 20 the same administrative area, on which one or more persons 2-1 on the far-m from which the transfer is made will be engaged 22. in'the production of rice and will -share in the proceeds 23 thereof, in accordance with such regulations -as the Scee24 tary may prescribe. Any allotment, or portion thereof,





52


5
1. transferred under this suibsection shall be regarded as planted 2 to rice -on the farm from which the transfer is made for 3 purposes of establishing future farm allotments. For the 4 purpose of determining the amount of payments and. loans 5 made under section 101 (g) of the Agricultural Act of 1949 6 with regard to farms to which allotments, or portions there7 of, are transferred under this subsection, the Secretary shall 8 establish a farm yield for any such farm for which there is
9 no established yield.

10 "(e) (1) The Secretary shall permit the owner and
11 operator of any farm for which a farm acreage allotment 12 has been established to sell or lease all or -any part, or the 13 right to all -or any part of such allotment, to any other 14 owner or operator of a farm in the same administrative 15 area, or to transfer all or any part of such allotment to any 16 other farm owned or controlled by him in the same admin17 istrative area. The Secretary shall also permit the person 18 for whom a producer allotment has been established to sell 19 or lease all or any part of such ,allotment to any other person 20 in the same administrative area. 21 "(2) (A) If a producer in a State in which farm rice
22 acreage allotments are determined on the basis of past 23 production of rice by the producer on the farm dies, his 24 history 'of rice production shall be apportioned in the whole






53


6

1 or in part among his heirs or devisees according to the ex2 tent to which they may continue, or have continued, his 3 farming operations, if satisfactory proof of such succession of

4 farming operati-ons is furnished the Secretary.

5 (B) Upon dissolution of a partnership in a State in

6 which farm rice acreage allotments are, determined on the 7 basis of past production of rice by the producer on the 8 farm, the partnership's history of rice production shall be 9 divided among the partners in such proportion as agreed 10 upon in writing by the partners. 11 "(0) Any part of the farm rice acreage allotment on 12 which rice will not be planted and which is voluntarily sur13 rendered to the county committee shall be deducted from 14 the allotment to such farm and may be reapportioned by 15 the county committee to other farms in the -same county 16 in amounts determined by the county committee to be fair 17 and reasonable. Any allotment surrendered under this sub18 paragraph shall be regarded for purposes of this subsection 19 as having been planted on the farm from which it was 20 surrendered..

21 (f) Any acreage planted to rice in excess of the farm

22 or producer acreage allotment in the crop years 1975 and

hall not be taken into awcount in establishing farm, or 24 producer acreage allotments in any year following such 25 -period.".





54


7
1 PAYMENTS AND LOANS
2 Sm. 102. Effective for the 197-6 and 1977 crops of
3 rice, section 101 of the Agricultural Act of 1949is amended 4 by adding the following now subsection at the end thereof: 5 (g) Notwithstanding any other provision of law6 (1) The established price for the purpose of making
7 payments on rice under this subsection shall be $8 per 8 hundredweight in the case of the 1976 crop, adjusted to 9 reflect any changes in -the index of prices paid by farmers 10 for production items, interest, taxes, and wage rates during 11 the period beginning on the date of enactment of the Rice 12 Production Act of 1975, and ending July 31, 1976; for 13 the 1977 crop the established price shall be the established 14 price for the 1976 crop adjusted to reflect any changes in 15 the index of prices paid by farmers for production items, 16 interest, taxes, and wage, rates during the twelve-month 17 period immediately preceding July 31, 1977: Provided, 18 That any increase that would otherwise be made in the 19 established price for the 1976 and 1977 crops to reflect 20 a change in the index of prices paid by farmers qnay be 21 further adjusted to reflect any change in (i) the national 22 average yield per acre of rice for the three calendar years 23 preceding the year for which the determination is made, 24 over (ii) the national average yield per acre for the three






55




1 calendar years preceding the year previous to the one for

2 which the determination is made.

3 (2) The Secretary shall make available, to cooperators

4 in the several States of the United States, loans and pur5 chases oni the 1976 crop of rice at a rate equal to $6 per 6 hundredweighit, adjusted to reflect any changes in the index 7, of prices paid by farmers for production items, interest, taxes, 8 and wage rates during the period beginning on the date of 9 enactment-of the Rice Production Act of 197~5 and ending 10 July 31, 1,976: Provided, That any increase in the rate of 11 loans and purchases for the 1976 crop to reflect a change in 12 the, index of prices paid by farmers may be further adjusted 13 to, reflect the change described in the proviso in paragraph 14 (1) of this subsection. Loans and purchases for the 11977 15 crop shall be established at such rate as bears the same ratio 16 to the loan rate for the 1976 crop as the established price for 17 the 1977 crop bears to the established price for the 1976 18 crops. The loans and purchases for the 1976 and 1977 crops 19 shall be made available to each cooperator with respect to a 20 quantity of rice determined by multiplying the allotment of 21 the-cooiperator for the crop by the yield establi shed for the 22 farmn, as determined in the manner described in the second 2"'3 sentence of paragraph (4) of this subsection. 24 "(3) The Secretary shall make available to cooperators 25 payments for each of the 1976 and 1977 crops of ricee grown





56


9
1 in the several States of the United States at a rate equal to 2 the amount by which the established price for the crop of
3 rice exceeds the higher of4 (A) the national average market price received by

5 farmers during the first five months of the marketing
6 year for such crop, as determined by the Secretary; or
7 (B) the loan level determined under paragraph
8 (2) for suchcrop.
9 (4) The payments for the 1976 and 1977 crops shall
10 be made available to each cooperator with respect to a quan11 tity of rice determined by multiplying the allotment of the 12 cooperator for the crop by the yield established for the farm. 13 The yield for the farm for any year shall be determined on 14 the basis of the actual yields per harvested acre for the three 15 preceding years: Provided, That the actual yields shall be 16 adjusted by the Secretary for abnormal yields in any year 17 caused by drought, flood, other natural disaster, or condition 18 beyond the control of the cooperator. If the Secretary de19 terminus that the persons involved in producing rice on 20 a farm are prevented from planting all or any portion of 21 the acres of the producer or farm acreage allotment to 22 rice or other nonconserving crop, because of droughts, flood, 23 or other natural disaster or condition beyond the control 24 of the producer, the rate of payment with regard to such 25 acres so affected shall be the larger of (A) the foregoing





57

10
I rate, or (B) one-third of the established price, except that 2 the Secretary shall make no payment pursuant to this 3 sentence on a farm from which acres were transferred under 4 section 352 (d) of the Agricultural Adjustment Act of 1938 5 with respect to the transferred acreage. If the Secretary de6 termines that, because of such disaster or condition, the total 7 quantity of rice which the persons involved in producing rice 8 are able to harvest on any farm is less than 66-2 per centum 9 of the farm acreage allotment times the yield of rice estab10 lished for the farm, the rate of payment for the deficiency in 11 production below 100 per centum shall be the larger of (A) 12 the foregoing rate, or (B) one-third of the established price. 13 Any payment made under the previous two sentences with 14 regard to acres transferred under section 352 (d) of the Ag15 ricultural Adjustment Act of 1938 shall be calculated with 16 respect to the farm yield established on the farm to which 17 such acres were transferred.
18 "(5) (A) The Secretary shall provide for a set-aside

19 of cropland for a erop of rice if he estimates (without tak20 ing into consideration the effect of a set-aside), that the 21 carryover of rice for the marketing year beginning in the 22 calendar year immediately following the calendar year in 23 which such crop will be grown will exceed 15 per centum 24 of the total supply of rice for the marketing year beginning 25 in the calendar year in which such crop will be grown. The-










1Secretary shall make a preliminary determination prior to 2the beginning of the calendar year in which such crop will 3 be grown and a final determination not later than April 1 4 of the calendar year in which such crop is grown of whether 5 a set-aside shall be in effect and, if so, the acreage of crop6 land required to be set aside. The determinations and esti7 mates on which they are based shall be published iin the 8 Federal Register at the time they are made. If a set-aside 9 of cropland is in effect under this paragraph then, as a condi10 tion of eligibility for payments, loans and purchases under 11 this subsection, the cooperators must set aside and devote 12 to conservation uses an acreage of cropland equal to ) 13 such percentage qf the farm acreage allotment as may be 14 specified by the Secretary (not to exceed 30 per centum 15 of the farm acreage allotment), plus, if required by the 16 Secretary, (ii) the acreage of cropland on the farm devoted 17 in preceding years to soil conserving uses, as determined by 18 the Secretary. The Secretary shall permit cooperators to 19 plant and graze sweet sorghum on set-aside acreage. The 20 Secretary may permit, subject'to such terms and conditions 21 as he may prescribe, all or any part of the set-aside acreage 22 to 1)e devoted to hay and grazing or the production of guar, 23 sesame, safflower, sunflower, castor -beans, mustard seed, 24 crambe, plantago ovato, flaxseed, triticale, oats, rye, or other 25 commodity, if lie determines that such production is needed






59


12

i to. provide an adequate supply, of such commodities, is not 2 likely to increase the cost of the price support program, and

3 will not adversely affect farm income.

4 "(B) To assist in adjusting the acreage of rice to 5 desirable goals, the Secretary may make land diversion 6 payments, in addition to the payments authorized in para7 graph .(3) of this subsection, to cooperators on a farm who, 8 to the extent prescribed by the Secre tary, devote to approved 9 conservation uses an acreage of cropland on the farm in addi10 tion to that required to be devoted under subparagraph (A) ii of this paragraph. The land diversion payments for a farm. 12 shall be at such rate or rates as the Secretary determines 13 to be fair and reasonable taking into consideration the diver14 sion undertaken by the cooperator and the productivity of 15 the acreage diverted. The Secretary shall limit the total 16 acreage to be diverted under agreements in any county 17 or local community so as not to adversely affect the economy 18 of the county or local community. 19 ".(6) The rice program formulated under this sub20 section shall require the cooperators to take such measures 21 a's the Secretary may deem appropriate to protect the set22 aside acreage and the additional diverted acreage from ero-. 23 sion, insects, weeds, and rodents. Such acreage may be 24 devoted to wildlife food plots or wildlife halbitait in conform25 ity with standards established by the Secretary in. consulta-








t3

1 tion with wildlife agencies. The Secretary may pay an ap2 propriate share of the cost of practices designed to carry out 3 the purposes of the foregoing sentences. The Secretary. m4y 4 provide for an additional payment on such acreage in the 5 amount determined by the Secretary to be; appropriate ip 6 relation to the 'benefit to the general public if the cooperator 7 agrees to permit, without other compensation, access to Sl 8 or such portion of the farm as the Secretary may prescribe 9 by the general public, for hunting, trapping, fishing, ayd 10 hiking, subject to applicable State and Federal regulations 11 "(7) If the operator of the farm desires to participate
12 in the program formulated under this subsection, he shall 13 file his agreement to do so no later than such date as the 14 Secretary may prescribe. Payments under this subsection 15 shall be made available -to cooperators on such farm only 16 if such cooperators set aside and devote to approved soil 17 conserving uses an acreage on the farm equal to the number 18 of acres which the operator of the farm agrees to set aside 19 and devote to approved soil conserving uses, and the agree20 ment shall so provide. The Secretary may, by mutual agree21 ment with the cooperators on the farm, terminate or modify 22 any such agreement entered into pursuant to this subsection 23 if he determines such action necessary because of any emer24 gency created by drought or other disaster, or in order to 25 alleviate a shortage in the supply of rice.





61


14

1 (8) The Secretary shall provide adequate safeguards
2 to protect the interests of -tenant s and sharecroppers including 3 provision for sharing, on a fair and equitable basis, in pay4 ments under this subsection.
5 (9) In the case in which the failure of a cooperator
6 to comply fully with the terms and conditions of the program formulated under this subsection precludes the making 1; of loans, purchases, and payments, the Secretary may, never9 theless, make such loans purchases, and payments in such 10 amounts as he determines to be equitable in relation to the
seriousness of the default.

12 (10) The Secretary is authorized to issue such regu13 nations as'he determines necessaryto carry oat the provisions .14 of this subsection.
15 (11) The Secretary shall carry out the program
16 authorized by this subsection through the Commodity Credit 17 Corporation.

18 (12) The provisions of subsection 8 (g) of the Soil
19 Conservation and Domestic Allotment Act (relating to as20 signment of payments) shall apply to payments under this 21 subsection.
22 (43) Notwithstanding any other provision of law23 (A) The total amount of payments which a person
24 shall be entitled to receive during a crop year under the 25 rice program shall not exceed $55,000.





62


15

I (B) The term 'payments' as used in this paragraph
2 shall not include loans or purchases, or any part of any pay3 ment which is determined by, the Secretary to represent 4 compensation for resource adjustment or public access for

5 recreation.
6 (C) If the Secretary determines that the total amount
7 of payments which will be earned by any person tinder the 8 program in effect for any crop will be reduced tinder this 9 section, the set-aside acreage for the farm or farms on which 10 such persons will be sharing in payments earned under such 11 program shall be reduced to such extent and in such man12 ner as the Secretary determines will be fair and reasonable 13 in relation to the amount of the payment reduction, 14 (D) The Secretary shall issue regulations defining the
15 term 'person' and prescribing such rules as 1e determines 16 necessary -to assure a fair and reasonable application of such 17 limitation: Provided, That the provisions of this paragraph 18 'which limit payments to any person shall not be applicable 19 to lands owned by States, political subdivisions, or agencies 20 thereof, so long as such lands are farmed primarily in the 21 direct furtherance of a public function, as. determined by 22 the Secretary. The rules for determining whether corporix23 tions and their stockholders 'may be considered as separate 24 persons shall be in accordance with the regulations issued 25 by the Secretary on December 18, 19700"0




63

16

1 SUSPENSION OF MARKETING QUTOTAS AND OTHER
2 PROVISIONS
3 SEC. 103. Sections 353, 354, 355, and 356 of the Agri4 cultural Adjustment Act of 1938 shall not be applicable to

5 the 1976 -and 1977 crops of rice.
6 TITLE I-RICE RESEARCH
7 SEC. 201. (a) The Secretary of Agriculture may, under
8 rules prescribed by such Secretary, carry out regional and 9 national research programs with regard to rice for the fol10 lowing purposes:
11 (1) to reduce fertilizer and herbicide usage in excess
12 of production needs;

13 (2) to develop varieties of rice more susceptible to
14 complete fertilizer utilization;
15 (3) to improve the resistance of rice plants to dis16 ease and to enhance their conservation and environ17 mental qualities;
18 (4) to increase the usage of rice and its processing

19 byproducts;
20 (5) to develop better husbandry practices in pro21 duction and conservation of rice;
22 (6) to develop more efficient rice shortage practices;

23 (7y to improve domestic and international market24 ing of rce; and

2 (8) to benefit the general welfare.





64

17
(b) The Secretary shall, in implementing the program 2 authorized in subsection (a), utilize the technical and re8 lated services of appropriate Federal, State, local govern4 mental, and private agencies.
5 (c) There is authorized to be appropriated not more
6 than $1,000,000 for any fiscal year to carry out-the pro7 visions of this section.
8 TITLE III-MISCELLANEOUS
9 UNUSED ACREAGE ALLOTMENTS
10 SEC. 301. Section 377 of the Agricultural Adjustment
11 Act of 1938-shall not be applicable to the 1976 and 1977 12 crops of rice. 1:
13 FINALITY OF FARMERS' PAYMENTS AND LOANS

14 SEC. 302. Effective only with respect- to the 1976 and
15 1-977 crops of rice, section 385 of the Agriculturalt Adjust16 ment Act of 1938 mis amended in the first sentence thereof 17 by inserting immediately after "cotton set-aside program,' 18 the following: "payments under the rice program author19 ized by section 101 (g) of the Agricultural Act of 1949,". 20 DEFINITION OF COOPERATOR
21 SEC. 303. Section 408 (b) of the Agricultural Act of
22 1949 is amended by striking out the period at the end of 23 the first sentence and inserting in lieu thereof the follow24 ing: ": Provided further, That for the 1976 and 1977 25 crops of rice, a cooperator shall be a person who has a rice





65


1 acreage allotment and, if a set-aside is in effect, who has set
2 aside any acreage required under section 101 (g) "
3 CONFORMING AMENDMENT
4 SEC. 304. Effective only with respect to the 1976 and
5 1977 crops of rice, section 408 of the Agricultural Act of 6 1949 is amended by adding at -the end thereof the follow7 ing new subsection:
8 "Reference to Terms Made'Available to Rice
9 "(m) Reference made in sections 402, 403, 406, 40M,
:10 and 416 to terms 'support price', 'level of support', and 'level 11 of price support' shall be considered to apply as well to the 12 level of loans end purchases for rice under this Act, and 13 references made to the terms 'price support', 'price support 14 operation', and 'price support program' in such sections and 15 in section 401 (a) shall be considered as applying as well 16 to the loan and purchase operations for such rice in this 17 Act."
















30-726-76---6






66


DEPARTMENT OF AGRICULTURE 4:0 1*FIMEQ THE SECRETARY
WASHINGTON. D. C. 20250

~OCT
Honorable Thomas S. Foley Chairman, Committee on
Agriculture
House of Representatives

Dear Mr. Chairman:

In view of the need for new rice legislation and the importance of early enactment, the Department is submitting herewith-its views on three provisions of H. R. 8529; "The Rice-Production Act of 1975". These provisions are in section 102, which amends section 101 of the Agricultural Act of 1949, by adding subsection (g). The three provisions are:

Sec. 101 (g) (1) and (2), which would require the
establishment of the target price and the loan rate for the 1976 crop at levels reflecting $8 and $6 per
hundredweight, respectively, adjusted to reflect
changes in the index of prices paid, interest, taxes,
and wage rates, from the date of enactment of the
bill until July 31, 1976.

Sec. 101 (g) (4), which relates to disaster payment
requirements.

Sec. 101 (g) (5), which would require a cropland setaside for rice in any marketing year for which the
ending year carryover is estimated to exceed
15 percent of the total supply.

Base rates for the target price and loan level of $8 and $6, respectively, are believed to be more than adequate to maintain farm income and provide interim financing of the rice crop. These rates are well in excess of average production costs. To immediately escalate them to even higher levels -as proposed in H. R. 8529 -would establish 1976 crop rates in, excess of requirements, and out of line With target prices for other commodities. Rates at these levels could artifically stimulate production of rice above prospective requirements, and thus increase the likelihood of acquisition of excess production by the Commodity Credit Corporation. The Department is opposed to escalation of target and loan levels commencing with the 1976 rice crop.

The Department remains opposed to mandatory disaster payment provisions such as those embodied in the Agriculture and Consumer Protection Act of 1973, and which have been included in H. R. 8529 as well. In lieu of such provisions, the Department favors legislation such as that which has been introduced as S. 1647. S. 1647 would substitute an expanded crop insurance program for disaster provisions, and would encourage private underwriters to offer all-risk insurance






67

The Department is opposed to the provision *in Sec. 101(g) (5) which would mandate a set-aside program for rice if the projected ending carryover exceeds 15 percent of the total rice supply. The basic principle of the set-aside concept is to provide discretionary authority to impose a setaside in the event it is needed to obtain an overall acreage and production balance for a number of important crops. The wording of H. R. 8529 is Inconsonant with the more general set-aside provisions included in the Agriculture and Consumer Protection Act of 1973, because it is tied narrowly to rice and because set-aside is mandatory under certain conditions rather than discretionary.

Finally, we wish to emphasize that the Department has not changed its recommendations, as set forth in H. R. 5695, for a target price of 7 cents per pound and a loan level of 5 cents. Support at these levels would not only provide adequate price protection for rice growers, but would also eliminate the need to make deficiency payments.

The Department strongly recommends that consideration be given to amending the listed provisions to make H. R. 8529 mutually acceptable.

A cost analysis for a 5-year period covering the current rice program, H.R. 8529 and H.R. 8529, if amended, is enclosed.

The Office of Management and Budget advises that there is no objection to the presentation of this report from the standpoint of the Administration's program.

Sincerely.




RICHARD A. JLHW0RTf
Deputy Under Secretary

Enclosure







68

Suamary: Not Governnmcnt Out liys of Alternat ivc Rice Prolrains


1976 Targnt' Pricc at $7
Pler Cwt Loan Levol at
,,.00 E~scalation of
Current Targcet for 19777Piaograta H.R. 8529 becutCrd

13ci~cc~nv Pv'ets-----------------Nillim)f Dollars -----------------1976 '-36
-1977 --36-1978 --50
1979 --71
1980 99
5-Year Total 292-Lonns and -Purcl..as'es

1977 -1978 -1.979 28- -9&0 99.--_ _127 -5 -Y ear ThtP-IaSO Costs
1976 259 238 238.
1977 270 238 238'
1978 283 238 238
1979 300 238 238
1980 321 238 238 .
5 --Ye.:r Total 1,433 ll; 1,0

Total
1976 259 274 238
1977 270 274 *238
1978 283 288 238
1979 328 309 238
1980 420 337 238
5-Year Total 11560 13,482 1,1190






69

Mr. MATis. The gentleman from Louisiana,]NMr. Moore.
Mr. Mfoom. I would like to off er at this time a substitute. It is an 'amendment to HT.R. 8529. It is in the nature of a substitute. Each of you has a copy-H.R. 4741, as introduced by John Breaux of Louis 'iana, along with a nun-fber of others, referred to as the Houston plan.
I would like to have that matter considered at this time and would like to have it offered in the nature of a substitute to this bill.
[The substitute offered by Mr. Moore follows,:]

AMENDMENT TO H.R. 8529, OFFERED BY MR. MOORE
Strike all language -after the enacting clause and insert in lieu thereof the following language:
That section 352 of the Agricultural Adjustment Act of 1938 is amended to read as follows:
NATIONALL ACREAGE ALLOTMENT
"SEC. 352. (a) The national acreage allotment of rice for the 1976 and subsequent crops of rice shall be two million acres, unless the Secretary determines, prior to December 31 of the calendar year preceding the beginning of the crop year for which the allotment is to be made, that the difference between the total supply of rice for the marketing year beginning in the calendar year preceding such crop year and the normal supply of rice for such marketing year is greater than 20 per centum of su~h normal supply.
"(b) If the Secretary makes the determination described in subsection (a), the national acreage allotment of rice for the crop year beginning after the determination is made shall be established at a level which will adjust the'supply of rice so that a quantity of marketable rice will be on hand in the United States at the end of the marketing year beginning August 1 of the calendar year in which the rice for which the acreage allotment is being determined is to be produced (not including rice produced in the calendar year in which such marketing year ends) which is less than 20 per centum of th-e estimated amount of rice which will be utilized in exports and domestic consumption during such marketing year, except that the national acreage allotment for rice for any crop of rice may not be less than one million six hundred fifty-two thousand five hundred and ninetysix acres.
(c) For purposes of this part, the term 'normal supply' means, with respect to any marketing year" (1) the estimated domestic consumption of rice during the marketing
year for which normal supply is being determined, plus
"1(2) the estimated exports of rice during such marketing year.".
S'EC. 2. (a) Section 353 (b) of the Agricultural Adjustment Act of :1938 is amended(1) by striking out the. second sentence; and
(2) by striking out "an old producer" and all that follows through "second sentence of this subsection," in the third sentence and inserting in lieu thereof "a producer or farm under the first sentence of this subsection,".
(b) Section 353 of such Act is amended by adding at the end thereof the, following new subsection:
(h) The Secretary shall permit the owner and operator of any farm for which a farm acreage allotment has been established to sell or lease all or any part, or the right to all or any part of such allotment, to any other owner or operator of a farm in the same State, or to transfer all or any part of such allotment to any other farm owned or controlled by him in the same State. The Secretary shall also permit the person for whom a producer allotment has been established to sell or lease all or any part of such allotment to any other person in the same State.".
Swc. 3. Section 354 (a) of the Agriculture Adjustment Act of 1938 is amended to read as follows:
(a) Whenever in any calendar year the Secretary determines the national acreage allotment under section 352 (b), he shall, not later than December 31 of such calendar year, proclaim such fact and marketing quotas shall be in effect, subject to subsection (b) of this section, for the crop of rice produced in the next calendar year."






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SEC. 4. Section 356 (a) of the Agricultural Adjustment Act of 1938 is amended to read as follows:
"(a) Whenever marketing quotas are in effect with respect to any crop of rice, the producer shall be subject to a penalty on the farm marketing excess at a rate per pound which is equal to the cost of production, as defined by section 108 of the Agricultural Act of 1949, per pound of rice for the crop with regard to which the penalty is imposed.".
SEC. 5. Section 301(b) (1Q) (A) of the Agricultural Adjustment Act of 1938 is amended by striking out "rice,'" in the first sentence and by striking out "10 per centum in the case of rice;" in the second sentence.
SEC. 6. Section 101 of the Agricultural Act of 1949 is amended(1) by striking out the undesignated paragraph in subsection (a) dealing
with rice;
(2) by inserting ", except for rice," immediately after "price support" the
first time it appears in subsection (d) (5) ; and
(3) by inserting "and rice" immediately after ", except tobacco" in
subsection (d) (3).
SEC. 7. Title I of the Agricultural Act of 1949 is amended by adding at the end thereof the following new section:
"PRICE SUPPORT FOR 1976 AND SUBSEQUENT CROPS OF RICE
"SEc. 108. (a) The Secretary shall make available nonrecourse loans and purchases for the 1976 and subsequent crops of rice. These nonrecourse loans and purchases shall be available only to persons producing rice on acres allocated under section 353 of the Agricultural Adjustment Act of 1938.
"(b) The amount of the loans and purchases available shall be based on the following:
"(1) the farm yield base, as determined by the Secretary, of the person
receiving the loan, multiplied by
"(2) the amount of acres of rice produced by such person on acres allocated to him under section 353 of the Agricultural Act of 1938, multiplied
by
"(3) the cost of production, as determined under subsection (c), of the
rice produced on the acres described in paragraph (2).
"(c) For purposes of this section, the term 'cost of production' shall mean"(1) with regard to the 1976 crop of rice, $8 per hundredweight of rice
or 60 per centum of the parity price for rice, whichever is higher; and
"(2) with regard to crops of rice subsequent to the 1976 crop, the cost of
production for the 1976 crop of rice adjusted each year to reflect changes
in a cost-of-production index for rice;
except that such term shall mean 50 per centum of the parity price for rice with regard to any crop of rice for which marketing quotas have been disapproved by producers.".
SEC. 8. The amendments made by this Act shall become effective with the 1976 crop of rice.
Mr. BOWEN. The bill is, as the gentleman from Louisiana pointed out, one which I sometimes refer to as the Breaux bill or the Houston compromise. It does reflect the views of Congressman Breaux and a number of producers in the south Louisiana, Texas, and California areas.
After examining that bill very carefully we put in a good deal of hard work and effort in coining up with the structure of the present bill. We feel we have made major compromises and concessions to the old growers in terms of giving them exclusive target price and loan protection compromises on acreage, on set-aside, and a number of other matters.
The only place where the new growers are given a concession not contained in that broad bill is in the fact there is no authority for the Secretary to restrict production. There is no way mandatory production quotas might be placed upon rice. That is the only victory, in a sense, which the new growers have.





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:Therefore, we feel we have designed a bill which fairly attempts to do the best job possible for all of the rice growers of the country~ which will at thesaine time insure tothe people of this Nation. and the world who need rice for survival that the farmers of America will be given the: freedom to plant rice if they feel so inclined based on the market condition.
With those observations, Mr.. Chairman, I would like to indicate my opposition to the substitute and urge we vote no on the substitute.
Mr. MATHIS. Further discussion on the substitute? I i.
Mr. Moop.F,. I would like to say, Mr. Chairman, this was worked out over the summer months since the 93d Congress with a number of producers who are already in the business of growing rice. They felt this is the best they could live with the international market situation and domestic situation the way they are.
I1 agree with Mr. Bowen a good deal of 'work has been put into H.R. 8529 offered by himself and the chairman. However, I think my substitute is one which has been agrreed to by the industry. T he other one was found objectionable to many of the rice producers. in Louisiana.
I met with rice producers as late as yesterda-y and talked to them over the telephone and again this morning. The "Houston plan", is one they are willing to go along with. They do not feel it is in the best interest of rice growers, new or existing, to go further than that.
I would ask members-of the committee to consider my amendment.
M-Nr. MATHIS. Without objection the previous question is ordered on the substitute offered by the gentlem an from Louisiana.
Those who favor the substitute signify by saying "aye.",
MA.r. MlooRE. I would like to ask a rollcall vote.
Mr. MATHIS. The Clerk-will call the roll.
The CLEini. Ayes: Representative Moore.
Nays: Representatives Jones of North Carolina, Bo wen,' Fithian, Johnson, and Mathis.
Present: Representative Findley.
Five nays and one aye.
Mr. MATHIS. The Chair now notes the presence of Mr. Findley who is a member of the subcommittee.
Perhaps Mr. Findley would like to be recorded on the Moore
-substitute.
Mr. Findley would like to show that he is present.
*The CLEiRK. The vote is five nays, one aye, and one voting present. Mr. AIATIS. With one aye, five nays, and one present th~e motion fails.
Are there further amendments to the bill?
Mr. FINDLEY. May I ask whether the language now before the subcommittee has the $55,000 payments limit in it?
Mr. BowEN. It is in the bill.
Mr. B~OR. The $55,000 payment limitation appears at the bottom of page 15 and reflects the language that Mr. Findley had proposed at a previous meeting.
Mr. FINDLEY. Very well. I have nothing further.
Mr. MATHIuS. Are there further amendments to the bill?
[ No response.]
'Mr. MATHIS. Is there further discussion?






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Mr. JoliNsox.. I feel that the Department's position with respect to the mandatory set-aside should be made clear at this time. The Department feels that the mandatory set-aside feature is undesirable. I felt it was harmful to the existing growers.
A~Te then received word the existing growers wanted it and I didn't see it made that much difference personally. I am sure the matter will be. brought up at the full committee and I thought I would alert the subcommittee to that f act.
Mr. MTATis. The observation has been noted.
Mr. MOORE. I would like simply to state again, having conferred as late as yesterday with the rice producers in the State of Louisiana, one of the major rice-producing States, albeit a great deal of effort has gone into this bill, and certainly this is a finer proposal than any of the others, other than my substitute which failed, the rice farmers in Louisiana are very much afraid, and I tend to agree with them, we have not established a need, nor the market for additional rice being grown.
If we open this thing up, which we will do at a time when cotton crops are not doing well, and encourage cotton farmers to convert to rice, what we will do is flood the market with rice, bringing prices down, and then later call for amendment of this act to help people ruined by its enactment to receive the protections the old ricegrowers get
I think we will see an extension of this legislation and thus an increase in Government expense and Government involvement in ricegrowing, which certainly is not in the best interest of the consumer, nor the ricegrowers, nor agriculture in general.
I, therefore, feel my objection to this bill is not so much what the bill says now, but what I fear will be the case in the future from the testimony I have heard and from the inclinations and information of people in the rice business.I .Although my district does not grow rice, and my district could grow rice if the chairman's bill is passed, I still submit this is not in the best interest of ricegrowers, not in the best interest of agriculture in general, nor consumers, nor the taxpayers of this country.
For that reason I will oppose this bill here, and before the full committee and on the floor of the House.
Mr. MATHIS. The Chair observes the gentleman from Louisiana has been a very able adversary of any change at all in the rice program, as has his colleague from Louisiana, Mr. Breaux.
The Chair would like to point out to the gentleman that prior to any price supports being instituted or legislated for any potential new growers that it would require a change in the law which would have to come before this subcommittee prior to the time it went to the full committee, and the Chair will assure the gentleman he would not ,support under any circumstances that kind of legislation as long ,as hie is chairman of the subcommittee.
I will also say to the gentleman he plans to be chairman of the subcommittee for some time if Democrats 'can retain a majority in the House.
Mr. MOORE. Responding to the gentleman, if I may, I would hope so long as the Democrats do control the House you do retain this position based on that assurance.





73

Mr. MATHIS. Mr. Bowen?
Mr. BOWEN. I would like to comment and agree with your remarks on this matter and point out that we are making an attempt to design legislation that would parallel the 1973 act language as it applies to other commodities.
Of course, excess land planted over allotments is not eligible for payment under that program nor would it be under this. I could not foresee a situation for which I would personally vote to provide parity price protection for all the riceland planted. I share the chairman's position in this respect.
At this point I would like to move passage of H.R. 8529. I move we report it to the full committee for favorable consideration.
Mr. M ATMS. Without objection the previous question is offered on motion of the gentleman from Mississippi.
Mr. Moom Recorded vote, Mr. Chairman.
Mr. MATiis. The Clerk will call the roll.
(The rollcall follows:)
Ayes: Representatives Jones of North Carolina, Bowen, Fithian, Findley, Mathis, and Johnson.
Nays: Representative Moore.
The CLERK. The vote is six ayes and one nay.
Mr. MATHis. There being six ayes and one nay the bill is favorably reported to the full committee with the recommendation that it do pass.
Mr. Fir--,LEY. Do you know when it will come up?
Mr. MA~TTis. I have no idea at this point. I have had discussion with the chairman of the full committee. As you well know there are other matters pending before the full committee at the present time and the full committee seems to have a difficult time establishing a quorum.
Unless there is further business before the subcommittee we will stand adjourned subject to call of the Chair.
[Whereupon, at 3:25 p.m., the subcommittee adjourned.]















RICE PRODUCTION ACT OF 1975


TUESDAY, OCTOBER 21, 1975

HOUsE OF REPRESENTATIVES,
COMMITTEE ON AGRICULTURE,
W ahington, D.C.
The committee met at 10:25 a.m., pursuant to notice, in room 1301, Longworth House Office Building, Hon. Thomas S. Foley (chairman) presiding.
Present: Representatives Poage, de la Garza, Vigorito, Jones of North Carolina, Jones of Tennessee, Mathis, Bergland, Brown, Bowen, Ros, Breckinridge, Richmond, Nolan, Weaver, Baldus, Krebs, Harkin, Hightower, Bedell, McHugh, English, Fithian, Jenrette, D'Amours, Wampler, Sebelius, Findley, Thone, Symms, Madigan, Peyser, Jeffords, Grassley, Hagedorn, and Moore.
Staff present: Robert M. Bor, counsel; Hyde H. Murray, counsel; John E. Hogan, associate counsel; Steve Allen, staff assistant; L. T. Easley, press assistant; Norman Gay and Roxie Burris, staff consultants, Subcommittee on Oilseeds and Rice; Glenda Temple and Mary Jarratt, staff assistants.
The CHAIRMA. The Committee on Agriculture will come to order. The committee meets today for consideration of t.R. 8529, the Rice Production Act of 1975 which was introduced by Mr. Mathis, along with Mr. Jones of Tennessee, Mr. Bowen, and Mr. Jones of North Carolina, and has been reported out by the Subcommittee on Oilseeds and Rice.
Before I recognize the chairman of the subcommittee, Mr. Mathis, to explain and present the bill to the Committee, the Chair wishes to note that there have been requests from a number of individuals and organizations interested in the legislation to speak in behalf of or against it.
The Chair's response to those requests was that, unless a majority of the full committee wished to entertain additional hearings, the Chair would follow the established practice of not having such hearings before the full committee.
The Chair also indicated that he was sure the full committee would be perfectly willing to hear Members of Congress who might wish to make additional presentations to the Committee.
This bill is scheduled for further consideration tomorrow. It is the intention of the Chair, without objection, to receive statements at that time from Members of Congress who wish to make presentations to the committee.
It is not the intention of the Chair, unless directed by the committee, to hear witnesses other than Members of Congress, however, we
(75)





76

will meet tomorrow at 9:30 a.m., if that is agreeable, to hear any Members of Congress who wish to testify.
The Vice Chairman advises me very appropriately that tomorrow is the day on which there will be a Democratic caucus. We will meet at 10 o'clock, rather than 9:30 to receive additional statements. These may be presented in writing or orally.
Mr. Mathis.
Mr. .LmS. Mr. Chairman, I would like to inquire as to how many Members of Congress have expressed a desire to be heard on this subject.
The CHARMAN. We have had expressions of interest from three or four Members of Congress.
Mr. MATHIS. Mr. Chairman, I believe two of our colleagues from the California delegation are here this morning. It would seem to me that it might be well, if it meets with the approval of the Chair, to hear from these gentlemen now in order that we might move on this legislation.
I think it has been probably unduly delayed thus far. I would certainly have no objection to other Members of Congress testifying tomorrow, but I think this would be appropriate for today. I think we could probably hear from these Members today.
The CHAIRMAN. The Chair would be perfectly willing to follow that procedure. I think we would have to notify all the Members of the Congress who have spoken to me about this, and offer them the opportunity also.
But we have with us today the distinguished majority whip, Mr. McFall of California and the distinguished chairman of the Subcommittee on Water and Power of the Interior Committee, with whom I had the pleasure of serving, Mr. Hal Johnson of California.
Gentlemen, would you prefer to make a statement today or tomorrow?
Mr. McFALL. The statement that we were to present to you was to be made by Mr. Leggett of California. He was advised that his statement would be accepted tomorrow. We can come back tomorrow and participate in his statement.
The C ITAMAN. We would be happy to hear from you at that time.
Without objection, the committee has placed before it the bill H.R. 8529. Without objection the gentleman from Georgia, Mr. Mathis, the chairman of the Subcommittee on Oilseeds and Rice, will be recognized for 10 minutes.
Mir. 'MATHIS. Thank you, M\r. Chairman. Every member of the committee had before him the analysis of the bill H.R 8529 which your Subcommittee on Oilseeds and Rice held hearings on early this year. Many members of the Committee will remember that last year we had a very similar problem and a series of hearings before the Subcommittee on Oilseeds and Rice, and then we reported a rice bill which was similar, but not in any way identical with the one that is before us today.
We ran into problems in the full House last year, therefore we find ourselves still dealing with the problem of rice'in this Congress. The bill which we have before us is, Mr. Chairman. a compromise
bill. It does not go nearly as far as some advocates of change in the rice program would like it to go. It goes farther than some of our colleagues in the House and some of our colleagues on this committee






,7
would have us go, who advocate and maintain with a great deal of authority that no changes at all are necessary in the current rice program.
Mr. Chairman, I would like, if we could to proceed with this analysis and go over it section by section based on the analysis sheet which I think is concise and well prepared.
If there are questions on any section of the bill, then we will invite questions from the members.
Section 101 of the bill provides for a temporary program. It covers the years 1976 and 1977 crop. It raises the national minimum acreage allotment from 1.6 to 1.8 million acres. It reduces from 3 to 1 percent the amount of State acreage allotment which may be reserved for distribution to new rice f arms or producers and to correct inequities in existing allotment holdings. It also authorizes penalties for failure to plant allotted acres which we find in most of these bills.
It allows the selling, leasing or transferring of farm and producer allotments within administrative areas. Prohibiting acreage planted in excess of allotments during 1975, 1976, and 1977 from being used in establishing f arm or producer acreage allotments in any year following that period.
Section 102 of the bill establishes a target price program for the 1976 and 1977 rice crops similar to the actions the committee has taken in the past. The target price for the 1975 rice crop is $8 per hundredweight. The old rate was $6 per hundredweight and we have an escalator provision that would go into effect on the enactment of the legislation and would in fact most likely raise the target price and the loan rate prior to the time that the 1976 crop is in.
The deficiency payments, of course, would only be available to those rice growers who are growing under the provisions of the law, that is, those allotment owners who have acreage -tinder the 1.8 million acres that will be planted under the provisions of this legislation. Of course they would only be made if the target price received by farmers during the first 5 months of the marketing year, and would be available only to cooperators.
The loan rate for the 1976 crop would be at $6 per hundredweight adjusted to reflect any changes in the index of prices. That of course would be effective for the 1976 and 1977 crop. The loans again would be available only on the rice produced.under the allotment acreacre at
1.8 million acres. We do have a provision for disaster payments.
There is a provision in the bill to require a set-aside with the projected carryout price for the marketing year. It has been mandated that the Secretary -will set aside acreage. He is mandated tinder the bill to put a set-aside provision in the act, and if that set-aside provision exists at the end of the marketing yearMr. FINDLEY.Will the gentleman yield?
It seems to me that this is a. reasonable recommendation b-v the Department in asking that that set-aside be discretionary instelld of mandated, which would conform to the 1973 act on commodities. Does the gentleman have any comments on the recommendation?
Mr. AIATMS. I woula say to you that we debated this in the subcommittee. It was the will of the subcommittee that thisbe mandatory rather than discretionary on the part of 4,he Secretary. Many of the old growers, and I believe the gentleman from Louisiana concurred with this, thought that this was a better provision and offered 1nore,







protection to the old growers than would a discretionary provision allowing the Secretary to have that discretionary authority.
I would strongly suspect that at some point during the markup there will be an amendment offered at that time, during the debate.
Mr. FINDLEY. This is mainly to provide comfort to the allotment holders who are concerned about the expansion of the plan.
Mr. MATHIS. I think you are very subtley correct.
Mr. Chairman, there is a date payment limitation of $55,000 included in this bill. At the urging of our friend from Illinois, Mr. Findley, this was put in. I think that the subcommittee is prepared to stay within that $55,000 figure
Section 103 of the bill suspends the apportionment of national acreage allotment, through the years 1976 and 1977. In section 201 we authorize research. In title II, section 301, 302, 303, and 304 are mainly technical amendments to the legislation.
Mr. Chairman, the Subcommittee on Oilseeds and Rice has held extensive hearings on this legislation. In essence they were continuation hearings that we had held in the past Congress but we did not want to settle for using old testimony, so we did in fact open the thing up again.
Those who favor changes in the program, as" I said, we heard from them. We heard from many people who favor existing programs, and what we have here today is a compromise position which I feeland I think the members of the subcommittee generally feel-we can live with, and this will offer the consumers here and abroad the opportunity to buy rice at competitive prices and still give protection, in my estimation, to rice farmers in this country, and gives us an opportunity to go into the world market on a larger scale and compete in a very competitive way to bring a favorable balance of payments and continuation of our efforts to a favorable balance of payments insofar as agriculture is concerned.
Mr. Chairman, if I have 'any time left I would like to yield to my friend from Mississippi, Mr. Bowen, who might have some observations which he might like to share with the committee as a coauthor of the bill.
Mr. BowEN. Mr. Chairman, if I might go into some greater detail on certain aspects of this legislation I will.
I would like to begin by pointing out that in 2800 B.C. the emperor of China established a ceremonial ordinance for rice planting and those ceremonies have grown and proliferated to the point that the U.S. Department of Agriculture administers them, ,and they do confer courtly privileges upon some 14,323 allotment holders in this country who have been granted something which approximates a patent, to grow rice.
The legislation which governs the growing of rice in this country isthe Agricultural Adjustment Act of 1938 as amended, set in 1955 the limit upon those who may grow rice. That is, the allotments as of that time have been carried forward, and if we continue the present law under which rice is produced in this country we are facing the inevitable action by the Department of Agriculture during the calendar year in which we 'are now operating, and 'imposition of marketing quotas which will bring about a cutback in production from the present level of 2.8 million acres to approximately 1.65 million acres.






79
That will result in a loss of approximately $1 billion. in foreign exchange to- the United Stes. It will result in the the increased price of rice to consumers in the grocery stores of America, by about onethird to one-half. (onceivably, based on past history, the price of rice could double if that happens.
I think most of you can imagine what would happen to some of the commodities with which you are more familiar if you took the entire national production of 2.8 million acres and you cut it back by 41 percent.
This is what we are faced with.
Chairman Mathis has outlined the basic features of the legislation. As he pointed out to you, the legislation is-a compromise bill. The Department would like the lower figures. Of course, the Department always likes lower figures; and we take that into consideration. I feel that the figures which we have are fair -and are a balanced compromise.
The CHAIRMAN. Without objection, the gentleman from Mississippi is recognized on his own time.
Mr. BOWN Thak you, Mr. Chairman.
Some proponents of the legislation want a long4erm bill. Some wanted permanent legislation. It was our feeling that because of the act of 1973, which expires in 2 years, that we should make this only a 2-year bill so thatit might be considered at the time of the expiration of the Agricultural and Consumer Protection Act of 1973. .
Hence, it is a 2-year bill. There are a number of other compromises involved. The present legislation provides 3 percent for allotments for new growers. We have reduced that to 1 percent as another concession to the present allotment holders, just as the 2-year figure was a concession to the present allotment holders.
We felt that the payments limitation which we adopted is also a factor which would make it attractive to present allotment holders and the very fact that the only people who will participate in the benefits of the target price payments or the loan will be the allotment holders; and only upon allotted acres.
The new growers who are in strongest support of this legislation are peopl who only want the right to grow rice. They only want the opportunity to grow rice for the market.
The old growers and the people who have the allotments; these 1400 or so people still have target price, just as under our basic legislation of 1973 they have participation alone, and only they, and only upon allotted acres. They will not be penalized. They will still be able to have the right for the use of the loan and the target price payments even if they go beyond that leveL.
These are some of the basic features in the legislation.
As I say, the worst aspect in my opinion of continuing with the present law that we have is, what is going to happen to us this year.
In December of this year it appears virtually certain that the Department will reimpose -marketing quotas. There is a complex formula which they use to arrive at this. I will not go into it in detail, but I will simply say that everybody who has gone through the exercise of comparing normal supply with total supply has agreed that there is no way that they can see that the Department will not impose quotas.
I have pointed out to you some of the consequences that will come about for the balance of payments if we do that. For example, the





80

rice grrowers of this country have projected that we will be exporting 2.1 billion metric tons of commercial sales each year for the next 3 years. If the Department imposes these marketing quotas and limits. production to allotment holders as they appear to be determined to do, then we will have only 1 million metric tons available for export.
The consequences of this I pointed out to you: a loss of somewhere between $600 million and about $1.1 billion, depending on what you do with the Public Law 480.
In any event, the consequences I think you can see; that the impact on the economy would be devastating if we continue with the current. law.
Mr. PEY'SE. Will the gentleman yield?
Mr. Bowim. Yes.
Mr. PEYSER. I simply want to say that on this legislation I think the subcommittee has certainly made a major step forward. While obviously it may not be everything that I feel ought to be in the legislation, I feel it is a major step forward and one I hope that will be passed by this committee. I am hopeful that we will not have major amendments which will reopen many wounds which were basically healed in a compromise of putting this legislation together.
I want to compliment the subcommittee at this time and state that I certainly will support, both in the committee and on the floor, this legislation.
Mr. BOWEN. Thank you very much.
The opponents of this legislation say that the price of rice is too low at this time. In my opinion, I think the history of rice prices should. be examined closely before we jump to any conclusions that the price of rice is too low.
If we look back over the last 5 years, you will find that avery year,. on an average, the price of rice has increased from this time of the year-that is, September, October period, which is the traditional low point in rice prices inasmuch as it is the harvest time-has increased from this period of the year until June by an average of 19 percent.
In fact, some have pointed out that they did not realize the price of rice, would be this low in the spring, in May, when we had our hearings. The pattern, in fact, is a fairly consistent one. Thee, is no, reason to presume that it will be strikingly different, but in any event, there is a market for rice now. The price is, on the average, running at about $9 or slightly more per hundredweight. On OlIe, garage that means a good bt more for some kinds of rice than others. There are a number of growers who have chosen not, to sell rice. They have preferred to wait. They think the price will go, up. I presume they must think that. After all, the support price established Iby law at this point is $8.5-2. They have been offered $9 or more. If they really felt the situation was as bad as they say it is, why would they be holding their rice?W
'the only rational reason that I can see f or a, farmer to hold his crop when hie is being offered more than the support price is because he feels that the market price will go higher.
I think that is a rational presumption on the part of rice growers. I do believe it will go higher.
Mr. BERGLAND. Would the gentleman yield on that point?
Mr. BOWEN. Yes.





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Mr. BERGLATKD. What and when was the high -water mark on rice prices?
Mr. BowEN. Somewhere in the early part of this year-I do not have the figures in, front of me, but maybe I can give you some estimate.
The CHAIRMAN. The time of-the gentleman has expired.
Perhaps you can look at your records and advise him., I recognize the gentleman from Illinois.
Mr. FINDLEY. I would like to express my support -for this bill with my congratulations to the gentleman from Georgia who has advanced it very successfully.
I voted to report the bill from- the subcommittee, and I will vote to report it f romi the full committee and defend it as best I can against amendments when it reaches the House floor. I view it as a step forward in loosening up the role of the Federal Government. iRice is one of about three commodities that are still subjected to a very tight governmental control. The Federal Government has been passing out the right to grow rice as a franchise item for about 40 years now. This bill will loosen up that franchise--not as much as I would like, but nevertheless it will loosen it up.
It will make it much easier for further steps to establish broader freedom to plant rice, and this, I believe, will occur in future years. Hopefully rice will be part of the extension of the 1973 act when that time does come.
I regret that peanuts has not been similarly treated by this committee. Perhaps that time will come too.
As members of the committee realize, I am sure, I have long.,advocated the lower payment limit. I would prefer, it here, but I recognize this bill as a stage in the development of a more rational Federal law dealing with rice.
I have the feeling that no stage would occur if the Congress were to insist on a much lower payment limitation.
Mr. BERGLAND. Would the gentleman yield?
Mr. FINDLEY. Yes.
Mr. BERGLAND. Will the gentleman from Illinois explain to me why rice payment limits should be treated differently from wheat and corn?
Mr. FINDLEY. I am glad to have that question.
A good argument can be made for having the same limitation for any commodity that is under Federal law. That is what, I would prefer if we were dealing in an ideal world.
I expressed the view just a moment ago that we would not have a rice bill at all if. the payment limit were established much lower than that which is in the subcommittee plan at this time. The $55,000 was the first stage in establishi-ng a limitation for wheat and feed. grains. It subsequently went from $55,000 down to $20,~000 and it may even go lower in the future. It is at $20,000 now and I would expect in time, perhaps, during the extension of the 1973 act, when that comes, the payments which will be authorized under rice will be at the same levels as those authorized for feed grains. I hope that will occur.
At this staae I think it is prudent,' for us to take as a limitation the same limitation which initially prevailed for feed grains and wheat.
Mr. BOwEN. I would like to point out that one of the reasons we dealt with this in this fashion was that the unusual expensive nature of
80-726-76-7





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rice production and the high costs inv olved, the large size of production, and the fact that there is a rotation factor involved. In most parts of the country only one-third of the acreage is in rice. It is about onehalf in California which is a more efficient area.
Of course, the reason which you gave being the fact that this is a temporary 2-year bill which would give us an opportunity to consider it. at the expiration of the 1973 act.
Mr. FIXDLEY. Of the two arguments, I prefer the latter argument, one that I think is more persuasive. But I recognize the points the gentleman has made.
I yield back my time.
The C,'IRMA-N. The gentleman from Texas, Mr. Poage is
recognized.
Mr. PotcE. Mr. Chairman, it is never a welcome position to be opposed to what a subcommittee wants. Of course, this committee has already made up its mind. This bill was decided a long time ago. It has taken years of hard work, and I should congratulate the gentleman and the industrious who have done it. They have done a successful job. There is nothing wrong with what they have done, but the people who have manipulated this legislation to its present position have done so, not with the idea of lowering the price of rice to consumers, Mr. Peyser. They have done so, of course, with the hope of lowering the price of rice to their particular industry.
That is their right and their privilege, and there is nothing wrong with doing -that, but if the members of this committee do not know why that bill is before us, then you ought to be sent to the simple farm.
We know why this bill is here. and you ought to know what this bill is going to do to your industries. I. do not grow any rice. I do not grow any tobacco. But I know that this bill is touching tobacco just the same as it is touching rice. The gentleman from Illinois was frank enough to admit it. Others have tried to cover it up.
My people do grow peanuts. This bill is a direct attack on the peanut program, of such a nature that I think that within 5 years it will completely destroy the profitability of peanut production.
Peanut production is generally in the hands of the smallest little farmers. Nine-tenths of you here wave the flag at the small f warmer. jIf you are interested in the small farmer, then you are not going to vote to destroy that peanut industry. It means livelihood to more than 100,000 of the smallest of our producers in the United States. It means a whole lot to them.
Mr. Findley, very frankly-and I congratulate him for his frankness-tells us that he knows it will wipe out the other programs just as you expect to wipe out the program for rice.
I know that some of you feel that you will be able to grow rice. You have had some 200 years in which to grow rice and your people have not found it profitable. They found that it was more profitable in Arkansas than Indiana, Texas, and California. Of course you can grow rice on the Atlantic coast and they did it before the Revolution. But since that time they have not found it profitable. I do not think they would find it profitable by just lowering their price. The price is already down. The gentleman did not know how much, but I think it is down to about 40 percent.





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Mr. BWE. If the gentleman would yield, the high point was in June 1973 and 1974 when it got up to $17.50 on the average. It has been fluctuating back and forth. It is about $9 now.
Mr. POAGE. In other words, it has dropped almost 50 percent.
Mr. Peyser, how much drop has there been in the price of rice to your consumers?
The price to the producer has dropped almost 50 percent. How much benefit have your consumers realized as a result of that disastrous drop in the price of the producers' product ?
Mr. PEYsER. I have in front of me the retail prices of rice in the marketplace. The drop between 1974 and 1975 has been from 53 cents a pound to 47 cents a pound. I am not that quick in calculating that.
Mr. POAGE. It is 10 percent.
Mr. PEYSER. It undoubtedly does not mean that there is as much a drop in the market.
Mr. POAGE. One-fifth as much drop to the consumer as there has been dropped in the price for the producer.
Mr. BowEx." I would like to point out that the high point I cited was a temporary high point, and was regarded generally as a bonanza for the rice growers, where they were making money hand over fist.
Mr. PoAGE. Mr. Peyser's talking about that too.
Mr. Bow7. We have rice growers by the thousands in Arkansas and Mississippi and northeastern Louisiana who can make a profit at S9 right now, and they are eager to grow rice.
Mr. P O. I come back to the proposition that we are trying to sell this to the public on the idea that it is something that is going to be of :great benefit to the consumer. That is, the housewife and the people who buy the rice to eat, not the people who buy it to use it with barley as a brew basis. All that we are doing with that is to shift from barley to rice.
Any of you who can grow barley might as well recognize that, if this bill actually does what Coors thinks it will do-and I suppose they know-will be to shift from barley to rice. That is all that it will do. It does not add one bushel -to the sales of grain. The sale of beer will remain the. same. But they will try to use a cheaper product than barley. That is all that is going to happen.
You are not helping your consumer. She has gotten a 10-percent reduction while there was a 50-percent reduction in the price of the producer's product, and the consumer got a measley 10 percent. Do not tell me that this is a conusmer's bill because it is not.
Mr. BrowN. I might compliment the vice chairman for his statement. I have always respected his vast knowledge of agricultural commodities even though I have not always agreed with his analysis of what is good for the consumer. In this case I believe that you are correct.
Both for that reason and for the adverse impact that this is likely to have on the California rice producers, I am personally going to oppose this bill and hope that a majority of the committee will see fit to send it back to the subcommittee for further consideration.
Mr. POAGL I thank the gentleman.
I want to review why we have a bill of this kind. As Mr. Findley pointed out, we have three programs. They are all small programs.






Q4

They grow about 11/2 million acres in each of the three commodities: 1,610,000 acres for peanuts, 1,600,000 of rice, and about 2 million for tobacco.
They are all three -fairly small programs'. They are three products which 50 years ago were known as Tobacco Row. These were poverty products. These three products today under our existing programs represent some pretty able farmers and people who are sending thear children to school and putting shoes on their feet. They did not have shoes 50 years ago before we had these programs.
You did not have them. in tobacco. You did not have them in peanmtte. There was not anybody growing rice except the very largest farmers..
That is all we had before we had these three programs.
Now you come in here and propose to destroy these three programs. This is not a bill that is confined to rice. This is a bill that is striking tit three of our farm programs. They are small programs, that is true, but they are important programs and vital programs in the areas in which they are operating.
To me it does not seem to make much sense to try to wipe out the effective and good programs which we have, in order to secure what? To secure a lower price, a price as competitive with barley, for the brewing industry. That is the only good reason that has been presented.
I have no objection to the brewing industry getting the cheapest price, they can get. They ought to try to get it,.
But to destroy the peor'ple'of the United States who grow peanutsand who grow tobacco in order to give a few brewers a cheaper price,. does not seem to make very good sense.
That is what we have here, gentlemen. I hope you will keep it in, mind.
I know that many of you are committed to vote for this bill. I want the record to show that Bob Poage said: "In 1975 if you keep this legislation on the books, then by 1980 there will be no tobacco and no peanut programs in the United States."
I want you gentlemen from peanut -and -tobacco areas to keep that irk mind. I may not be here in 1980 but you will be. I do not want to wish you any bad luck, but I think your decision should bear in mind that you were warned as to what you are doing today to your own, constituency.
Thank you, Mr. Chairman.
The CHAIiMAN. I recognize Mr. Thone.
Mr. THONE. Mr. Mathis, I wonder if you would respond. Do you. have the Department of Agriculture letter signed by Richard Ashworth dated October 20? Would you refer to the next to the last paragraph? He there refers to the cost analysis for the 5-year period covering the current rice program, and then under H.R. 8529 and H.R. 8529 if amended. Ashworth then attaches a summary which is the last page. Do you have that before you, Mr. Mathis?
Mr. MA'rrns. Yes; I do.
Mr. THONE. I want to understand the arithmetic on this. Do I read this correctly? That under the current program, the 5-year total cost would be $1,560 million? That is, the very last figure on the chart.
Mr. MATHais. If we accept these figures from the Department, yes,. that is my understanding.





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Mr. THONE. Under your legislation H.R. 8529, the expenditure would be $1,482 million, in other words, a saving to the taxpayers of $78 million.
Mr. MATIS. That is exactly what the Department is saying in its cost analysis, but I would point out that all of this is conditioned upon the Public Law 480 cost.
Mr. TiaoNE. If you accept the Departments estimates, including Public Law 480, then there would be a saving of $78 million?
Mr. MATHIS. Yes.
Mr. BowEN. Actually the Department's figures are a bit inaccurate. That is not of course unusual. The figures there for deficiency payments are really not likely to be such. In the next few years there will not be any. The $8 target price, which we have said with the escalator on it, has present projections indicating that it would add about 30.cents on to that, so you have about an $8.30 target price. At that point I do not think there is anybody in the rice industry or anybody in this room who really believes that rice is going to sell below that point.
Right now it is at $9, but I think you can scratch out that column. There will not be any deficiency payments. The way things are projected right now, I do not know but I suppose the Department has its own reasons to make it appear that their program is better than ours. But I want to make it clear to you that -obody in the rice industry expects that to happen, and there would not be deficiency payments.
At ,the same time, the Department fails to put figures in the column for the present legislation, if they had to take over rice, which they may do, they would have to, in the present program, pay storage costs. They would have to resort to export subsidies. They have a variety of administrative costs involved in the present program which are not included there.
So, it is tilted just a bit. The differences which we are pointing up are even greater. There is a far greater saving with this legislation than with the present legislation.
Mr. THONE. Restated then, if we passed H.R. 8529, and if you are correct, then there would not be the deficiency payments and the savings to the taxpayer under your legislation would be $370 million, is that correct?
Mr. Bow Yes.
Mr. THO-NE. Yes; I was using your figures.
Mr. BowEN. Then if that is correct arithmetic, that is correct.
Mr. THONE. I yield to Mr. Poage.
Mr. POAGE. The whole cost is based on the assumption that the price of rice is going to drop substantially below what it is today. Both these sets of figures are based on that assumtpion. It assumes that the price will drop whether you pass this bill or not. The price of rice is going to drop substantially. There could not be any deficiency payments if you keep the price where it is today under the present program or the new program.
Mr. THOiNE. I understand that.
Mr. PO AGE. So the Department assumes that the price of rice is going to drop way down. So you do not have to pass this bill, Mr. Peyser, in order to get a drop in the price of rice because it is coming. It is coming under this bill or under the present program.





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If you are going to drop the price of rice still farther under this bill, then you are simply not going to have the profitable operation that the gentleman over here on my right feels is going to take place. You cannot have a profitable operation if you drop the price below a breakeven price where we are now.
Mr. THIONE. Mr. Poage, for the edification of a Nebraskan who does not grow very much rice and who has little familiarity with the program, let me ask you this. Even if you go for the $7 per hundredweight target price, USDA estimates that the passage of this bill will save the taxpayer $370 million, does it not ?
Mr. POAGm. No; that is based on the assumption that under the terms of this bill that the price is going to drop. If you carry the Department figures on out, then for the present program they also estimate that the price is going to drop.
But, if you will compare his bill and their estimated prices under the new bill with the present price, then of course you are going to have enough drop that you are going to make a substantial saving when you reduce the payments. He is going to reduce the payments. He is going to have a $6 loan. All of those people in Mississippi are going to get $6 for their rice. Across the river in Arkansas they are going to get $8. That is what you are going to have under this bill.
You are going to have a $6 price east of the river, and an $8 price west of it.
Of course, if you are willing to take that sort of thing and say that your people are going to grow for 25 percent less than the man across the river, then I will not say what is going to happen to anybody but I do not understand it.
Mr. THOT. May I yield to that man across the river?
Mr. BowN,. Let me clarify this a bit. Even if the price of rice stays where it is now, that is, on an average of about $9, the increase in parity price for next year will take the support level up to about $9.25 or $9.50, so even if it stays at the level it is now-which I say, growers in my area can produce with la profit-then the Government would have to acquire substantial stocks of rice at that point.
So, that is the advantage of the target price system which we are discussing here today. The Government does not have to acquire stocks of rice. It opens the market for production, and I think pro,ides a more satisfactory arrangement for producers and consumers.
The CHAIRMAN. The time of the gentleman has expired.
The gentleman from Minnesota is recognized. Mr. Bergland.
M7r. BERPGLAN-D. Thank you very much, Mr. Chairman.
I need some help here.
I know that substantial amounts of rice were committed under Public Law 480 and sent to Vietnam and Cambodia during the wvr. That I think has since disappeared. Undoubtedly there have been other factors worldwide and domestically in the production of rice in terms of carryover. The consequence has been a drop in the price.
But what is the situation in the world market? What is happening under Public Law 480 and our reserve stocks? Are they building up, what is taking place?
Mr. BowEN. Would you yield?
Mr. BERGLA N D. Yes.
Mr. BowEN. I would point out to you that the world demand has skyrocketed in recent years and our exports, for example, last year






87

went up 48 percent over the preceding years. There are commercial exports. We now supply one-third of the worlds export market. For example, just to give you a few examples of countries, in the Middle East last year we sold 700,000 metric tons; we sold only 100,000 metric tons the previous year, Iran went from 42,000 to 500,000; Iraq went from 9,000 to 110,000; the Public Law 480 program is in sound shape.
We have absolved the loss of the Cambodia and Vietnam market as though it were not there.
The Department tells us that they project 800,000 metric tons of the Public Law 480 program without any difficulty this year.
For example, 2 years ago the only Public Law 480 rice went to Vietnam and Cambodia. Now we have neither of those, and we have easily found outlets for it, particularly Bangladesh, South Korea, and the like.
The situation, I think, in terms of the market is a sound one. For example, the Russians want to buy 100,000 metric tons now that the moratorium is off. I do not know what our future is in Cuba, but if they return to the market then they would be buying something like 200,000 metric tons.
If I might just point out this. The world population is going up about 3 percent a year adding about 6 million to the population. That demands about 7.5 million tons of rice more every year. The United States is really the only place on the globe that can expand production to meet that.
Just a simple 1 percent increase in rice consumption-and it is going much greater than this in the world-would take the entire export product of this country in rice.
So I feel the market is solid and the long-term outlook is a very attractive one for rice growers. That is why rice growers in my part of the country simply want the freedom to grow rice without having the Secretary of Agriculture restrict the production to a very limited number of growers.
Mr. MATis. Will the gentleman yield?
Mr. BERGLAND. Yes.
Mr. MATIs. You mention the situation in Southeast Asia. It is our understanding that Red China buys some 200 million metric tons of rice and we assume that it will be like Cambodia and Vietnam. That takes the Thai rice out of the market, and allows our people to come into the marketplace to sell our rice there.
I would also point out that the rice we were sending to Southeast Asia was title II rice. It was a total giveway. Yet now we are talking about replacing the 200,000 tons from Thailand with our commercial rice. At least, that is the word we get from the people in the industry.
Mr. BERGLA'i. While we have had acreage allotments on rice for a long time, it was my recollection that those provisions were set aside in the last 2 to 3 years. There has, in effect. been no marketing quota and farmers have been free to produce all the rice that they chose to grow.
Why have they not responded to the setting aside of the allotments and increased the acreage? Why do we need the bill?
Mr. MATHIS. They have responded and we have more rice than we had before. I would also point out to some of the opponents of the legislation that this rice is being grown by traditional old growers of rice.





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It is too expensive to come into the market speculating on what the market might be. You cannot afford to get the machinery necessary. Mr. BERGLAND. There has been no legal prohibition against going into the rice production?
Mr. MArmis. Not for the past 2 years.
Mr. BERGLAND. And this bill has simply set aside the acreage allotment? It would not give them income protection. They are not affected by the payment provisions. What is in there for the new growers?
Mr. MATHIS. The new growers 'are simply going in and taking a chance. I would point out again that with the acreage allotments being raised this would allow the old growers to expand. Based on past history, I would say that many of the old producers of rice are going to be the ones to expand. This is a 2-year deal. It will in fact expire at the end of 2 years and we will revert back to- the old program if it has not proven itself in that time.
Mr. BERGLAND. Thank you very much. I yield back the balance of my time.
The CHAIRAWAN. Mr. Peyser.
Mr. PEYSER. Mr. Chairman, I would like to comment briefly on what my good friend, the vice chairman, had to say. He has injected something into this discussion that does not relate to the merits of this particular legislation. He brought in tobacco and peanuts.
I would like to differ with the vice chairman. I believe for those of you who are interested in tobacco and peanuts, that this legislation is the only hope that the tobacco and the peanut people' have for the survival of any program by 1980.
I say this because this bill is a compromise and at least a reasonable step. I assure you that, given My choice, I would not pass this legislation because I am opposed to the concept of what is involved here, but I am willing to accept it because it is a step forward.
If you do not pass this, th en the tobacco and peanut programs, believe me, are going to be drastically changed in the next 2 to 4 years.. The public now is becoming more aware of what these programs embody and will no longer stand for the existence of these programs as they are. This legislation wil. probably give way for tobacco and peanuts to come under some reasonable legislation., Without this legislation, I would say, again. by 1980, they will not have a program at all.
I will also say that it is not my plan to be-here in 1980 either. Time will tell.
However. I' do think it is fair to say that consumers will not benefit from the legislation.
I think that the consumer has got to benefit by the changing of these programs, and by the opening up on a permanent basis of the allotments. It gets away from the statement of my friend from Minnesota when asked why people come into this. The answer was well stated: The expense of coming into this is just too much to make it because the Secretalry of Agriculture might. say the next year that it is over.
So I do think it is necessary, and that the consumer will benefit without any question.
I am not fighting any battle for the breweries or the major rice producers one way or the other as far as the marketplace is concerned, except that, if they can get a product at a better price, then the public has grot to benefit.






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I. am well aware of the many discrepancies which take, place between what a farmer sells his beef for and what the consumer pays for it. These are inequities.
It is my hope that finally at some time we are going, to get around to attacking this horrendous situation of what happens in the middle when the consumer does not get all the benefits he should get.
He will get benefits and this program will be a positive step forward.
I come back to the other point. I say to the gentlemen who have an interest in tobacco and peanuts that without this bill you are looking, at the true end of any program to help those particular crops. I urge once again that the task of this legislation will not suffer. any crippling amendments. I think there, is a fragile balance at this time. I think it can pass the House.
Mr. POAGE. Will the gentleman yield?
Mr. PEYSER. Yes.
Mr. POAGE. Let me address that first point about consumers. If the consumer gets the same reduction that they hiave had in the last few years, as the price to producers goes down, then by the time the price to the consumer gets down 40 cents,. the producer will be giving his rice away, will hie not? That is a 7-cent reduction.
When he got 5 cents he got it by producers taking a reduction of nearly 50 percent.
In order to get that next 7 cents, the farmer has got, to give away his production.
Mr. PEYSE R. I1 do not agree with that.What I see is not necessarily that the farmer would take less, but that we have to consider the inflationary impact and what it has been at the retail level, which is something the f armer has no input into; in other words if the inflation itself can be slowed down, then this will have an impact on the retail market. Further, if we can work through the Justice Department and other areas to find out what has happened and what is happening in temdlwrewe have suspected, collusion and trust violations, then we can get the consumer. helped.
Mr. POAGE. If you can bring Heaven to Earth for the next few years, thien of course you can get results, but my question was not about
those nusua cicmtne.M question is: If the ratio remained
exactly what it has been in the last few years. then there would be absolutely no return to the producer. That is right, is it not?
Mr. PEYSER. Let me point out this.
Mr. POAGE. Let us stay with this question.
Mr. PEYSER. I am trying to address that question. I see that in 1972 the retail price per pound went to 24 cents,, retail, for. rice. That is, in 1972.
Mlr. POAGE.' What was the producer's price?
Mr. PEYsER. I am coming to that. In 1972 the producer price was 16 cents.
If it is 16 cents and it goes up to 22 cents then that is a comparatively narrow margin.
That does not relate to what is happening today.
Mr. PoAGE. Producers do not sell it by the pound, they sell it by the hundredweight.
Mr. PEYS8R. I am saying, the spread has become tremendous. You are exactly right, the spread is tremendous today, but I do not think






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that changes the implications of this legislation. It is not going to worsen the consumer situation. That is for 'sure.
MNr. POAGE. May I ask the gentleman one more question? It has been suggested that people who are interested in rice and peanuts and tobacco ad better vote for this bill because if they do not, they will not have any program. He suggested if they did vote for the bill they would have some kind of program. What do you suggest they would have?
M1r. PEYSER. I would suggest that they would have a, program similar to what we can get right here. Once again, I would never have proposed this kind o1 legislation because my proposals on something like peanuts would be far more drastic than this particular program, but I am sayin g that for their 'benefit there would have to be a majority just to give a life in the future for their own program. I yield back the balance of my time.
Mr. Jo~zs of Tennessee. As cosponsor of H.R. 8529, I would like to associate myself to the remarks of the chairman of the subcommittee, as well as the remarks of the gentleman from Mississippi.
I think a really good point has been made, and I stand as a strong supporter of this legislation for many reasons, some of which have been announced here. The need is to increase rice production in the years ahead.
M%'r. MATHis. Will the gentleman yield?
Mr. JONEs of Tennessee. Yes.
Mr. MATHIs. Much has been said this morning, about peanuts and the proponents of the peanut program. Z
Mr. Chairman, for the record, as chairman of the Oilseed and Rice Subcommittee which, of course, has jurisdiction over peanuts and representing the congressional district, it probably grows more peanuts than any other one in the country, I would say I wish we had the problem that people in rice did, because our problem is overproduction and the lack of a market, to be very candid at this point. And there is no way that I am going to do anything intentional to hurt the rice producers in this country.'
I wish I knew that we could arrive at a program that I feel would be as equitable as this program is, or this proposal is, in that it provides protection for old rice growers.
Mfr. Findley pointed out that it loosens the restrictions on the new growers coming into the market, but I repeat again at the risk of being redundant, that I feel, and I think experience has shown, that many of the so-called new growers are in fact going to be old growers of rice.
I hope we do not confuse peanuts, tobacco, and rice and lump them all in one category because all three programs obviously -have problems, and I would be the first to admit that we have problems with peanuts and I would hope that we could find a solution.
I think that a solution could be found if the U.S. Department of Agriculture would quit dragging their feet.
The CHAIMxAN. Mr. Richmon~d.
Mr. RICHMOND. Mr. Chairman, I apologize for coming late and I apologize for not knowing as much about rice as I should.
Let me ask two rather amateurish questions.
First of all, the price of rice as I understand went up to $17 per hundredweight and now it is down to $9 per hundredweight.






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The retail price has only gone down 10 percent. Is there any way we could get a USDA price impact statement on the effect of this bill on the retail market?
It seems to me that a 50-perent drop in the commodity price should result in something better than a 10-percent drop in the retail price.
The ( Au&Aw. The Department could, of course, speculate on the various factors that might come into play in relation to the consumer prices at the retail level.
They understand perfectly changes in producer volume and their impact on the retail market. I wish they would elucidate that relationship in the various areas of food production, because I think that is one of the most perplexing problems we have.
The Department has not been asked specifically for that
information.
The gentleman of course could request it himself although I am not sure we could get a response early enough to help us with this bill.
Mr. BowE. Would the gentleman yield?
Mr. RICHNOND. Yes.
Mr. BowEN. I could point out this to you. We do not know what would happen to thhe price under this legislation because one of the virtues of target price legislation is that the market is free to move without being restricted or hampered by legislation. But we do know what would happen if we continue under the present legislation. We do know for a fact that the Department of Agriculture will impose marketing quotas, and will allocate allotments and that production will be cut back about 40 percent. We know that for a fact.
If that happens there is no way that the consumer can avoid paying a great deal more for rice at the counter, and there is no way that we can avoid losing somewhere from $750 million to $1 billion in the export market. We know that. We know that about present legislation. We are not certain what will happen under this. We just know that the market will move in certain ways.
'We think that on the basis of price history the $9 we have here migt go up somewhat. It may not go up to the high point that it has been at before, but I think that is about all the Department can tell you about it.
Mr. RICHMO1'D. On the other hand there is a substantial surplus.
Mr. BOWEN-. It depends on how you define a surplus. The carryover was only 7 million hundredweight which is not high. The Department has a history of overestimating carryovers. Last year they thought there was going to be 27 million hundredweight carryover, but it turned out they made a small error. There was only a 7-million carryover. They make that kind of error consistently.
That is not 'high. Most people in industry consider that the 10 million carryover as normal. As the market expands, the carryover will expand to adjust.
Mr. RICHoND. If I may address one other question to Mr. Mathis, let me say this. On every other commodity that we have discussed in this committee, the payment limitation has been $20,000 per person. Why would you establish a $55,000 limit for rice? This is an obvious inequity.
The C1AMAN,. That question was addressed before you came in. oould Mr. Mathis respond?





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Mr. MATHIS. The author of the amendment is Mr. Findley who has been a consistent advocate of a limitation. He feels, and the majority of the members of the subcommittee felt, that this was a step in the right direction. There has been no limitation. He articulated also that as a political step this could get it moving. If you want changes in the rice program, constructive changes such -as the subcommittee feels, I would strongly urge the gentleman to support the $55,000 limitation. If he does not, and wants to make it more restrictive, then lie is going to lose the support of many of the members who have tried to arrive at some kind of compromise, some kind of reasonable position on the rice legislation.
Mr. NoLAN. Will the gentleman from Georgia yield for a couple of questions?
When we took up soybeans we had comments from the major universities as to what the actual cost of the actual commodity was. Would you have any similiar kinds of figures for an average sized family at current rates of interest? What are the costs of production or rice?
Mr. MATHIS. They vary from section to section in the country. I do not have those figures before me, but I believe the gentleman from Mississippi has some figures.
Mr. BowEx. As you know, this varies a great deal. I have a study that Texas A. & M. has conducted. I have great respect for that outstanding land grant institution, and they have done a study on the major rice-growing States in which they estimate that the net return, that is, the profit per acre is approximately the following, based on normal production and based on the $9 price that we are talking about, which we feel is a low price.
At that figure they estimate that the State of California has a return of $257 an acre, in Texas $116 an acre, and Louisiana $112 an acre, in Arkansas $172 an acre, and in Mississippi $149 an acre. Many people in other commodities would, I think, feel that that was quite an adequate return in terms of net return in income. I happen to feel it is, and I think the farmers in my part of the country feel that it is.
There are a variety of other figures I could give you, if you would like.
Mr. BEROLAND. Would the gentleman yield on that point?
Mr. NOLAN. Yes.
Mr. BEGLAN-D. 1Tow much could the price of rice drop before that profit is wiped out? What are we talking about? What is the yield per acre per State?
Mr. BowEN. I just picked the present price of rice. I suspect this. I could do the mathematical projects and figure out what the $8 or $7 per hundredweight would be.
Mr. BERGLAND. I would appreciate that.
Mr. NoLAN. I would likewise appreciate that.
I have another question. I see there is provision for disaster payments.
How were they computed, and at what price per pound, or hundredweight are the payments made?
Mr. BowEN. The disaster payment provision is exactly the same as all other legislation. The language is the same.






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The CHAIRMAN. Let me interrupt, if I may. We will take a moment to have the reporter change his tape.
I recognize Mr. Bor.
Mr. BOR. The disaster payments are discussed on pages 9 and 10 of the bill. The rate of payment is the larger of the deficiency payment or one-third of the established price, which is $8 per hundredweight, so it would be essentially one-third of $8 per hundredweight.
Mr. BOwE-N. This is the same as the 1973 act?
Mr. BOR. Yes.
Mr. BOWEx. It is the same as several other areas.
The CHAIRMAN. It is the same as the feed grains.
Mr. BEDELL. Is that based on planted acres or allotted acres?
Mr. BoR. Allotted acres.
Mr. NOLAN. I have one other question. There is a $1 million authorization for research. Do you have any idea what amount has been spent on research by growers associations or State universities, or the USDA under a similar authorization?
Mr. BoWEN. Can we ask the staff ?
The CHAIRMAX. Would you restate the question?
Mr. NOLAN. There is a $1 million authorization for research and I was wondering if anybody had any figures on how much money was currently being spent on research by growers associations, State universities, and the like, and perhaps the USDA under some other authorization.
The CHAIRMAx. The staff will be instructed to obtain that information today from the Department of Agriculture and to make it available.
Mr. NOLAx. That concludes my questions, Mr. Chairman.
The CHAIRMAN. Mr. Bedell.
Mr. BEDELL.We just talked about the disaster payments. Would they be applicable to the people who had not been in the past allotment, or would they not be applicable to the new people under this act?
Mr. BOR. The only people who would be entitled to payments, whether they be disaster payments or deficiency payments, would be the holders of allotments.
Mr. BEDELL. I have another question. Are these primarily family farms, or are they large corporate farms generally? What is the makeup of the normal rice producer?
Mr. BOWExN. The average size is 600 acres. You might compare that with farms in your part of the country.
Mr. BEDELL. Is that the size of the farm, or total acres planted ?
Mr. Bo Ex. I could call them family farms. It is hard to define.
Mr. BEDELL. Is 600 acres the total planted or the size of the farm?
Mr. BOWEN. About 200 of those acres wold be rice and the other would have to be fallow or planted with some alternative crop which is usually the case.
Mr. BEDEL. So it is similar in size to regular farms?
Mr. BOWEN. Yes.
Mr. BEDELL. I do not want to pick at this, but it is quite difficult for me to justify, as Mr. Richmond mentioned, the $55,000 limit as compared to the lower limit for the other crops. Am I to understand that





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this is simply a political thing to tat to satisfy sople Who might be concerned?
Mr. BoiEN. May I get this for you tomorrow? It is my impression from figures I have seen, which I do not seem to have in front of me right now, that the cost inputs in rice farming are substantially higher than in most other commodities. Equipment is more expensive. The method of operation is more expensive. There is the fact that you can only use one third of your land each year to plant actually in rice.
These are factors which go to a need for a higher leveL I will try to get some figures for you and present them to the committee by tomorrow.
Mr. FITFITAN. Will the gentleman yield?
Mr, BEDELL. Yes.
Mr. FITHiAN. I would like to ask the gentleman from Mississippi to get some other figures. The figure which is important to me is what is the average income? I have some problem with the $55,000 figure.
Mr. BEDELL. I yield to Mr. Jones of North Carolina.
Mr. JoNEs of North Carolina. It might be important for you to know that all limitations on all other commodities, once Congress saw fit to set them, stated at the $55,000 figure.
Mr. BEDELL. I understand that, but that does not make me comfortable. It seems to me that if we are to correct things, that we ought to correct them as of today rather than what we did in-the past on something.
If it makes sense for that to be the limit on other crops where there are similar costs and similar problems, then we ought to do it here. It is not anticipated that any payments would need to be made, but we should have a similar limitation for all these similar crops, but if the gentleman would have information, and if the figures would indicate justification, then I would like to have it.
Mr. FITiA-N. I do not, know whether the figures which we were quoting here were correct because I did not have the ones in front of me which Mr. Thone had, but I did a quick computation of 15,000 growers.- The amount that you cite from the Department of Agriculture would indicate that we are paying about $25,000 pergrower. That is a pretty healthy welfare program. But maybe the costs are high.' The CHAIRMAN. Just for the record, the present rice program does not have any payment limitations. These apply only to wheat, feed grains, and cotton. In addition, there were special payment limitations in the 1924 sugar act which was not adopted by the House. We do no have any overall payment limitation legislation, but we have had appropriations from time to time.
Mr. BimpLL. Do I understand that this actually would lower the price-support level as compared to what it is now if we pass this legislation?
Mr. BowEN. The price support now is based on computations and they vary. The price support now is $8.50 per hundredweight. The estimate is that by next year it would go up to about $9.25 or $9.50, so this target price level is $8. The loan level is $6, so you can see for yourself what the relationship would be between those.
Mr. BEDELL. Are those nonrecourse loans ?
Mr. BOWEN. Yes.






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'The C 'YAirMNAN. The rice program does not have a target price at the -present time. This legislation would introduce it for the first time. This is traditional legislation. which has a support price but no target price. When other -reforms occurred in the 1973 Agricultural Consumer Protection Act, we did not reform the rice program.The time of the~ gentleman has expired.
Are there any Members who would like recognition?
If not, -at this point the committee will adjourn until, tomorrow morning at 10 o'clock when we will hear Members of Congress and proceed with this legislation.
The Commiittee on Agriculture will stand adjourned.
[Whereupon,, at 11:45 a.m., the committee adjourned.]