•Ag

:41 TUNG NUT PRICE SUPPORT PROGRA1V1-k4N

GOVERNMEN1 

JMENTS

Storage

I 1 2 1973

. . L.1 CR1 A ;•'RKANSAS STAT UNiV:It—L.IisHEARINGS

BEFORE THE

SUBCOMMITTEE ON OILSEEDS AND RICE

OF THE

COMMITTEE ON AGRICULTURE

HOUSE OF REPRESENTATIVES

NINETY-THIRD CONGRESS

FIRST SESSION

ON

H.R. 2303

MARCH 21 AND APRIL 17, 1973

Serial 93-I

Printed for the use of the Committee on Agriculture

U.S. GOVERNMENT PRINTING OFFICk;

95-321 WASHINGTON : 1973
COMMITTEE ON AGRICULTURE

W. R. POAGE, Texas, Chairman

FRANK A. STUBBLEFIELD, Kentucky,

Vice Chairman

THOMAS S. FOLEY, Washington

E DE LA GARZA, Texas

JOSEPH P. VIGORITO, Pennsylvania

WALTER B. JONES, North Carolina

B. F. SISK, California

BILL ALEXANDER, Arkansas

JOHN R. RARICK, Louisiana

ED JONES, Tennessee

JOHN MELCHER, Montana

DAWSON MATHIS, Georgia

BOB BERGLAND, Minnesota

FRANK E. DENHOLM, South Dakota

SPARK M. MATSUNAGA, Hawaii

GEORGE E. BROWN, JR., California

DAVID R. BOWEN, Mississippi

CHARLES ROSE, North Carolina

JERRY LITTON, Missouri

BILL GUNTER, Florida

CHARLES M. TEAGUE, California,

Ranking Minority Member

WILLIAM C. WAMPLER, Virginia

GEORGE A. GOODLING, Pennsylvania

ROBERT B. MATHIAS, California

WILEY MAYNE, Iowa

JOHN M. ZWACH, Minnesota

ROBERT D. PRICE, Texas

KEITH G. SEBELIUS, Kansas

WILMER D. MIZELL, North Carolina

PAUL FINDLEY, Illinois

LAMAR BAKER, Tennessee

CHARLES THONE, Nebraska

STEVEN D. SYMMS, Idaho

EDWARD YOUNG, South Carolina

JAMES P. JOHNSON, Colorado

EDWARD R. MADIGAN, Illinois

FOWLER C. WEST, Staff Director

JOHN F. O'NEAL, General Counsel

HYDE H. MURRAY, Associate Counsel

JOHN RAINBOLT, Associate Counsel

L. T. EASLEY, Staff Consultant

011.1.1.0.•111••••••

SUBCOMMITTEE ON OILSEEDS AND RICE

WALTER B.

JOHN R. RARICX, Louisiana

BILL ALEXANDER, Arkansas

DAWSON MATHIS, Georgia

CHARLES ROSE, North Carolina

JONES, North Carolina,, Chairman

WILLIAM C. WAMPLER, Virginia

LAMAR BAKER, Tennessee

JAMES P. JOHNSON, Colorado

EDWARD R. MADIGAN, Illinois
CONTENTS

H.R. 2303, a bill to continue mandatory price support for tung nuts only

through the 1976 crop 

Brunthaver, Carroll G., Assistant Secretary of Agriculture, letter of March

20, 1973, report on H.R. 2303 1

Morrison, Mrs. Hamilton, Larow Plantation, Picayune, Miss., letter of

March 21, 1973 13

Weir, Glenn, Associate Administrator, A.S.C.S., U.S. Department of

Agriculture, statement of 7

(in)

Page

PHASEOUT OF THE TUNG NUT PROGRAM

WEDNESDAY, MARCH 21, 1973

HOUSE OF REPRESENTATIVES

SUBCOMMITTEE ON OILSEEDS AND 'RICE

OF THE COMMITTEE ON AGRICULTURE,

-Washington, D.C.

The subcommittee met, pursuant to recess, at 2 p.m., in room 1301,

Longworth House Office Building, the Honorable Walter Jones (chairman) presiding.

Present: Representatives Jones of North Carolina, Rarick, Mathis,

Rose, and Wampler.

Also present: Representative Findley; Hyde H. Murray, associate

counsel; John Rainbolt, assistant counsel; and Betty Prezioso, staff

assistant.

Mr. JONES. The committee will come to order. We have before us

this afternoon H.R. 2303, which is a bill to continue the mandatory

price support for tung nuts only through the 1976 crop.

['H.R. '2303 and the departmental report follows:]

[H.R. 2303, 93c1 Cong., 1st sess.]

A BILL To continue mandatory price support for tung nuts only through the 1976 crop

Be it enacted by the Senate and House of Representatives of the United States

of America in Congress assembled, That section 201(b) of the Agricultural Act of

1949, as amended. is amended to read as follows:

"(b) The price of honey shall be supported through loans, purchases, or other

operations at a level not in excess of 90 per centum nor less than 60 per centum

of the parity price therefor; and the price of tung nuts for each crop of tung

nuts through the 1976 crop shall be sunported through loans, purchases, or other

operations at a level not in excess of 90 per centum nor less than 60 per centum

of the parity price therefor: Provided, That in any crop year through the 1976

crop year in which the Secretary determines that the domestic production of

tung oil will be less than the anticipated domestic demand for such oil, the price

of fling nuts shall be supported at not less than 65 per centum of the parity price

therefor."

DEPARTMENT OF AGRICULTURE.

OFFICE OF THE SECRETARY,

Washington D.C., March 20, 1973.

Hon. W. R. POAGE,

Chairman, Committee on Agriculture,

House of Representatives.

DEAR MR. 'CHAIRMAN: This is in response to your request for the Department's

recommendation and report concerning H.R. 2303, to continue mandatory price

sunport for tung nuts only through the 1976 crop.

The Th_Apartment strongly recommends the enactment of H.R. 2303.

Tung production has proved to be uneconomic in the United States. Most tang

farmers and the Government through its support program have lost heavily.

Frequent freeze damage at blossom time and destructive hurricanes have led to

the abandonment or destruction of most of the groves. Production of oil has

(1)
fallen from 45 million pounds in 1958 to only 4 million currently. Meanwhile,

U.S. consumption has fallen from over 100 million pounds to less than 30 million

pounds per year.

The Government has for several years been acquiring all of the U.S. production under the support program. At the current minimum legal support of

27.6 cents a pound, compared with recent CCC sales prices of between 12 and

13 cents a pound, the Government is losing well over 50 percent of the investment in the program. With China, the world's major producer, now able to

enter the U.S. market, future prospects are poor indeed. CCC holds approximately 20 million pounds of tung oil in inventory acquired under earlier year

support programs.

Enactment of the proposed legislation would not require additional funds

and will reduce future losses to the Federal Government. The reduction in

losses to the Federal Government is estimated to be an average decrease in

budget authority and outlays of between $500,000 and $750,000 annually beginning in fiscal year 1978. The Commodity Credit Corporation should have disposed of all stocks of tung oil by fiscal year 1978.

Enclosed is a Tung Summary furnishing background information.

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,

Enclosure.

TUNG SUMMARY

CARROLL G. BRUNTHAVER,

Assistant Secretary.

The tung tree is native to Southern China. Significant commercial production

elsewhere has developed only in the United States and South America and only

when Chinese exports were cut off during World War II. Climate and soil preconditions severely limit the areas where tung can be successfully grown. Tung

production in the U.S. developed in a belt 50 to 150 miles north of the Gulf of

Mexico stretching from North Florida across Alabama, Mississippi and Louisiana

and touching Texas. U.S. production increased up to the middle 1950's and has

since declined. Production in South America developed in Missiones province

in Argentina and the adjacent portion of Paraguay. Production, while leveling

off in Argentina by 1960, continues to increase in Paraguay.

The tung tree produces a crop of tung nuts 5 years after planting. Yields increase up to age 15 and then decline becoming uneconomic at between 25 and 30

years of age.

Tung oil (China wood oil) is crushed from the tung nuts at an outturn of 15

and 16 percent The valueless hull is 45 percent of the rut and the cake is useful

only as fertilizer. Tung oil is a very high quality drying oil used in the manufacture of protective coatings, varnish, paint and insulation.

U.S. imports in the decade before World War II were almost entirely from

China and averaged over 100 million pounds a year. In World War II tung oil

was classed as a critical and strategic oil and all available supplies were retained

for defense use. The chemical industry began a search for substitutes. Quite

,different from castor for which production goals were set and financing provided,

the planting of tung was not aided as a war measure because of the 5 year oil

production time lag. However, the planting of tung was considered patriotic as

well as considered to have economic 'potential. Shortly after the war with the

development of substitutes, the critical and strategic classification for tung oil

was withdrawn.

After World War II the increasing U.S. production again faced the competition

of over 100 million pounds a year of imports from China while imports from the

increasing production in South America began to enter the market. In addition,

alkyds, resins and other chemiedlly produced substitutes were developed. Likewise, a steadily increasing quantity of tall oil was produced as a by-product of

the pulp and paper industry and processed into products for drying oil use.

The growing U.S. tung industry appealed to Congress for help and secured

legislation in 1949 making support of tying nuts mandatory at between 60 and 90

percent of parity. Since tung nuts do not store well and since tung nut producers

toll crush and own the tang oil CCC has operated the support program through

tung loans on tung oil, In 1956 the mandatory tung support requirement was

amended to provide a minimum support of 65 percent of parity as long as domestic consumption of tung oil exceeds domestic production.
3

• The communist victory in Mainland China and the Korean War embargo on all

Communist China exports to the U.S. in 1950 stopped the heavy flow of tung oil

from China. However, production in the U.S. and South America, combined with

a decline in consumption, could by then create a surplus at the U.S. support level

in good production years.

Tung production has been notoriously variable. As with most tree crops there

is a regular biennial fluctuation, i.e., an off and on year. Additionally, there is

frequent freeze damage at budding time. Particularly has this occurred in the

U.S. though also occasionally in South America. The result has been alternate

periods of surpluses with CCC acquisition and shortages with high prices.

Twice in the 1950's in periods of surplus, low world prices and CCC acquisitions, President Eisenhower limited imports under Section 22 of the Agricultural

Adjustment Act of 1933. The limitations established were 26.0 and later 22.4

million pounds which permitted a little more than half of the U.S. consumption to

be supplied from abroad. COC thereupon sold its acquisitions for export at world

prices while imports moved into consumption in the U.S. at just below the support

level. In the three crop years beginning November 1, 1958. CCC sold 65 million

pounds for export while imports this same period totalled 77 million pounds.

In periods of shortages and relatively high prices markets were lost to the

chemically produced substitutes and have never been recovered. U.S. consumption has accordingly fallen from a level of 100 million pounds a year in the immediate post World War II period to the present level of less than 30 million pounds

a year. Apparently low prices do not stimulate consumption because of consumers' apprehension of future uncertainties of supply.

Since U.S. consumption has since 1956, with the exception of 1 year, exceeded

U.S. production this places support at not less than 65 percent of parity. Even

when held at this legal minimum in recent years the support price has risen

because of the increase in parity. As a result of the increasing availabilities from

South America and a reduction in consumption, world prices since 1964 have

been substantially below the U.S. support.

Beginning with 1964, in spite of the rapid decline in U.S. production, CCC has

again found itself holding the free world surplus. After it was determined that

import controls under Section 22 would not be reintroduced, CCC decided to sell

limited quantities of tung oil at periodic Intervals for unrestricted delivery. This

in effect meant selling domestically at the world price. This has involved acquiring all of the diminishing U.S. production under the support program. CCC tung

oil holdings increased to 63 million pounds in 1967 and have since been reduced

to about 22.5 million as of February 12, 1973.

The tung groves in the U.S. have not only faced increasingly frequent freeze

damage in the last 15 years but have also been struck by hurricanes. Camille, the

last one in August 1969, destroyed two-thirds of the then remaining U.S. producing trees. Because of the freeze damage and hurricane losses there has been very

little replacement of tung trees in the last decade and no new groves. Consequently, almost all of the still existing producing groves are well past their prime

producing period and will probably be uneconomic within a few years. Production has dropped from a potential of 45 'million pounds in the mid 1950's to a

present potential of only 5 million in a good non-freeze year. The 1972 crop

appeared to be a good crop until harvest time in November. Since then continued

rain has hindered harvesting and injured the crop reducing the estimated production to 3 or 4 million pounds of tung oil.

U.S. producers faced with frequent freeze damage and high labor costs have

complained that at the current support level they have been unable to meet

costs and consequently more and more orchards have dropped out of production.

The 1971 crop was almost completely wiped out by a freeze in March. Proper

maintenance of a producing orchard involves fertilization, pruning, replacing

of dead trees, etc. all at considerable cost. Undoubtedly many of the remaining

orchards are not being well maintained. Potential production can be expected

to continue to decline in the years ahead until a very low level is reached.

It might be thought that tung production in the U.S. would completely phase

Itself out in a few years and that, therefore, no Congressional action to terminate

this uneconomic program is needed. This might indeed occur. However, new

tung tree varieties have been developed that increase the yield substantially

and another new variety has been developed that blooms late enough in the

spring to escape freeze damage. This latter variety is low yielding. The tung

horticulturists believe they should be able to crossbreed and eventually develop

a high yielding late blooming variety. The success of such crossbreeding would,
4

however, take several years to prove out. If the development of a high yielding

late blooming variety occurs and if the mandatory support at 65 percent of

parity is continued then tung growing in the U.S. would become profitable to

growers but at the expense of the Government and the taxpayer. It is reported

that tung oil can be produced in South America and exported to the U.S. at a

delivered price of 150 a pound. This compares with the current U.S. legal

minimum support price at 27.60 •a pound. At present levels of consumption

South America can now supply all the European and U.S. requirements. World

consumption is not increasing but Paraguay's production is increasing.

China, the 'world's major producer, must now also be considered. Chinese tung

oil has not been supplied in volume into Europe since the closing of the Suez

Canal. However, China has been supplying Japan a portion of her requirements.

With trade developing between the U.S. and China, China could again become

an important supplier to this country. China's production cost must surely be

well below that of the U.S. There were efforts to market Chinese tung oil in

the United States last year that never materialized but nevertheless, did have

a depressing effect on price. There are again reports of negotiations to bring

Chinese tung oil into the United States in 1973.

To summarize:

1. Tung production in the U.S. cannot come close to competing with production elsewhere;

2. 'There are only a few growers left with producing orchards;

3. Most of the remaining trees are old and the orchards will soon have to be

either replanted or converted to other land uses;

4. Orchards destroyed by Hurricane Camille should not be encouraged to be

replanted to tung and

5. Continuing the program might result in serious and increasing costs to

the Government in the future.

TUNG OIL: PRODUCTION AND TOTAL DISAPPEARANCE, CROP YEARS 1949-72

II n million pounds]

Production

Total

disappearance Exports

Domestic

disappearance Production

Total

disappearance Exports

Domestic

disappearance

1949 26.8 120.6 8,2 112,4 1961 33.3 46. 1 11.3 34.8

1950 12.3 74.9 6.4 68.5 1962 7.6 33.6 2.5 31. 1

1951 14. 7 52.5 1.3 51.2 1953 20.6 36.2 2.2 34.0

1952__ 43.4 50.0 .4 49.6 1964 36.8 31.3 .8 30.5

1953 39. 6 49. 5 . 3 49. 2 1965 10.0 36. 7 .8 35.9

1954 15.2 54.8 3.6 51.2 1966 25.0 32.9 1.3 31.6

1955 2.2 53.0 1.4 51.6 1967 13.3 33.6 2.0 31.6

1956 32.0 51.7 1.3 50.4 1968 5.5 35.8 1.9 33.9

1957 25.5 38. 1 .4 , 37. 7 1969_ ___ 5. 6 31. 8 2. 0 29. 8

1958__.... 44.8 68. 1 20.7 47.4 1970___ 3.7 28.4 2.0 26.4

1959 34.0 61.2 19.2 42.0 1971 ____ . 1 29.7 1.2 28.5

1960 13.0 67.9 26.3 41.6 1972 ____ 4.0 30.0 2.0 28.0

TUNG OIL: CCC LOSSES BY FISCAL YEARS

110 thousands of dollars]

Fiscal year Losses Gains Fiscal year Losses Gains

1950 1964 

1951 234 1965 98 

1952 1 1966 68 

1953 1967 371 

1954 3 1968 1, 916 

1955 295 1969 2,916 

1956 480 1970 1,010 

1957 206 1971 552 

1958 1 1972 I 1, 721 

1959 1,596 

1960 998 Total 13,557 484

1961 1,325 

1952 250 Net losses 13, 073

1963 

I CCC still had 27,800,000 pounds in inventory.
5

TUNG-ESTIMATED ACREAGE, OIL PRODUCTION AND VALUE AND CCC ACQUISITIONS AND LOSSES BY CROPS

WITH MANDATORY SUPPORT CONTINUED AND NOT CONTINUED BEYOND 1976

Estimated acreage

in production

(thousand acres)

Tung oil production

(million pounds)

Tung oil acquired

by CCC

(million pounds)

Crop value, Tung

oil production

(millions)

CCC loss for

(millions)

1962 88.2 7.6 $2.9

1963 83.0 20.6 14.8 5.5 $2.0

1964 77.8 36.8 22.9 9.5 3.4

1965 73.4 10.0 9.2 2.4 .7

1966 68.9 25.0 24.6 6.0 2.4

1967_ 64.4 13.3 13.3 3.2 1.4

1968 60.0 5.5 5.5 1.3 . 6

1969 1 25.7 5.6 5.6 1.4 . 6

1970 24.2 3.7 3.7 1.0 . 6

1971 22.8 .1 .1 (2) .2

1972 21.5 4.0 4.0 1. 1 .7

If mandatory support beyond 1976 isCon- Not

tinued continued

Con- Not

tinued continued

Con- Not

tinued continued

Con- Not

tinned continued

Continued

Not

continued

1972 21.5 21.5 4.0 4.0 4.0 4.0 $1.1 $1.1 $0.6 $0.6

1973 21.0 19.0 3.0 2.0 3.0 2.0 .8 .5 .4 .3

1974 21.2 16.0 5.0 2.0 5.0 2.0 1.3 .5 .7 .3

1975 22.2 13.0 3.0 1.0 3.0 1.0 .8 .3 . 3 . 1

1976 23.8 8.0 5.0 1.0 5.0 1.0 1.4 .3 .5 1

1977 26.6 (3) 4.0 0 4.0 0 1.2 0 .5 o

.

1978 30.5 (3) 6.0 0 6.0 0 1.8 0 .8 0

1979 34.4 ()3 5.0 0 5.0 0 1.6 0 .7 0

1980 38.4 (3) 7.0 0 7.0 0 2.3 0 1.1 0

1981 42.0 (3) 6.0 0 6.0 0 2.1 0 1.0 0

1982 ()3 10.0 0 10.0 0 3.6 0 1.9 0

1 Hurricane Camille.

2 Less than $100,000.

Any remaining not harvested.

TABLE 2.-TUNG OIL-U.S. SUPPLY AND DISPOSITION BY CROP YEARS 1962-71 ACTUAL, 1972 ESTIMATED AND

1973-81 PROJECTED

Beginning stocks,

Nov. 1

ProducMillions of pounds Domestic

disappearance

CCC activity Prices

(cents per pound)

AcquiTotal CCC tion Imports Exports sitions Sales Support Market

1962 __ 12.5 0 7.6 20.3 2.5 31.1 0 0 24. G 38.0

1963___ 6.8 0 20.6 29.5 2.2 34.0 0 0 24.0 26.7

1964___ 20.7 14.8 36.8 25.0 1.0 30.3 14.8 0 24.0 25.9

1965___ 51.2 37.8 10.0 28.5 .8 35.9 22.9 .6 24.0 24.0

1966___ 53.0 46.6 25.0 21.2 1.3 31.6 9.2 8.2 24.0 13.5

1967___ 66.3 62.9 13.3 19.4 2.0 31.6 24.6 18.3 24.0 10.3

1968___ 65.4 57.8 5.5 18.7 1.9 33.9 13.3 19.3 24.3 14.4

1969_ 53.8 44.1 5.6 19.0 2.0 29.8 5.5 7.8 25.6 22.9

1970_ 46.6 41.9 3.7 24.6 2.0 26.4 5.6 8.4 26.4 15.0

1971___ 46.4 39.1 . 1 19.2 1.2 28.5 3.7 15.0 27.2 10.6

1972 __ 36.0 27.8 4.0 15.0 2.0 28.0 . 1 15.9 27.6 12.0

IF MANDATORY SUPPORT IS CONTINUED BEYOND 1976

1973___ 25.0 12.0 3.0 15.0 2.0 28.0 4.0 16.0 26.1 12.5

1974___ 13.0 0 5.0 22.0 2.0 28.0 3.0 3.0 26.3 12.5

1975___ 10.0 0 3.0 27.0 2.0 28.0 5.0 5.0 26.6 12.5

1976... 10.0 0 5.0 25.0 2.0 28.0 3.0 3.0 26.9 13.0

1977___ 10.0 0 4.0 26.0 2.0 28.0 5.0 5.0 27.6 15.0

1978_ 10.0 0 6.0 24.0 2.0 28.0 4.0 4.0 28.0 15.0

1979___ 10.0 0 5.0 25.0 2.0 28.0 6.0 6.0 29.2 15.0

1980___ 10.0 0 7.0 23.0 2.0 28.0 5.0 5.0 30.7 15.0

1981___ 10.0 0 6.0 24.0 2.0 28.0 7.0 7.0 32.4 15.0

1982___ 10.0 0 10.0 20.0 2.0 28.0 6.0 6.0 34.3 15.0

95-321-73 2
6

FABLE 2.-TUNG OIL--U.S. SUPPLY AND DISPOSITION BY CROP YEARS 1962-71 ACTUAL,, 1972 ESTIMATED AND

1973-81 PROJECTED-Continued

Beginning stocks, CCC activity Prices

Nov. 1 Millions of pounds Domestic (cents per pound)

Produc- disap- AcquiTotal CCC tion Imports Exports pearance sitions Sales Support Market

IF MANDATORY SUPPORT IS DISCONTINUED BEYOND 1976

1973___ 25.1 12.0 2.0 16.0 2.0 28.0 4.0 16.0 26. 1 12.5

1974..__ 13.1 0 2.0 24.9 2.0 28.0 2.0 2.0 26.3 12.5

1975___ 10.0 0 1.0 28.0 2.0 28.0 2.0 2.0 26.6 12.5

1976___ 9.0 0 1.0 27.5 2.0 27.5 1.0 1.0 26.9 13.0

1977___ 8.0 0 0 27.0 2.0 27.0 1.0 1.0 15.0

1978___ 6.0 0 0 27.0 2.0 26.0 0 0

1979___ 5.0 0 0 27.0 2.0 25.0 0 0

1980___ 5.0 0 0 26.0 2.0 24.0 0 0

1981___ 5.0 0 0 25.0 2.0 23.0 0 0

1982_ 5.0 0 0 25.5 2. 0 23. 5 0 0

TABLE 3.-TUNG OIL-CCC ACTIVITY, FISCAL YEARS'

Quantity (thousand pounds) Value (thousands of dollars)

Acquisition

Ending

Disposition inventory

Sales

proceeds

Cost of

sales Charges Net loss

1963 

1964 

1965 14, 847 131 14, 716 31 35 94 98

1966 1,097 18 15,795 3 65 68

1967 3,088 12,707 419 739 51 371

1968 21,844 14,837 19,714 1,754 3,596 74 1,916

1969 9, 246 59, 946 9, 014 2, 19$ 5, 029 80 2, 916

1970 43, 357 12, 732 39, 639 2,353 3, 200 163 1, 010

1971 5,656 5, 747 39, 548 1,070 1, 425 130 485

1972 3,664 15,837 31,375 1,393 2,977 137 1,721

If mandatory support is

continued beyond

1976:

1973 100 14, 925 56, 550 1, 721 3, 582 72 1, 933

1974 4,000 15, 225 5, 325 1, 878 3,820 33 1, 975

1975 3,000 8, 325 1, 041 2, 238 8 1, 235

1976 5, 000

1976 5, OCO 5,000 625 1,315 5 695

1977 3,000 3,000 385 798 3 416

1978 5,000 5,000 717 1,345 5 633

1979 4,000 4,000 600 1,104 4 508

1980 6, OCO 6,000 900 1,680 6 786

1981 5,000 5,000 750 1,469 5 715

1982 7,000 7,000 1,050 2,149 7 1,106

IF MANDATORY SUPPORT IS NOT CONTINUED BEYOND 1976

1973 100 14,925 16,550 1,721 3,582 72 1,933

1974 4,000 15,225 5,325 1,878 3,820 33 1,975

1975 2,000 7,325 916 1,977 8 1,069

1976 2,000 2,000 250 522 2 274

1977 1,600 1,000 128 266 1 139

1978 1.000 1,000 143 276 1 134

1979 

1980 2 ... 

1 1963-72 from Fiscal Division data. 1973 estimated and pro'jections thereafter.

2 No activity in subsequent years.

Mr. JONES. For the benefit of those on the committee who may not

know about this, we had similar legislation last year, with rather

exhaustive hearings, both pro and con, as I recall. That bill placed a

5-year limitation on the phasing out of supports. The bill before us

carries a 4-year time expiration for these supports. I think this afternoon, the only witness I have listed is Mr. Weir, the Associate Administrator of the ASCS of the U.S. Department of Agriculture.

Mr. Weir, I will recognize you at this time.

1
•

STATEMENT OF GLENN WEIR, ASSOCIATE ADMINISTRATOR, ASCS,

ACCOMPANIED BY CLAUDE COFFMAN, DEPUTY GENERAL COUNSEL; HARLAN H. HOLLEMAN, DIRECTOR; DON HOTT; AND MALCOLM_ W. 1VIACLAY. OILSEEDS AND SPECIAL CROPS DIVISION,

ASCS, U.S. DEPARTMENT OF AGRICULTURE

Mr. WEIR. Mr. Chairman and members of the committee, I am delighted to appear this afternoon and to present the Department's views

on H.R. 2303, a bill pertaining to the support program for tung nuts.

My name is Glenn Weir, Associate Administrator, Agricultural

Stabilization and Conservation Service U.S. Department of Agriculture. I have with me on my far left Mr:Claude Coffman, Deputy General Counsel, and Mr. Harlan H. Holleman, Director and two gentlemen from the Division, Mr. Don Mott and Mr. Malcolm Maclay.

H.R. 2303 would continue the mandatory provisions of current

legislation with respect to a price support program for tung nuts

through the 1976 crop. This would have the effect of making support

for tung nuts beginning with the 1977 crop permissive with the Secretary at a level not in excess of 90 percent of the parity price for tung

nuts.

The Department favors enactment of this proposed legislation.

Present legislation provides that the price of tuna nuts shall be

supported at a level between 60 percent and 90 percent of the parity

price except that for any year in which the anticipated domestic production of tung oil is less than the anticipated domestic demand for

such oil, the minimum level of support is 65 percent of the parity price.

Over the last 25 years domestic production has exceeded domestic

utilization in only 1 year. Thus, in recent years the minimum level of

support has been 65 percent of the parity price and prospects are

that this will continue into the foreseeable future.

Tung growers—plagued by recurring freeze damage, hurricanes and

rising costs—have reduced their operations. Domestic production of

tung oil which was 27 million pounds in 1949 reached a peak of 45

million pounds in 1958, and has since declined to an average of only 3

million pounds for the four crops since Hurricane Camille swept into

the (ruff coast. Hurricane Camille destroyed about two-thirds of the

1969' 'producing acreage. Most of the remaining tung acreage is in

Florida and has passed its prime. Available information indicates

that fewer than 100 producers remain with an economic size orchard

of 50 or more producing acres.

The 1971 crop year was a disastrous one for most of the remaining

•tung producers because of severe freeze damage at blossom time. Only

one crushing plant was in operation to handle the crop. About 364 tons

of nuts were delivered to the mill by six producers; three of them from

the Mississippi area and three from Florida. Less than 100,000 pounds

of oil were derived from the crushing of these nuts.

Prospects for the '1972 crop were originally more favorable. Frost

damage was quite small. However, drought during the summer has

apparently reduced the oil content and continuing wet weather in the

fall and winter has delayed harvest and possibly reduced the crop

from the estimate of 4 million pounds of oil,
8

Domestic utilization of tung oil has steadily declined, falling from

112 million pounds in the 1949-50 marketing year to the current annual level of below 30 million pounds. The domestic market has been,

supplied in large measure by imported tung oil, mainly from Paraguay and Argentina. Last month a shipment of about 1,900 metric

tons, 4.2 million pounds, were imported from The Peoples Republic of

China. All tung oil is entered duty free and without quota restrictions.

Looking forward to the '1973 crop this is the critical period for

possible Frost damage, namely mid-March through mid-April. There

are reports that the orchards are not being fertilized and well maintained.

Prices have been such that CCC has for many years acquired virtually all of the domestic crop. Today, March 21, 1973, CCC has an

uncommitted inventory of 18.7 million pounds of tung oil. With support on 1972-crop tung oil at 27.6 cents per pound and the current market price of about 13 cents losses are running over 50 percent of the

Government's investment. With no revision in the legislation future

losses on the program can be expected to remain relatively high.

This is a critical time of decision for tung growers. The tung acreage

destroyed by Hurricane Camille has been cleared and is !available to

replanting to tung or conversion to other use. Most of the remaining

orchards must be renewed to remain productive.

The Department favors enactment of H.R. 2303 at this time in order

that growers will not be encouraged to make new plantings, rehabilitate old orchards or replace orchards destroyed by Hurricane Camille.

The opportunity to present the Department's views on this bill is

appreciated. We will be pleased to answer any questions you might

have.

Mr. JONES. Mr. Rarick, any questions?

Mr. RARICK: Not at this time.

Mr. JONES. Mr. Wampler ?

Mr. WAMPLER. I have no questions, Mr. Chairman.

Mr. JONES. Mr. Mathis?

Mr. MATHS. No, sir; I have no questions.

Mr. JONES. I do not think the Chair has any questions.

Thank you, sir.

The Chair will recognize Mr. Findley?

Mr. Findley, do you have any questions?

Mr. FINDLEY. Thank you very much, Mr. Chairman.

Mr. Weir, in your opinion, will the 4-year extension proposed in

this bill amount to an incentive or an invitation to any of the tung nut

producers to improve or enlarge or extend their plantings?

Mr. WEIR. 'Congressman Findley, it is our opinion that this does not

offer the incentive to plant new tung acreage. There is, to our knowledge, only a total of approximately 700 acres of tung trees that are

what we would call new production; that is, production in the earliest

form. Most of the acreage is in an area of rapidly declining production

and will at the end of this period of time, 1976 probably be about

finished as far as production is concerned.

'Mr. FINDLEY. You estimate that the Government's loss on the tung

nut program for the current year as 'being about 50 percent of the

market price. Do I understand that correctly?

Mr. WEIR. That is right, yes.

•
9

Mr. FINDLEY. Could you estimate 'what this loss will amount to for

the current production year in dollars?

Mr. WEIR. On one of our tables that we will insert in the record, we

are saying that for the 1972 crop year, we project about $1.7 million.

The crop year started in November 1972, so the 1972 crop year will be

to November 1973.

Now, to a large part, the Government's loss depends upon the price

and the amount of our stocks that we are able to dispose of during this

period of time. Over the last month or 6 weeks, we have sold substantial

amounts of tung oil in the marketplace, and up to this point in this

year, we have disposed of about 5.9 million pounds of tung, substantially above what we have done in the past.

Mr. FINDLEY. And at that rate of disappearance, how long 'will

present Government holdings last?

Mr. WEIR. Of course, to a certain extent, that depends upon the

market demand and we cannot foresee the amount of competition that

might come from the Peoples Republic of China. The price a year ago

was in the range of the 10 cent area. It is now at the 13 cent level. We

have sold in the last 6 weeks at that level on three occasions.

We would anticipate 'because of the somewhat less than good crop

in South America that the price will stay up, again depending upon

the Peoples Republic of China coming into the market, and we would

hope to be able to cut considerably into our 18-plus million pounds of

stocks during this year.

Mr. FINDLEY. But it would be reasonable to state that we have approximately a 3 to 4 year supply in Government hands at the present

time?

Mr. WEIR. Yes, sir. If you go back in history in the normal disposition of oil.

Mr. FINDLEY. Thank you, Mr. Chairman.

Mr. MATHIS. Mr. Chairman.

Mr. JONES. I recognize the gentleman from Georgia.

Mr. MATHrs. I have a question or two I would like to direct to Mr.

Weir and possibly to Mr. Holleman, but not necessarily with regard

to this bill. I would like to ask a question or two but I would not like

to be ruled out of order by the chairman. May I proceed out of order

if I am?

Mr. JONES. Certainly.

Mr. MATHis. Mr. Weir, I have heard some rumors in the last couple

of days that there was a possibility of some reorganization within

the Department. Is there anything going on there now that would tend

to combine oilseeds and special crops with some other division in a

process of reorganization?

Mr. WEIR. Mr. Mathis, I think it would be inopportune for me to

comment on the specifics of the reorganization that we are in the

process of trying to implement. We do have a reorganizational plan

in the Agency. It has not been cleared within the Department. In fact,

it is in more than the talking stage, of course. This would not combine

oilseeds with some other divisions, but would combine some other divisions with oilseeds in order to make more efficient use of a number of

people that we have in ASCS to utilize them better and to put those

commodities under the supervision of Mr. Holleman, for example, that
10

he does have expertise in and the people that would come into that

division would have a wider ranging expertise in this area.

Mr. MATHIS. What might be an opportune time to discuss it?

Mr. WEIR. As you know, Mr. Mathis, bureaucracy red tape does take

time. We would be hopeful that it would be in the very near future.

Mr. MATHIS. I wonder if anybody in the Department-has given consideration to discussing this with some members of the various subcommittees of this committee which have jurisdiction?

Mr. WEIR. To my mind, there has been no discussion at this time.

We would be happy to once we get it firmed up within the Department as to the direction that we would like to go. We would be most

happy to.

Mr. MATHIS. I can only speak for one member of this subcommittee,

but I certainly think we would like to have some input into the decision. We have seen a lot of decisions made downtown in recent weeks

that we have not been consulted on, even advised about until after

they have taken place. I do think this is one thing that is vital to this

subcommittee, and I would certainly like to have an opportunity to

have some input.

Mr. WEIR. May I comment a little bit further, Congressman, that

the reorganization that we are looking at would enhance the efficiency

of our Agency to every extent that we could, without having any reduction in force or hiring new people for that matter. And it is not intended in any way to downgrade or upgrade any commodity, or any

commodity .group, but to more efficiently use the people in their areas

of expertise.

Mr. MATHIS. I think you will find sympathy on this subcommittee

to try to achieve this goal.- In fact, you may find that we might have

some ideas that would be useful to you.

Mr. WEIR. Thank you, sir.

Mr. RARICK f Mr. Chairman?

Mr. ;TONES: Mr. Rarick ?

Mr. RARICK. Mr. Weir, the. principal States that are involved in that

tung program are .Louisiana, Mississippi, and Florida, is that right?

Mr. WEIR. Those are the three principal -States.

Mr. RARICK. And these tung nut producers were originally encouraged to get into the tung nut program, thinking that they were helping

our 'Government and our people?

Mr. WEIR. That is true.

Mr. RARICK. You are really not surprised that the record over the

last couple of years shows a decline in the production of tung nuts,

are you?

Mr. WEIR. No, We are not.

Mr. RARICK. Is it not true that our Government has been trying to

phaseout or wind down the program?

Mr. WEIR. That is true, what with the natural disasters of hurricanes and freezes and the loss of the price incentive, the increased use

of synthetics encroaching upon the tung market as such, it does not

give much hope for a viable economic unit in tung.

Mr. RARICK. How many farmers—how many tung nut producers

:t re we talking about?
11

Mr. WEIR. As near as we know, and we could be off by a few people,

there are 100 producers that are involved in this enterprise at the

moment.

Mr. RARICK. Are there any of these 100 that are totally dependent

upon tung nut production ?

Mr. WEIR. We are not aware of any. In most of the evidences that I

have seen, Mr. Rarick, livestock enterprises are being interwoven with

tung enterprises. This is being done by using the rows between the

trees for grazing purposes, thus the producers are not totally dependent upon tung for income.

Mr. RARICK. IS it the Department's thinking that within the coming

4-year period, the entire domestic tung nut program should be phased

out with a minimum of financial hardship to the people involved?

Mr. WEIR. Yes, that is our opinion, Mr. Congressman. The bulk of

the acreage involved in the orchards will be of the older trees by the

end of the 4-year period, so the opportunity is there between now and

then to use the income from tung nuts to get into replanting to pine

trees, for example, or soybeans if land that is involved is suitable,

or livestock, or other enterprises. It is not our position to cut out all of

a sudden or force into 1 year's period a relocation or a redesign of an

operation that involves the tung nut producer.

Mr. RARICK. At our hearings last April, Mr. Mead said that all you

knew about the Red Chinese imports of tung oil was more or less hearsay. You do confirm now that there has been at least one shipment?

Mr. WEIR. Yes. sir; that is right.

Mr. RARICK. There has been a shipment of 4.2 million pounds of

tung oil from Communist China. Is this the first shipment?

Mr. WEIR. As far as we know, this is the first shipment that we

have any evidence of wining into this country from the Peoples Republic, yes sir.

Mr. RARICK. Is this price, then, competitive with the oil coming

in from Paraguay and Argentina?

Mr. WEIL Apparently it is. The last sale made by CCC was 13

cents, I believe, at New Orleans, and the Rotterdam price was 13.6

cents so apparently they are competitive within that price range with

South American origins.

Mr. RARICK. Are there any new markets for tung oil opening up

domestically?

Mr. WEIR. Not that I am aware of personally. Perhaps the people

in the division are more expert in the uses of tung than I am and

might add something.

Mr. RARICK. I notice that the Family Circle magazine, apparently

put out by Sears and Roebuck, has an article on pages 16 and 174

indicating or recommending the use of tung oil on antique furniture.

Is the Department aware of this?

Mr. WEIR. No, the Department has not looked into this. My wife

notified me of this use last night.

Mr. RARICK. I might note it is in the April 1973 issue of Family

Circle.

Mr. WEtn. Yes, my wife was telling me, but we did not have a copy

and I was not able to read it. She tells me that on antique furniture,
12

you can set a wet glass down on it if it has been treated with tung

oil or a stain or varnish or polish with tung oil in it and that glass

will not leave a ring. So far the synthetics, to our knowledge, have

not reached that point. I am sorry that I have not read the article.

Mr. RARICK. Are you aware of any plans for additional imports of

tung oil from Red China?

Mr. WEIR. No, not that I am aware of. We are on the world market

that is the world market price; and we are trying to take advantage

of the increased prices in the disposal of Commodity Credit stocks

and we would hope that we can dispose of them at this price level,

at least.

Mr. RARICK. Of course if we wind down the tung program in the

United States, we will become completely dependent upon tung oil

from either South America or from Red China. Are there any other

sources, any other countries that produce it?

Mr. WEIR. Not that I am aware of.

Mr. RARICK. Thank you, Mr. Chairman. I have no further

questions.

Mr. FINDLEY. Mr. Chairman, may I add one question?

Mr. JONES. The Chair recognizes Mr. Findley.

Mr. FINDLEY. Thank you.

Mr. Weir, based on the experience of the Department with tung

nut production in this country, do you expect that tung nut production will disappear completely in the United States when the program

is phased out completely?

Mr. WEIR. I think perhaps, Congressman Findley that the crushing mills are one of the main answers that you have to have in that

sort of statement, that if there is crushing capacity or if there are

mills to :utilize the nuts and get the oil, perhaps there will be tung

production for quite a long time. The 700 acres that I have talked

about is apparently a very young orchard and if there is mill capacity

in operation, these trees might be in production for 10 to 15 years.

Mr. FINDLEY. Will the material that you place in the record include

cost of production on various operations or do you have access to such

data?

Mr. WEIR. Not to my knowledge.

Mr. Holleman, do you know?

Mr. HOLLEMAN. These are our figures given last year by the people

in the trade that were here giving us their cost figures. It is an average

of those that we were given at that time.

Mr. FINDLEY. If new domestic uses such as furniture polish do

blossom and grow, it is at least within the realm of possibility that a

flourishing tung nut industry could be established in this country in

the total absence of the Government support programs, is it not?

Mr. WEIR. If in fact the price remains at the present level of 13

cents, and it has been down much lower, and it has been much higher.

It has been up, I think, at 38 cents at sometime during the program.

As we see from the records, producers would say somewhere around

25 cents is the break-even point or the profit motive edge that they have

to have. So I think there would have to be some increase in price in

order to stimulate that kind of production.
13

Mr. FINDLEY. Thank you, Mr. Chairman.

Mr. JONES. Mr. Findley, the Chair would state that if indeed it is

found that tuna oil is good for antiques, the industry will flourish.

Mr. RARICK. Mr. Chairman, may I ask another question, please.

Mr. JONES. Yes, Mr. Rarick.

Mr. RARICK. Mr. Weir, if we phase out the U.S. tung oil program

and later find a need to restore a domestic source how many years

would it take to plant and have tung trees producing?

Mr. WEIR. As I understand it and I am certainly no expert on the

new varieties, Congressman, that perhaps are in the research area,

but a 5-year growth is about necessary for a start of good production

in the age of a tung tree. Of course, this would be added to 1 year of

planting. So in the area of 5 to 7 years, you could expect some production in tung unless there are some radical changes in varieties that

may be developed that we do not know about.

Mr. RARICK. I have tung producers in my district and it is embarrassing for them to go around and say that the Federal Government

is phasing them out that they are being replaced by Red Chinamen.

Thank you, Mr. Chairman.

Mr. JONES. The Chair is sympathetic with the gentleman's position.

Are there any other witnesses who desire to be heard?

If not, we thank you and your colleagues for coming here this

afternoon.

Without any objection, I would like to insert this letter in the

record from Mrs. Hamilton Morrison, Larow Plantation, Picayune,

Miss.

[The above referred to letter follows:]

LAROW PLANTATION,

Picayune, Miss., March 21, 1972.

CHAIRMAN,

Oilseeds and Rice Subcommittee,

Committee on Agriculture, Washington, D.C.

DEAR MR. CHAIRMAN: Since no one from the tung belt could appear at the

meeting, I am sending a folder of information which I hope will be read.

We need the tung support for the existing trees but we are not planting any

more. We feel if we keep status quo for awhile we will get new uses and be able

to stand alone. Please be patient.

Sincerely,

MTS. HAMILTON MORRISON.

Mr. JONES. There is some attendant material which I would like to

make a part of the file but not of the official record.

[May be found in the file.]

Mr. JONES. The Chair is under the impression that under the organization of the committee rules, this subcommittee could, if the

members so desire, take action on this bill this afternoon to avoid a

later meeting of the committee.

Mr. WAMPLER. Mr. Chairman, I move that the hearings be closed.

I further move that we report the bill favorably to the full committee

with the recommendation that it do pass.

Mr. MATHIAS. I second it.

Mr. JONES. It has been moved and seconded that the committee

proceedings be closed and that the bill, H.R. 2303, be reported favorably with recommendation that it do pass.
14

So many as favor the motion, say aye.

[Chorus of ayes.]

Mr. JONES. Opposed ?

Mr. RARICK. No.

Mr. JONES. Apparently, the ayes have it.

The committee stands adjourned.

[Whereupon at 2:35 p.m., the subcommittee was adjourned.]
PHASEOUT OF THE TUNG NUT PROGRAM

(Business Meeting)

TUESDAY, APRIL 17, 1973

'HOUSE OF REPRESENTATIVES,

'COMMITTEE ON AGRICULTURE,

Washington, D.C.

The committee met, pursuant to notice, at .10:05 a.m., in room 1301,

Longworth House Office Building, the Honorable W. R. Poage [chairman] presiding.

Present: Representatives Poage, Stubblefield, de la Garza, Vifforito,

Jones of North Carolina, Sisk, Rarick, Jones of Tennessee, Mcher,

Mathis, Denholm, Brown, Bowen, Rose, Litton, 'Gunter, Teague,

Wampler, Goodling, Mayne, Zwach, Sebelius, Mizell, Findley, Baker,

.Symms, Young, and Johnson.

Also present: Fowler C. West, staff director John O'Neal, general

,counsel John Rainbolt, associate counsel L. 'T. Easley, press assistant

,Steve Allen, staff consultant and Martha Hannah, subcommittee clerk.

'The CHAIRMAN. The committee will please come to order. We are

-met this morning to consider any reports which the subcommittees

might have. The 'Subcommittee on Oilseeds and Rice has possibly two

•or three pieces of legislation to bring before us.

Mr. JoNEs of North Carolina. We do have one, Mr.- Chairman.

Mr. Chairman, I call to your attention H.R. 2303, a bill introduced

by Mr. Findley and myself, which would phase out the support price

tung nuts after the '1976 crop.

Briefly, tung nuts are confined to product-ion in about four southern

'States—Alabama, Florida, Louisiana, and Mississippi. By way of

-explanation, this tung nut production became very vital during the

Second World War to produce tung oil, which had a very high strategic value. But after the 'Second World War, the demand for tung nuts

and tung oil went down almost to- zero and many of the farmers who

-were engaged in the tung nut production prior to and during the

Second World War have now turned to other crops. It was during

this time that 'Congress enacted a support price for tung nuts to keep it

'alive and viable, but it now appears that this is a product or commodity for which there is little or no demand. As I say, many of the

farmers have now turned to other crops.

As I undertsand it, the tung nut trees are of a variety or breed which

have to be replaced every 5 or 6 years—I think I am correct on that,

-as I recall the testimony. SO in fairness to the few producers who still

-exist, this bill gives them 4 years to phase out. It is not like some of the

act-ions of the Department at this time, where they stop it in midstream,

but this is fair warning and will enable them to move to other crops.

(15)
16

The figures involved, the growers estimate it costs them about 25

cents a pound to produce tung oil. The Commodity Credit is supporting the item at 27.6 cents a pound, but selling it at the world price of

only 13 cents. So 'COC is taking a loss of nearly '15 cents on each pound.

This may not strike a happy chord with many of you, but it is a fact

that we can import tung oil from 'South American countries and others

at a figure much less than we can produce it at a figure considerably

less than the support price that Commodity Credit is now paying.

So with that, the Subcommittee on Oilseeds and Rice, by a vote of,

I 'believe, 5 to 1, voted up H.R. 2303. That is what is before us this

morning. It is estimated that it will save the Department in excess of

$1 million a year.

Let me repeat again, at the 'hearings this year, only one witness

offered any evidence of opposition and that was some elderly lady

down in Louisiana, I believe, who said she did not know what to turn

to. So the Department, of course, obviously would like to see the bill

enacted. Our subcommittee recommends it to the full committee.

Mr. Chairman, I will be glad to answer any questions you may

have.

The CHAIRMAN. You said this is going to be a phaseout. Actually,

what you mean is you are going to reduce the support price immediately, do you not?

Mr. JONES of North Carolina. No sir, it continues for the next 4

years.

The CHAIRMAN. And the next 4 years, it is going to be 65 percent of

parity rather than 90, is that right?

Mr. MATHIS. If the gentleman will yield, Mr. Chairman, I believe

it has been left to the Secretary's discretion to go between 60 and 90

if passed.

The CHAIRMAN. I know, but to be practical about it, you are talking

about 65 percent support this year and for the next 3, are you not?

Mr. MATHIS. Yes sir.

Mr. JONES of North Carolina. In all probability, sir.

The CHAIRMAN. You are not talking about a matter where you cut

it down, say, 10 percent each year, but you actually make the cut this

year.

I am not trying to find fault with it.

Mr. JONES of North Carolina. Under the arbitrary authority the

Secretary has, yes sir, it could be.

The CHAIRMAN. Well, now, you know it will be.

Mr. JONES of North Carolina. In all probability, Mr. Chairman,

yes sir.

The CHAIRMAN. I have no objection.

Mr. JONES of North Carolina. We are dealing—this may be of

interest to the committee, if I may be recognized. You are dealing

with three farms in Alabama. Florida has about 60, most of them

small. Louisiana has 10, and Mississippi has about 27. It is dying at

this time.

Mr. DENHOLM. Would the gentleman from North Carolina care to

comment on how it affects honey and why 

Mr. JONES of North Carolina. Affects honey?

None whatsoever that I know of.

Mr. DE LA GARZA. He is just restating the law.
17

DENHOLM. Are you restating the law as it now refers to honey?

Mr. JONES of North Carolina. Right.

Mr. DENHOLM. Is that acceptable to producers of honey?

Mr. JONES of North Carolina. They have no objection.

Mr. GUNTER. Will the gentleman yield for another 'question ?

Mr. JONES of North Carolina. Yes.

I r. GUNTER. What would happen if the bill were not enacted into

LINN'

Mr. JONES of North Carolina. 'The Department would be required to

continue the support until the law is repealed.

Mr. GUNTER. Would the support terminate at the end of the Agriculture Act of 1973?

Mr. JONES of North Carolina. I am under the impression that it is

a separate bill.

Mr. DENHOLM. Will the gentleman yield? What law are you operating under now?

Mr. JONES of North Carolina. Under the parity concept of the

Commodity Credit Corporation, a law that was introduced sometime

in 1949.

Mr. DENHOLM. I support the bill, but I am concerned about acting

on one thing at a time when we have under consideration the omnibus

farm bill.

Mr. JONES of North Carolina. Would the gentleman yield?

Mr. DENHOLM. Yes.

Mr. JONES of North Carolina. Off the record.

Mr. Chairman, may I go off the record?

The CHAIRMAN. Yes.

[Off the record discussion.]

Mr. JONES of North Carolina. Any other questions?

Mr. DENHOLM. No.

Mr. JONES of North Carolina. Mr. Chairman, I move the adoption

of H.R. 2303 and that it be reported favorably.

Mr. ZWACH. Mr. Chairman?

The CHAIRMAN. Yes.

Mr. ZWACH. I would just like to second the statement that Mr. Denholm made, that I hope we do not start adopting support prices for

products piecemeal and hope that we have an overall look at this and

that we do not want to come up to feed grains with everything else

passed. So I am not going to object to this now, but I want it understood that we are talking about 60 to 90 percent of parity here. I hope

we do not forget those figures as we come into some other parts of our

farm programs.

Mr. JONES of North Carolina. Will the gentleman yield?

Mr. ZWACH. Yes, I will be glad to yield.

Mr. JONES of North Carolina. On the contrary, Mr. Zwach, I take

the position that we might be far wiser to take these individual programs one by one and give them a careful scrutiny rather than come

in with a whole bag of terminations and that sort of thing.

Mr. ZWACH. I am not objecting.

The CHAIRMAN. As a matter of fact, it is not a part of the general

farm bill.

Mr. ZWACH. No, I realize that.
18

The CHAIRMAN. The Chair simply wants to make this statement. I

am thoroughly in favor of the bill; I do not want you to question that.

But I would like all of those who voted for the new rules to think now

and then. I have an idea that you will find more people here who voted

against those 'rules than you will find among those who are absent,

those who make it impossible for us to proceed. There is not a thing

in the world I can do here without a quorum. Because on this bill, when

we report it out, we are going to be asked, was there a quorum present

when it was reported? I cannot say that there was.

Mr. GUNTER. How about proxy, Mr. Chairman?

The CHAIRMAN. A proxy is no good to get a quorum. A proxy is

allowed to vote, but they cannot be used to establish a quorum.

Now, I have tried to tell the members of the committee—I can tell

you folks because you are here—but it is getting to be outrageous here.

•This committee has not had a quorum for the last week.

Now, there are a few of you who have been here regularly 'and I

appreciate it. I can look around and see you now and you know that

you have been attending. But the great majority of the committee

has not been attending. We have members here who have ignored

us for the last 2 weeks. They have been around here a long time and

they were very anxious to get on this committee. I do not know why

members want to get on this committee if they do not want to work

on it.

I suppose the only thing to do is name one of the members Sergeant

at Arms and let him go out and bring them in.

Mr. MIZELL. Some of our members are probably celebrating

Passover.

The CHAIRMAN. I do not think any of our members can claim that.

Here comes one. We need three more.

Mr. BAKER. Mr. Chairman?

The CHAIRMAN. Yes, Mr. Baker.

Mr. BAKER. In consideration of the language that applies to tung

nuts in the bill, would it be just as digestible to indicate that subsidies

would cease—because they do cease if the legislation expires. But

supporting tung nuts is disturbing me 'tremendously because it is

purely for the purpose of accommodating the people who participate

in this unnecessary crop. I do not want to destroy them: I just want

them to understand that this is the end of the road on this program.

Would this be doing any violence to the language if we amended it

to indicate that the program is going to terminate in 1976, if that is

the intention of the committee?

The CHAIRMAN. I think it does say that.

Mr. DE LA GARZA. We are in effect asking for a year's extension

from 1975.

Mr. BAKER. It says to 1976, I understand that. But it looks like

where we are citing for another 4 years and at that time, we will

extend it further and further.

Mr. TEAGUE. Will the gentleman yield?

Mr. BAKER. Certainly.

Mr. TEAGUE. Perhaps we can cover that for the committee's attention in the committee report.

The CHAIRMAN. Oh, I think so. I do not think it will change anything to change the language.
19

Mr. BAKER. It is not like our other support bills. I assume we do

intend to eliminate it.

The CHAIRMAN. That is my understanding.

Mr. BAKER. Wisdom dictates that. I would like for this to be

terminated. Of course, it will be in the consideration on the floor and

in the reports, I am sure.

Mr. MIZELL. Mr. Chairman, do we have any indications of what the

production of tung nuts was last year? Was-there any devastation to

the crop by Hurricane Camille?

Mr. JONES of North Carolina. Will the gentleman yield?

Mr. MIZELL. Yes.

Mr. JONES of North Carolina. According to the report I have, "In a,

good year—that is, one in which there is no freeze damage, or hurricane—about one third of these orchards produce about '10,000 pounds

of oil, about one third produce up to 50,000 pounds and the rest produce from 50,000 to 100,000 or more pounds of oil and many of these

producers are absentee owners."

More specifically, if the gentleman will yield again?

Mr. MIZELL. Yes.

Mr. JONES of North Carolina. In 1949, the production was 26.8 million pounds. I think the highest year was 1958. In 1972, the total production was 4 million. And the last 5 years, it has been approximately

5 million down to 3,1, and 4.

Does that answer the gentleman's question?

Mr. MIZELL. Yes. As I look at this report, it says, U.S. consumption

has fallen from 100 million pounds to 20 million pounds, but we only

produced 4 million currently.

Mr. JONES of North Carolina. That is correct, sir.

Mr. MIZELL. With the production running below what the consumption level is in the country, what is the major problem with this

program?

Mr. JONES of North Carolina. Well, I do not think you were here.

The U.S. growers, it costs them about 25 cents a pound to produce

tung oil. The Commodity Credit is supporting the commodity at 26

cents a pound. But we are having to sell it at the world price of about

13 cents.

Does that answer your question?

Mr. MIZELL. Yes.

The CHAIRMAN. Well, to put it in plain language, the trouble is that

there is so much palm oil and coconut oil and other oils coming on the

world market at a lower price, that are competitive with tung nut oil,

that the stuff just does not bring but 13 cents a pound. That means that

in order to get the 90 percent parity, the U.S. Government has to

subsidize it at a very high amount.

Mr. MIZELL. Mr. Chairman, I remember very well when the Government was the one that encouraged all these people to produce tung

nuts and assured them of some support.

The CHAIRMAN. It did.

Mr. MIZELL. I am merely raising these questions do we not feel as if

we have some obligation to those people that still have the orchards,

even though the production is going down.

The CHAIRMAN. That question is before us.

Mr. JONES of North Carolina. That is exactly the question.
20

The CHAIRMAN. I think that is exactly the question and as Mr. Jones

points out, his subcommittee did not think so.

Mr. MIZELL. I know at the time we discussed this last year, the point

was brought up, what would be the possibility of developing language 

to where there is support for those that are in business now with the

understanding that none of those crops that were lost because of Hurricane Camille would be replaced in support. With a freeze at this

point, and the only way•you can go is you freeze it out as the orchard

quits producing rather than in an arbitrary manner like this.

Mr. JONES of North Carolina. Are you asking me a question?

Mr. MIZELL. Yes, I am really just posing the question—

Mr. JONES of North Carolina. Mr. Mizell, as I understand it, according to the testimony—I know nothing about tung nuts, as a way of

dismissing the rot—I hesitate to relate some descriptions I have heard

in recent days. But I understand from the testimony that these tung

nuts are being replaced at regular intervals—Mr. Chairman, is that

right? This is to give them a reasonable opportunity not tci replace,

as you say, Hurricane Camille or Ginger, whoever the hurricane might

be, not being cruel but realistic about it, trying to force these people

into soybeans or some other crop.

Mr. TEAGUE. Will the gentleman yield?

Did you not say a while ago that you understood the trees have to

be replaced every 5 years?

Mr. JONES of North Carolina. As I recall the testimony it is 5 or 6

years, somewhere in there.

Mr. MIZELL. No, Mr. Chairman that is not correct as far as the

production life of a tung orchard. 

Chairman,

not know exactly what it is, but,

John, how long will these trees produce?

Mr. RARICK. Barring hurricanes and freezes they will last about 10

or 12 years, but they destruct themselves. They grow and by heavy

producing break their own limbs. It takes 5 years after planting a

tung orchard before it will produce a crop.

Mr. MIZELL. Then it is my understanding that this period of time

to 1976 is that most of the trees that are in production now will have

gone through their maturity.

Mr. JONES of North Carolina. I did not mean to imply that, no.

Over a period of time, the trees would have to be replaced. They are

not like the oak that lives forever.

The CHAIRMAN. Is there any objection to the motion? The motion

is that the bill be reported favorably and recommended that it do pass.

All those in favor of the motion, say aye.

{Chorus of ayes.]

The CHAIRMAN. Those opposed, say no.

Mr. RARICK. No.

The CHAIRMAN. The ayes have it. The bill is reported with the recommendation that it pass.

Mr. RARICK. Mr. Chairman, I ask unanimous consent of the committee that I may be recorded as voting against the bill.

The CHAIRMAN. Voting against?

Mr. RARICK. Recorded as voting no.

The CHAIRMAN. YOU will be recorded as voting no, then.

[The committee then proceeded to consider other legislation.]

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