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HEARING

BEFORE THE

COMMITTEE ON AGRICULTURE

HOUSE OF REPRESENTATIVES

EIGHTY-EIGHTH CONGRESS

SECOND SESSION

ON

H.R. 12698 and H.R. 12699

SEPTEMBER 29, 1964

Serial CC C

Printed for the use of the Committee on Agriculture

U.S. GOVERNMENT PRINTING OFFICE

38-689 WASHINGTON: 1964
COMMITTEE ON AGRICULTURE

HAROLD D. COOLEY, North Carolina, Chairman

W. R. POAGE, Texas, Vice Chairman

GEunOE GRANT, Alabama

E. C. GATHINGS, Arkansas

JOHN L. McMILLAN, South Carolina

THOMAS G. ABERNETHY, Mississippi

WATKINS M. ABBITT, Virginia

PAUL C. JONES, Missouri

HARLAN HAGEN, California

LESTER R. JOHNSON, Wisconsin

D. R. (BILLY) MATTHEWS, Florida

FRANK A. STUBBLEFIELD, Kentucky

RALPH R. HARDING, Idaho

G. ELLIOTT HAGAN, Georgia

GRAHAM PURCELL, Texas

JAMES H. MORRISON, Louisiana

BENJAMIN S. ROSENTHAL, New York

ROBERT B. DUNCAN, Oregon

ALEC G. OLSON, Minnesota

ROBERT L. LEGGETT, California

SPARK M. MATSUNAGA, Hawaii

Mrs. CHRISTINE S. GALLAGHER, Clerk

HYDE H. MURRAY, Assistant Clerk

JOHN J. HEIMBLIRGER, General Counsel

ROBERT C. BRUCE, 218.Sigtalit Counsel

FRANCIS M. LEMAY, Staff Consultant

CHARLES B. HOEVEN, Iowa

PAUL B. DAGUE, Pennsylvania

PAGE BELCHER, Oklahoma

CLIFFORD G. McINTIRE, Maine

CHARLES M. TEAGUE, California

ALBERT H. QUIE, Minnesota

DON L. SHORT, North Dakota

CATHERINE MAY, Washington

DELBERT L. LATTA, Ohio

RALPH HARVEY, Indiana

PAUL FINDLEY, Illinois

ROBERT DOLE, Kansas

RALPH F. BEERMANN, Nebraska

EDWARD HUTCHINSON, Michigan

RESIDENT COMMISSIONER

A. FERNOS-ISERN, Puerto Rico

•
CONTENTS

H.R. 12698, a bill to extend and amend provisions of the Sugar Act of

1948, as amended 3

H.R. 12699, a bill to extend and amend provisions of the Sugar Act of 1948,

as amended 3

Statement of:

Ferris, Josiah, representing mainland cane sugar area 11

Shields, Robert H., president and general counsel, U.S. Beet Sugar

Association 

Communications submitted to the committee:

Cooley, Hon. Harold D., chairman, Committee on Agriculture, telegram of September 25, 1964, to various segments of the sugar

industry 1

Creed, Joseph M., on behalf of Industrial Sugar Users Group, telegram

of September 28, 1964 5

Ferris, Josiah, representing mainland cane sugar area, letter of

September 28, 1964 4

Lee, Robert E., Acting Assistant Secretary for Congressional Relations, Department of State, letter of September 28, 1964 5

Marshall, James H., chairman, executive committee, U.S. Cane Sugar

Refiners' Association, telegram of September 28, 1964 5

Platt, S. L., Hawaiian Sugar Planter's Association, telegram of

September 28, 1964 4

Shields, Robert H., and others, U.S. Sugar Beet Association, telegram of September 28, 1964 

Smith, Dudley, vice president, Association of Sngar Producers of

Puerto Rico 6

EXTEND AND AMEND THE SUGAR ACT

TUESDAY, SEPTEMBER 29, 1964

HOUSE OF REPRESENTATIVES,

COMMITTEE ON AGRICULTURE,

Washington, D.0 .

The committee met, pursuant to notice, at 10 a.m., in room 1310,

Longworth House Office Building, Hon. Harold D. Cooley, chairman

of the committee, presiding.

Present: Representatives Cooley (presiding), Poage, Gathings, McMillan, Abernethy, Jones of Missouri, Hagen of California, Johnson

of Wisconsin, Matthews, Stubblefield, Harding, Hagan of Georgia,

Purcell, Morrison, Rosenthal, Duncan, Olson, Leggett, Hoeven,

Belcher, Teague, Quie, Short, May, Findley, Beermann, and Resident

Commissioner Fermis-Isern.

Also present: John J. Heimburger, general counsel; Francis M.

LeMay, staff consultant; Hyde H. Murray, assistant clerk; and Martha Hannah, staff assistant.

The CHAIRMAN. The committee will be in order, please.

Last week I received a communication from the Department proposing a resolution concerning the sugar program, and upon receipt

of it I sent a telegram to representatives of all the industry. I would

like to recognize Mr. Heimburger to read the telegram which I sent.

Have you received any answers to the telegram?

Mr. JOHN J. HEIMBURGER (committee counsel). Yes, Mr. Chairman.

The CHAIRMAN. Read the telegram.

Mr. HEIMBURGER. We have not as a matter of fact yet received

physically a copy of the communication the Department sent up. It

was transmitted to the Speaker of the House yesterday and will be

sent over to us today. Last Friday, on being informed that the Department was sending up the executive communication, you sent out

the telegrams based on it, to find out whether or not this bill which the

Department proposed had the unanimous support of the various segments of the sugar industry.

I will read your telegram. I think everybody is familiar with it.

This was the telegram which you sent to various segments of the sugar

industry on Friday afternoon, September 25:

The Department of Agriculture has forwarded to Congress a bill which would

extend the foreign quota provisions of the Sugar Act for 6 months through June

30, 1965, and continue for the same period the import fee at the 1964 level: viz.,

100 percent on global quota sugar and 30 percent of the global rate on quota

sugar. In view of the probable imminent adjournment of Congress there would

appear to be no possibility of enacting this bill unless all important segments of

the sugar industry are willing to support it without amendment. So that the
2 EXTEND AND AMEND THE SUGAR ACT

Committee on Agriculture may know your position on this matter, please notify

me by Monday noon your answer to the following two questions:

1. Will your organization support enactment of the Department bill without

change in both the House and Senate and actively oppose any amendment

thereto?

2. Would you support the bill in both House and Senate without any change

other than an amendment reducing the global import fee to 30 percent?

HAROLD D. COOLEY,

Chairman, House Committee on Agriculture.

The CHAIRMAN. How many answers did you receive?

Mr. HEIMBURGER. We received answers from all of the relevant

participants, Mr. Chairman—from the beet industry a combined answer, from Hawaii, Puerto Rico, the cane refiners, the domestic cane

sugar industry, and the industrial users. I believe that is it.

The CHAIRMAN. How many responded favorably to these questions?

How many have answered "yes"?

Mr. HEIMBURGER. I would say, Mr. Chairman, that all answered

"yes" to both questions except the State Department ( we sent a telegram also to the Secretary of State) , the domestic cane growers, and the

beet industry. The State Department answered "yes" to the first question, that they support the bill as submitted by the Department of

Agriculture. They felt the question of import fees should not be

touched in this bill, but should go over until next year.

The domestic cane industry answered a qualified "yes" or a qualified

"no," depending on how you look at it.

Mr. ABERNETHY. Could we have those messages read ?

Mr. HEIMBURGER. They are before you, Mr. Abernethy. I shall

be glad to read them.

Mr. ABERNETIIY. I did not realize that.

Mr. HEIMBURGER. They are before you in mimeographed form.

Mr. ABERNETHY. That is all right.

Mr. HEIMBURGER. The cane people answered a qualified yes or no,

depending on the way you look at it, to both questions. With respect

to question No. 1 they said, yes, they were in favor of the Department's

bill as probably the best that could be obtained at this point but, no,

they could not guarantee that some of their friends in Congress would

not try to amend it and, by implication, that they would support such

amendment. With respect to question No. 2, they answered that they

were not in favor of reducing the import fee unless there was some

specific provision to provide for the sale of domestic surplus in the

same bill.

As I recall, Mr. Chairman, the beet industry did not return a direct

answer to the two questions you asked. They said they felt there was

still time for Congress to take some action which would relieve domestic sugar producers of the surplus which had been built up in

1963 and 1964 as a result of departmental action.

The CHAIRMAN. The State Department would go along with the

Department's recommendation?

Mr. HEIMBURGER. Yes.

The CHAIRMAN. I assume the Department of Agriculture would

go along with it since they sent it up.

Mr. HEIMBURGER. There is no question about that.

Mr. CHAIRMAN. Are you sure they are for it?

Mr. HEIMBURGER. Mr. Murphy is here, and he can speak for himself.

Mr. Chairman, to complete the preliminary statement, let me add
EXTEND AND AMEND THE SUGAR ACT 3

that on yesterday, at your instruction, we introduced two bills in

the House for you. One of them, H.R. 12698; the other one, H.R.

12699. H.R. 12699 embodies the proposal exactly as submitted by

the Acting Secretary of Agriculture. H.R. 12698 embodies the proposal which was postulated by your second question in your telegram-in other words a 6-month extension with a reduction in the

global import fee to 30 percent of the difference between the world

and the U.S. price.

(The bills Introduced by Mr. Cooley, H.R. 12698 and H.R. 12699,

follow:)

[H.R. 12698, 88th Cong., 2d sess.]

A BILL To extend and amend provisions of the Sugar Act of 1948, as amended

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

of America in Congress assembled, That section 202(c) of the Sugar Act of

1948, as amended (relating to quotas for foreign countries), is amended by

striking out "1963 and 1964" in each place it appears therein, and inserting in

lieu thereof "1963 through the first six months of 1965", and by adding a new

subparagraph (7) at the end thereof as follows:

"(7) The quantities established for the first six months of 1965 shall be

one-half of the annual quantities provided for in the other subparagraphs

of this subsection (c)."

SEC. 2. Section 213 of such Act is amended (1) by deleting the period at

the end of the first sentence of section 213(a) and inserting a colon and the

following language in lieu thereof: "Provided, That such import fee for sugar

imported during the first six months of 1965 shall be 30 per centum of the fee

established as provided in subsection (b) of this section."; (2) by striking

from section 213(c) the language "during the years 1962, 1963, and 1964, which

fee in such year shall be respectively 10, 20 and 30 per centum" and inserting

in lieu thereof "during the years 1962, 1963, 1964 and the first six months of

1965, which fee shall be 10 per centum in 1962, 20 per centum in 1963, and 30

per centum in 1964 and the first six months of 1965"; and (3) by striking from

section 213(c) the language "during the years 1962, 1963, and 1964 shall be

respectively 0.1, 0.2, and 0.3 of 1 cent per pound" and inserting in lieu thereof

"during the years 1962, 1963, 1964 and the first six months of 1965 shall be in

1962 0.1 of 1 cent, in 1963 0.2 of 1 cent, and in 1964 and the first six

months of 1965 0.3 of 1 cent per pound".

[H.R. 12699, 88th Cong., 2d sess.]

A BILL To extend and amend provisions of the Sugar Act of 1948, as amended

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

States of America in Congress assembled, That section 202(c) of the Sugar

Act of 1948, as amended (relating to quotas for foreign countries) is amended

by striking out "1963 and 1964" in each place it appears therein, and inserting

in lieu thereof "1963 through the first six months of 1965", and by adding a new

subparagraph (7) at the end thereof as follows:

"(7) The quantities established for the first six months of 1965 shall be

one-half of the annual quantities provided for in the other subparagraphs

of this subsection (c)."

SEC. 2. Section 213 of such Act is amended (1) by striking from section 213(c)

the language "during the years 1962, 1963, and 1964, which fee in each such

year shall be respectively 10, 20 and 30 per centum" and inserting in lieu thereof

"during the years 1962, 1963, 1964, and the first six months of 1965, which fee

shall be 10 per centum in 1962, 20 per centum in 1963, and 30 per centum in

1964 and the first six months of 1965"; (2) by striking from section 213(c)

the language "during the years 1962, 1963, and 1964 shall be respectively 0.1, 0.2,

and 0.3 of 1 cent per pound" and inserting in lieu thereof "during the years

1962, 1963, 1964, and the first six months of 1965 shall be in 1962 0.1 of 1 cent,

in 1963 0.2 of 1 cent, and in 1964 and the first six months of 1965 0.3 of 1 cent

per pound".
4 EXTEND AND AMEND THE SUGAR ACT

The CHAIRMAN. Do you have the answer from the Hawaiian growers?

Mr. HEIMBURGER. It should be in this mimeographed packet which

you have, Mr. Chairman. Would you like me to read these responses ?

The CHAIRMAN. I do not think that is necessary as long as you have

summarized what is in them and we each have copies before us. Without objection, we will insert them in the record at this point.

(The responses to the telegram which was sent by Chairman Cooley

are as follows:)

HAWAIIAN SUGAR PLANTERS' ASSOCIATION,

September 28, 1964.

Hon. HAROLD D. COOLEY,

Chairman, House Committee on Agriculture,

U.S. House of Representatives,

Washington, D.C.:

In reply to the two questions you asked in your telegram of September 25, 1964:

First question. The Hawaiian Sugar Planters' Association is willing to support

the administration bill forwarded to Congress September 25, 1964, extending

foreign quota provisions of the Sugar Act for 6 months through June 30, 1964,

and continue for same period the import fee at 1964 level; viz, 100 percent on

global quota sugar and 30 percent of the global rate on quota sugar provided

that all segments of the industry sign a written statement agree as we do any

amendments will be actively opposed and provided that the House Agriculture

Committee and executive departments concerned will agree to resist any attempt to amend the administration's proposal at this late date. We would assume that if any amendment is made at any stage you and the House leadership

would then oppose further consideration of the bill.

Second question. The Hawaiian Sugar Planters' Association would support

the bill in both the House and Senate and would actively oppose any amendment

thereto, except an amendment to reduce the global import fee to 30 percent, provided you and the executive departments concerned agree upon such reduction,

and provided all other segments of the sugar industry and the executive departments similarly agree to support the bill and actively oppose any other amendment. As in reply to the first query above, we would assume that if any other

amendment is made at any stage you and the House leadership would then oppose further consideration of the bill.

S. L. PLATT.

WASHINGTON, D.C., September 28, 1964.

Hon. HAROLD D. COOLEY,

Chairman, Committee on Agriculture,

House of Representatives,

Washington, D.C.

DEAR Mn. CHAIRMAN: This is in reply to your telegram of September 25.

Under the bill proposed by the Department of Agriculture, any additional

sugar which the Secretary of Agriculture may have to authorize for marketing

this year would have to come from foreign countries who would be shipping

sugar to the United States under the quota presently withheld from Cuba. We

believe that if the United States needs additional sugar this year this need should

be satisfied with sugar which the Secretary of Agriculture, during a time of

sugar scarcity last year, asked domestic producers to produce.

Enactment of this bill is better than no action by Congress at this session.

Therefore, we will not oppose it but we cannot guarante that our Members of

Congress will not try to amend it.

Unless the bill is amended to grant domestic producers the right to sell at

least part of the additional sugar our Government asked them to produce, we

believe our Members of Congress will feel it necessary to actively oppose any

amendment to reduce the import fee on sugar which foreign countries sell in

the United States under the quota presently withheld from Cuba.

Sincerely yours,

Josuar FERRIS,

Representing Mainland Cane Sugar Area.
EXTEND AND AMEND THE SUGAR ACT 5

DEPARTMENT OF STATE,

Washington, September 28, 1964.

Hon. HAROLD D. COOLEY,

Chairman, Committee on Agriculture,

House of Representatives,

Washington, D.C.

DEAR MR. CHAIRMAN: The Secretary has asked me to reply to your telegram of

September 25. The Department of State fully supports the proposal submitted

to both Houses of the Congress by the Department of Agriculture calling for a

6-month extension without change of the foreign quota provisions and the

import fee provisions related thereto of the Sugar Act of 1948 as amended.

We believe that further time is required for consideration of the many suggestions that have been made for changes in various provisions of the act. Some

change in the import fee may well be called for but we believe this matter

should be considered in connection with other important matters, such as quotas,

that the Congress will pass on next year.

It is our hope that the legislation as proposed by the Department of Agriculture can be acted upon during the current session of the Congress.

Sincerely yours,

ROBERT E. LEE,

Acting Assistant Secretary for Congressional Relations.

[Telegram]

WASHINGTON, D.C., September 28, 1964.

Hon. HAROLD D. COOLEY,

Chairman, House Committee on Agriculture,

U.S. House of Representatives, Washington, D.C.:

Reurtel of September 25 and questions therein addressed to me as general

counsel American Bakers Association and Thomas F. Baker, executive vice

president American Bottlers of Carbonated Beverages, as spokesman for the

industrial sugar users group, in answer to question 1 although we would not

be disturbed if those provisions expire December 31, 1964, the group would not

object to a simple extension of foreign quota provisions of Sugar Act of 1948

through June 30, 1965. We would reluctantly accept continuation of the import

fee. Re question 2, we support any action moving toward elimination of global

import fee. Our answer to question 2 therefore is affirmative.

Respectfully,

JOSEPH M. CREED,

For and on behalf of Industrial Sugar Users Group.

[Telegram]

SEPTEMBER 28, 1964.

Hon. HAROLD D. COOLEY,

Chairman, House Agriculture Committee.

Washington, D.C.:

In your telegram of September 25, you ask this association to respond to two

questions. Both questions relate to a bill forwarded to the Congress on the

above date proposing extension of the foreign quota provisions of the Sugar Act

through June 30, 1965, with the import fee for the same period to remain at the

1964 level; namely, 100 percent on global quota sugar and 30 percent of that rate

on country quota sugar. Below we restate your questions and record our

answers:

Question 1. Will your organization support enactment of the Department bill

without change in both the House and Senate and actively oppose any amendment thereto?

Answer. The U.S. Cane Sugar Refiners' Association will support enactment of

the Department's bill without amendment in both the House and Senate. It will

actively oppose any amendments thereto except the possible amendment discussed

in our answer to your second question. This response is conditioned upon all

other important segments of the sugar industry and the executive departments

concerned similarly agreeing to support the bill and to actively oppose any

amendment thereto except the possible iniport fee amendment. We also assume

38-589-64--2
6 EXTEND AND AMEND THE SUGAR ACT

that if any amendment is made at any stage (except the possible import fee

amendment) you and the leadership will oppose further consideration of the bill.

Question 2. Would you support the bill in both House and Senate without any

change other than an amendment reducing the global import fee to 30 percent?

Answer. The U.S. Cane Sugar Refiners' Association would support the bill in

both the House and Senate and would actively oppose any amendment thereto

except an amendment to reduce the global import fee to 30 percent provided you

and the executive departments concerned agree upon such reduction and provided

they and all other important segments of the sugar industry similarly agree to

support the bill and actively oppose any other amendment thereto. We assume

that if any other amendment is made at any stage, you and the leadership will

oppose further consideration of the bill.

JAMES H. MARSHALL,

Chairman, Executive Committee, U.S. Cane Sugar Refiners' Association.

[Telegram]

SEPTEMBER 28, 1964.

HOUSE AGRICULTURE COMMITTEE,

House Office Building, Washington, D.C.:

In reply to questions raised your telegram regarding sugar legislation we will

support either question in both Houses and oppose any amendments thereto. We

feel this is the only way to get this important matter solved before Congress

adjourns. We appreciate your continued interest in our behalf.

DUDLEY SMITH,

Vice President, Association of Sugar Producers of Puerto Rico.

(The reply from the U.S. sugarbeet farmers and beet sugar processors appears with the statement of Robert Shields, see p. 7.)

The CHAIRMAN. I have said many times that personally I was very

much in favor of 'providing the legislative authority for the domestic

producers to sell the sugar which they legally 'produced. Apparently

that cannot be done without going further and all segments of the industry are not going to agree on that. It has been my feeling and still•

is my feeling that if we are to have a sugar program in the days to

come, we will have to get back within the framework of the act. I

certainly do not look with favor upon unlimited production of sugar

any more than I do unlimited production of other price-supported

crops. You have no legislative authority to sell the sugar and the

program will be ended when we adjourn. So we should agree, and

we have gotten fairly close together here in the final days of the session. I know there has been some concession, but apparently not

enough concession on the reduction of domestic beet and cane acreage in 1965 and unless the beet people indicate a willingness to go along

with the acreage reduction we cannot pass a bill this session.

This is a controversial resolution, and we might as well find it out,

right now and make our decision now. We cannot embark upon hearings on a contorversial bill because we have only a matter of days left.

We are glad to have hearings at any time we receive recommendations

from the Department or from the industry, but up to now we have not

had any recommendation from the Department, except the one which

we have just received and this recommendation is the subject of this

hearing.

Without going into any extended hearings to clear the thing up, I

would like to call on someone representing the beet producers to state

clearly whether you are for the resolution or whether you are not for

it. If you are for it, we could pass it out and get it on the road. It

is controversial but with unanimity of all the segments of the sugar

industry, I am sure we can pass this 'bill.
EXTEND AND AMEND THE SUGAR ACT 7

Who is here to speak for the continental beet producers ? I think

we should confine the discussion to the resolution itself and not go into

all the ramifications involved, and I hope this will be (lone.

STATEMENT OF ROBERT H. SHIELDS, PRESIDENT AND GENERAL

COUNSEL, UNITED STATES BEET SUGAR ASSOCIATION, WASHINGTON, D.C. AND RICHARD W. BLAKE, EXECUTIVE SECRETARY,

NATIONAL BEET GROWERS FEDERATION, GREELEY, COLO.

Mr. SHIELDS. Mr. Chairman and gentlemen, my name is Robert

Shields. I represent the United States Beet Sugar Association, all

the beet sugar processors in the country. With me is Richard Blake,

executive secretary of the National Beet Growers Federation. Between us, this morning, we represent all areas of production and

processing in the beet sugar industry.

I agree with you that the time has now come for action and not

words, so I shall make my statement very brief.

The members of this committee already know the position of the

domestic beet sugar producing industry on the two bills, H.R. 12698

and H.R. 12699, under consideration. This position was presented in

a telegram to the chairman yesterday, copies of which I understand

have been provided to other members.

(The telegram referred to above follows:)

TEXT OF TELEGRAM SENT MONDAY, SEPTEMBER 28, 1964, TO CHAIRMAN HAROLD

D. COOLEY ( DEMOCRAT, NORTH CAROLINA) OF HOUSE AGRICULTURE COMMITTEE

BY U.S. SUGARBEET FARMERS AND BEET SUGAR PROCESSORS

"Reurtel sugar recommendation submitted September 25 deals with only one

phase of sugar problems which need attention this session of Congress and which

have been under discussion many months. It ignores completely need of American producers for congressional authority to market additional sugar they

have produced in direct response to Government urging. This important omission

is in direct conflict with earlier recommendation of President himself.

"Undoubtedly Congress, if given opportunity, would grant American farmers

and producers these morally implied marketing rights. Although time for congressional action is short, believe there still remains time for passage balanced

stopgap sugar legislation which deals fairly and realistically with problems

affecting the domestic beet and mainland cane sugar producing industries.

"We respectfully urge you give House Agriculture Committee immediate opportunity to act favorably on urgent needs of American sugar producers."

"LOREN ARMBRUSTER,

"Director, Grower Affairs, Farmers & Manufacturers Beet Sugar Association, Saginaw, Mich.

"RICHARD W. BLAKE,

"Executive Secretary, National Beet Growers Federation, Greeley, Colo.

"ALDRICH C. BLOOMQUIST,

"Executive Vice President, Western Sugarbeet Growers, Fargo, N. Dak.

"GORDON LYONS,

"Executive Manager, California Beet Growers Association, Ltd., Stockton,

Calif.

"JAMES W. WITHERSPOON,

"Executive Secretary, Texas d New Mexico Sugar Producers Association,

Hereford, Tex.

"ROBERT H. SHIELDS,

"President and General Counsel, United States Beet Sugar Association,

Washington, D.C."
8 EXTEND AND AMEND THE SUGAR ACT

Mr. SHIELDS. In essence, we believe neither bill is complete because

neither bill authorizes the marketing of any of the additional sugar

in the domestic beet sugar area and the mainland cane sugar area produced at the request of the Government.

The bills, if enacted, would only preserve or enhance for another

6 months the present preferred posltion of certain foreign sugar interests in our market, with no regard for the urgent needs of American

sugar producers.

The intent of the Government to increase domestic sugar production

through various actions taken in the spring of 1963 has been recognized by the members of this committee and is well documented.

With the chairman's permission, I will supply that documentation

for the record at this point.

(The information follows:)

DOCUMENTATION OF GOVERNMENT URGING FOR MORE BEET SUGAR PRODUCTION

Various actions were taken by the administration early in 1963 to obtain more

beet sugar production.

1. On March 14, 1963, the Department of Agriculture announced there woluld

be no acreage restrictions on sugarbeets in 1964. The announcement very clearly

said the action was being taken to obtain more production through expansion

of existing plants and through building new plants to ultimate capacity immediately. The announcement was made by means of the following press release:

"U.S. DEPARTMENT OF AGRICULTURE,

"TVa8hington, March 14, 1963.

"No SUGARBEET ACREAGE RESTRICTIONS IN 1964

"Secretary of Agriculture Orville L. Freeman announced today that there will

be no acreage restrictions (proportionate shares) on the 1964 crop of sugarbeets.

"The 1963 domestic beet sugar marketing quota is approximately 2,700,000

tons. Stocks of beet sugar on hand January 1, 1963, amounted to 1,368,000 tons

and it is anticipated that 616,000 tons will be produced from 1962 crop beets to be

harvested in 1963. This provides a supply of 1,984,000 tons of beet sugar to

meet requirements until new crop sugar reaches the market next fall. Marketings of beet sugar in the last quarter of the year will be heavy. A larger quantity

of old crop sugar would have promoted more orderly marketing throughout the

year in accordance with the present quota.

"Production of sugar from the 1962 crop of beets has been estimated at 2,580,000

tons by the beet sugar industry. Even a large increase in 1963 production would

not result in excessive reserve supplies.

"The U.S. Department of Agriculture indicated it is too early to determine

whether restrictions will be necessary on the 1965 crop. However, it observed

that production will have to exceed marketings sufficiently to create safe and reasonable stocks before acreage restrictions could be reimposed.

"It is assumed that the industry will attempt in 1963 to produce at the maximum capacity of its plants. Today's action is expected to encourage plant expansion. First, it should encourage existing plants to modernize and expand

their facilities since they can now be assured of at least 2 years of unrestricted

operations. Second, new plants under construction for operation in 1963 and 1964

could be expanded immediately to their ultimate capacity so as to take advantage of this opportunity for full production and the building of production and

marketing history in excess of the tonnage provided from the national acreage

reserve.

"USDA suggests that when acreage restrictions are reimposed, major consideration should be given to production history in the period immediately preceding

the resumption of controls. That should provide fair treatment for those who

increase production sufficiently to meet prospective marketing quotas and stock

requirements."
EXTEND AND AMEND THE SUGAR ACT 9

2. Further incentive to produce more beet sugar was offered on May 6, 1963,

when the Department of Agriculture, by issuing the following press release, announced there would be no restrictions on sugarbeet planting in 1965:

"U.S. DEPARTMENT OF AGRICULTURE,

"Washington, May 6, 1963.

"No SUGARBEET ACREAGE RESTRICTIONS FOR 1965 CROP

"The U.S. Department of Agriculture announced today that acreage restrictions (proportionate shares) would not be established for the 1965 crop of sugarbeets.

"This announcement was made concurrently with action taken by the Department which increased 1963 domestic sugar requirements (total quotas) from

9,800,000 to 10,400,000 tons. At the same time the 291,537 tons of 1963 quota

increase accruing to the beet area was reallocated to the foreign countries

because the anticipated supplies of beet sugar available this year make it unlikely that the area would market the additional sugar.

"On March 14, 1963 ( USDA 848-63), the Department announced that 1964 crop

sugarbeet plantings would not be restricted. At that time, it was observed

that beet sugar production would have to exceed marketings sufficiently to create

safe and reasonable stock levels before acreage restrictions could be reimposed.

Today's action establishing the 1963 requirements at 10,400,000 tons, with accompanying quotas for the beet area of 2,990,127 short tons, reemphasizes the need

for additional beet stocks to permit the area to meet future marketing opportunities."

3. Testimony by responsible officials of the Department of Agriculture in late

May and early June of 1963 made it abundantly clear that the intent of the

acreage actions was to increase beet sugar production. Under Secretary of

Agriculture Charles Murphy and the then Director of the USDA Sugar Policy

Staff, Lawrence Myers, testified emphatically to this effect before the Senate

Finance Committee and before the Consumer Affairs Subcommittee of the House

Committee on Banking and Currency. Excerpts from the!r testimony follow:

"Mr. MURPHY. One of the major objectives of the Depal fluent in announcing

that restrictions would not be imposed on sugarbeet production in 1964 and

1965 was to encourage the modernization and expansion of existing factories

and the enlargement of factories now under construction." (From p. 22 of

printed record of hearings re "Factors Relating to Recent Syarp Increases in

Sugar Prices," before Subcommittee on Consumer Affairs of the House Committee

on Banking and Currency, June 5, 1963.)

"Mr. MYERS. Congressman Vanik, under the amendment passed last year, new

plants may have assured acreage sufficient out of each year's requirement figure

to produce 65,000 tons of sugar. Because of legislative history and other provisions, we have interpreted that to mean that there should be not less—not

over 50,000 tons per one plant. And as the committee report said, that would

allow one new plant each year and a fourth plant every third year.

"That does give these new plants a base, so to speak, for such future times as

we may reestablish quotas.

"Now, in the meantime, if a plant greatly expands its facilities and its acreage, production and marketings, it has that new higher history on which to

build.

"And it was for exactly that reason, as the Secretary pointed out in his testimony this morning, that the industry is assured that acreage restrictions would

not be applied in either 1964 or 1965, to encourage this modernization and expansion immediately, so that they would get on this higher basis of production."

(From pp. 123 and 124 of printed record of hearings re "Factors Relating to

Recent Sharp Increases in Sugar Prices," before Subcommittee on Consumer

Affairs of the House Committee on Banking and Currency, June 5, 1963.)

"Senator SMATHERS. * * * Would it have contributed to the alleviation of

the present situation or might we have avoided it altogether had we had a

greater production of cane and beet sugar domestically?

"Mr. MYERS. Senator, if we were on a domestic self-sufficiency basis, of course,

we could insulate ourselves from the world market; we have built up a domestic

supply from our mainland and offshore domestic areas to fill 60 percent of our

total requirements, as Secretary Murphy pointed out.

"Naturally, the more self-sufficient you are, the less you have to depend upon

world prices.
10 EXTEND AND AMEND THE SUGAR ACT

"Senator SMATHERS. Forgetting for a moment the foreign involvements in this

whole sugar matter and looking at it totally from a domestic viewpoint, would

it be the inclination of you or the Secretary to make a recommendation that the

domestic producers of beets and sugarcane have an increased quota so that in the

future we would not find ourselves in this shortage where we are subjected to

the combinations of world speculators?

"Mr. MURPHY. If I may respond to that, Senator, we have already taken

restrictions off production of beets for this year, 1964, and 1965, and cane for this

year and 1964.

"Certainly, we would hope that production will increase as a result of this

action. As to a permanent division of the market, quotas between this country

and foreign countries, we would not be prepared at this time to make any recommendation." (From p. 26 of printed record of hearings re "Sugar Prices," before Senate Finance Committee, May 29, 1963.)

4. The response of the beet sugar industry to the Government's urging for

more production, as well as the industry's voluntary resistance to upward price

pressures, both were given public recognition by a responsible official of the

Government early this year:

"Let me take this occasion to congratulate on two scores the farmers who

grow. sugarbeets and the companies which process them into sugar: First that

they were successful in producing a tremendous crop of sugar when it was

needed. Second, that although they raised their prices last year they did not

raise them as much as the cane sugar refiners did." (Tom 0. Murphy, Director,

Sugar Policy Staff, Agricultural Stabilization and Conservation Service, U.S.

Department of Agriculture, at the annual meeting of the California Beet Growers

Association, in San Francisco, Jan. 31, 1964.)

5. In identical testimony before the Senate Finance Committee and the Consumer Affairs Subcommittee of the House Committee on Banking and Currency,

Under Secretary of Agriculture Charles Murphy stressed the importance of

the domestic sugar-producing industry toward assuring supplies for consumers,

and the importance of the Sugar Act in maintaining a healthy domestic industry.

The subject under discussion today is basic toward maintaining a healthy domestic

sugar-producing industry. Mr. Murphy's testimony:

"Mr. MURPHY. Finally, let me say that all of us should be grateful for our

sugar legislation over the years and the assurance it has made possible for

sugar supplies at this time. It should be abundantly clear that U.S. sugar supplies

today would be infinitely more precarious if we had not had the protection of

this law and the quota system over the past 30 years. For without this system,

our domestic sugar industry might not have survived the disastrously low

world prices of 1960-62. U.S. farmers today are producing and the U.S. processing industry is manufacturing 6 million tons of sugar that constitutes nearly

60 percent of our sugar supplies. The protection that the Sugar Act has afforded

over the years has maintained a healthy and growing domestic sugar industry

which is indispensable in such a period of tight world supplies." (From p. 28

of printed record of hearings re factors relating to recent sharp increases in

sugar prices, before Subcommittee on Consumer Affairs of the House Committee

on Banking and Currency, June 5, 1963. (Identical statement appears in prepared testimony presented by Mr. Murphy at hearing re sugar prices before the

Senate Finance Committee on May 29, 1963, p. 10, printed record of bearing.))

Mr. SHIELDS. The response of the domestic beet and cane producers

is also well known to this committee. The beet sugar industry, for

example, responded in 1963 by producing some 20 percent more sugar

than in 1962. In continued response and as a direct result of incentives offered by the Government for 1964, we are now beginning the

harvest of a sugarbeet crop that will yield some 700,000 to 800,000 tons

more sugar than our present quota.

When we were asked to produce more sugar, there was an implied

understanding that we would be able to market that extra sugar. The

extra sugar production was, in fact, produced to be marketed and not

to be put in storage.

On December 20 last year and on January 31 of this year, the administration recognized its moral obligation to ask Congress to provide the authority for additional marketing of domestically produced
EXTEND AND AMEND THE SUGAR ACT 11

sugar this year. The Department conveyed the administration's request to the Congress last December, and the President of the United

States did so this January. Recognition of the moral obligation we

are sure still exists within the administration.

Unless we are given authority for additional marketing this year, we

will be unable, fully, to supply our regular customers later on this

year in our normal marketing territory. - Because of the heavy demand

for beet sugar early this year, when foreign sugar interests were reluctant to sell in this market and because of our confidence that the

administration would press its earlier recommendation for extra marketings, our marketings this year have been at an increased rate, at

the rate of 3 million tons a year, while our quota remains at 2.7 million.

If we are required to carry all of the additional sugar we now have

on hand, in view of the large crop now coming in we shall be burdened

with excessive storage charges. We shall be penalized, that is to say,

for having responded to theGovernment'spleas to produce more sugar

and its promise to secure extra marketing rights.

On the import fee, as previously stated, our feeling is that the fee

is an integral part of the foreign provisions of the Sugar Act. If the

other foreign provisions are to be extended without change into next

year, the present fee provisions might be more appropriately extended

without change, also, awaiting full consideration of the entire foreign

fabric of the law next year. However, as we have also said, we would

not oppose any adjustment of the import fee which the administration

and this committee may agree upon if extra marketings are included

in the package.

In conclusion, the position of the domestic beet sugar industry is

that any stopgap legislation which fails to include provision for extra

marketings in 1964, 500,000 total, in the discretion of the Secretary,

up to 275,000 for beet and 225,000 for mainland cane—any stopgap

legislation which fails to include such a provision for extra marketings is fatally defective.

The CHAIRMAN. I understand that your group opposes the resolution sent up by the Department.

Mr. SHIELDS. We favor it with the inclusion of extra marketings

for the domestic area.

The CHAIRMAN. Otherwise, you do not favor the bill?

Mr. &Imam. That is a fair statement yes, sir.

The CHAIRMAN. Who will speak for the continental cane producers?

STATEMENT OF JOSIAH FERRIS, REPRESENTING MAINLAND CANE

SUGAR AREA

Mr. FERRIS. My name is Josiah Ferris. I represent the mainland

cane sugar area.

Mr. Chairman, we sincerely appreciate the interest you have taken

in our problem. I will not rehearse or go over the figures of our

marketings and just what we are faced with because you have accorded us the very great privilege of discussing those with you informally, and also with various members of your committee. We

would hope that you would view our answer in the light that it is a

qualified yes, rather than a qualified no.
12 EXTEND AND AMEND THE SUGAR ACT

We are disappointed, of course, that the Government bill did not

take into consideration the marketing problem that we face. We are

not criticizing them for not doing it. We realize that circumstances

were such that it was very difficult for them to take a position. We are

grateful to them for at long last coming out with something, even

though it does not accomplish our purpose.

As we stated in our written reply to you, if that is the best bill we

can get, we will have to take it, but we certainly do not like it.

We do not want to create the false impression that we are speaking

for our Members of Congress, who have problems of their own, and

we certainly do not want to create the impression that we are committing them. As far as I know, certainly there is no objection to

reporting out the Government bill as quickly as you can. We would

be in favor of that.

The CHAIRMAN. Are you going to use that just as a vehicle to

attach amendments? That is what we are worried about.

Mr. FERRIS. Mr. Chairman, we are as interested in maintaining the

Sugar Act as any group of people I know. It is the instrument under

which we have grown and prospered. Without it we could not live.

So, we do want to maintain it But we do not like to have our hands

tied if there is some possibility of bettering our position.

The CHAIRMAN. Mr. Shields used the expression that the Government requested the domestic producers to increase production and that

it carried with it an implied understanding. I do not know how you

can imply an understanding that would be binding on this committee

or the Congress. He said in effect they promised to provide legislative authority. I do not know anybody in the executive branch of

the Government who has a right to promise anybody to provide

legislation. Legislative authority should have been asked for at that

time.

As of now, I do not think the committee would give legislative authority for the production of sugar. I do not think we should. I

sympathize with your situation and I appreciate the attitude you have.

taken. You have just heard the statement on behalf of the beet industry. I do not know about the other Members of the House but I

think everybody here would vote for relief for the 1964 surplus, but

to go beyond that we are endangering the whole program. If you are

willing to get back within the framework of the law and move on from

here, we will be all right.

I have not received a recommendation from the Department until

just now. The situation we are in I think is right where we were when

we had an informal conference in this room and we could not get together, and we are not any nearer together now. I do not know what

will be the situation after we adjourn, but I think it will be bad. I am

not representing anybody in the sugar business, but if I were in the

situation you are in, I would be willing to make some concessions.

Has anybody else any observations on this

What we should do is to get back fully under the act. I think the

beet sugar industry would go along with a 5-percent reduction. I do

not know whether they would go any further than that or not. Negotiations have been going on.

Mr. HAGEN. There is no concession on their part in the administration bill.
EXTEND AND AMEND THE SUGAR ACT 13

The CHAIRMAN. No. I know that.

Mrs. MAY. Mr. Chairman, I would like not to let your statement

stand in the record without some comment, that the beet sugar people have been willing to make no concessions.

The CHAIRMAN. They have been willing to make a concession up to

5 percent, but they have not indicated what figure they would go to

above that.

Mrs. MAY. In the nature of negotiations, of course, when somebody

is asked to reduce and at the same time have not been offered the

privilege of marketing, I think it is very natural they would not offer

to cut their own throats when they did not have any assurance they

would get a chance to sell sugar.

The CHAIRMAN. The suggestion to reduce the acreage in 1965 certainly was coupled with the thought they would be given authority to

sell the 1964 crop.

Mrs. MAY. I do not think the negotiations as reported to me previous to this meeting ever came to that sort of agreement.

The CHAIRMAN. It has been talked about time and time again. I

want the domestic producers to sell their surplus.

Mrs. MAY. I am not quarreling with the chairman. I am talking

about other sections of the industry.

The CHAIRMAN. During the meeting at one time there was an understanding that they would get together and support this legislation.

Mrs. MAY. I am going back to the gentleman's original statement

that the beet people were not willing to make any concessions, and

I do not think that statement as such should be allowed to stand in

the record.

The CHAIRMAN. I qualified it by saying any concession they are

willing to make was the one made this morning by Mr. Shields. He

maintains the position now that he has maintained right along, as I

understand.

Mr. POAGE. It seems to me the whole crux of this thing has been

that the beet people, not having been accustomed, I suppose, to making

any reduction in their crop, have felt that a token cut was adequate

and that they did not have to make any real, substantial reduction.

They have not been in the position that other people have been in.

Wheat has been reduced from 85 million acres down to 55 million

acres and now we are trying to bring it on down to 42 million acres.

Cotton has been reduced from 43 million acres down to the present

16 million acres or a little less than that, actually. Corn has been

reduced from around 80 million—I do not have the exact figure—

down to 55 million acres. Peanuts took a 55-percent cut in acreage

in 1 year, in my State. All at one time. Tobacco—I do not know

what their acreage was reduced from, but it has not been increased

for some 30 years.

Somehow or other, other people in the United States have all

recognized they had to take some substantial cuts if they were to have

support programs with the price maintained as a result of governmental action. I do not think anybody disagrees if We did not have

the Government supporting this price it would be all right for anybody to grow all the beets they wanted anywhere in the United States

tit any time. But if the Government is to pay the bill—and I do not

know a human in the United States, and that goes for my district as
14 EXTEND AND AMEND THE SUGAR ACT

well as everywhere else, as I have a lot of people in my district who

want to grow beets, but not a one one of them that wants to grow

beets and sell them on the market at world prices. They want to grow

beets under a program whereby the U.S. Government will guarantee

them a better price than they can get otherwise. If they are to continue to do that, they have to show some kind of cooperation with

the Government and maintain an acreage somewhat in keeping with

the needs of the Nation.

Of course, I realize that it has been said that we should give a larger

share of the market to domestic growers. Somehow or other, I cannot

get out of my mind that if we are to do business we have to live up

to our contract. We made a trade. Every industry and every group

represented in this room today was a party to that. So was this

committee. So was the Department of Agriculture. So was the

Congress. We agreed to a basic division between domestic and imported sugar. That agreement has 2 more years to run.

If we are simply to repudiate those agreements at will, I do not

think there is a bit of use in the world of our bothering about a program. If the very basic agreement on which the program is founded

can be scrapped simply because somebody finds it advantageous to scrap

it, I do not see why we bother with any legislation at all, because that

can be scrapped, too.

Mr. SHORT. Mr. Chairman, we have not scrapped the Sugar Act.

Mr. POAGE. No but you are, in effect, asking that we do so. There

are 850,000 tons of surplus sugar which were produced legally but are

excess to the needs of this country. Every ton of that sugar that is sold

reduces by that much the amount of imported sugar which can be

refined at seaboard refineries. I am like the chairman. I stated long

ago that I thought we must let these people sell the sugar they legally

produced. I am ready to do that, but I cannot now agree that they

may not only sell what they have grown but that they can do the same

thing next year. My people, like yours, Mr. Short, want to get into

the business but they have not been in the business heretofore. They

want in the business. But I am not going home and tell those people

that they can get in the beet business, much as I would like to, if it

means repudiating a contract and taking business away from people

who agreed to a whole series of provisions here on the understanding

that we were going to have 58 percent domestic and 42 percent imported sugar. That agreement has 2 more years to run. At the end of

that time I am perfectly willing to talk about trying to get something

more for American growers, but I think it is worth something to the

people of the United States, and I think your people have a whole lot

more at stake than mine, because we do not yet grow any beets, to

establish a reputation for reliability. I think for the next 2 years your

people are pretty well going to need to maintain this program. Mine

do not need it. We have nothing to lose if sugar drops to 2 cents, but

I fear it would break these old growers who seem to want to wreck the

program.

Mr. SHORT. If the gentleman will yield, the beet industry has never

suggested that the Sugar Act be revised.

Mr. POAGE. They have.. They have asked to sell 850,000—just a second. You asked me to-yield, and I have the floor to answer you, "You

made a statement which. clearly is na correct, Mr. Short. The beet
EXTEND AND AMEND THE SUGAR ACT 15

industry asked to sell this excess sugar in the market. Every ton they sell into the market displaces a ton of sugar that we promised, that

we agreed, that we wrote into the law, would be imported sugar going

through the seaboard refineries. I do not have any seaboard refineries,

and I am not about to grow any cane, because it freezes in my country

every year and there is no chance to do it. My district's only interest is in growing beets, but I am not going to go home and mislead the people who want to grow beets down there. I am going to tell them

the facts, and the facts are that we made an agreement and I am going

to-try to live up to that agreement.

Mr. SHORT. If the gentleman now will yield.

Mr. POAGE. Certainly.

Mr. SHORT. I think we have to recognize the very basic and important question that this additional sugar which was produced was not produced 

Mr. POAGE. 

by virtue 

Did I 

of 

not 

any 

state 

revisionin the first place that it was legally pro- duced?

Mr. SHORT. All we are asking, I would respond to the gentleman

from Texas, is that we be allowed to market a part of the sugar that

was legally produced at the request of the Secretary of Agriculture.

Mr. POAGE. That is not all you are asking. If that were all, we would have had this settled long ago. You are asking to sell that

sugar this year, and you are asking to have the right to grow up to 5

percent that much next year and to sell it. You are asking to con- tinue to grow a surplus each and every year. You are asking to grow

95 percent of what you did grow. You are overproducing the needs

- of the market by some 22 percent, I believe it is. I may be wrong on

those figures.

Mr. SHORT. Where is the language in this 'bill that has anything

to do with next year's production?

Mr. POAGE. This bill hasn't anything to do with the sale of surplus

sugar. This bill hasn't anything to do with that surplus sugar. But

the demand of the sugarbeet people is to sell all of the sugar they

legally produced in the past and to continue to produce 95 percent of

what they have produced. The only difference between your position

and mine is, I say they sell it and then let's don't do the same thing

next year. I would say: "Go and sin no more." You would say, "Let's

be forgiving and go out and sin again."

Mr. SHORT. Where do We say this?

Mr. POAGE. The gentleman standing back there next to the door

said his people would give a reduction of 5 percent and no more.

The CHAIRMAN. Let US get back to the Witness.

Mr. SHIELDS. If we are going to go beyond the two bills, I would

like to say something more.

The CHAIRMAN. Have you anything more to say, Mr. Ferris?

Mr. FERRIS. No. Thank you very much.

Mr. JONES. I would like to make a comment on Mr. Ferris' statement. I think it is very clearly implied that, while he says the group

he represents will not oppose this, he goes right on and says "we

cannot guarantee that our Members of Congress will not try to amend

it." I think that implies the Members of Congress representing those

interests will try to amend this bill. If we are to get into a fight, we

are just wasting a lot of time here this morning, because we are not
16 EXTEND AND AMEND THE SUGAR ACT

going to get any bill that everybody can agree on. I think that is evident from the conversation that has gone on here.

We should just wait until January and start in and have some hearings on this. I am interested in seeing what will happen if we do not

pass any legislation and let this act expire. There is so much difference of opinion among the Department and among the representatives of the various segments of this industry about what is going

to happen. Let us see what is going to happen.

Mr. HAGEN. I would like to ask the gentleman from Texas a question. Will you support legislation to put these new areas in the same

catecrory as the old areas?

Mr. POAGE. I am for leaving the legislation as it is.

Mr. HAGEN. You were one of the advocates of these new hearings.

Mr. POAGE. That is right.

Mr. HAGEN. The deal was lost in the Senate. The package that was

agreed to was not the package that was passed. The Senate altered it

radically in favor of the new areas, so the old beetgrowers are the

ones taking the whipping.

Mr. POAGE. What did the Senate do to change the language with

regard to new areas?

Mr. HAGEN. I do not know exactly. I know they gave new areas

preferred positions, which was not in the House bill.

Mr. POAGE. Actually, the House or this committee—inserted the

provision for the new areas. I submitted the language myself.

Mr. HAGEN. You were one of the stanchest advocates.

Mr. POAGE. I appreciate the compliment. I did what I could to get

an agreement which I considered fair to all and I am in favor of

carrying out that contract, just as I am in favor of carrying out every

other contract. We have an agreement, and I believe in being bound

by the contract.

Mr. HAGEN. To be fair, you should support legislation 

Mr. POAGE. To repudiate that contract? I will no more deny the

beetgrowers the benefit of the contract than I would deny the seaboard

refiners the protection of the provisions which are favorable to them.

The CHAIRMAN. Mr. Hoeven?

Mr. HOEVEN. We are getting nowhere fast, and I move the committee go into executive session.

The CHAIRMAN. Without objection, we shall go into executive session and we thank the gentlemen for coming up here.

(*hereupon, at 11 a.m., the committee proceeded in executive

session.) 40,„

0