Special Message to the Congress Upon Approving Bill Relating to Cotton and Peanut Acreage Allotments and Marketing Quotas.

To the Congress of the United States:

On March 31, 1950, I approved H.J. Res. 398, "Relating to cotton and peanut acreage allotments and marketing quotas under the Agricultural Adjustment Act of 1938, as amended, and to price supports for potatoes."

I approved this measure with reluctance, because it contains some provisions which seem to me to be definitely undesirable, and its other provisions merely undertake to alleviate defects in the existing farm program temporarily, without correcting those defects. Moreover, even this temporary relief, which is urgently needed, will require additional expenditures of public funds and increase the likelihood of future difficulties for the farm program.

One part of the bill, that relating to potatoes, is a step in the right direction for the long run. While it would do little or nothing to remedy for this year's crop the defects in the potato price support program, it does hold out hope of improving this program for subsequent years. However, if each step made in improving the farm program in one place is to be accompanied by a step backward in another place, we will fail to make the advances in that program which are necessary if it is to retain the approval of the American people.

This Joint Resolution furnishes additional grounds for the charges that the present farm program is costly and piles up unmanageable surpluses at the same time that it maintains artificially high prices for agricultural commodities. What is needed is for the Congress to approach this problem with a view to correcting the fundamental shortcomings in the present farm program rather than patching it up with makeshift legislation.

In spite of the shortcomings of the present Joint Resolution, I have decided that the urgent need for the relief which it will give to cotton producers, and the promise which it holds out for making some improvement in the .potato program, outweigh the defects of the measure.

The principal relief provided is in the form of additional cotton acreage allotments. The cotton acreage allotment system was revised by the Congress last year. In that legislation, against the advice of the Secretary of Agriculture, the Congress adopted an allotment system based primarily upon the farmer's acreage of crop land. The legislation provided in detail the method by which allotments were to be made. Just as the Secretary of Agriculture had warned, this legislation has had grossly inequitable results. Some cotton farmers were required to make little or no reduction in cotton acreage to comply with their allotments, other cotton farmers were required to reduce their acreage by as much as eighty percent. The present Joint Resolution merely provides additional cotton acreage allotments for this year to alleviate the hardship in those cases where the reductions have been inequitably severe. It does not remedy the basic defect in the present system of determining cotton acreage allotments. Indeed, in one respect it makes it even worse. It provides, in effect, that cotton acreage which is surrendered by one farmer and re-allotted, even though it is not planted by any farmer, must continue in future years to be allotted to that same county and State. This provision is obviously not necessary to relieve present inequities and it is clearly unfair to areas where cotton farmers are being severely restricted in their plantings, and favors areas making little or no contribution to the reduction of cotton production.

I urge the Congress to revise the permanent laws regarding the cotton acreage allotments and marketing quotas. Such legislation should provide for allotments to be based primarily upon each farmer's past planting history. Furthermore, it should give ample latitude to farmer-elected local committeemen, so that they may alleviate inequities among their neighbors and make adjustments for local conditions. These principles are generally in effect for all major crops but cotton, and experience has demonstrated their superiority to those embodied in the cotton legislation enacted last year, from which farmers are now seeking relief.

Sections 3, 4, and 5 of H.J. Res. 398 deal with Irish potatoes. The most important of these is Section 5, which provides that no price support shall be granted to potatoes for the crop year 1951 and later years unless marketing quotas are in effect. Since no marketing quotas for potatoes are permitted by present law, this Section amounts to a policy declaration by the Congress that it intends to enact better price support legislation for potatoes than we now have. With this purpose I am in hearty accord.

Successive Secretaries of Agriculture have been urging the Congress for several years to enact better legislation regarding potatoes, in order to bring supplies into line with demand, to provide better distribution of surplus potatoes, and to reduce the cost of the program to the Government. To amend present law to provide for effective marketing quotas would be a substantial improvement over the present situation. It would not, however, in my judgment, be all that is necessary. I again urge the Congress to authorize a system of production payments for potatoes (and other perishable commodities) so that unavoidable surpluses can be sold to consumers and used, instead of taken off the market and largely wasted.

Sections 6 and 7 of the Joint Resolution deal with peanuts. Section 7 is designed to provide some relief for the peanut farmers in several States (particularly Alabama and Texas) whose acreage was cut especially severely under present law. I believe that the peanut farmers of the States affected should have such relief, and that is one of the reasons which led me to approve the Joint Resolution.

Section 6, however, is another matter. This Section would permit the planting of peanuts to be increased substantially above the acreage allotments now established. The peanuts produced on these extra acres would not be eligible for price support, but would, instead, be sold for crushing, and the farmer would receive only what the resulting peanut oil would bring on the market. The domestic "two-price" system for peanuts thus established is subject to serious objections.

First, under present conditions, the production of peanuts for oil is unprofitable for the growers and is an uneconomic and wasteful use of agricultural resources. During the war and right afterwards, when fats and oils were in seriously short supply, we needed peanut oil badly. Now that supplies of soybeans and other more economical sources of edible fats and oils are again sufficient, it would be foolish to go on using good land to produce peanuts for oil which would not yield a profit to the growers. I believe that peanut farmers will realize that it would not be to their own best interest to expand their plantings of peanuts greatly. Consequently, I do not expect large additional amounts of peanuts to be produced for oil as a result of this Section. Nevertheless, this provision represents a breach in the integrity of the quota system upon which the support price program depends. If it should be taken as a precedent for other crops, the whole support price program might be endangered.

Second, the administrative difficulties of operating this "two-price" system for peanuts will be very great. In order to prevent the diversion of peanuts produced on the excess acres to the higher of the two price outlets, an extensive system of inspection, identification, and supervision will have to be developed. Administrative difficulties should not stand in the way of desirable programs, but in this case a complicated, costly, and annoying administrative network will be required for a very dubious purpose.

Above and beyond these specific objections to Section 6, it may have very unfortunate implications for future years and other crops. If farmers do produce large quantities of peanuts for oil at no profit, there will inevitably be pressures for supporting the price of peanut oil in the future, which would only complicate matters further. Even more serious, if these special provisions for peanuts were to be regarded as a precedent, it may be urged that similar provisions should be enacted for other crops, regardless of the disruption that could result to domestic and world markets. I believe it would be a very serious mistake for us to embark on such a course, and I do not regard this peanut provision as anything but a temporary aberration from proper legislation.

We face no small task in providing a system of agricultural legislation which will serve the needs of farmers for a fair income and will, at the same time, serve the needs of consumers for ample supplies of foods, fibers, and other crops at reasonable prices, and the needs of the whole Nation for a growing, expanding economy and a healthy world trade. During the present postwar transition period, our agricultural legislation is necessarily costly, but we obviously cannot afford to add to those costs for purposes which will not contribute to the real long-run interests of farmers or the Nation.

I urge the Congress to proceed to consider fundamental improvements in our agricultural legislation to make it more efficient, less costly, and more conducive to abundant production of farm crops, yielding a fair return to farmers, and selling at prices consumers can afford.

HARRY S. TRUMAN