B-140385, AUG. 21, 1959

B-140385, AUG. 21, 1959

TO THE SECRETARY OF AGRICULTURE:

BY LETTER OF AUGUST 3, 1959, YOUR ASSISTANT SECRETARY, MARVIN L. MCLAIN, REQUESTED OUR DECISION CONCERNING A PROVISION RELATING TO THE CONSERVATION RESERVE PROGRAM CONTAINED IN THE DEPARTMENT OF AGRICULTURE AND FARM CREDIT ADMINISTRATION APPROPRIATION ACT, 1960, 73 STAT. 167, 174.

THE PROVISION IN QUESTION READS AS FOLLOWS:

"IN ESTABLISHING ANNUAL RENTAL RATES FOR NEW CONTRACTS NO SUCH RENTAL RATE SHALL BE ESTABLISHED IN EXCESS OF THE LOCAL FAIR RENTAL VALUE OF THE ACREAGE OFFERED, SUCH FAIR RENTAL VALUE TO BE BASED UPON THE AVERAGE ANNUAL CROP PRODUCTION HARVESTED FROM SUCH ACREAGE DURING THE PAST 5 CROP YEARS INCLUDING THE CURRENT YEAR * * *.'

THE QUESTION PRESENTED FOR DECISION IS WHETHER THE PROVISION REQUIRES THE LOCAL FAIR RENTAL VALUE TO BE BASED SOLELY ON THE PRODUCTION REMOVED FROM THE LAND BY HAND OR MECHANICAL MEANS, OR WHETHER IT PERMITS TAKING INTO ACCOUNT THE VALUE OF CROPS REMOVED BY GRAZING OR "HOGGING OFF.'

IT IS EXPLAINED THAT THE QUESTION ARISES BY REASON OF CERTAIN PROVISIONS CONTAINED IN THE SOIL BANK ACT, 70 STAT. 188, 192, WHICH SPECIFY THE TERMS AND CONDITIONS WHICH MUST BE MET BY THE PRODUCER IN ORDER TO BE ELIGIBLE FOR PAYMENT. TWO OF THE CONDITIONS PRESCRIBED IN SECTION 107 (A) ARE THAT THE PRODUCER SHALL NOT HARVEST ANY CROP FROM, NOR GRAZE, ANY ACREAGE ESTABLISHED IN PROTECTIVE VEGETATIVE COVER, WITH CERTAIN EXCEPTIONS. SECTION 123 PROVIDES A PENALTY AS TO ANY PRODUCER WHO KNOWINGLY AND WILLFULLY GRAZES OR HARVESTS ANY CROP FROM THE ACREAGE.

THE ASSISTANT SECRETARY URGES THAT, AS USED IN THE APPROPRIATION ACT, THE WORD "HARVESTED" IS BROAD ENOUGH TO INCLUDE THE VALUE OF CROPS GRAZED AND THE VALUE OF CORN OR PEANUTS "HOGGED OFF," SINCE THE VALUE OF SUCH CROPS WOULD NORMALLY BE INCLUDED IN ANY DETERMINATION OF RENTAL VALUES. FURTHER SUPPORT OF THIS VIEW THE ASSISTANT SECRETARY STATES THAT---

"THE VALUE OF CROPS GRAZED OR HOGGED OFF IS IDENTICAL IN MOST CASES WITH THE VALUE OF CROPS HARVESTED BY HAND OR MECHANICAL MEANS. FOR EXAMPLE, A BROME-GRASS ALFALFA MIXTURE IS COMMONLY USED FOR ROTATIONAL PASTURE IN THE HUMID AREAS DURING ONE YEAR OUT OF A 4 OR 5 YEAR ROTATION. FROM A FEED VALUE STANDPOINT, THIS CROP IS EQUAL IN VALUE TO SIMILAR FIELDS HARVESTED FOR HAY AS WELL AS TO SOME OF THE GRAIN CROPS NORMALLY GROWN AS A PART OF THE ROTATION PATTERN AND CONTRIBUTES EQUALLY TO THE SURPLUS FEED SUPPLIES. WE PROPOSE TO TAKE INTO ACCOUNT ONLY THE VALUE OF GRAZING OF ROTATIONAL CROPS WHICH COULD BE HARVESTED BY HAND OR MECHANICAL MEANS. THIS APPLICATION OF THE LIMITATION WILL IN NO CASE GIVE CREDIT FOR CROPS GRAZED FOR MORE THAN 2 OUT OF THE 5 YEAR PERIOD COVERED IN THE APPROPRIATION PROVISION. THIS WOULD ELIMINATE ANY POSSIBILITY OF GIVING CREDIT FOR CROPS GRAZED ON ANY LAND THAT HAS BEEN RETIRED FROM ROW CROP PRODUCTION. THE VALUE OF CORN OR PEANUTS "HOGGED OFF" SHOULD BE INCLUDED IN DETERMINING THE LOCAL FAIR RENTAL VALUE SINCE THIS IS A NORMAL METHOD OF REMOVING SUCH CROPS IN ORDER TO SAVE LABOR COSTS.'

THE VIEWS SUGGESTED BY YOUR DEPARTMENT APPEAR TO BE REASONABLE AND WE HAVE FOUND NOTHING IN THE LEGISLATIVE HISTORY OF THE PROVISION WHICH WOULD REQUIRE A CONCLUSION CONTRARY TO THOSE VIEWS.

ACCORDINGLY, WE AGREE THAT IN ESTABLISHING THE FAIR RENTAL VALUE CONSIDERATION MAY BE GIVEN TO THE VALUE OF CROPS REMOVED BY GRAZING OR "HOGGING OFF" PROVIDED THAT SUCH CROPS COULD HAVE BEEN ..END :