1040 . GENERAL FARM PROGRAM 



Without this source of income people in the area must take a much 

 lower level of living and resort to the painful process of making a 

 new adjustment to other uses of their resources or to leaving the area. 



The problems facing the tung industry: Several critical economic 

 problems face tung producers. These include (1) the sharp faU in 

 the past 2 years in the average price per ton received by growers; 

 and (2) the necessity of caring for the tung trees under relatively 

 high cost conditions in hopes of more favorable price situations at 

 some later date. 



The price of tung nuts in Mississippi is estimated at an average of 

 $101 per ton for the 4-year period 1943-46, according to the State 

 statistician of the Bureau of Agricultural Economics (exhibit A). In 

 1947 the price dropped to $64, and declined again in 1948 to $55. 

 Prices in other tung-producing areas of the belt have followed the 

 same trend, although their average has been slightly lower than Mis- 

 sissippi. With unit rates for production cost still high the producers 

 are severely pinched by this sharp change in selling price and are 

 much concerned about whether they should try to keep on in the 

 industry or let their orchards go without further cash costs for care 

 and upkeep. 



Tung production requires several years of cost application to 

 establish an orchard and develop it to a producing age. If proper 

 care is not given for any period of time the orchard will, deteriorate 

 rapidly and if this neglect is prolonged will cease useful production. 

 If again tung oil is desired in quantity and quality as it was in the 

 recent war period, a new start will need to be made and several years 

 will be required to get producing trees. As a result, growers who 

 were encouraged to develop the industry in recent years are now faced 

 with an acute problem of whether to try to hold out with hopes of 

 better prices and market outlets in the future, or to reduce drastically 

 current cash costs and forget about past costs that they incurred to 

 establish the enterprise. 



Some of the conditions giving rise to these problems in tung: 

 Several significant items, primarily of past Government policy, have 

 played quite an active part in bringing about the situation which now 

 confronts the industry. During the war expansion of industry was 

 encouraged and the demand was strong for tung oil. Planting and 

 care of tung was a conservation measure for which the Government 

 offered incentive payments. Farmers interpreted this as a favorable 

 directive and proceeded to establish and develop tung orchards. 

 Research and experimentation work was expanded to explore the 

 possibilities of new varieties, proper fertilization, and other new de- 

 velopments. Results have been most encouraging, and hold much 

 promise for the futiu^e, if only the industry can get this new technology 

 established before the industry is discouraged too greatly by the 

 present economic situation. Tung is going through the "growing 

 pains" stage experienced by most new developments and needs op- 

 portunity to get established just as most of the other major enterprises 

 have had to do in their time. 



Of major concern to the area has been the handling by the Govern- 

 ment of the price-support program, particularly as related to com- 

 petitive or substitute oils. Tung oil is used widely in the manufacture 

 of paints and allied products. Its competition in price and substitute 

 uses is largely with linseed and soybean oils. These two products 



