The need for understanding various self-help methods that can be used for economic progress is of utmost importance in low income rural areas since there is clear evidence that such areas have not shared in the general economic growth. For example, we have developed information on the role of rural credit unions in conserving limited capital resources.

WORKLOAD

Table 1 presents a summary of estimated line project activity for fiscal years 1964 and 1965. The table shows our estimated workload for research line projects and advisory service work. There is considerable variation in the scope and duration of individual projects, but the information shows the overall level of our program.

TABLE 1.-Estimated workload for Farmer Cooperative Service, fiscal years 1964-65

Mr. KNAPP. We will be glad to answer your questions on our work and plans.

WORK UNDER OTHER FUNDS

Mr. NATCHER. Dr. Knapp, at this time we would like you to discuss with the committee the transfer of funds from other agencies as set forth on page 212 of the justifications.

Mr. KNAPP. Mr. Chairman, the funds transferred to us to assist under the ARA program, the estimated amount for 1965 is $19,900.

The second area of the estimate for 1965 is $13,540 for the purpose of assisting AID by training programs.

Mr. NATCHER. Dr. Knapp, please describe in a little more detail just what is done in these two instances?

WORK UNDER ARA FUNDS

Mr. KNAPP. In the case of the assistance under the ARA program, we help in appraising projects that arise, and proposals; we look at them from the standpoint of their economic and cooperative feasibility. We look at them primarily from the standpoint of their feasibility as cooperative organizations, to see whether they are in line with family farm policies, to see whether they will be to the benefit of farmers, family farmers, and to see whether they can be activated or made viable from the standpoint of cooperation; that is whether they are cooperative, or whether they can develop as cooperative enterprises.

We have many calls for advice with regard to proposals that have not come in in the form of definite projects. We are asked to provide information to groups. I recall a telephone call I received from New Mexico about 10 days ago, a group of distressed sheepmen were concerned about getting information on how a cooperative might be formed to help them and we made certain suggestions. We sent information out by airmail, we suggested that they get in touch with the people at New Mexico State College, and with the State cooperative council, and we indicated we had a man in the territory that we could get down there to consult with them.

But at any rate, we indicated that after they considered the material sent them, we would like to hear from them and we would endeavor to be of assistance to them if we could.

We have many requests of that kind, where farmers have a problem and they come to us to see whether we can offer suggestions as to how they might form a cooperative enterprise to meet their problems.

So I would say our work with ARA funds is in two general areas. The first is in helping review programs to see that they are economically and cooperatively sound. We have many projects of that kind relating to the marketing of livestock, fruits and vegetables, dairy products or other commodities, and in some cases a supplying organi

zation.

We also have many calls of the kind I referred to, where groups are contemplating a proposal and we advise them as to whether they could go the cooperative route.

Mr. NATCHER. At this point in the record, if you please, we would like you to place an example, deleting the names, of just how this works.

Mr. KNAPP. We will be glad to.

(The requested information follows:)

At the request of a federation of seven dairy cooperatives in one of the North-Central States, a study was made of the economic feasibility of constructing a cooperative milk drying plant. The federation had applied for a loan from the ARA for this purpose. Our study covered both the proposed marketing operations of the federation and an appraisal of the effect this plant would have on milk marketing in both the immediate and the surrounding areas. The study concluded that the best marketing alternative for members of the federation and also farmer members of other dairy cooperatives in both the area and surrounding territory would be to establish a coordinated marketing program that would fully utilize existing cooperative plant facilities. It did not appear possible to obtain a sufficient volume of milk to operate a milk drying plant in the area. Therefore, we recommended that the federation not built a plant at this time but rather to continue to market its milk through existing facilities.

Three ARA technical assistance studies are being made under contract with land-grant colleges to determine the economic feasibility of establishing cooperative livestock feedyards and slaughter facilities in North Dakota, Montana, and Oregon. FCS is supervising the conduct of these studies and has provided the contractors with information on livestock feedyards and slaughter facilities necessary in carrying out this work. Preliminary manuscripts have been prepared by the contractors presenting findings completed to date. For example, the Oregon study shows that it is economically feasible to operate cattle feedyards in that State. Their report covers feedyard designs, capital requirements, and operating cost information for livestock feedyards of 500, 2,000, and 5,000 head capacity. In the North Dakota study emphasis is being given to the feasibility of establishing cooperative feedyards and slaughter plants on Indian reservations in that State. FCS will combine results of the three State studies into a report which can be used by groups in various areas of the country.

While these studies deal only with three States, the findings will be of great value to cooperatives and producer groups in other States in analyzing the feasibility of establishing producer-owned and operated feedyards and slaughtering facilities.

In the past 2 years we have reviewed or provided information on 65 proposals for Area Redevelopment Administration loans to finance commercial or industrial enterprises in rural areas. These involved the production, processing, and marketing of livestock, fruits and vegetables, grain, dairy products, forest products, and feed. About 20 of these related specifically to cooperative enterprises. We have worked to better acquaint cooperative leaders with the RAD program. For example, in cooperation with the Office of Rural Areas Development we have produced a movie, "Plant for the Future," which shows how a new apple packing cooperative was developed. We have issued a number of publications on how cooperatives can contribute to rural development. Many articles in our News for Farmer Cooperatives have dealt with various aspects of rural development.

Mr. NATCHER. Anything else?

Mr. KNAPP. I might give you a little more detail as to the number of projects and things of that kind, so you have a fuller understanding there.

Mr. NATCHER. That will be fine. That will be of great assistance to the committee.

Mr. KNAPP. Thank you.

WORK UNDER AID FUNDS

Now, with regard to the other programs, where we render assistance under our training project for AID, we have been assisting on training programs for foreign visitors since 1948. In that period of time, we have had about 4,000 foreign visitors from 117 foreign countries. This last fiscal year we had 605 foreign visitors from about 85 countries. In some cases these people come in groups, sometimes as individuals. We often help them work out itineraries.

The main thing is we endeavor to help them understand the use of the cooperative forms of organizations that we have in this country. We feel that this program is a very important one from the standpoint of the building of good will and the strengthening of the rural economies of some of the underdeveloped countries. Most of these people come from underdeveloped countries. We feel that by helping them build up their agricultural industries, their local industries, along cooperative lines, we eventually will make them stronger nations that appreciate the democratic types of organizations and operations that we have in the United States, so they will not be affected or influenced or carried off into other types of programs that will be not appreciative of democratic organizations.

We feel that over a period of time, we will help strengthen the economies of such countries and that this will improve our economic relations. They will be better customers of ours, they will know of our products, they will know of our organizations.

In many cases, we have instances where the representatives of these organizations go back to their home countries and then arrange to obtain products from our American cooperatives, because they have made contacts of that kind. I have had a rather unusual opportunity to observe how we in this country have been the recipients of benefits from this program.

Back in the early years of this century, Sir Horace Plunkett from Ireland was the major adviser of President Theodore Roosevelt on

our rural life problems and the Country Life Commission was set up at his suggestion. The Commission on Agricultural Credit and Cooperation that went to Europe with representatives from every State in the Union in 1913 was a direct result of Horace Plunkett's proposal that such a Commission be set up to draw on the lessons of foreign experience.

We benefited greatly. Many of our agricultural institutions, such as the Farm Credit Administration, got their start from what we learned from other nations.

In a way our present assistance to foreign countries is designed to help these countries get on their feet; to help them like we have been helped in the past. The benefits flow both ways.

Mr. NATCHER. Dr. Knapp, do you have anyone assigned overseas at the present time that assists in this particular type of work?

Mr. KNAPP. We have a man on leave from us in Ghana, Dr. Krause, who was Chief of our Dairy Branch. He has been over there a year and a half. He has reemployment rights with us, but he is now, of course, financed entirely by AID. But we anticipate he will rejoin our staff perhaps at the end of this year.

We also have Mr. John Bailey in Chile but his time is just about up. He also has reemployment rights with us.

Mr. NATCHER. Is he also paid by the Agency for International Development?

Mr. KNAPP. Paid entirely by them; yes.

KANSAS COOPERATIVE COUNCIL STUDY

Mr. NATCHER. I want to call your attention to page 212 of the justifications and I wish you would explain to the committee, a little more in detail, the $11,000 item here pertaining to the Kansas State Cooperative Council. Give us a little idea about that matter, Dr. Knapp.

Mr. KNAPP. Well, I am quite well informed with regard to this project, because I was a speaker at the meeting of the Kansas State Cooperative Council when this research project of the council was considered by the delegate body and they discussed it thoroughly. We had been brought in earlier to help with the preliminary plans for the project. The purpose of it arose from the belief of the cooperative leaders in Kansas that they did not know enough about the attitude of the public toward cooperatives. They didn't know how the members themselves felt about their own organizations. They were concerned about what problems the members felt that they might have toward these organizations. They therefore asked us to help them develop a study, which would make a full inventory of the attitudes toward cooperation of business people, of the professionals, the ministers, doctors, of the people in the rural towns, of the people in the cooperatives, of the people in schools and colleges and so forth. And it was decided that this project could be done in a way in which Farmer Cooperative Service would help in designing the project, in planning how it might be carried on in a scientific way. The cooperatives concerned agreed to help finance the study, and help us obtain information and essential data from the use of their fieldmen. We found out what assistance could be obtained through Kansas State University.

You see, this was a partnership thing, in which all forces were involved. It was believed that one part of the study, the part to find out the attitudes of business and professional people, would have more standing if it were done by an independent research agency, not a Government institution. We are thus doing this part of the study through contract.

When I say "we," I mean that we are working in cooperation with the Kansas Cooperative Council and the cooperatives. We negotiated this contract which is part of our contribution to the total study, and we are well pleased with the way in which the service called for is being performed. We already have a preliminary report from the

contractor.

RECOGNITION OF FCS

Mr. NATCHER. What resolutions on behalf of your work and other commendations have you received during the past year, Dr. Knapp? Mr. KNAPP. I haven't many with me, but I would be very happy to select a few and put them in the record, if I may.

Mr. NATCHER. Yes, you might, and amplify on the ones you want to discuss. That will be of service to the committee.

Mr. KNAPP. We have resolutions, for example, from the National Milk Producers Federation and the National Council of Farmer Cooperatives, and we can put a few of them in and then we could put in some letters and things of that kind, if agreeable.

Mr. NATCHER. That will be fine.

(The requested information follows:)

Resolution adopted at annual meeting of the National Milk Producers Federation, November 1963:

"The federation commends the continuing research and educational activities conducted by the Farmer Cooperative Service."

Resolution of National Council of Farmer Cooperatives, reaffirmed January

1964:

"Farmer Cooperative Service The National Council of Farmer Cooperatives commends the Farmer Cooperative Service of the U.S. Department of Agriculture for its material assistance to farmers and their cooperatives. The council holds that the solution of many of the serious problems confronting farmers today requires strengthening of farmer cooperatives by research, service, and educational assistance of the type provided by the Farmer Cooperative Service." Resolution of Ninth Annual Joint Conference of Cooperative Soybean and Cottonseed Oil Mill, March 4-6, 1963:

"Be it resolved, That we, the cooperative soybean and cottonseed processors, operating facilities owned by over 400,000 producers and assembled at our ninth annual joint conference, go on record as:

"Expressing our appreciation to the Farmer Cooperative Service for the aid in arranging this conference, planning of the program and conduct of the meeting, and other valuable assistance throughout the year including the assistance to the new Soy Cot Sales Cooperative and the preparation of the comparison of annual operating reports;

"Further, that we formally request the Administrator of the Farmer Cooperative Service; the Directors of the Northern and Southern Laboratories; and the Administrator of the Foreign Agriculture Service; to continue to cooperate with us in this work and to help with a similar conference next year."

Resolution of National Conference on Cooperative Fruit and Vegetable Bargaining Associations. January 1964:

"Therefore be it

“Resolved, That the cooperative fruit and vegetable bargaining associations throughout the Nation commend and wish to show their appreciation to the U.S. Department of Agriculture, and especially to Dr. Joseph G. Knapp, Administrator of the Farmer Cooperative Service, for the development and continuance of this invaluable service; furthermore

"It is the desire of those participants of the Houston conference that a similar program be arranged for 1965. We therefore ask the Farmer Cooperative