For nearly a century, the Grange has been vitally concerned with the problem and welfare of the farm families and rural people of the Nation. At the 99th annual session of its delegate body last November, the following resolution was unanimously adopted: Resolved, That the National Grange support the efforts of cotton producers to obtain the enactment of appropriate legislation to enable them, subject to producer approval by referendum, to carry out cotton research and promotion programs to be financed by uniform assessments on cotton producers throughout the Nation. This resolution was an implementation of a fundamental policy of the Grange of long standing to support the efforts of producers of any agricultural commodity to obtain necessary enabling legislation whereby they may have the opportunity to carry out self-help research, advertising, and promotion programs to expand markets. This bill is such a producer self-help measure since (subject to producer approval by referendum) it will require the cotton producers to pay and cotton handlers to collect from them and to remit to a cotton board, responsible to and appointed by the Secretary of Agriculture from nominees made by cotton producers, an assessment on each bale of cotton handled, to be used to pay the cost of cotton research, advertising, and sales promotion programs developed and carried out by the producers themselves. We believe that subsection (g) of section 7 of the bill is particularly well designed in that it will assure that no funds collected from cotton producers under the provisions of the bill will be used to finance programs of cotton research, advertising, or sales promotion, unless those programs have been initially developed by and are to be carried out by the producers themselves through their own representative organization. At this point, Mr. Chairman, I would like to say that we think that this is one reason that this approach is superior to the present voluntary program, and that this does provide more producer control over those funds than appears ot be in the present cotton institute program. We would also comment at this point that although there have been some questions (such as those raised in the House hearings about the authority of the Secretary), the provision that this is handled about as we have handled the other marketing programs: through the hearing and the referendum process, and the addition of the exemption clause and the termination provisions to this makes it difficult for us to believe that anybody is going to be able to have any more control than the producers themselves do not want them to have. We would say also that in our judgment when the Department, through its marketing agencies, whether it is in milk or whatever it is, does get in a position where it is responsible for the collection and handling of money, even though that money is finally spent by producer groups themselves, they certainly should have some control in order to provide that the money is properly accounted for and properly disbursed according to the will of the producer groups. But this in our judgment is a long way from giving the control of this program to the Secretary of Agriculture. It seems to us that this provision is essential in order to create and sustain the incentive in cotton producers, which must continue to exist widely throughout all of the cotton-producing States, if it is to be expected that the producers will maximize their use of the tool for selffinancing which this measure would make available to them. The Grange has always urged that there be some sharing by industry in the responsibility for the promoting of the use of agricultural products. We note with approval the report of the Cotton Council International that countries accounting for over one-half of the free world's exports to Europe and Japan have taken steps toward putting up a dollar a bale to finance international market development for cotton. We also noted with a great deal of approval that the industry was assuring the producers that they were willing to make a maximum contribution toward matching these funds. The director of the council's sales promotion division said: Almost unbelievable amount of cooperation is available to cotton-from retailers, chains, garment manufacturers, and mills—if industry will provide program and funds to attract it (release from National Cotton Council). The Grange would urge that the industry allocate sufficient funds to match the promotional effort of farmers so that the full burden for promotion does not fall on those least able to bear it. Senator HOLLAND. Mr. Graham, I noted with interest and approval your statement that the industry was preparing to match these funds. From what source do you get that information? Mr. GRAHAM. This release from the National Cotton Council, and also from statements that were made during the House hearings. Senator HOLLAND. You understand that such statements will be repeated here? Mr. GRAHAM. Yes. Senator HOLLAND. When you say the industry is willing to match it, what elements in the industry do you refer to? Mr. GRAHAM. I don't know that I remember exactly who made these statements in the House. I think this will come out very easily in the testimony, but there were a number of people that were testifying there, and there will be a number of them here. They are perfectly able to state this themselves. Senator HOLLAND. And the other elements in the industry are not producer elements. Mr. GRAHAM. Yes. Senator HOLLAND. Thank you. Mr. GRAHAM. We would also warn the total industry, we mean both producers and the handlers, that this program does not offer an immediate panacea for all the ills of the cotton industry, and that their position urging further expansion of production is not only unrealistic but almost irresponsible in the light of production trends in the United States and the rest of the world, carryover stocks, and the level of the market price available to producers. Senator HOLLAND. You speak as if some element in the industry has been requesting further expansion of production. Mr. GRAHAM. Yes. Senator HOLLAND. Who is doing that? Mr. GRAHAM. There have been some statements made that if this kind of a program could be adopted, and again I don't remember those exactly I can document this for you if you want me to Senator HOLLAND. I wish you would. Mr. GRAHAM. I will have to go back to the hearing record from the House. It isn't available yet. Senator HOLLAND. I didn't know there was any effort underway to expand production. Mr. GRAHAM. There have been some statements made to the point that if we had a proper promotional program, that we wouldn't have to worry about any controls, which we just don't believe is realistic at the present time. I don't have the statements available yet from the House. Senator HOLLAND. Until there is something like total use of the amount produced, your statement is certainly sound. It is unrealistic to talk about expanding so long as the stockpiles in the Government's hands have been increasing so rapidly. If there is a reverse trend, that would be the time to talk about expanding production. Mr. GRAHAM. This is the whole point, but this 15-million-bale carryover doesn't encourage us that anybody is going to expand acreage very quickly with any ready market for that expansion. The function of the cotton program is not to furnish price-depressing surpluses to domestic and foreign mills, but rather to create an orderly and balanced price-market situation in which market factors can function on a more normal and orderly basis. The Grange support for the legislation before this committee is strong and vigorous, but not unequivocal. If it is not continued as a part of a total program to bring cotton production into balance with market demand, then it can become another way of removing money from producer's pockets to benefit the rest of the industry. If it is made a part of the total cotton program, and if as it should be, it is matched by industry contributions, then it can make a substantial contribution toward the longtime solution to the vexing and persistent cotton problem. The Grange, therefore, urges favorable action on this proposed legislation by this committee and by the Congress. Senator HOLLAND. I thank you for your statement. Now if I may put in the record my understanding of the conditions behind the Grange's approval of the program, there are two. First, that this new program will be part of a total program to bring cotton production into balance with market demands. Mr. GRAHAM. Right, we don't consider this as a substitute. Senator HOLLAND. And second, that the amount of this program in dollars should be matched by industry contributions. Mr. GRAHAM. That is correct. Senator HOLLAND. Thank you very much. Mr. GRAHAM. Thank you, sir. Senator HOLLAND. Senator Jordan? Senator JORDAN. No questions. Thank you for your statement. Senator HOLLAND. The next witnesses are Mr. G. C. Cortright, chairman of the board and Mr. William Rhea Blake, executive vice president of the National Cotton Council. Mr. Cortright and Mr. Blake, will you come forward. We are glad to have you gentlemen. I see you have some other associates with you? STATEMENT OF G. C. CORTRIGHT, JR., CHAIRMAN OF THE BOARD, NATIONAL COTTON COUNCIL, ROLLING FORK, MISS. Mr. CORTRIGHT. Mr. Banks Young, Mr. Albert Russell, Mr. George Buck. Senator HOLLAND. They will be available? Mr. CORTRIGHT. Yes, sir; and on our promotion questions Mr. Ed Lipscomb to answer. Senator HOLLAND. All right, thank you, sir. Mr. CORTRIGHT. Mr. Chairman, my name is G. C. Cortright, Jr., a cotton farmer of Rolling Fork, Miss.; a member of the board of trustees of the Cotton Producers Institute; and board chairman of the National Cotton Council. I am here to support H.R. 12322. I speak for myself and for thousands of other cotton farmers who have endorsed this self-help approach toward financing a fully adequate program of cotton research and promotion. When our bill was before the House its opponents raised some questions which generated quite a bit of confusion and controversy. So, in the course of my testimony today, I intend to discuss fully and frankly each of the main questions that arose as the bill moved through the House. I hope and believe you will agree on the merit of the position taken by the bill's supporters on each of these argumentative questions. Senator HOLLAND. I certainly approve of your willingness to come to grips with the controversial matters and to deal with them frankly. That is what I think this hearing should do. Mr. CORTRIGHT. First however I would like to get before you the essential facts about what is happening to cotton's markets; facts which are not in dispute; facts which are not subject to controversy; facts which show, beyond any question, the urgent necessity for cotton to compete in research and promotion. To give you these facts, I call on Rhea Blake, executive vice president of the National Cotton Council. Senator HOLLAND. All right, Mr. Blake. STATEMENT OF WILLIAM RHEA BLAKE, EXECUTIVE VICE PRESIDENT, NATIONAL COTTON COUNCIL, MEMPHIS, TENN. Mr. BLAKE. Mr. Chairman, we have some charts here. Senator HOLLAND. All right, Mr. Blake, we are glad to have you and are glad to have your charts. Proceed as you wish. Mr. BLAKE. Thank you, sir. Mr. Chairman and members of the committee, as we said, we do have here a few charts that we think will show you quickly just what is happening to cotton's markets and why it is happening. First let's look at the record of fiber consumption in the United States since the Korean war. We have it plotted here on this chart annually in terms of cotton bale equivalents. This means simply that these other fibers have been reduced to cotton bale equivalents so that you get an accurate comparison. |