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Here's another question: Why shouldn't the handler who collects the money be authorized to accept a producer's application for a refund?

If an amendment of this kind should be adopted, it would kill the whole purpose of the bill. The one problem we couldn't get around with CPI was competition between handlers at the point of collection. If we allow them to accept refund applications, we will immediately have some of them saying to the farmers: "You do business with me, and, if you'll just sign this little slip of paper, I'll get you a rebate of a dollar a bale."

Obviously, we must have a uniform collection, or the legislation before you becomes meaningless.

Here's another question: Shouldn't it be mandatory to have subsequent referendums to assure continuing producer approval of the program?

Actually, the refund provision offers a constantly recurring referendum, throughout the year, to each individual farmer. He can vote at any time to terminate the program-insofar as his participation is concerned by simply requesting a refund.

But the bill has still other safeguards. The Secretary can have another referendum any time. Or 10 percent of the number of farmers voting initially can sign a petition and make it mandatory to have another referendum.

One final question: Would our program conflict with, or duplicate, any other program of cotton research and promotion, public or private?

Absolutely not. We are counting in a vital way on the continuation and expansion of other programs. Those of us in the cotton industry have had a world of experience in meshing our work with that of others. We will continue to do this in the future.

As a producer, I could not come here without expressing deep appreciation for what the Government has done to help cotton. Without its vital assistance in research, cotton would long since have ceased to be a major fiber. Through Public Law 480 it has given us great assistance in the development of international cotton promotion. Through the Agricultural Acts of 1964 and 1965, it has moved to make cotton fully competitive in price-certainly an essential ingredient in the drive to hold and expand our markets. The continuation of these programs, on a sound basis, is vital to us.

But I do want to say, after coming before you so often to support measures involving Treasury funds, that it is most gratifying now to advocate a proposal which recognizes the producer's responsibility to himself, and which in the long run promises a reduction in the most costly part of the Government's program for cotton.

We know our Government cannot tolerate a carryover that will exceed 16.5 million bales by August 1. As producers, we know that we cannot live with the acreage reduction that necessarily accompanies a carryover of this size. The one and only answer is to sell more cotton.

The legislation we propose offers us a real chance to use our own money-not the taxpayers' money-to build a program that will truly be capable of expanding our markets and preserving an industry that means so much to so many Americans. We feel that we deserve this opportunity. We trust and hope you will enable us to have it.

May I add just a word? We feel it is extremely urgent that we move in time to make this legislation effective for this crop. Otherwise we will lose a full year in initiating a sizable program, and lose the continuity of the program we already have begun. We would ask that with full consideration, but with deliberate speed, we try to move this through the Congress.

Thank you.

Senator HOLLAND. Thank you very much. I will comment on just one part of your statement, because it makes such complete sense, at least to me, and that is where you comment on the position of some, I don't know who they are, that additional referendums should be required to continue the program. Having had considerable experience with marketing agreements and orders, I would say that that would be unnecessary for any order that I know anything about.

Secondly, the machinery that you have here for discontinuance of a program is very far reaching. It is easier to call this off than it is to vote it in terms of the agreement, and aside from that, as you state, each producer has it in his power to end the program's application to himself by requesting that his contribution be refunded. I think there is no use at all in talking about additional referendums.

That is one question that I don't think has bothered our committee. I have heard nothing on that. There is another question that I have already commented on as you went along. That is the suggestion which you say is made by some that the bill be amended to assess other branches of the cotton industry. I have received no suggestions of that kind.

As I stated this morning, the complaints I have had dealt wholly with the question of the one-member, one-vote or one-producer, onevote problem, and the question of the right to claim a refund. On that I think that the second one is the only one that departs from what I found to be almost the unanimous practice if not the unanimous practice in the several marketing agreements and orders that I know about. I know of none that provides for refunds. I know of many, and none of them that I know anything about requires referendums each year to keep the order in force.

All right, the next witness is Mr. Hervey Evans, Jr., chairman of the Cotton Producers Institute of North Carolina, Laurinburg, N.C.

STATEMENT OF HERVEY EVANS, JR., CHAIRMAN, NORTH CAROLINA STEERING COMMITTEE, COTTON PRODUCERS INSTITUTE, LAURINBURG, N.C.

Senator HOLLAND. Mr. Evans, sit by your good Senator.

Senator JORDAN. Mr. Chairman, I would just like to introduce this young man. He has been a very fine citizen and a good farmer. He comes from a farm family. I have known his father and mother and the whole family for many, many years, and they are very fine citizens, and they are always promoting something that is good for North Carolina and the industry in which they are engaged, and I am happy that he is here to testify in whatever capacity he wants to discuss this.

Mr. EVANS. I certainly appreciate those comments, Senator Jordan. Mr. Chairman, my name is Hervey Evans, Jr., from Laurinburg, N.C. I am a cotton producer, a cottonseed breeder, a cotton ginner,

and have interests in other types of cotton handling and processing businesses. I am serving as the chairman of the Cotton Producers Institute Steering Committee in North Carolina and am also president of Cotton Council International, an organization that is engaged in helping conduct cotton promotion programs in 16 foreign cottonconsuming nations. I am appearing today in my capacity as CPI chairman for North Carolina.

It has been well established in previous testimony that thoughtful and responsible cottongrowers know they must have a vastly larger program of research and promotion and are willing to pay for it.

Our growers in North Carolina are no different. We were one of the last States to initiate CPI on its planned time schedule, but support for its program has been excellent wherever it has been introduced.

One of our problems is the large number of small growers in North Carolina. It is prohibitive in cost to try to reach one of them through direct contacts. But we know from previous experience in our State that the big majority of all farmers will support worthwhile programs of self-help if a mechanism like that embodied in H.R. 12322 is employed. We already have a North Carolina Cotton Promotion Association which the growers in our State organized to help promote the cotton industry in North Carolina. For a number of years, we also have had successful programs in our State on tobacco and on peanuts. Because North Carolina has many farmers with comparatively small cotton allotments, along with farmers who have medium or large allotments, I feel compelled to comment on the criticism that has been leveled at H.R. 12322 on the basis of its provisions for program approval in the referendum. As you know, the program could be approved by two-thirds of the farmers voting, or by two-thirds of the volume of those voting. It is said that the volume provision discriminates against small farmers.

Gentlemen, this is a false issue. All cotton farmers, regardless of size, have a stake in saving their crop. Just because a farmer is small is no indication that he doesn't want to carry his fair share of the cost of research and promotion.

Our farmers certainly feel that the program is justified if it is favored either by two-thirds of the numbers or the volume. We feel this is completely fair since any size farmer, through the refund provision, can decide for himself whether he will be in or out of the program.

The basic principles in this enabling legislation have been carefully considered by most of the cotton interest groups in North Carolina, and we like what we see. We feel the Government has already gone as far as any reasonable person could expect in assisting cottongrowers with their competitive problems and that it's time we do more to help ourselves.

All we are asking is a mechanism that will allow cottongrowers to decide whether they want to assess themselevs for research and promotion and, if so, to establish a uniform collection system that will eliminate the unfair competitive features inherent in our present system. The act will also provide a practical mechanism whereby growers can develop and operate their own program. Mr. Cooley's release announcing the introduction of this bill stated he was proud to sponsor

this rather unusual piece of farm legislation-one that the taxpayers will not be called upon to pay for. We are proud of it for the same reason, and being from North Carolina, we are especially proud our distinguished fellow North Carolinian sponsored such an act.

I mentioned earlier in my testimony that I am presently serving as president of Cotton Council International. Before closing, I would like to call the attention of the committee to some of the experiences we have had in the 11-year history of this organization. As you know, Cotton Council International receives as its principal source of funds foreign currencies originating under the marketing development section of Public Law 480, and thus represents an active partnership between the cotton industry and the Federal Government.

During these 11 years, through cooperative projects involving the textile industries of Western Europe, Japan, and certain other countries, we have learned how important it is to carry on an active market research, product development, and promotional program for cotton. There is no question but that the position of cotton in the cooperating countries is much stronger today as a result of these efforts. Just this past month, a new international organization called the International Cotton Institute was formed to promote cotton consumption in Western Europe and Japan. Seven countries now belong to this organization, and it appears that several more will shortly join in to add to the promotional funds available at the rate of $1 per bale of cotton consumed in Western Europe and Japan.

I point this out because here we have a concrete example of how this type of program can operate successfully, and how the cooperation between the cotton producing industry and the Government can be successfully carried out. During the history of Cotton Council International, it has been left to our organization to formulate and carry out these promotional plans with only the minimum amount or redtape and reports being made to the U.S. Department of Agriculture. The success of this program illustrates that we are on the right track with the new proposed Cotton Research and Promotion Act.

In closing, I can't stress too strongly the urgent need for this program to go into effect with the 1966 crop. Even 1 year's delay will cost us cotton markets and cotton acreage that will be difficult, or even impossible to recover. I haven't talked to a single cotton farmer in our area who doesn't agree that we need to find an effective way to raise the research and promotion money so desperately needed to be able to stand up against our synthetic fiber competition.

Mr. Chairman, I would like to, if I might, comment briefly on a couple of questions that were raised this morning that I think are very appropriate. One of them has to do with this question of whether the ginner should be the point for collection and should be so designated in the act.

As the act is now drafted, this is nonspecific. It is left as a handler. In our part of the country particularly, I think it is advisable to leave it this way because traditionally the ginner in our part of the country and the farmer have developed a relationship that the farmer more or less expects cottonseed to pay for the cost of ginning. This puts a real squeeze on the ginner, particularly since cottonseed doesn't bring the price today that it once did, and it is a pretty normal thing for cottonseed just about to pay for ginning costs.

Now, if the ginner is required to be the collecting point for this, it is going to make it even more of a competitive factor and difficult for the ginner. On the other hand this $1 a bale, if it could be tied to the lint in our part of the country, would operate in a less competitive fashion, and the ginner would be a happier person because it wouldn't upset his relationship with the farmer.

We have relatively speaking fewer handlers, first buyers or loan agents that we have ginners, so it is not a question of numbers. We could handle it with a relatively few people.

But I do think if we were flexible enough so that we could hopefully implement this in our area, not through the ginner but through the first buyer or the loan document, it would be a little smoother thing in our section.

Senator HOLLAND. Who would you suggest to be the collecting and accounting agency?

Mr. EVANS. I would suggest, sir, that in our area the first buyer of the cotton or the Government loan document handle it, if it goes into the Government loan. I think if the decision could be made administratively through the Cotton Board, it would be better, because there may be some parts of the country that would like to do it in a different

way.

Senator HOLLAND. Do you mean you feel it should be left so that it might be handled in different ways in different parts of the belt?

Mr. EVANS. I personally think, sir, that maybe by letting it be an administrative decision rather than spelling it out in the law might work a little better.

Senator HOLLAND. Is there any other handler who handles all the cotton except the ginner?

Mr. EVANS. Well, not in a sense that the ginner handles it, but it is either bought by a buyer or goes into Government loan, and it would be easier to handle it in the loan documents, and then if the buyer had to do it, I think that could work very well. I think we probably only have, Senator Jordan, maybe less than 1,000 people who would either handle loan or warehouse cotton, wouldn't we?

Senator JORDAN. I really don't know. I am not thoroughly familiar with that. I know we are getting fewer and fewer gins all the time because they don't have the volume in a certain area, and they have to go to the fellow with the cotton, unless they have built more in recent years. As our cotton has gone back into production, there have been some new gins.

Mr. EVANS. That is right.

Senator JORDAN. This releasing and reapportionment has helped, particularly in the eastern counties. I don't know about your section. Mr. EVANS. There have been in our area.

Senator JORDAN. Very fine gins, too.

Senator HOLLAND. I think it would make little difference from the standpoint of the committee, assuming that the committee would approve the bill in general, what handler should be the accountable one. I don't know whether it is desirable to leave it in the alternative or whether maybe it is broader than that, so that it might be one of two or three handlers depending on what part of the country you are in.

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