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as many of the controversial features that have been under discussion today as possible.
The CHAIRMAN. This committee will work its own will on it, and you know the committee well enough to know that we will try to clear up the controversy and compose differences.
According to the list of witnesses I have here, I don't believe we have called a single witness that asked to be heard in opposition to this bill, except those that are intimately connected with the Farm Bureau. Do you know of anybody else?
Mr. JOHNSON. I don't know of anybody else, Mr. Chairman. As I say, we have our doubts about the promotion of a raw product, and we would like to see the millers and some of the other people who are going to benefit from this program, if it will benefit them, counted in to help pay some of the costs.
The CHAIRMAN. Well, I believe with that observation I would like to see it too, and I think there is a possibility that the manufacturers and handlers might make a contribution.
Mr. Johnson. Well, I am encouraged by the statement made here by a witness that they could expect these funds to be matched.
But if this is the case, what would be wrong with this committee providing some kind of a provision in this bill to also have the millers and others contribute? They seem to be most happy about having the farmers fund a promotion program of this scale, and I don't know why they shouldn't be counted in.
For example, now I understand that the millers pay, I think, 20 cents a bale, those at least who participate in the cotton council program. They pay 20 cents a bale to the cotton council. We are asking the producers to pay $1 a bale.
The CHAIRMAN. Well, don't they make a contribution to the PCA or the CPI?
Mr. JOHNSON. I think on some special projects you have I am not an expert in this field—but apparently on some special promotion projects you have matching of funds or some type of arrangement like that.
But the beneficiaries of this program it seems to us have a big stake in putting together a fund of sufficient size to do some good, and here we are letting them off scot free, and we are giving them a voluntary program
for sure. The CHAIRMAN. Thank you very much, Mr. Johnson.
We call Mr. Harry Graham, legislative director of the National Grange.
STATEMENT OF HARRY L. GRAHAM, LEGISLATIVE REPRESENTA
TIVE, NATIONAL GRANGE Mr. GRAHAM. May I say, Mr. Poage, I think the chairman knows what I am going to say.
Mr. Chairman, I am going to, with your permission, file the statement that I have for the record. I would like to file the second statement that has in it a correction, and simply discuss some of the issues that have been raised.
Mr. Poage. Without objection.
(The statement referred to follows:)
STATEMENT OF THE NATIONAL GRANGE
Mr. Chairman and members of the committee, I am Harry L. Graham, legislative representative of the National Grange. We appreciate very much this opportunity to testify in support of H.R. 12322.
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 unaminously 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. 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 self-financing which this measure would make available to them.
The Grange, therefore, urges favorable action on this proposed legislation by this committee and by the Congress.
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.
"He [the executive director] said almost unbelievable amount of cooperation is available to cotton * * * from retailers, chains, government, 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.
We would also warn the industry 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.
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 longtime solution to the vexing and persistent cotton problem.
Mr. GRAHAM. I would like to read the resolution of the National Grange, which I think might be a relief to the proponents of this legislation to hear from a farm organization:
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, Mr. Chairman, in our judgment, is precisely what this legislation does.
I would point out that although this becomes a function of the Department of Agriculture, since the Department of Agriculture has. some relationship to the integrity of the funds that are collected. This, in our judgment, does not put the complete control over these programs in the hands of the Secretary of Agriculture. It puts the control properly where it belongs, in the representatives of the cotton producers.
At that point, unless we misread the bill, we believe that these representatives of the producers can allocate funds to present and projected research programs of CPI and the National Cotton Council, and the projections of doom concerning these two important institutions seem to us to be unjustified and unsubstantiated.
The question of voluntary contributions and the contributions to the voluntary agencies was raised repeatedly by the witness this morning and the committee. I wish I felt I was in a position to give you the details of what has happened in one of the organizations of which the president of the Farm Bureau stated he was a member of the board of directors. The master of the National Grange is also a member of that same board of directors, the National Meat Board.
But I can tell you, Mr. Chairman, that if Mr. Shuman has read his mail, he will know that the decline in contributions that has plagued the cotton industry has been much greater in the meat industry, and if the committee would ask the meat board for a statement on this, I think probably they would get it.
The exact figure is something that I don't feel I am free to put in the record at this point. But there has been a substantial decline, and the substantial decline came at the point that the direct shipments, in which the Farm Bureau is also engaged, which bypassed the terminal markets, also bypassed the point of collection. There is no question but what the argument that the voluntary groups, where the marketing agencies are collecting this money, is the panacea of all the ills of the cotton industry as well as the rest of the industry, it simply is not borne out by the facts.
The thing that frightens me about the bill as it stands at the present time, in the light of the threatened opposition of the American Farm Bureau, which I am sure will materialize, is that we give them a 2-to-1 advantage immediately in the referendum under the two-thirds rule, and the friends of this bill and the friends of cotton and those who want to promote the use of cotton are at a disadvantage from the word
"go," because we have to vote twice to counteract their one negative vote.
Now I am not sure how far they would get with that because you had exactly the same threat thrown at you in the committee, in terms of the tobacco program of last spring.
We were assured that the tobacco producers were all against this. Yet when the referendum was held, there were almost 75 percent that voted for the acreage poundage limitation in the tobacco bill. So this is one of the things that troubles me a little, because it is so difficult to get information.
As Mr. Giffin pointed out the practical problem that is involved, it seems to be a great deal easier to get out misinformation that it is to get out information, and if we had the facilities for the distribution of information as available to us as the opponents for the distribution of misinformation, I think the odds might be evened up a little.
But the point is that this is good legislation. It is consistent with longtime Grange policy of supporting the right of producers to develop their own programs, to assess themselves for promotion of their own products, and with the assurance that we have had from the industry that they are willing to participate in this program cost, it has the approval and the vigorous support of the National Grange.
Mr. POAGE. Mr. Graham, as far as this question of combination by the producers is concerned, do you place any great importance to this referendum when each individual can counteract the law if he wants to, when nobody is compelled to put anything in, or let's put it that nobody is compelled to keep any money in this program, and as long as every producer has the opportunity to withdraw every dollar that he puts in, does it make much difference about whether there is twothirds or nine-tenths or 1 percent that favors it? Nobody is going to be hurt. Anybody who doesn't like the program can get his money.
Mr. GRAHAM. My worry is not that one, Mr. Poage. I think this has been brought out repeatedly today, that this is the fact. My worry is that the program would not even get started in the original referendum.
Mr. Poage. I know, but what I am asking you is do you see any special moral reason that we should have any vote of any kind?
Mr. GRAHAM. No.
Mr. PoAGE. As to whether or not he wants to contribute the money, doesn't he?
Mr. GRAHAM. I see no difference in the basic concept of this and the voluntary wheat program or any other voluntary programs we have that do not require referendums. If it did not have this recovery clause, this would be an entirely different situation.
Mr. Poage. But they do have the recovery clause.
Mr. GRAHAM. Consequently despite the fact that our resolution says "supported by referendum,” from the discussion that took place in the National Grange, I know they were considering some kind of a program from which there would be no voluntary withdrawal. And since you provided this, then I don't have to support that part of our program.
Mr. Poage. There is no voluntary withdrawal from the wool bill, is there?
Mr. GRAHAM. Of course not, and tobacco.
Mr. Poage. The witness for the Farm Bureau testified that they did support the wool bill, although they said that they objected to this particular
phase of it, but they supported the bill, including this phase of it. And there is no withdrawal in the wool bill, is there?
Mr. GRAHAM. Of course not. There never has been.
Mr. Poage. No. Now where then is the great matter of principle involved?
Mr. GRAHAM. It escapes me, Mr. Chairman.
Mr. GATHINGS. Mr. Chairman, I would just want to say to the gentleman that I don't know of any members of your organization in Arkansas, but if you ever come to my congressional district, I assure you that I will get you up a good crowd of farmers.
Mr. GRAHAM. I will take you up on that one, Mr. Congressman.
Mr. GATHINGS. Every time you come before this committee, you bring something constructive. I haven't agreed with you all the time, but you have been pretty near right most of the time.
Mr. GRAHAM. From you that is high praise.
Mr. GATHINGS. So I would like to commend you for your testimony.
Mr. GRAHAM. Thank you.
Mr. Poage. Are there any further questions? If not we are very much obliged to you, Mr. Graham. We do appreciate your testimony. We appreciate the effort on the part of you and of the Grange to try to work something out when we are faced with a difficult situation. (The following letter was furnished for the record :)
AMERICAN FARM BUREAU FEDERATION,
Chicago, Ill., February 21, 1966. Hon. HAROLD D. COOLEY, Chairman, House Committee on Agriculture, The House of Representatives, Washington, D.C.
DEAR MR. COOLEY: In view of the testimony of Mr. Harry Graham of the National Grange at the hearings on H.R. 12322 I wish to supplement my testimony in order to set the record straight with regard to voluntary contributions for meat promotion.
Mr. Graham's reference to the National Meat Institute suggests that he has confused the American Meat Institute and the National Live Stock & Meat Board. I assume, however, that he meant to refer to the National Live Stock & Meat Board. In contrast to the American Meat Institute, which is a trade association of meatpackers, the National Live Stock & Meat Board is an industrywide organization for the promotion of red meats.
Producer contributions to the meat board are assembled by marketing agencies who do so on a voluntary basis at no pay. Mechanically, the account of sale includes a statement indicating that the contribution made by the producer at the time he markets his livestock is refundable on request. Market agencies refrain from withholding funds for the meat board when so requested by the owner of livestock. Contributions are made at the rate of 2 cents per head on cattle, two-thirds of 1 cent on hogs and calves and two-fifths of 1 cent on sheep and lambs. Efforts are being made to increase the per-head contributions to 3 cents on cattle and 1 cent on sheep and hogs. New sources of revenue, both