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Mr. ABERNETHY. Well, would you object to amending the bill so as not to deny this particular farmer, who asks for a refund, participation in future referendums?

Mr. GIRARD. The Department would have no objection to an amendment deleting that provision.

Mr. ABERNETHY. You would not have any objection to such an amendment ?

Mr. GIRARD. If the committee desires to do that.
Mr. ABERNETHY. I just want to know.

Mr. HEIMBURGER. I just want to suggest that the spokesman for the Cotton Council, in their testimony, will suggest an amendment to this provision you are discussing.

Mr. ABERNETHY. Perhaps, we could save a lot of time by hearing him now.

The CHAIRMAN. Any further questions?
Mr. STALBAUM. I would like to ask some questions.
The CHAIRMAN. Mr. Hagen is first.

Mr. HAGEN of California. How do you determine the volume of production by each voter?

Mr. GIRARD. There are very few commodities concerning which we have more information than the production of cotton, because of our other programs. So, the producers would have to declare, and then, of course, we have ways of checking through our county offices as to whether that declaration is accurate.

Mr. HAGEN of California. You verify it, then?
Mr. GIRARD. We could verify it.
Mr. HAGEN of California. Another question.

Since production practices, and so forth, vary from State to State, do you contemplate individual State programs or just a national program?

Mr. GIRARD. There is nothing in the bill which would preclude a State program, but, as I understand the desires of the sponsors, they feel that it should be a national program, to make it work properly.

Mr. HAGEN of California. But the language of the bill-
Mr. GIRARD. I am sorry. I was in error.

Mr. Hagen of California (continuing). Seems to me to indicate otherwise.

Mr. GIRARD. It says all production areas. I stand corrected.

Mr. HAGEN of California. The language of the bill seems to contemplate State programs rather than a national program.

Mr. GIRARD. That is, from a State-participation standpoint. In other words, say that a State which reduces its contributions by asking for refunds, its representation on the Board would be reduced accordingly. So, that is how the States get into the picture, plus the fact that each State must be given at least one representative on the Board.

Mr. HAGEN of California. I understand the construction of the Board, but say that you want a production research program for Mississippi, which is not applicable to California--say that you wanted that, who would determine whether or not that program would be conducted ?

Mr. GIRARD. I was in error when I first made that statement, Mr. Chairman.

Section 3, page 4, the last sentence of that section of the bill provides :

Such orders shall be applicable to all production or marketing areas, or both, in the United States.

It would be impossible under this bill as now written to have a State program.

Mr. HAGEN of California. I see. That is all. Thank you.
The CHAIRMAN. Mr. Stalbaum.

Mr. STALBAUM. I noted that in setting up the program, you have a Cotton Board, which is on page 10, with the approval of the Secretary, and then you have a Promotion Board— I guess that is about the only term that I can give it—which comes up later, apparently coming from the same groups and subject somewhat to the same approval of the Secretary. Perhaps my question should not be directed to you, maybe it should be to the author or to those who have promulgated this plan, why the need for two Boards?

They are really representing the same group, and both are specifically designated under section 14 as the parent group from which they come and then going back, one reviewing the work of the other.

Mr. GIRARD. I would prefer that they, the sponsors of the program, answer that question, Mr. Stalbaum. All I can say is that this is a new and novel approach, insofar as our programs are concerned.

Mr. STALBAUM. I would like to ask the chairman on that point. Maybe he would rather defer the answer to that question to someone who will testify later. The question that I raised pertains to the fact that there are two boards set up under this bill, a Cotton Board from the various groups, and then later a sort of a Promotion Board, also, from the various groups, both coming from the same area,

all certified by the Secretary, and my question is: Why the two groups for the two Boards?

The CHAIRMAN. If I understand it, the first group would be a larger group, so that everybody could participate, is that right, that, is in all areas! Then, the final decision is based upon the recommendation of the first group, which would be recommended or rejected by the second Board, and then it would go to the Secretary.

Mr. GIRARD. That is the way that the program is set up.

The CHAIRMAN. Then, the Secretary at the top level issues the order.

Mr. STALBAUM. Both Boards come from the same group—both refer to the same section in the bill, section 14both have to have their action approved by the Secretary. I am wondering why the need for two Boards.

The CHAIRMAN. I will be delighted to go into that, unless you would like to answer the question.

Mr. GIRARD. I prefer that Mr. Cortright answer the question.
The CHAIRMAN. We can have the industry do that.
Mr. GIRARD. Yes.
The CHAIRMAN. Let us go off the record just a minute.
(Discussion was had outside the record.)
The CHAIRMAN. Back on the record.
Mr. DOLE. I have just one question.

It is with reference to section 11, mentioned in the letter from Mr. Schnittker and the attachment thereto, which, probably, relates to

the same question raised before: Is the demand for the refund under this bill to be made by the producer, or how is it to be made?

Mr. GIRARD. Certainly, by the producer, rather doing it through the processor or the handler acting as his agent. It is contemplated that the producer himself should be the one to make the application and not somebody else.

Mr. DOLE. You feel that section 11 in its entirety is necessary?

Mr. GIRARD. Well, if you are going to give it a voluntary twist, I think it would have to have some basis for getting the refund; otherwise, the producer could not obtain a refund. In other words, whether this is written the way that it ought to be is one thing.

Mr. DOLE. Could it not be written so that the assessment would not be made in the first place, so as not to have the burden put on the producer?

Mr. GIRARD. It could be written that way; it could also be written whereby if the producer who did not want to have the assessment made would issue some sort of a statement or a request, or something of that sort, but that is not in the present bill.

Mr. STALBAUM. Will you yield for a question there?
Mr. DOLE. Yes.

Mr. STALBAUM. It states, also, in order to get his refund he has to get a statement from the purchaser. Supposing that the purchaser will not give him a statement, might it not be possible, for instance, to merely provide that adequate documentation that the assessment had been paid would suffice?

Mr. GIRARD. Paid on his behalf?

Mr. STALBAUM. In other words, that the final bill that receives for it, some certification of that be made on that, might not that suffice?

Mr. GIRARD. Yes; there is one thing that must be kept in mind. We construe this bill as applying the assessment against the handler irrespective of whether he collects it from the producer or not. It is conceivable that some handler may have paid the assessment but has not collected it. Of course, in that case, the producer should not be entitled to recoup what he did not give. It is a question of how that should be structured to make sure that the refund requested has been paid.

Mr. STALBAUM. To follow up my inquiry, a statement clearly showing that he had made the payment through various deductions—that this might be sufficient for the purpose of the refund?

Mr. GIRARD. That could be that is a possibility, but we have to make sure that the aggregate of the statements matched the aggregate of the payments for that particular handler, so that we could have some kind of a check in there.

Mr. STALBAUM. I recognize that.
Mr. ABBITT. Will you yield?
Mr. DOLE. Yes.

Mr. ABBITT. I notice on page 14, line 11, that the man who requests the refund, that such record shall be a matter of public record.

What is contemplated by that matter of public record?

Mr. GIRARD. Well, I suppose it means that if somebody wants to find out who did not make the refund, they could go to the Cotton Board and ascertain that information. That is all that I can see on

that.

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Mr. ABBITT. It would be a piece of paper, or something like that?

Mr. GIRARD. It is a matter of public record. Whether the Cotton Board would publish a list, that would depend on how the order is written. I think under this language, conceivably they would have authority to do it.

Mr. ABERNETHY. Who is the custodian of the fund?

Mr. GIRARD. The Cotton Board. And they operate like our other marketing order programs. They would have to deposit their funds in a bank account, insured, as Federal funds are; they would have bonded employees, and they would be subject to an audit by the Office of the Inspector General to make sure that their funds were properly accounted for.

Mr. HEIMBURGER. May I ask just one question ?
The CHAIRMAN. Yes, sir.

Mr. HEIMBURGER. Mr. Girard, I would just like to clear up in my own mind a question as to the handling of the money which is collected from the producer. Does that money at any time go into the Federal Treasury?

Mr. GIRARD. No, sir.

Mr. HEIMBURGER. And the Federal Government has no discretion as to the expenditure? It must be spent for the purposes for which it is collected?

Mr. GIRARD. That is correct.
Mr. HEIMBURGER. Or not spent.
Mr. GIRARD. Or not spent.

Mr. HEIMBURGER. It cannot be spent on a bridge out in Iowa or a national park in New Jersey, or something like that?

Mr. GIRARD. No. ·
Mr. HEIMBURGER. Thank you.

The CHAIRMAN. I said in my opening statement that I had some misgivings about this legislation as to its constitutionality. Well, are you satisfied that the bill as it is now written is constitutional ?

Mr. Bucy. You will notice that there is a finding in there that this is supplemental to the regulatory program and a part of it. On that basis, you will recall that under the Defense Production Act, during the war, that we controlled milk the same as marketing orders control milk, and we collected assessments to pay the expenses of that program, and the courts sustained those as being a proper assessment. tion of whether the dollar reflects the expenses or not would be a matter that presumably the proponents of an order would establish as a matter of record, so as to justify the flat sum being collected as being an assessment with direct reference to the cost of administering the program.

The CHAIRMAN. Mr. Hagen.

Mr. Hagen of California. Was there not a similar proposal made some 4 years ago with respect to a meat board ?

Mr. Bucy. It was a different situation that you are speaking of, in relation to the meat board.

Mr. HAGEN of California. With reference to meat ?
Mr. Bucy. The meat board situation.
Mr. HAGEN of California. Yes.
Mr. Bucy. That was a voluntary program.

The ques

Mr. HAGEN of California. Mr. Poage had a bill.

Mr. Bucy. That bill was because of a provision in the Packers and Stockyards Act controling the marketing agencies in their fiduciary capacity which said that they could not deduct from their principal's money sums without the principal's prior consent. The bill that Mr. Poage sponsored and which was passed said that that act should not be construed as prohibiting a marketing agency from deducting the money, so long as they notified the party that they could get it back on request.

Mr. HAGEN of California. That is the Meat Board situation!
Mr. Bucy. That is the Meat Board situation today.
The CHAIRMAN. Thank you gentlemen very much.

We will now call Mr. Cortright, chairman of the board of the National Cotton Council of America.

STATEMENT OF G. C. CORTRIGHT, JR., CHAIRMAN OF THE BOARD

OF THE NATIONAL COTTON COUNCIL OF AMERICA

Mr. CORTRIGHT. Mr. Chairman and gentlemen of the committee, my name is G. C. Cortright, Jr. I am a cotton farmer of Rolling Fork, Miss. I also am a member of the board of trustees of the Cotton Products Institute, and board chairman of the National Cotton Council of America.

My purpose in being here is to testify as a cotton farmer in support of H.R. 12322. I also speak in behalf of thousands of other cotton farmers who have endorsed this approach toward financing a fully adequate program of cotton research and promotion.

In announcing his introduction of this legislation, Chairman Cooley said:

I am proud to sponsor this rather unusual piece of farm legislation—one that the taxpayers will not be called upon to pay for.

I, too, am proud of this legislation, under which cotton farmers are proposing to use their own money to finance an essential program of self-help.

As producers, we realize and deeply appreciate what our Government has done to help us. Without its vital assistance in research, cotton would long since have ceased to be a major fiber. It goes without saying that we, like other segments of agriculture, count heavily on a continuing and expanding effort in research through the USDĂ and State experiment stations.

Our Government has provided immensely important promotional assistance in foreign countries, through Public Law 480; this will continue to be essential to our effort to expand raw cotton exports.

And, through the Agricultural Acts of 1964 and 1965, our Government has moved to make cotton fully competitive in price, certainly an essential ingredient in the drive to hold and expand our markets.

Let me repeat: These programs have helped save cotton as a major industry, and their continuation of a sound basis is vital to us. But after coming before you so often to support measures involving treasury funds, it is most gratifying now to support a proposal which recognizes the producer's responsibility to himhelf, and which is the

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