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What we have to go on is a good bit of experience in this, through our previous work with the National Cotton Council and the Cotton Producers Institute.
Throughout promotional programs, even though they have been limited with these two organizations, we have been able in nearly all cases to at least double the funds that we have available by cooperative campaigns with industry groups.
We feel that we can do so also in this situation, and so we feel that we are talking not about $12 million in actual fact, but we are talking about a market impact of about $25 to $30 million. And with this we think we can really make a significant impact.
Now one other thing I think needs to be kept in mind along this line, and that is that at the present time the synthetic fiber producers are not only trying to create primary demand for synthetic fibers, but they are also trying to create secondary demand for their specific product. That is to say, Du Pont is competing with Dacron against Eastman Kodak's Kodell, and they are in turn competing against Fortrel, and so forth. So there's a lot of competition between the synthetic fiber producers which does not really affect the primary demands.
In our case we are producing one fiber, we are promoting one fiber, and we can make a significant market impact with that.
Thank you very much, sir.
The next witness is Mr. Jack Funk, chairman of the Cotton Producers Institute Steering Committee for Lower Rio Grande Valley, Тех. .
We are glad to have you. STATEMENT OF JACK FUNK, CHAIRMAN, COTTON PRODUCERS
INSTITUTE STEERING COMMITTEE FOR LOWER RIO GRANDE VALLEY, TEX. Mr. FUNK. Thank you, Mr. Chairman, and members of the committee.
My name is Jack Funk. I am a cotton producer and ginner from the Lower Rio Grande Valley of Texas, living at Harlingen, Tex. I am also chairman of the Cotton Producers Institute in the valley and am currently serving on the board of trustees to the Cotton Producers Institute. My purpose in being here is to testify as a cotton grower and ginner in support of H.R. 12322.
The lower Rio Grande Valley is comprised of four counties and produces nearly a half million bales of cotton a year. The valley is recognized as a major cotton producing area. I am happy to report that the CPI program has been well received in the valley and the progressive producers are enthusiastic about supporting a self-help program of research and promotion for cotton. Due to our high costs of production in the valley where losses from insects and diseases are very heavy, growers realize the need to supplement USDA and landgrant college research to get at these high costs.
As valley chairman for CPI, I have probably pushed this program harder at my gin than most. I collect from all my customers and then refund to those who do not wish to pay. In the first year, I had only
one request for a refund and this was on a landlord's share. Incidentally, this landlord now contributes to CPI, after learning about the merits of the program.
In spite of the growers' acceptance of this worthwhile program, we are experiencing a gradual decline in revenue due mainly to the back of a uniform collection procedure and complacency on the part of some of our ginners. Frankly, gentlemen, the dollar a bale is too competitive at the gin level unless all gins attempt collection. For this program to continue in the lower valley for another year, we must establish a uniform collection procedure.
I am a past president of the Texas Cotton Ginners Association, which passed a strong resolution supporting a referendum approach to the collection of CPI funds. This association, which is the largest of its kind in the Cotton Belt, took the position for two basic reasons:
First and foremost in our minds as ginners, we recognize that we can't process cotton unless farmers grow it, and farmers can't grow it unless more is sold. This means new and better cotton products and a lot more advertising and promotion.
Secondly, without a uniform collection procedure, an undesirable competitive situation is created between gins.
There is no question about the need for this legislation. We in the valley begin planting cotton this month, and in order for it to apply to this year's crop, we urge speedy passage of this bill.
I appreciate the opportunity of presenting the view of cotton farmers and ginners from the valley on this important proposal to the members of this committee.
Thak you, Mr. Chairman.
The CHAIRMAN. Thank you very much, Mr. Funk—a very well prepared statement.
Our next witness is Mr. Don Anderson, member of the Cotton Producers Institute Steering Committee, High Plains area of Texas.
STATEMENT OF DON ANDERSON, MEMBER OF COTTON PRODUCERS
INSTITUTE STEERING COMMITTEE, HIGH PLAINS AREA OF TEXAS
Mr. ANDERSON. Thank you, Mr. Chairman.
My name is Don Anderson. I am a cotton grower from Crosbyton on the South Plains of Texas, and have an interest in two cotton gins in Crosby County. I have been serving on the Cotton Producers Institute Steering Committee for the plains area since 1961. I also am vice president of the Plains Cotton Growers Association—an area organization with 20,000 members—and am chairman of the Boll Weevil Committee for the High Plains. I am appearing before you in my official capacity with the Cotton Producers Institute.
In 1961 the program of the Cotton Producers Institute was initiated in our area. In that first year, we conducted 198 educational meetings in our 23-county area. At these meetings we signed over 5,000 of our largest cotton growers on individual agreements that requested their respective gins to deduct $1 per bale for the Cotton Producers Institute. These 5,000 agreements covered over 850,000 bales, and were signed in good faith. However, we learned that when the gin yards get covered up with cotton, and our gins go on a 24-hour basis the
help in the gin offices either could not or would not take the time to go down a list and deduct the $1 a bale from those growers who had signed agreements. This resulted in collections of only $278,000 that
The next year we used a different approach and partially corrected this problem. It was to get gins in a given competitive area to uniformly deduct the $1 a bale from all their customers, and then refund to those who did not wish to pay. Although all gins did not agree to do this, at one point over a million dollars was collected following this procedure. But then a few of the gins started refunding this money as a means of price cutting. Once this was started in some communities, it spread like wildfire because our gins are highly competitive. The end result was that refunding left us with only $425,000 of CPI income on the plains in the second year.
In our third year we attempted to follow this same approach, but learned from the previous year's experience that too many of our gins had lost confidence in what their competitors would do on this matter, and our collections dropped back below the first year's level.
In the fourth year, in order to save the whole CPI effort, the cooperatives in our area agreed to collect and remit the dollar a bale on all the cotton they handled. This pushed collections up to almost $800,000, but in order to do this the cooperatives found they had to collect at some point other than the gin because of the competitive situation mentioned previously. Their collections were actually made through the regional cooperative oil mill; marketing association and compressed
It is my understanding they agreed to do this for only 2 years, to provide time for working out some sort of uniform collection procedure. This means that the crop we have just finished ginning is the last one on which this type of collection will be in effect.
I would like to cite our experience with the boll weevil program in West Texas as further proof cottongrowers can and will put up their own money to help themselves when the need arises and if a uniform collection procedure can be established.
I believe most of this committee is familiar with the fact that 2 years ago the boll weevil moved up on the Caprock for the first time, and some heavy infestations became established. To meet this threat, the cottongrowers in the area agreed to put up 50 cents a bale to help carry out the most massive control program of this type ever attempted. We profited by our earlier experience with CPI, however, and established a uniform collection procedure whereby these funds would be collected at the compress. Even though refunds were provided for, participation in this program exceeded 95 percent and has been eminently successful in every respect. In my judgment the Cotton Producers Institute program can reach a similar level of participation, but only through this enabling legislation which will provide the mechanism whereby cottongrowers can establish a uniform system of collections.
The CHAIRMAN. Thank you very much, sir. We are glad to have your statement.
The next witness is Mr. J. Russell Kennedy, executive committee, Cotton Producers Institute.
We are glad to have you, Mr. Kennedy.
STATEMENT OF J. RUSSELL KENNEDY, EXECUTIVE COMMITTEE,
COTTON PRODUCERS INSTITUTE Mr. KENNEDY. If I may say something to the chairman off the record.
(Discussion off the record.)
Mr. KENNEDY. My name is Russell Kennedy, of Bakersfield, Calif. I am general manager of Calcot, Ltd., a grower-owned organization engaged in cotton marketing and warehousing in California and Arizona. I served on the original beltwide producer committee that initiated the Cotton Producers Institute and subsequently have served on the California steering committee for CPI and as a CPI trustee and member of the trustee executive committee since the first board was established in 1962. I cite this to establish that I have had varied experience in all phases of this movement from the very beginning.
My position as general manager of Calcot has provided me with a better opportunity than most to understand how cottongrowers feel about this type of self-help program and also to understand the need for greatly accelerated research and promotion efforts if American cotton is to survive as a major industry.
We market a large volume of cotton for our 4,000 members and maintain close contact with the spinning mills where cotton must first compete with manmade fibers. This provides us the opportunity to see very clearly the nature of cotton's competition with other fibers and to understand some of the things cotton must do if it is to meet this competition. In my opinion, our greatest need today is for product development research, and for promotion.
Our recent experience with permanent press is a real good example of why I say this. Two years ago, research initiated and financed by the Cotton Producers Institute provided a breakthrough that opened the door to the first commercial permanent-press fabrics. That year one company made and sold over 2 million pairs of permanentpress trousers made with 100 percent cotton. They were an excellent product except for one weakness and that was reduced abrasion resistance. To overcome this problem, manmade fibers were blended with cotton and last year these blended trousers captured the bulk of the market. As soon as cotton's shortcoming became apparent, the board of trustees for CPI concentrated more of its research funds toward solving cotton's abrasion problem. These efforts have resulted in solid progress within the last few months. We have been most gratified to learn that 13 different companies have announced they will manufacture and market new types of all-cotton permanent-press fabrics and garments during 1966. But still further improvement is needed for cotton to compete successfully in some important permanent-press uses, and since the synthetic and blend products themselves will undoubtedly be improved, our research efforts on cotton should be increased sharply. And certainly it goes without saying that if cotton is to take full advantage of the development, large sums of promotion and advertising money will have to be thrown behind it. We must do this because permanent press has already become the most important textile development in a great many years.
California and Arizona cottongrowers believe in this type of selfhelp program. These two States have contributed about half of the money raised by CPI since it was initiated. Eighty-five percent of
Calcot's members have been participating through their respective cooperative gins. Many other company-owned and independent gins have had equally good records. Unfortunately, many others have not and we have lost ground in each of the last 2 years. There is now general agreement among most of our growers that they will not continue to put up their money unless the rest of the Cotton Belt strongly participates. This is possible only with a uniform collection procedure.
The drastic acreage reduction which is to go into effect with this year's crop has convinced farmers they are in serious trouble and I firmly believe they are more willing than ever to spend their own money for research and promotion. But because of the competitive problems that have been created through not having a uniform collection procedure, our fundraising will continue to go downhill rapidly in this period of greatest need. We must have greatly expanded research and promotion if cotton is to survive and we must have H.R. 12322 to accomplish this goal.
The CHAIRMAN. Mr. Kennedy, thank you very much for this very fine statement. I am sure it will be carefully considered by all the members of this committee before final action is taken.
Mr. Hagen of California. Mr. Chairman, I would like to ask one question either of you or Mr. Kennedy.
Why was this originally put in here: no such advertising or sales promotion program shall make use of false or unwarranted claims on behalf of cotton or products or false or unwarranted statements with respect to the quality, value or use of any competing product.
That seems a little bit restrictive.
Mr. KENNEDY. Well, that's what you have to swear to when you go on the air with a television program, so I suppose they are just nailing it down.
Mr. HAGEN of California. It is pretty general language. I thought it might be unduly restrictive.
Mr. KENNEDY. Maybe the committee will take that out if they think it is, and the lawyers don't think it's necessary.
Mr. Chairman, may I add another statement or so?
Mr. KENNEDY. In the West there has been considerable activity among some of the growers' organizations in connection with this whole program. Here is a resolution passed by the California Farm Bureau in December of 1965, resolution No. 126, which reads as follows:
We support the Cotton Producers Institute program in order to establish a permanent research and market development program designed to insure American cotton its fair share of world trade, to develop new cotton products and uses for cotton products, and to provide for adequate cotton reserach. Special commodity programs: Any commodity should have the democratic right to vote in a referendum within their commodity, to bind themselves together for promotion programs, and/or a marketing order, unless by specified policy statement they have requested otherwise.
Now, here is a statement by the Arizona Farm Bureau of November 1965.
We reaffirm 1965 policy No. 27 which reads: "The long range resolution to the problems confronting the cotton industry lie in research to increase the efficiency