With respect to the provisions of Public Law 91-190, Section 102 (2) (C), we believe this legislation would have no significant impact on the quality of the environment. Because of the above problems and the President's moratorium on new Federal spending programs we cannot support enactment of S. 772 at this time. The Office of Management and Budget advises that while there is no objection to the submission of this report, enactment of S. 772 would not be in the longrun interest of agriculture, the food industry, or consumers in general. The involvement of the Federal Government in the promotion of a particular commodity at the expense of other commodities would compel other commodity groups to seek similar assistance in order to maintain their share of the food market. The net effect of such action would be to unnecessarily increase costs to both producers and consumers. Sincerely, RICHARD L. FELTNER, Senator LEAHY. At this point, without objection, I will insert the statements of Senator George McGovern and Senator Bob Dole. [The statements of Senators McGovern and Dole follow:] STATEMENT OF HON. GEORGE MCGOVERN, A U.S. SENATOR FROM THE STATE OF SOUTH DAKOTA Mr. Chairman, I am pleased that you have called hearings on this bill in a timely fashion, reflecting the real economic pinch in which most of our livestock producers are caught today. I find it most encouraging that the livestock producers organizations have developed a plan which would allow producers themselves to help themselves out of the present crisis, and to continue to build the market strength of their industry. I am pleased to be a cosponsor of S. 772, one of several measures which I have sponsored or cosponsored in an effort to restore economic solvency to livestock production. No one of us should be under the impression that enactment of this bill would overnight put our cattlemen back on their feet. It will not; neither will any other measure that this Congress will consider this year. However, an effective system of research into better and more efficient methods of breeding and raising cattle, and a truly effective promotion program that would result in more and more efficient livestock marketing, would over the long run permit stockgrowers assurance of at least some stability in what has become too much a boom-and-bust market. One aspect of the Beef Research and Consumer Information Act of 1975 which holds great potential for producers and consumers alike is the possibility of research to produce beef protein even more efficiently than our present technology. Members of this Committee have heard, as have I, the protests of many Americans about the amount of grain consumed in the production of beef. Many figures have been thrown about, usually varying from 21 to 3 pounds of grain for each pound of retail beef. An effective research and education program could help substantially to provide credible facts for the American public as the dialogue over our eating habits vis-a-vis those of less developed countries continues. In an effort to obtain the views of livestock producers and their organizations in my State, I wrote to many of the leaders of agriculture and solicited their comments. I would like to submit, for the hearing record, the responses which I have received to date. Many of the responses, including some which I received by telephone rather than in writing, suggest that amendments would strengthen this bill. Some of these amendments are appealing to me, and I shall keep an open mind on them pending the completion of the record of today's hearing. I ask unanimous consent, Mr. Chairman, to include at this point in the hearing record letters and statements from the South Dakota Department of Agriculture, the South Dakota Farmers Union, the South Dakota Farm Bureau Federation, and the South Dakota Stockgrowers Association.* The above-mentioned statements follow: STATEMENT OF ROBERT DUXBURY, SECRETARY, SOUTH DAKOTA DEPARTMENT OF AGRICULTURE, PIERRE, S. DAK. The South Dakota Department of Agriculture and the South Dakota Cattle Industry-through its Action Committee-both endorse S. 772, the Beef Research and Consumer Education Act. The Committee is a five-man group named during a statewide meeting of livestock and related farm organizations in February; it was formed to help coordinate efforts of the various organizations toward solving the economic crisis of the cattle industry. Their endorsement was made at their meeting in Pierre April 7. We see the Act as one which facilitates national cooperation among cattle producers in promotion of their product and in support of their research and education programs. Presently, beef industry promotion, research, and education funds are totally inadequate and do not compare favorably with funds available to many other sectors of Agriculture. Prune growers, for example, have more funds at their disposal. Another factor is that some choice and prime beef cuts now share in the family's luxury budget and must compete with highly advertised luxury items including cosmetics, air travel, and wearing apparel. Further, manufacturers of meat substitutes now disburse large sums of money to use for increasing their share of the non-luxury portions of the family budget. Promotional monies are indeed essential to the cattle producer, as these examples show. A second advantage of the Act is that it assures accountability and responsibility in the industry's use of such funds. Because the authority of law is needed for the checkoff, the use of funds must and will bear the scrutiny of government. A third advantage of the Act is that it solves the problem of nonjoiners who accept the benefits of group action without contributing to the program. The Act will provide predictable, budgetable, and equitably derived funds in adequate amounts to support this costly, but essential, undertaking. And yet, it does not change the way the product moves through the marketing process or how the price is determined. A fourth advantage of the Act lies in the uniformity it offers over present programs. It now is quite difficult for marketing agencies serving several states to collect individual checkoffs for the state-of-origin for each group of cattle. We see a fifth advantage in that money would be administered by a producer board under which there would be no problem in using funds for marketingsystem investigation of cost, equity, and efficiency in guiding producer decisions to meet consumer demands. Considerable production research-especially that related to market quality-still could be justified under the definition of "research" as we suggest that it be modified below. A sixth advantage is that a national program would feature a professional and knowledgeable staff which could serve the industry in many ways. An example of this lies in the National Livestock and Meat Board and the Beef Industry Council which both have shown that much can be accomplished-even with a modest budget. The Action Committee suggests (and I concur) that "general advocacy for the industry" be added to the purposes of the Act. The Department of Agriculture suggests that the definition of "research" be changed in the Act to encourage that animal nutrition, beef cattle housing, pasture improvement, and similar research continue to receive its major financial support from present sources. The Beef Board research budget should be used for improvement of the marketing system and product development. We see little difficulty in getting this relatively noncontroversial and potentially valuable legislation placed into law. We do feel that a difficult challenge lies in properly explaining its provisions to producers to enable an intelligent vote on the referendum. However, the South Dakota cattle industry and this Department both stand ready to assist in that effort. The immeasurable value of this great industry to our Nation goes without saying, and yet, the threat to its economic survival continues. In light of this Nation's ever-increasing reliance upon agriculture for balance-of-trade, and in light of the world's mushrooming population statistics, do we dare not to pass legislation which will contribute to the industry's economic survival? SOUTH DAKOTA FARMERS UNION, U.S. Senator GEORGE MCGOVERN, TS. Senate, Washington, D.C. DEAR GEORGE: Thank you for your request of my statements on the "Beef Research and Consumer Information Act." While we are not opposed to the idea of establishing a beef board to promote beef consumption and do research in that area, we are not particularly enthusiastic. As you know, we in Farmers Union believe the problems currently confronting beef producers run deeper than a simple matter of public relations. I am not really convinced that there is a necessity of a further advertising effort on the part of beef producers. Our problem isn't that people don't like and won't buy beef. What we now face is a continuing glut of beef on the domestic market and the bottom side of the boom and bust cycle that our so-called "free market" has inflicted on all farmers. Frankly, I believe other proposals currently before the Congress-the 90-day moratorium on beef imports, the $2 billion beef purchase program and Senator Abourezk's anti-corporation farming act-will do a lot more than will this bill to help livestock producers. Ultimately, I believe the only real solution to the dilemma facing livestock producers is inclusion on the target price concept and better long term market information-plus a detailed investigation of the price spread between producer and consumer. The real selling job, which we should be working on, is in convincing both livestock producers and the consuming public that in the long run, the boom and bust hurts everyone and stable farm prices for all agricultural commodities will benefit everyone. DEAR SENATOR MCGOVERN : Thank you for your letter of April 2 requesting a statement from South Dakota Farm Bureau on the proposed "Beef Research and Consumer Information Act." The members of Farm Bureau have long favored promotion, research and public information for agriculture products and we are vitally interested in legislation which will assist South Dakota's largest and most important industry, beef. Attached I have outlined our statement. We have purposely kept it brief but are prepared to present supplemental information if so requested. Sincerely, HENRY KNOCHENMUS, President. STATEMENT OF HENRY KNOCHENMUS, PRESIDENT, SOUTH DAKOTA FARM BUREAU FEDERATION, HURON, S. DAK. The members of South Dakota Farm Bureau Federation wish to affirm that they are in favor of the concept of promotion, research and information programs for the beef cattle industry. The proposed "Beef Research and Consumer Information Act," currently under consideration by the U.S. Senate, is a vehicle which can accomplish the goals of those in the cattle business. Farm Bureau would like to express the following recommendations relative to this legislation. These recommendations are designed to improve the bill and cause it to be more responsive to the needs and desires of the farmers and ranchers involved in the beef industry. A. Eligibility to Vote.-The Farm Bureau recommends that anyone who has sold cattle within the 12-month period prior to the date of the referendum should be eligible to vote. B. Registering Voters.-The Farm Bureau feels that the Agricultural Extension Service or Agricultural Stabilization and Conservation Service could conduct an advance registration of voters. C. Advance Registration.-The Farm Bureau recommends that voters be required to register at least 10 days prior to the date of referendum. D. Validity of Referendum.-The Farm Bureau recommends that in order for a referendum to be valid 50 per cent of the registered producers must have voted, with two-thirds casting an affirmative vote. E. Sharing of Contributions with State Beef Promotion Groups.-The Farm Bureau recommends that the language in the beef promotion proposal under the heading "Beef Board” dealing with the sharing of producer contributions with state beef promotion groups be closely interpreted by legal counsel. The Farm Bureau feels that some provision will be necessary for qualified state beef promotion groups to receive a share of producer contributions and recommends that this be limited to not more than 10 per cent of the contributions received from producers in a given state during the year. The Farm Bureau also recommends that the state beef promotion groups should be required to submit requests for funds to the National Beef Board in advance. The Farm Bureau recommends that no funds should be provided to state beef promotion groups on producer contributions from the previous year. The official position of the Farm Bureau, in line with policy position, is that if the proposed legislation is revised in conformance with the organization's recommendations we will support it. Senator GEORGE MCGOVERN, SOUTH DAKOTA STOCKGROWERS ASSOCIATION, Rapid City, S. Dak., April 10, 1975. DEAR SENATOR MCGOVERN: We have received and read copies of S. 772 introduced in the first session of the 94th Congress. We think its a great bill-long overdue-and we are ready to support your efforts to get this passed-Quick-in every way! Our phone is (605) 342-0429. Vince Crago will be in Washington, May 12 and 13, and this bill will be a priority with him during that visit. Of course, if companion House Bills-HR 3718 and HR 4298-move first and gets to the Senate we ask that you support which ever bill can become law among S. 772/HR 3718/HR 4298. Sincerely, JACK MCCULLOH, P.S. As long as Sec. 12 stays in and guarantees a refund would it then not be reasonable to change in Sec. 9 the requirement of two-thirds to fifty-one percent? STATEMENT OF HON. ROBERT DOLE, A U.S. SENATOR FROM THE STATE OF KANSAS Mr. Chairman, for nearly two years livestock producers, particularly beef producers, have sustained heavy financial losses due to an imbalance in supply and demand. During this period beef producers, rather than sit on their hands and do nothing, have drafted a self-help program to help bring the industry out of its current economic doldrums, and hopefully, present a repeat performance. During the past two years, there have been attacks and discrimination against the product itself and against the producers of beef which they never before have experienced. I refer to the Government price controls in 1973 which, under Phase IV, singled out beef and triggered unprecedented economic losses for cattle feeders and producers; to expanding beef imports into the United States, which have depressed prices and continue to threaten the markets for our domestic beef; to the increasing number of regulations, by State and Federal regulatory agencies, which could undermine and demoralize this largest sector of our agricultural economy; to beef boycotts and "Eat Less Meats" campaigns -by groups that admittedly used beef as a symbol of their protest against inflation, without realizing that beef cattle prices actually have come down more than any other major consumer item. This self-help plan which the Chairman of the Agriculture Committee (Senator Talmadge) and I, along with 42 other Senators, have introduced can (1) strengthen the beef industry, (2) assure consumers of more beef at prices they can afford, and (3) cost the Government nothing. This proposal, which is a product of the efforts of many, is the best example of bootstrap operation. It would be a case of producers helping themselves by working in a united manner to improve the market. In the past, this type of self-help program has met with a great deal of sucress in the grain and citrus industries. Our export markets represent a very important part of those industries. Agricultural exports have also become a very beneficial part of the national economy. They have helped to improve our trade balance tremendously and have strengthened the overall health of the economy. I am hopeful that a market development organization for beef will be beneficial in expanding our foreign markets for American beef as well as improving market conditions here at home. The Beef Research and Consumer Information Act would help consumers in many ways. It would provide for expanded research on nutrition, health, new beef products, marketing, and distribution. Likewise, it would expand research on reduced cost of production and marketing of beef cattle-to assure a stable and adequate supply at reasonable prices. Then, it would permit more consumer education programs-youth education in our schools as well as adult education— on purchasing economics; on how to get more for your food dollar; on how to select and prepare the most economical beef cuts; etc. Mr. Chairman, other witnesses will outline the provisions of this bill, but let me merely say that the financing of this program will add nothing to the amount consumers pay for beef. The funds will be deducted, on a voluntary basis, from amounts paid by the packers to the producer. In conclusion, let me say that I look forward to the testimony of each of our witnesses and am completely open-minded about any proposals for changes in the original bill that will benefit producers and consumers. Senator LEAHY. Mr. Blum, Associate Administrator, Agricultural Marketing Service. Glad to hear from you. STATEMENT OF JOHN C. BLUM, ASSOCIATE ADMINISTRATOR, AGRICULTURAL MARKETING SERVICE, U.S. DEPARTMENT OF AGRICULTURE Mr. BLUM. Senator, we appreciate the opportunity to appear before your committee this morning to present the Department's views on the proposed Beef Research and Consumer Information Act. Accompanying me today are Mr. John Pierce, on my left, Director of the Livestock Division, Agricultural Marketing Service, and Mr. John Chernauskas, Director of the Marketing Division, Office of General Counsel. S. 772 would enable cattle producers to establish, finance, and carry out a coordinated program of research, producer and consumer education, and promotion to improve, maintain, and develop markets for cattle, beef, and beef products. The Department now administers a number of such programs for other agricultural commodities-the 32-401 - 75 - 5 |