producers to develop and implement a comprehensive program of research, consumer education, promotion and market development. The National Milk Producers Federation is a national farm commodity organization representing dairy farmers and their cooperative marketing associations throughout the Nation. The Federation's membership consists of dairy farmer cooperative associations doing business in all 50 States of the Union. The policy positions presented by the Federation are the only nationwide expression of dairy farmers and their cooperatives on national public policy.

While some may not view this legislation as affecting dairy producers, it must be borne in mind that the dairy farmer is a substantial producer of beef and, in many sections of the Nation, local beef production is centered largely in the dairy herds of the region.

In the dairy industry, we have had considerable experience with programs of the type proposed by this legislation. We feel that they have yielded benefits not only to the dairy farmer, but to consumers as well. Programs of this nature have the capability of providing the vehicle through which the industry can address some of the most pressing problems facing it while building the base on which long term progress can be made.

The proposed legislation would provide for the establishment of a program under which beef producers across the Nation, if they approve such an effort, could join together to work toward solutions to a broad range of common problems. To the dairy industry, this is more than just a passing consideration. Dairy cows make up almost 20 percent of the Nation's cow herd. A substantial portion of the beef marketed today originates on the dairy farms of the country. The value of this beef and the cost of producing it and maintaining our cow herd, of course, is of vital concern to every dairyman.

Of course, Mr. Chairman, you are aware of the very extreme economic problems that have been confronted by dairy farmers. You conducted hearings not too long ago, as a matter of fact, on this issue. While most of the attention has been given to the rapid decline in the farm price of milk during that period, the decline in income of the dairy farmer through the sale of cull cows, calves and heifers has been even greater on a percentage basis.

If, through such a program, new improvements in market efficiency, reductions in the cost of production or similar gains can be made, the producers of livestock and the consumers of the country both stand to gain.

I feel it must be emphasized that this is a voluntary program that could only be put in place after being approved by the producers themselves. Further, the funding of these efforts would be through producer funds.

Since this is to be a producer financed program, it is important in our opinion that the producers themselves retain control over it. Provision for a 68-member board as developed by the task force to administer the activities of the program and the funds raised for it, and it should assure this. It would be well, however, for specific attention to be paid to discussion.

As I indicated earlier, the dairy industry has had long experience with programs of the type proposed in this legislation. These efforts

have been of assistance in the development of new dairy products and dairy foods, and the development of marketing efficiencies, and have in our judgment been of great help to the industry.

These advances have also meant savings to the consumer reduced marketing costs, quality improvements, and other advances which have lowered overall food costs. But these efforts have been aimed at dealing with fluid milk and dairy products. The meat production side of the dairy business has long been ignored.

This kind of legislation and these programs that have been referred to here will fill a gap in our present efforts.

The day is long past when the producer of agricultural commodities can concern himself simply with the production of his farm and let someone else see to it after it passes the farm or ranch gate. If by working together, farmers and ranchers are able to bring about improved production and marketing efficiencies, improve the understanding of human nutrition among our people and to broaden the markets for their product, we will all gain in our judgment.

I know that other witnesses appearing before you today will discuss the details of this program fully. In closing, I do want to offer the support of the National Milk Producers Federation and certainly mine as president and as a dairyman myself, with a substantial number of cattle going to markets each year, we believe that the committee should favorably consider S. 772 and I would like to have the statement entered as it is drafted. Thank you, very much.

Senator LEAHY. Thank you very much.

One of the prior people testifying, Mr. Jones from the Livestock Feeders Association, had an amendment to exclude dairy products from the bill. Now, he mentioned in his testimony that the definition as it now stands would include milk and other dairy products. He suggested that they should be excluded. As I understand it you would prefer the bill as it presently stands. I am referring to page 4, lines 9 and 10 of the bill.

Mr. LAKE. Well, I don't believe I would care to-page 4?
Senator LEAHY. Lines 9 and 10.

Mr. LAKE [continuing]. Comment specifically on the proposed amendment. I did not have a copy, have not seen a copy of the statement or the proposed amendment and thus I would not like to comment on that without further study. I would answer this way, Senator Leahy, that we had in our dairy industry through the United Dairy Industry Association which is our family of programs for promotion of and education on dairy products, we had an opportunity to participate in this. I would stand on the provision made by the draft of the bill. We would not in our judgment expect that this piece of legislation would necessarily result and we would not want it to result in any kind of interference with the present milk promotion programs.

Senator LEAHY. I understand. Coming from a dairy producing State I find your testimony particularly interesting.

Is there anything else you would want to answer, either any of the questions or the answers that you have heard here today?

Mr. LAKE. I can't now quite recall all the questions you asked. I would just close by saying we support the principles of this legisla

tion. We think reasonable safeguards are being included in it. I am sure that others with more expertise than I might have on the beef program might have some beneficial suggestions to offer to the committee.

Senator LEAHY. Fine. Thank you very much, Mr. Lake.

The next witness is Arnold Mayer, legislative representative of the Amalgamated Meat Cutters and Butcher Workmen of North America, AFL-CIO. Mr. Mayer's statement indicates his union's opposition to S. 772.

Mr. Mayer, please feel free to elaborate on your statement in any way you would like.

STATEMENT OF ARNOLD MAYER, LEGISLATIVE REPRESENTATIVE, AMALGAMATED MEAT CUTTERS AND BUTCHER WORKMEN OF

NORTH AMERICA (AFL-CIO)

Mr. MAYER. My name is Arnold Mayer. I am the legislative representative of the Amalgamated Meat Cutters and Butcher Workmen (AFL-CIO).

The Amalgamated is a labor union with 500,000 members organized in about 500 local unions throughout the United States and Canada. The Amalgamated and its local unions have contracts with thousands of employers in the meat, retail, poultry, egg, canning, leather, fish processing, sugar refining and fur industries.

Our members include men and women who are employed at every stage of the process by which live cattle is transformed into consumer cuts of meat and sold on the cases of retail food stores. Our collective bargaining agreements cover stockyards, cattle slaughtering plants, beef processing and fabricating plants, wholesale beef operations and retail meat departments.

Thus, the welfare of a sizable sector of our total membership depends on the progress and the health of the cattle industry. Our members, too, have suffered from all the special problems which have plagued the industry in these past 2 years. Beef boycotts, edicts on meat production wages and sales prices, withholding actions by producers, and the drop in effective consumer demand for beef, all of these developments have caused unemployment or grave insecurity to our members.

Our Union is all too familiar with the massive problems suffered by producers in their struggle to meet record high costs while choice. cattle sells at $35 a hundredweight. We are concerned with the preservation of the industry. And we know of hundreds of cattle feeders who, after absorbing heavy losses, are washing their hands of the whole business. Our sympathy, however, does not extend to the Wall Street. Dallas and Hollywood cowboys who had been exploiting cattle feeding for tax advantages.

We would like to support the Beef Research and Consumer Information Act (S. 772 and H.R. 3718) but we are unable to do so. In fact, we see extremely serious problems in the legislation. With the permission of the chairman and the committee, I would like to comment on various parts of the bill:

(1) Essentially, the bill would impose a 0.3-percent value added tax in the first year and between 0.1 and 0.5 percent value added tax

thereafter on the sale of cattle. The tens of millions of dollars thus collected annually would be spent to advertise, promote and research beef in the hopes of increasing the sale and price of cattle and thereby raising the income of various parts of the industry.

We greatly doubt whether this outcome would actually result from the enactment and administration of the bill. It is possible to increase the sales of a specific set of products from a specific company through advertising and promotion. Brand identification and brand loyalty may be achieved. But it is doubtful that the sale of an already wellknown, and undifferentiated product, such as beef, can be increased in this manner. Will the members of this committee go out and buy more steaks because they see a beautiful, glossy page extolling the virtue of beef in a popular magazine?

Therefore, a basic premise of the legislation is faulty. The measure will not increase the income of cattle raisers or anyone else in the industry. It will do wonders, however, for the income of the advertising industry and the persons who manage and operate the fund. (2) The bill provides a wide-open grant of authority to use the large funds collected from the value added tax for

establishing, and carrying on research, marketing, and development projects, and studies with respect to sale, distribution, marketing, utilization, or production of cattle, beef or beef products * * *.

Our Union is concerned about such vague grants of authority since we have suffered from the use of so-called "research" by Secretary of Agriculture Earl L. Butz. He and some of his subordinates have blamed our members for nearly everything which has gone wrong in the food industry during his tenure and virtually each attack has involved some alleged USDA "research" or "study."

For example, in most of the Secretary's and the Department's "explanation" of high meat prices, they highlight the fact that in Chicago, meat is not cut or sold after 6 in the evening. In actual fact, meat prices in Chicago averaged substantially below meat prices elsewhere in the country where, under our union's contracts, meat is sold during evening hours. Food chain executives candidly say that the concentration of meat sales and meat market operations to limited times of the day-inconvenient though they may be to consumersdoes create greater efficiencies and lower operating costs. Yet the Department goes merrily on with its untruthful canard clothed in alleged "research" and "reports."

Similarly, the research of this bill would permit-in the name of "increasing efficiency" in the production and distribution system-an interference in the collective bargaining process, efforts to destroy the wages and working conditions of employees, attempts to turn cattle raisers and consumers aaginst workers, etc. We have problems enough with the huge resources of the U.S. Department of Agriculture being used in this manner. We have no desire to have tens of millions of dollars in new funds added to the campaign. Our fears are raised by not only the vague wording of the legislation, but the massive powers given the Secretary in carrying out the wide-open provisions of the act.

(3) The program would be paid for by the imposition of a value added tax, according to the bill. If this legislation were enacted, it

would, as far as we can tell, be the first and only system of value added taxes sanctioned by Federal law. Such a precedent is dangerous and totally undesirable.

A value added tax is one of the most regressive forms of taxation. Because of its regressiveness-its imposition of totally unproportional burdens on poor and moderate income families-State legislatures and the Congress have repeatedly shunned it. We suggest you do so again.

(4) Supporters of the bill argue that the cost of the program will be paid entirely by cattle raisers. That may be true under some market conditions, but totally untrue under others.

In the current market, it is likely that producers and other handlers of the cattle will have to absorb this added cost. The market is probably too weak to permit passing on this expense to consumers. However, when the market firms-and it will-the effort will be made to put the program costs into the consumer price of beef and that effort will succeed. For example, during the period of high cattle prices in 1973 and early 1974, the cost would have been paid by consumers. Who ends up paying the value added tax would depend upon which stage of the cattle cycle we are in at a particular time.

Even though consumers will often sustain the program by paying an additional half-cent or more when they buy a pound of beef, they would have no say whatsoever in the policymaking and administration of the program. The program would be operated as a closed corporation among representatives of meat industry organizations, according to the bill. This would be very unfortunate and inequitable. (5) To market his cattle, a producer must pay his dues to the program. He may get a refund after each transaction, if he applies in writing and includes proof of payment. He must apply within 30 days of each transaction.

This provision is an extreme and complicated version of the maintenance of membership and checkoff clauses written into many labormanagement contracts. In fact, it may have originally been developed from those union clauses. We have no objection to it, but we are extremely surprised that the list of supporters of this legislation includes strong advocates of the so-called right to work laws.

These statutes ban the maintenance of membership and often the checkoff clauses when they apply to union dues. The supporters of the so-called right to work laws argue intensively that a worker should have an absolute right to join a union or not join a union as he sees fit. They see no need for a union security clause. We would normally assume that they would similarly oppose the producer refund provision of this bill and argue that a cattle raiser has the absolute right to join or not to join in the promotion scheme.

We sincerely hope that if these right to work advocates do support the producer refund section, their action indicates a new view toward all maintenance of membership and checkoff provisions. We hope it does not represent a feeling that meat industry organizations and labor unions should be treated differently, under law, on the same issue.

In summary, the Beef Research and Consumer Information Act will not help to solve the severe economic problems of cattle raisers.