It is unlikely to increase the sale of meat nor is it likely to raise the income of any part of the meat industry. It is a mirage in this respect. Parts of the bill will, however, create deep suspicions and will potentially increase the conflicts in the industry.

We must therefore, oppose this legislation.

Senator LEAHY. Mr. Mayer, you indicate in your statement that the program would be operated as a closed corporation, in fact. Would you feel differently if among those 68 representatives there were members of the consuming public represented?

Mr. MAYER. Senator Leahy, that would be an improvement. However, we would still have the problems of wide-open grants of authority on research and the value added tax. Also there is the question whether this whole promotion business is of any use whatsoever.

Senator LEAHY. Does your union suggest changes in the basic legislation or do you feel in any way that it could be changed to make it acceptable?

Mr. MAYER. I think changes could be made on the issues we raised. We would have to see what the changes are. At the moment, as this bill is written now, we would oppose it.

Senator LEAHY. I might add parenthetically, Mr. Mayer, you are not actually expecting these cattlemen's organizations to change their attitude on right-to-work because of this particular checkoff, are you? Mr. MAYER. There is always hope, Senator. Always hope. I think it is rather fascinating, that not only some cattlemen, but also the list of supporters and people who introduced the bill include people who very rigorously opposed the repeal of section 146 of the Taft-Hartley Act.

Senator LEAHY. On the question of the research provision, is there really any other way that that could be worked as a practical matter? Mr. MAYER. As a practical matter I think there could be exemptions written in. Also, the research authorization could be more specific. It could be handled. As far as I know, the part which I quoted is the only real directive for research. It has been a couple of weeks since I read the bill. It is wide open and we have had rather sad experiences with what research consists of.

Senator LEAHY. Are there any other comments that you would like to make based on any of the questions or answers that you have heard here today?

Mr. MAYER. No, Mr. Chairman. I am afraid I came in late and I didn't hear too many of the questions. I am ready to submit anything further that the committee might wish.

Senator LEAHY. Are you also testifying this afternoon before the House?

Mr. MAYER. Yes.

Senator LEAHY. I believe just about everybody here is.

I have no further questions unless any of the members of the staff have some.

Thank you very much.

Mr. Foreman, Carol Foreman.

I'm sorry-Ms. Foreman. A good friend of mine is the district attorney of Houston, Tex., Carol Vance, who spells his name your

way, and having had so many people from Texas here today I thought I was in the proper frame of mind. Ms. Foreman and Ms. Shubow. Ms. Foreman is the executive director and Ms. Shubow is the information director of the Consumer Federation of America.

STATEMENT OF MS. CAROL TUCKER FOREMAN, EXECUTIVE
DIRECTOR, CONSUMER FEDERATION OF AMERICA

Ms. FOREMAN. Senator, we would like to ask that our whole statement be inserted in the record, please, and we will kind of skip about in it. We are grateful for the opportunity to testify on the Beef Research and Consumer Information Act. While it is painfully clear that there is need for more consumer information and education about many aspects of the beef industry, we don't think the scope and structure of this act will provide it.

We object to the bill for the following reasons:

(1) It seems to equate consumer education with advertising and sales promotion and doesn't really contribute anything to helping consumers making intelligent marketing decisions.

(2) There is a total absence of consumer representation on the 68member Beef Board. We feel that any assessment for the Beef Board's activities will ultimately be borne by consumers.

This could create a very vicious circle, for meat prices could tend to rise to cover the financial assessments and the Beef Board would have to spend more consumer dollars on advertising to encourage consumers to purchase more beef at higher prices, and if that didn't happen, then there would be a need to spend more money for more advertising and in order to encourage more purchasing of beef.

One of the primary purposes of S. 772, as stated in section 7, is to provide for the establishment and administration of appropriate plans or projects for advertising, sales promotion, and consumer education with respect to the use of beef products. The bill's definition of consumer education as "any action to advance the image or desirability of beef" is an insult to the consumer's intelligence and should not be equated with slick advertising and sales promotion. Consumer education is the dissemination of objective information and concepts, free of seller bias, to enable the consumer to function confidently and independently in the marketplace. Advancing the image of beef as a definition of consumer needs to make intelligent marketing decisions regarding beef products and what industry feels will satisfy this need. The plans and projects resulting from this legislation will be designed and determined by a Beef Board composed of 68 cattle producers. The Board would appear to work against the best interests of consumers in two ways. Any board with that many people on it is too large to identify accountability adequately.

Second, and more important, there is no consumer representation on the Beef Board. The act is purportedly designed to educate and inform the consumer. But how will the Board know what consumers want? How will the Board know what consumers really need to know in order to make intelligent decisions? Or is it the purpose of the Board to reduce rational decisionmaking if that decisionmaking conflicts with probeef decisionmaking?

It is particularly ironic that the opening of hearings on S. 772 coincides exactly with the date that the U.S. Department of Agriculture's new beef grading regulations are scheduled to go into effect. We vigorously opposed those proposed changes in beef grading because it was felt consumers should not pay Choice prices for Good grade meats. Furthermore, the new grading system appears deceptive and would create additional difficulty for the consumer earnestly attempting to make a calculated marketing decision. The new grades will also discourage retail outlets from handling Good grade beef because it will be difficult to obtain since producers will be feeding primarily to the new Choice grade.

If membership on the Beef Board is to be solely determined by the Secretary of Agriculture and excludes consumers, CFA fears that issues such as grading and grass fed beef will be put by the wayside in favor of the development of sophisticated sales promotion devices and more technicolor pictures.

Another important question raised by S. 772 is the issue of who will pay for the advertising, sales promotion, and so-called consumer education. Given the crisis situation in the American livestock industry today, it seems that any assessment will be but an additional burden to the already suffering cattle producer. We question the ability of many of those producers, especially the smaller ones, to bear the burden of this tax and, further, we have no question that eventually the cost of the Beef Board's activities will come out of the consumer's pocket in the form of higher beef prices. If this committee would like to make a meaningful contribution to both the cattle raisers and the consumer we think perhaps that an investigation of the farmer-to-retail market spread in the meat industry would be worthwhile.

The USDA says cattle prices for beef fell 20.7 percent between January 1974 and January 1975, but supermarket prices for beef fell only 7.1 percent. CFA feels this spread should be fully investigated. In light of the recent San Francisco area Federal court decision that awarded $32.7 million to seven cattlemen because A. & P. supermarkets were found guilty of conspiring to fix the price of beef, there is ample evidence that producers and consumers could benefit more from antitrust enforcement and elimination of anticompetitive practices in the meat industry than from a public relations Beef Board selected by the Secretary of Agriculture.

Finally, I would like to comment on the fact that this is not really a private thing that is being set up. It is a new Government program that is being set up to benefit a group of producers. It has the force of law. The initial payment is compulsory. The Secretary of Agriculture is required to promulgate the order and to enforce it and we presume that the taxpayers will pay for those activities by the Secretary of Agriculture.

The Secretary has to approve any advertising, sales promotion, and consumer education under the act and in addition to the fact that we question whether or not this is a good use of the Secretary's time. In addition, as long as Earl Butz is Secretary of Agriculture consumers will question how he can do so.

(2) There is a $1,000 fine for noncompliance by the producer's which is another indication that it is a Government program rather than a private program. And finally, I would like to point out that there is a whole list of powers given to the Secretary for enforcement including the subpenaing of witnesses and records. We find it more than passing strange that a large number of the sponsors of this act are those who are on record in strong oposition to giving much lesser powers to an Agency for Consumer Advocacy.

Thank you.

Senator LEAHY. Thank you. Many of them, not all of them.
MS. FOREMAN. Yes, sir.

Senator LEAHY. When you mentioned antitrust enforcement you were not suggesting a change in the antitrust laws, but rather a change in the enforcement policy of those laws, is that correct?

Ms. FOREMAN. Somewhat of both. We do advocate passage of the Family Farm Antitrust Act which we think would be worthwhile. We think that it might be worthwhile to have a congressional investigation of a number of aspects of enforcement of antitrust laws in the food industry.

Now, one thing we have suggested over an extended period of time is that Congress appropriate funds for the Department of Agriculture to go through all of its massive data that it collects each year about food production and distribution in the United States to see if that data indicates anywhere that there are anticompetitive forces at work. The Department-we have asked the Department to do this and they have declined to do so and it has been charged by the Federal Trade Commission that even when they ask for help because they have a feeling that anticompetitive situations do exist, that the Department has not been cooperative in providing data requested.

Senator LEAHY. Thank you. I also take it from your testimony that you would have somewhat different feelings, at least on one aspect of the legislation, if there were consumer representation on the Board? Ms. FOREMAN. We think, by and large, that it is a program that would be better carried out as a private corporation, but, yes, if the Beef Board-if there is to be a Beef Board and if there is to be a Federal program for promotion of beef, we think that it is only equitable since consumers are 50 percent of this equation, we think, that the Board should have at least the 50-percent representation by

consumers.

Senator LEAHY. You have heard the questions I have asked along that line.

Ms. FOREMAN. I am sorry. I, too, came in late and I didn't hear most of them.

Senator LEAHY. I have raised basically that same point with most of the witnesses here today.

Mr. FOREMAN. We appreciate that.

Senator LEAHY. You mentioned it being a private corporation and you realize, of course, that there would be differences of opinion among those who support the concept as to whether it is or is not a private corporation. I am not detracting from the comments you made about the setup and enforcement. If it was a totally private

corporation, with producers making totally voluntary contributions to it, how would you feel about that?

Mr. FOREMAN. Well, we think this is a more appropriate way to handle it. The compulsory checkoff system enforced through Government action does bother us somewhat.

Senator LEAHY. Although there is provision for a refund.

MS. FOREMAN. Yes. I think what turned out with Cotton, Inc., though, is that not very many people applied for that refund and I know that refund has to be applied for within 30 days. And that that is so rigid that we question how many people would be able to take advantage or would actually follow through on getting the rebate. It is putting out money and then placing the burden on the person to ask for it back and consumers generally oppose that kind of activity in the marketplace. I think we probably wouldn't have any objection if cattle producers would like to set up a promotional activity. I think we might try to persuade them and we do, as a matter of fact, meet with various cattlemen's associations and try to persuade them that technicolor photographs are probably not in the long run the best way to get consumers to spend more money for beef.

Senator LEAHY. But there also has been discussion here today from some of the witnesses that part of the money has in the past been used for educational programs in schools, indicating ways to prepare, buy, select less expensive cuts of meat, things of that nature.

MS. FOREMAN. I think that is true and I think that when that material goes into the school, I would prefer that it be marked as having come from a private organization rather than having the imprint of the U.S. Department of Agriculture and the U.S. Government.

Senator LEAHY. If the material, itself, said precisely the same thing in either case, is there really any difference?

MS. FOREMAN. I still think that I would prefer to have it marked as coming from a private corporation rather than from the Government. I do think that Government information, even the Congressional Record, for heavens sake, is frequently quoted to people as being irrevocably true because it is a Government document.

Senator LEAHY. When the Congress is held in a high degree of minimum esteem, as a former Member of the Senate used to say, I am not so sure the Congressional Record will continue to carry quite that

MS. FOREMAN. That seems to linger on after the esteem is gone. STATEMENT OF MS. MIDGE SHUBOW, INFORMATION DIRECTOR, CONSUMER FEDERATION OF AMERICA

Ms. SHUBOW. Also the bulk of that kind of information is to publicize the things that they want publicized, with a minimum amount of pure education. In other words, you would find them encouraging the purchase of Choice beef rather than telling them how to cook Good beef.

Senator LEAHY. But all the testimony today has been to the opposite, to indicate that part of the program is to show ways to prepare and select less expensive cuts of beef, although we have asked for