There should be some particular consideration for those political realities which do exist.

Senator CLARK. I think the committee, and I am sure Senator McGovern, would be interested in any specific suggestions you might have as to how that could be done.

I can see it would be a problem for the reasons that Mrs. Means particularized in her testimony. I can see, certainly, that you run into difficulties.

I think the problem is to know how to write a bill which allows for that and makes it administratively possible to do it.

We thank you very much for your testimony. We appreciate it. The committee will stand in recess until the hour of 2 o'clock, at which time we are going to hear from James Mack, Calvin Fisher, Charles Trimble, and Jonathan Taylor.

[Whereupon, at 12:35 p.m., the subcommittee recessed, to reconvene at 2 p.m., the same day.]

AFTERNOON SESSION

Senator HUDDLESTON [presiding]. The committee will come to order. We will resume the hearings.

The witness this afternoon is James E. Mack, general counsel, Peanut Butter Manufacturers and Nut Salters Association.

STATEMENT OF JAMES E. MACK, GENERAL COUNSEL, PEANUT BUTTER MANUFACTURERS AND NUT SALTERS ASSOCIATION

Mr. MACK. I am James E. Mack, general counsel, Peanut Butter Manufacturers and Nut Salters Association which, as the name implies, is the National Trade Association of Peanut Butter Manufacturers, Nut Salters and Supplies to the industry.

This appearance is entered in support of S. 2871. For many years. peanut butter has been an integral part of the school lunch program nationwide of the U.S. Department of Agriculture. We believe it is in the interest of the school children and the Nation to have this Federal Government distribution of peanut butter made through the school lunch program.

Children like peanut butter. While food authorities might have different opinions about various foods, they seem to be all in agreement that peanut butter is one of the finest foods for high protein value.

Peanut butter is a food which children like. It is a food which nutritional authorities agree they should eat. There are not so many foods which so qualify, which is indicated by the fact that the Department of Agriculture Food and Nutrition Service specifies peanut butter as a meat alternate for a Type A school lunch meal.

We recognize that the Department of Agriculture would like to get out of the commodity distribution business, and we respect their business philosophy. In this instance, however, we think it is in the interest of the Nation to keep school children eating the excellent protein food of peanut butter which they like so well.

It is recognized that the Department favors continued operation

of Federal Government school lunch financial support, but would do so by means of cash payments in lieu of the direct providing of food supplies. In this connection, if the cash payment system is restored to, it is pointed out that the schools could buy peanut butter and such other foods as they desire and that undoubtedly there would be significant quantity purchases of peanut butter.

The reason for our favoring the direct distribution of peanut butter rather than having school authorities purchase it on the open market is an obvious one. Even assuming school authorities should expend an amount in dollars equivalent to the amount the Department of Agriculture spends to purchase peanut butter, the quantity of the peanut butter obtained for child consumption would be much less.

Under the current program the Government invites competitive bids. The peanut butter then is processed, packed and shipped in accordance with Department of Agriculture specifications; and the Government and the school children get a lot of peanut butter for the money.

Peanut butter distributed through the schools when acquired in this manner involves larger containers, quantity shipments and reflects primarily the cost of the peanuts, of processing, packing and shipping. The children simply would get much less peanut butter if it were purchased individually and directly by State and local authorities than if acquired by the current central purchase program of the Government.

Senator HUDDLESTON. Thank you, Mr. Mack.

The nature of your testimony indicates to me that in addition to being a learned counselor, you must be quite an effective salesman. You have done exceptionally well. On the matter of special packaging, is this a type of packaging that is not available on a retail level?

Mr. MACK. The Department specifies the size of the container, and they are large containers. The peanut butter may be packed either in tin or glass. Frequently, and most of the time, the tin containers prevail.

Senator HUDDLESTON. This is a method that allows you to do it at much less cost?

Mr. MACK. This way the only costs involved are the peanuts, the processing, the packing and the shipping.

Senator HUDDLESTON. If they did switch to an all cash program, what method will you use then to sell your product?

Mr. MACK. Each of our manufacturers and/or distributive outlets would contact individual purchasing authorities. Presumably in some cases, it would be an entire State. It might be a county, or it might be an individual school.

Senator HUDDLESTON. At any rate, it would require more effort on your part, or more expense, and the net result would be that the school district might get less for the dollar spent than it is now getting?

Mr. MACK. Yes.

Senator HUDDLESTON. Thank you very much, Mr. Mack, for your testimony.

I would like at this time to include in the record a statement from

Senator Eagleton of Missouri, and to have the statement of Senator Metcalf placed in the hearing record, along with certain attachments. [The statement of Senator Eagleton follows:]

STATEMENT OF HON. THOMAS F. EAGLETON, A U.S. SENATOR FROM THE STATE OF MISSOURI

Mr. Chairman, I appreciate the opportunity to submit for the consideration of the Subcommittee on Agricultural Research and General Legislation a statement in support of S. 2871 which would authorize and direct the Secretary of Agriculture to use funds available under Section 32 of Public Law 74-320 and Section 416 of the Agricultural Act of 1949 to purchase and donate foods to local school districts for use in school lunch programs.

In recent testimony before committees of the Congress, Department of Agriculture officials have disclosed their plan to terminate the distribution of foods to school by June 30, 1975. Instead, schools would be given an "equivalent" amount of cash assistance.

School food service officials in Missouri have told me that the elimination of government-donated commodities would be a severe blow to the ability of school districts in my state to provide low-cost nutritious lunches to schoolchildren.

During the last school year, 2,789 schools in Missouri served a total of 99,222,024 Type A lunches. An average daily participation of 581,000 children represented 51.8 percent of enrollment in participating schools and 61.2 percent of average daily attendance.

Of the total cost of the school lunch program in Missouri, 41.2 percent is covered by child payment, 38.7 percent by federal aid in the form of cash and commodities, 19.2 percent by local funds, and .9 percent by state funds.

Since the beginning of the National School Lunch Program, governmentdonated commodities have been the backbone of this program in Missouri. In fiscal 1948, donated commodities covered 10 percent of the cost of the program. During the 1972-73 school year, commodities covered 11.8 percent of program costs.

During that school year, 371 train carloads of foods, with a wholesale value of $6,842,099, were received and distributed to participating schools. An additional $1,705,545 in cash in lieu of commodities was distributed to schools when USDA was temporarily unable to purchase sufficient food.

As this Subcommittee well knows, commodities have been purchased and delivered to schools under three authorities: Section 6 of the National School Lunch Act, Section 32 surplus removal authorities, and Section 416 price support authorities. During the past several years, commodities have been donated to schools from these three sources in an amount roughly equivalent to seven cents per lunch.

When, during the 1972-73 school year, the Department of Agriculture found it was no longer able to purchase sufficient foods under the surplus removal and price support authorities to meet its commitment to schools, Congress acted to alleviate this situation in two ways.

First, Public Law 93-59 authorized cash donations in lieu of commodities to make up for the shortfall in donated commodities during fiscal 1973. It was under this authority that Missouri received $1,705,545 during that fiscal year. Later, Public Law 93-150 made permanent the authority for the donation of cash in lieu of commodities when this becomes necessary in order to meet programmed levels of commodity assistance.

Second, Section 4(a) of Public Law 93-86 authorized the Secretary of Agriculture to use funds available under surplus removal and price support authorities to purchase foods on the open market for donation to schools and other food assistance programs. This authority expires on June 30, 1974.

S. 2871, the bill now before the Subcommittee, would extend that authority and direct the Secretary of Agriculture to use it in order to maintain traditional levels of commodity donations to school lunch and other food assistance programs.

Mr. Chairman, in my view it is essential that the donation of commodities to schools be continued.

School lunch officials in Missouri have indicated to me, and witnesses before the Senate Select Committee on Nutrition and Human Needs have testified.

that it would be impossible for local school districts to buy the quantity and quality of food that the Department of Agriculture can buy with an equivalent amount of money per lunch.

First, prices to school districts would inevitably be higher because they would buy in smaller quantities than the Department of Agriculture.

Second, most school districts do not have the expertise, access to national markets, or storage facilities that enable USDA to make mass purchases at the time of year when prices are lowest.

Third, USDA inspection and grading capabilities which insure the high quality of donated foods could not be duplicated at the state or local level. Mr. Chairman, school lunch programs across the country are already faced with a combination of increasing food prices and decreasing participation. They must not be thrown another curve in the form of a precipitous end to commodity donations.

I urge your Subcommittee to approve legislation requiring the Department of Agriculture to continue to purchase and donate foods for use in school lunch programs as well as for other purposes, including day care centers, summer recreation programs, nutrition programs for the elderly, supplemental food programs for mothers and infants, charitable institutions, and disaster relief.

Furthermore, I believe it should be noted that schools are already experiencing a decline in commodity assistance as a result of both decreases in funds programmed for commodity purchases and the erosion of the food value of those purchases by increased food prices.

In fiscal 1973, the combined value of donated commodities and cash in lieu of commodities totaled $315,364,000. During the current fiscal year, it is estimated that the value of commodities donated to schools will total $313,700,000. The budget for fiscal 1975 contemplates the donation of commodities with a value of only $290,000,000. This represents a $23.7 million decrease in commodity donations next year even though the number of lunches served is expected to remain level and the number of breakfasts served is expected to increase by 25 million.

Mr. Chairman, if school lunch programs are not to be adversely affected it is necessary not only to maintain commodity assistance but to maintain the level of that assistance. Therefore, I urge that your Subcommittee also consider amending the National School Lunch Act to provide that the value of commodities donated to schools-or of cash donations in lieu of commodities-be increased as the cost of food increases.

Hon. JAMES B. ALLEN,

U.S. SENATE,

COMMITTEE OF INTERIOR AND INSULAR AFFAIRS,
Washington, D.C., March 27, 1974.

Chairman, Senate Subcommittee on Agricultural Research and General Legislation, Dirksen Office Building, Washington, D.C.

DEAR CHAIRMAN ALLEN: Attached is my statement in which I am joined by Senator Mansfield, on the bill, S. 2871, the subject of your current hearings. We would be grateful if our joint remarks together with the supporting data, also enclosed, might be made a part of the printed record of hearings on the measure.

Thank you very much for your courtesy.
Very truly yours,

Attachment.

LEE METCALF,
U.S. Senate.

STATEMENT OF HON. LEE METCALF, A U.S. SENATOR FROM THE STATE OF MONTANA

Mr. Chairman, I appreciate the opportunity to present a statement urging enactment of S. 2871. Senator Mansfield, also a cosponsor of the measure you are now considering, has read my testimony and wishes to be associated with it. We would be grateful if letters and statements from our constituents supporting the bill might be included in the printed record of hearings.

As we know, the Department of Agriculture has misread the intent of Congress by attempting to phase out all commodity purchase programs when it was our clear intent that only the family commodity program should be replaced by a Food Stamp system.

Montana has benefitted enormously from the commodity purchase program and would lose enormously if, as has been threatened, the Federal Government were to cease purchases for schools, institutions and, under the family commodity authority, Indian people.

We believe that Congress acted wisely in providing for a uniform food stamp system for families nationwide., Particularly in urban areas, food stamps are a simpler means of feeding hungry people while providing them a free choice in selection. However, for Indian tribes it is not a practical system at this time and commodity purchases and distribution should continue.

Further, respecting school lunches, the State Superintendent of Public Instruction says in a letter of 19 March that cash payments in lieu of commodities are less than "the cost of obtaining equivalent food at the local level." With budgets already strained beyond capacity and the lines at the revenue sharing window lengthening, where will local communities find the resources to continue institutional support and school lunch programs?

Mr. Chairman, at present there are 70 institutions in our State receiving food commodities serving nearly 8,000 people. Last month I forwarded to you a list of these institutions and you graciously agreed to make the list and Mr. Carlson's letter a part of the hearing record.

Mr. Jack R. Carlson, Administrator of the Economic Assistance Division for Montana, has submitted a statement for the Committee's consideration. He points out that of the total number of service institutions in Montana, the seven which are State supported used $54,419.38 in food supplementation during 1973.

In addition to the service institutions cited in Mr. Carlson's list, there are 521 public schools in Montana receiving food commodities for school lunch programs and 33 who receive them for breakfast programs. At wholesale last year, these commodities had a value to the State of Montana of $1,479,036 for the school alone. This figure includes the cost of foods to private schools, which themselves cover the costs of handling and distribution. The figure is an estimate of last year's value and would require adjustment upward to reflect inflation since then.

Further upward adjustment would be required for all but a few of Montana's school districts if they were forced to purchase food on the open market, because as small, rural communities, they cannot have the advantages of quantity buying.

Finally, because of the rigidity of the Department of Agriculture interpretation of the Conference Report on the Agriculture Bill, there is a third group in Montana that will be adversely affected unless Congress spells out its intent as proposed in S. 2871. I refer to our seven Indian reservations.

The tribes are receiving and distributing commodities to their members in an efficient and established system. Because of their rural setting and the distances to be travelled in all kinds of weather, and because of the high cost of food in the few stores that do business on the reservations, a food stamp program is not practicable. The tribes are not prepared at this time to effect the change and should not be required to do so.

Under a different Administration, very probably the Department would find that Congress meant what it said in calling for a nationwide food stamp program, “except where impossible or impractical" and would exempt Indian tribes from its application. But this is not a different Administration and Congress must therefore be specific.

It is our understanding, Mr. Chairman, that you have generously reserved time for Mr. Roland Kennerly, Chairman, Montana Inter-Tribal Policy Board, to present testimony in behalf of Montana's Indian people.

In this connection, Senator Mansfield and I would like to call your attention to supporting documents we have received from two of our tribes that are representative of the attitudes and problems which Mr. Kennerly will address in detail. We would be grateful if correspondence from the Chairman of the Business Committee, Chippewa-Cree Tribe, and from the Supervisor of the Commodity Program, Blackfeet Indian Reservation, may be included in the record.

I hope that your Subcommittee will see fit to approve S. 2871 and that the full committee will promptly adopt the measure. Senator Mansfield has said he is eager to assist in any way he can in moving the bill quickly through the Senate, should the Agriculture and Forestry Committee recommend its enactment.