some of the large companies are willing to settle for 10 percent. At 10 percent of the gross selling price, the purchasing price for a store is probably 65 to 68 cents per dozen.

So the USDA on a delivered basis today would pay the equivalent of 50 cents a dozen, paying $1.50 a pound.

Now, I feel that it would cost about 3 cents a pound to deliver from the manufacturer or surplus area in the Midwest to any point in the country. If you are going to warehouse it for 6 months, you have to plan at least a half cent a pound per month including in and out cost, and that is another 3 cents a pound.

If we add a 10 percent administration cost on the basic cost of the product, it would amount to 15 cents a pound for the USDA to administer and distribute this to the areas where the needy families are located. Institutions would pick it up at the warehouse. It would be 3 cents for delivery, 3 cents for warehousing, and 5 cents for administration, and that gives you a total cost at the consuming level of $1.71 per pound or 57 cents per dozen.

I defy any mass feeding program for the schools, for individual family and for the poor to equal this product nutritionally.

Another question I have is the management of a cash system. I worked with the Government in the 1950's, when we were getting into huge storage programs for surplus farm commodities. There was extreme mismangement and graft. I was involved in commodity credit investigations. It took the Government about 5 years before this became smooth, manageable, and I think the graft was all eliminated. That is one thing we have to question, and that is the management of the cash distribution program, vouchers, and so forth. It has to be properly managed. I am sure with the honesty of the civil service, it will be well managed, but it will be tough for a few years.

How are you going to control the diets? If you hand a cash program to the consumer, are you going to say, "here is a check for a dozen eggs, or peanut butter?" You will have to specify what the products of the program are going to be to control the diets.

This particular item gives you a balanced diet with the best amino acids and proteins available.

The last item I would comment on is that they have discussed the storage of food items for disaster programs. This product is ideally suited for storage of up to 2 years for disaster programs, crop failure, earthquakes, or any kind of disaster. If it is properly stored it would be stored for 2 years.

Senator HUDDLESTON. Are you selling your product to the USDA? Mr. FISHER. Not at the present time.

Senator HUDDLESTON. If they should go into a cash distribution rather than a commodity distribution, would your product be available to the individual school districts separately, or as a whole?

Mr. FISHER. It will mean setting up a sales distribution, by systems, brokers, and distributors. Brokers and distributors by the time you add them together will put 18 percent on the top.

If a broker/distributor can get it to the schoolhouse door cheaper than the present methods, then it is the way to go.

Senator HUDDLESTON. It would be your contention that not only for your product, but for the overall purchases of the Department, they

can achieve enough savings by volume purchasing to offset the cost of sustaining, distributing and storing the product?

Mr. FISHER. I would not like to project myself as an expert. I can only relate on my experience.

We bid at least 15 to 20 percent a pound less to the Government than commercial sales.

Senator HUDDLESTON. Who do you sell to commercially?

Mr. FISHER. We sell it in bulk to Durkees, to General Mills, and we sell it in bulk to brokers, and we export a small amount.

Senator HUDDLESTON. Is there any reason why the Department has discontinued its purchases in December?

Mr. FISHER. I believe they purchased enough to handle their requirements through the end of this fiscal year.

Senator HUDDLESTON. I think you pointed that out.

Mr. FISHER. This is the type material we use. It gives you an indication of what it does.

Senator HUDDLESTON. We are not purchasing products.
Mr. FISHER. And this outlines the patents.

Senator HUDDLESTON. Thank you very much, Mr. Fisher.

We will now hear from Mr. Trimble, executive director of the National Congress of American Indians.

STATEMENT OF CHARLES E. TRIMBLE, EXECUTIVE DIRECTOR, NATIONAL CONGRESS OF AMERICAN INDIANS

Mr. TRIMBLE. Mr. Chairman and members of the committee, my name is Charles E. Trimble, executive director of the National Congress of American Indians, the oldest and largest national Indian organization in the United States. On behalf of NCAI, I express appreciation for this opportunity to appear before you regarding this important legislation.

In August 1973, Public Law 93-86, the Agriculture and Consumer Protection Act was passed, calling for the implementation of the nationwide food stamps program. This act also called for the phasing out of the family commodity distribution program as of June 30, 1974. This law included the phasing out of commodity distribution programs and the institution of food stamps programs on Indian reservations as well.

Responding to concerned Indian tribal welfare workers who foresaw much confusion and turmoil in the premature transfer from commodities to food stamps programs on reservations, the National Congress of American Indians sponsored a small meeting last January, bringing together tribal welfare representatives, Government officials, and congressional staff representatives.

A position paper was drawn up at that meeting defining the problems and suggesting remedies to those problems. I shall quote extensively from that paper and I ask that that paper, in form of a letter to Secretary of Agriculture, Earl Butz, be placed in the official record of this hearing.*

It is our understanding that, under present law, the States run the food stamps programs. But, in the State of North Dakota, the State refuses to administer such programs on Indian reservations.

*See p. 6.

According to the North Dakota food stamp director, a Mr. Conrad Moe, the Department of Agriculture holds the State accountable for program losses due to fraud, but the State has no local jurisdiction to prosecute food stamp fraud cases within the reservations.

Such hesitance on the part of States is not always based on such apparently justified legal cause however. A number of States have long sought jurisdiction on Indian reservations as a means to impose taxes on reservations and to open up those lands for exploitation. Tribes could become extremely vulnerable to such cruel blackmail by States that would literally starve tribes into submission to State jurisdiction by withholding food stamp services from them in the absence of an alternative welfare food delivery system.

Even in cases where States have expressed good faith in cooperating with Indian tribes, there exists an unwillingness to extend the programs physically onto reservations. This unwillingness is apparently due to the added costs for the State and their inability to recoup such costs under the present Federal-State schedule.

Under the present conditions Indian people are invited into offreservation border towns for food stamp services where, more often than not, thy face harsh discrimination. Such discrimination would increase when Indians are "on their knees" seeking services to which they are fully entitled.

It is our understanding that seeking certification for food stamp program eligibility in off-reservation border towns is a traumatic experience for Indian people. Certifying agents of non-Indian extraction seldom understand the cultural, economical, or legal situation with Indian people.

An Indian person who owns land or shares in tribal assets is not necessarily financially independent. Nor are Indian people per capita recipients of "all that money the Government gives Indians." On the contrary, Indian people are on the lowest rung of the national economic and social ladder. Yet, such misconceptions of Indian people prevail at large among non-Indian neighbors in off-reservation border

towns.

Nor is the overall problem with off-reservation border towns only that of race and culture. Mr. Howard Tommie, chairman of the Seminole Tribe of Florida, in a letter to NCAI, described some of the problems of logistics:

Often the local food stamp office which services the Hollywood reservation has an 8-hour waiting line. In fact, clients who have waited in line from 7 a.m. to 3 p.m. are often told to come back the next day.

When they return the following day, there is no assurance that their appliIcation will be received. Some clients have waited in line for 2 or 3 days. This procedure poses an addiitonal problem for the elderly who may not be able to withstand the physical strain or are unable to get an interpreter to accompany them for such extended periods of time.

It should be noted that on occasions, clients have been unable to budget their money so that they can purchase food stamps at a given time. Should they fail to purchase food stamps in any month, subsequently, they are removed from the food stamp rolls and must go through the certification procedure all over again.

Even without discrimination and misconceptions, forcing Indian people to go off the reservations for certification and food stamp

purchases poses a financial and physical hardship. Without any form of public transportation on many reservations, travel on most reservations is sufficiently costly to virtually negate benefits of the bonus food stamps. With the continuing energy crisis, travel for many reservations could become almost impossible.

Such as the manifest problems with State administration of food stamp programs instituted for Indian reservations in the short time since the passage of Public Law 93-86 last August.

More importantly, however, tribes are philosophically, legally, and justifiably opposed to mandated control over reservations by State governments. Tribes have a unique relationship with the Federal Government, with a special status at least equal to the several States; and most tribes have proven their capability to administer very complex programs with large sums of money.

Recognizing this in his historical Indian message to Congress of 1970, President Nixon pledged extensive governmental development and economic development measures for tribes. Forcing tribes under State control in the food stamp program, without option to administer the programs themselves, subverts the self-determination initiative of the administration and Congress. And forcing Indian people off the reservation for the purchase of the stamps encourages the expenditure of the stamps in off-reservation towns, thus subverting reservation economic development as well.

It is obvious that legislation and policy directives are needed to correct the deficiencies of the food stamps program for Indian reservations. Effective legislation, and administration regulations take time, particularly in Indian affairs where consultation and intertribal deference are of paramount importance.

In view of this, the National Congress of American Indians supports proposed measures to extend the commodities distribution program on Indian reservations during an adequate transition period. To us an adequate transition period is more like 2 years.

In existing law and in proposed legislation, consideration was not given to the total lack of ancillary systems which make food stamp programs workable in other areas: These include the lack of public transportation systems on Indian reservations; lack of personal mailboxes that are required for official communication between caseworker and client; lack of discount or reasonably priced markets; and lack of nearby welfare offices.

These problems must be worked out over a period of time, and provisions for sufficient time is not made in proposed legislation.

In addition, provisions are needed for a major communication effort to inform Indian people on the food stamp program itself, on basic economic matters and on nutritional matters. Such information, effectively disseminated, can help Indian people make the most. of the food stamp program and lessen their vulnerability to exploitation by unscrupulous traders with regard to food stamps.

Now, Mr. Chairman, regarding this legislation: S. 2871.

First of all, we commend Senator McGovern, and his distinguished colleagues, for sponsorship of this legislation to deal with this problem. This bill grew out of hearings held on the Pine Ridge Indian Reservation in South Dakota, last August by the Select Committee on Food and Nutrition chaired by Senator McGovern.

The people there expressed their deep concern over the impending demise of the commodities programs and the initiation of food stamps on reservations. In this time of national cynicism of the Government, the people of Pine Ridge and elsewhere would be very pleased to see the fruition of congressional response to their voice.

We commend this committee for its proposed extension of the commodities food distribution program, although we are requesting a lengthier period for transition. We are also concerned that the Department of Agriculture will not necessarily live up to their mandate to provide such foods.

The Department of Agriculture steadfastly maintains that commodities is a dead issue; if not because of their inability to purchase on the open market for extended periods of time, then because of a projected lack of surplus foods. The prevailing attitude in agriculture is that, "we can extend the commodities program as long as you want, but we hope the Indians love peanut butter."

We just heard the testimony of the peanut butter and dairy interest, and that brings up another issue,, and that is packaging. The Indian people do not have the facilities to store perishable products for any length of time. And this is a real problem.

NCĂI expresses its concern that S. 2871 extends beyond what is necessary to resolve the Indian food problem in its provisions for additional funds for State administration of their programs. We feel that these provisions to relieve the States of administrative costs would render the bill vulnerable to strong administration opposition, and possible veto, because of additional massive budget requirements. We ask that Indian people, who are in the most difficult straits in this issue, not be trapped in a political pincer.

We endorse the provision for tribal option in administering the food stamps program themselves. This is consistent with the selfdetermination policies of the Congress and the administration.

Finally, Mr. Chairman, the fact that we are here today to work together for the resolution of a deplorable problem of poverty and malnutrition says something in itself. But we must continue to work for the resolution of all of the problems, only one of which is malnutrition. There are bills pending before both houses of Congress that would provide for better health services, and that would protect Indian lands.

We commend you for your efforts in this matter before us now. But we strongly urge your support for the many other pieces of legislation designed to help our people.

Thank you.

Senator HUDDLESTON. Thank you, Mr. Trimble. It is your judg ment that there is no way, under present conditions, to substitute money or stamps for commodities and have the end result be as desirable as it would be with commodities?

Mr. TRIMBLE. I think it is difficult, Mr. Chairman. We are operating on the assumption, which I understand is largely true, that in time the commodities food distribution program is a dead issue. We realize that we are going to have to deal with the problem.

I think the commodity food program has worked out in Indian reservation. We were talking to the health services, and finally after