However, the lack of a guarantee of continuous payment at full rates of reimbursement throughout the school year would very likely inhibit many schools from continuing the program. I would like also to cite some data which I have not heard presented earlier today. It is in terms of the significance of the program in your dairy economy. Applying the formula that 100 pounds of 3.5 percent milk will produce 2 pounds of butter and 8.5 pounds of nonfat dry milk solids, or 9 pounds of American cheese, shows that the 2 billion half-pints of milk consumed by our schoolchildren in the past fiscal year would have produced more than 43 million pounds of butter, plus more than 72 million pounds of nonfat dry milk or more than 92 million pounds of American cheese. I believe that it is reasonable to assume further that much of this would have found its way into Government warehouses because the additional butter and powdered milk or cheese would not have been eaten by these schoolchildren since they are already consuming these products from Governmentdonated stocks at the maximum possible rate of consumption. It appears, therefore, that we face the problem of providing additional funds with which to finance the special milk program, or face the probable even greater problem of purchasing and disposing of additional surplus dairy products. The American School Food Service Association supports the proposition that the needed funds be made available for the continuation of the special milk program at full capacity, and at the full rate of reimbursement for the next 2 years as a health-giving, sound economic program for all concerned. We are not in a position to recommend a specific amount of increase in the authorization; however, in view of the testimony adduced this morning by official witnesses, to the effect that the maintenance of the current rates of reimbursement, plus the normal growth of the program that can be anticipated, would require more than $80 million during the next fiscal year, certainly suggests a necessity for providing authorization in excess of $80 million for 1960, and a further increase for the growth that might reasonably be anticipated for 1961. We suggest that, since these constitute authorization of funds, it is desirable that the authorization be adequate to guarantee that the claims that will be rendered will be possible of reimbursement, and that these guarantees be available at the beginning of the school year; that the school administrators not be obliged to risk the possibility that if shortages and deficiencies develop, the provision will be made at or near the close of the year. Their determinations as to starting a program must be made before the opening of school, and a guarantee of adequate funds would make a substantial difference in the number of programs that would be operated. Here I would like to cite, as a specific illustration, precisely what the problem of a school district is. In New York City we welcomed the special milk program and took immediate steps to utilize the funds that were being made available to the fullest possible extent. We extended the program into all of our schools, something over 1,000. We made the milk available to a school population of over 1 million. The superintendent of schools made a statement of policy with respect to the importance of this program to the health of the children and to their scholastic achievement. Classroom teachers intensified their efforts to persuade children to the importance of milk in their daily diets. Moreover, we embarked upon a program to substitute for the standard 8-ounce container of milk a third-quart container of 10% ounces. This required the 30 or more milk distributors in our city to make certain expenditures to adapt their packaging equipment to this new-sized container. We launched this program and it has proved quite successful in terms of achieving the objectives of the legislation, and here is a point which I would wish to make insofar as the importance of the school milk program to the total dairy economy. While Mr. Wells has indicated that the consumption represents 21⁄2 percent of the total milk production, a relatively small percentage can have an important effect. This is what happened in New York State. In 1954, and 1955, we had experienced a decline, a steady decline in the price of milk that the producer received. Following the inauguration of our special milk program in New York City, and particularly with this immediate increase of 33% percent that resulted from the third-quart container idea, in the place of an increase in the volume of milk production, this decline in the price paid to the producer was arrested, and the milk marketing administrator found that there had been no change in any pattern of consumption except this change in the consumption of milk in our schools. So that it would appear that our consumption in the schools had a direct and important bearing upon the income of the dairy producers of the State of New York. This, I suggest, is an important consideration, particularly when we revert, if I may, to the statements made by Assistant Secretary Miller before the full committee in March. Secretary Miller pointed out quite properly the important part which the Department had played in encouraging schools to enter the school milk program, to extend it to more and more children, to encourage the increased consumption of milk. He also cited, as did Mr. Wells this morning, the fact that the situation with respect to the Department's inventories of manufactured dairy products today stands in considerable contrast to the position of 1954-55, that the Department now appears to take the position that since this has been accomplished in these 5 years, the need for further expansion of the program appears to have ceased to exist. We submit that it is important, from the viewpoint of the dairy farmer, to insure that this new and important market for fluid milk be maintained, that no action be taken which might have the result of diminishing the market with the result that this favorable trend, insofar as inventories of manufactured dairy products, might be reversed. I shall conclude, Mr. Chairman, with some comments on the testimony which Mr. Wells has presented to the committee this morning. Mr. Wells offered as his opinion the conjecture that if rates of reimbursement were reduced, if the present level of authorization be maintained at $75 million for the next 2 years, there would be no decrease in consumption. This is in direct contrast with the studies which have been made and with the facts which have emerged from those studies. It is in direct contrast with my own knowledge that if rates of reimbursement are reduced, we, in New York City for example, will not be able to continue our usage of one-third quart containers because we shall not be able to give, as we do give, without charge to the child, that additional milk on the school lunch program. Because we do give the difference between a half-pint and a third-quart without any charge to the child, to every child who takes lunch to school, plus the third-quart for every child who drinks the milk separately. I am confident that this same situation confronts other communities, so it is not a matter of opinion, so much as a matter of fact that the resultant increase in the selling price of milk would have the inescapable effect of reducing the consumption of milk. It would have the inescapable effect of preventing the extension of the program to many new schools, to schools that would otherwise be inclined to enter the program. Mr. Wells said, for example, that the Department desires to keep the program open for new schools, to encourage more and more new schools to come into the program. We suggest that reducing the rates of reimbursement definitely militate against the achievement of this objective. Mr. Wells said, further, that the Department hopes that more and more children and adults will be inclined to drink milk at home and to pay the full price for it. We submit that the schools of the Nation have done and continue to do an outstanding job in teaching children to accept and drink milk, that there is compelling evidence that the present per capita consumption of fluid milk, particularly by young adults, is directly attributable to the experience and the instruction which they had in school. We submit that if the objectives of the Congress, the objectives which the Department of Agriculture consistently supports, are to be fully achieved, it is essential that an adequate authorization be provided to maintain the present rates of reimbursement and to permit all of the schools that would like to participate to do so. We, therefore, suggest that the program be permitted to continue to enjoy its normal and its natural growth, and that this not be the time to seek to stabilize it at its present level. We are grateful for the opportunity, Mr. Chairman, of offering this viewpoint and we hope that it will enable the committee to arrive at the conclusion which will be in the interests both of the dairy farmers of our Nation and the schoolchildren and other children who participate in the benefits of the program. Thank you very much. Mr. JOHNSON. Thank you, Mr. Allen. I shall again say that I think it is wonderful to have a city man come and talk country language. I think it shows, also, how important this agricultural legislation is to a city like New York, when a man administering the school lunch program of the city of New York, takes the time to come out and talk to this committee. I am sorry that Mr. Gunderson could not come, but am very glad we were able to have a man from the city of New York. Are there questions? Mr. McINTIRE. I have two short questions. Mr. Allen, you speak of the potential of this program. What do you envision? I mean, as to how much potential there still is for ex panding this program? Let us put it in a monetary figure-$78 million for fiscal 1959? What does that represent? Fifty percent, seventy percent of the potential, or what would be your opinion? Mr. ALLEN. This is a very difficult question to answer. Any statement that I would offer would be the greatest form of conjecture. I believe that official witnesses have testified that the number of schools presently in the program is 78,000 but that there are as many as 120,000 schools in the Nation. Mr. JOHNSON. If I may interrupt, I think the schools with higher enrollments of students are now in the program. When you say 52 percent of the schools are in and 48 percent are out, it does not mean that 52 percent of the schoolchildren are in. The percent of schoolchildren now participating is higher. Am I right in that, Mr. Garber? Mr. ALLEN. That is true, but we are talking now in terms of 22 million schoolchildren, as against something slightly less than 40 million. So it is still not much over 50 percent, so there would appear to be a substantial potential which has not yet been realized, and I think the interesting point is the rate of growth. As the program goes along, the rate of growth appears to be accelerating so that, in the past year, that rate of growth exceeded the rate of growth of the previous year. One of the reasons-this is purely opinion-that may be affecting this is this one: A good number of schools that are not in the program are not in the program because they do not, at the moment, see their way clear to operating on a nonprofit basis. They do offer milk to their children but they offer it at a price which yields them a modest profit, which they use to support other school activities. I think this would be particularly true of our various parochial schools, of all faiths. They are hard put to meet their expenses. However, as the program grows, as it becomes better known, there is increasing pressure of public opinion upon these schools. The parents of the children attending private schools where the child pays 10 cents for a half pint of milk are beginning to ask how come my neighbor's child who attends the public school across the street can buy milk for 2 or 3 cents, and more and more this force of public opinion is persuading schools to enter the program so that each year I think there is a momentum built up, a greater understanding and knowledge of the program, a greater desire on the part of parents whose children are not benefiting at the present time, to have their children share in these benefits, with the result that I believe that this rate of growth might well continue for another year or two. How far we have still to go, I could not venture an opinion. Mr. McINTIRE. My second question, Mr. Allen Mr. ALLEN. I beg your pardon. I would offer this opinion, that the way to find out is to provide the necessary authorization of funds. This is to put it to the test, what is the natural growth, what is the natural potential. Mr. McINTIRE. My second question is, does the association for which you are speaking this morning look upon this program as a temporary program? Mr. ALLEN. We are obliged to do so because the Congress has put it on a temporary basis-2 years-3 years, now. Mr. McINTIRE. You are speaking of your support of a specific bill. But my question is broader than that. If a bill were introduced here which made this a permanent program, compared to the bill which supports it for another 2 years, which bill would you be supporting, all other factors being equal? Mr. ALLEN. There, again, I could not give a yes or no answer. It would depend on the nature of the bill. If it were a bill to provide for the continuation of the program indefinitely with the use of Commodity Credit Corporation funds, I believe that our inclination would very definitely be to support such a proposal. On the other hand, if the bill were to provide that this now be considered not primarily as a price support measure, but rather as a child health measure, and that it should now be a matter of annual appropriation, then I am inclined to think that our position might be different for fear of competing with the school lunch program appropriation. Anything that would tend to prejudice the school lunch appropriation, we would feel it absolutely necessary to oppose, because, as Mr. Wells said, school administrators do consider the school lunch program as the important program because it provides the complete and balanced meal, including milk, and this is, of course, completely in line with our educational objective to teach the child to accept a complete and balanced diet. So there, the question-the answer to the question would depend on the nature of the proposed legislation. Mr. JOHNSON. If there are no further questions-Have you one, Dr. Dixon? Mr. DIXON. No. Mr. JOHNSON. I believe that we have a rollcall call. We shall adjourn the meeting. We are glad you could come and we wish to thank you very much for your wonderful testimony. Mr. ALLEN. Thank you, Mr. Chairman. (The following statement and letter have been submitted to the subcommittee:) STATEMENT OF E. M. NORTON, SECRETARY, NATIONAL MILK PRODUCERS FEDERATION This statement is submitted in support of the efforts to assure adequate financing for the special milk program for children during the next 2 fiscal years. The position of the National Milk Producers Federation on this subject is identical with that presented to the full Committee on Agriculture of the House of Representatives on March 17, 1959. The National Milk Producers Federation is made up of cooperatives whose membership is dairy farmers. Therefore, the federation speaks only for producers. At the present time, there are over 800 dairy farmer cooperatives whose membership represents the preponderant percentage of farms producing milk on a commercial basis. Since its inception in 1954 this program has continually progressed-a real tribute to congressional leadership and cooperation among Federal, State, and local agencies, school officials, and parents. Reference to program statistics shows that the objectives set by the Congress are being realized-more milk is being consumed in schools and in child-care centers and summer camps, and, therefore, the acquisition of dairy products by the Commodity Credit Corporation has been directly decreased. This means that more children are getting more milk in school than ever before. It means that costs for purchasing and storing dairy products under the price support program are lower. It means that more children are developing the habit of including milk in their diet. It means that |