Since the sheep industry of the entire country is now conducting an extensive lamb and wool advertising and promotion program through the American Sheep Producers Council, under section 708 of the National Wool Act of 1954, the question naturally arises as to our interest in securing the legislation described in the above resolution.

As long as the National Wool Act and the promotion program made possible under section 708 of that act remain in existence, the sheep industry will probably not elect to go into the promotion program which this proposed legislation will permit. Many sheep producers tell us the National Wool Act is proving to be the salvation of the sheep industry and one of its important features is an effective producer-financed promotion program.

Although work under this lamb and wool promotion program was just initiated in January of 1956, members of our industry are convinced that it has been an important factor in the improved markets for their products. They do not want any legislation enacted at this time that would interfere with the current program, but they do wish to provide a source of funds to continue this valuable promotion program if the time should come when funds are not available from growers under provisions of the Wool Act.

The legislation under consideration here today does provide such a source for promotion and research funds. If enacted, it will not duplicate collection of funds from sheepmen, but it is enabling legislation which will permit promotion deductions on sales at posted markets. If or when section 708 funds are no longer available for promotion of the products of the sheep industry, an organization sponsored by the sheep producers could ask that deductions be made on sales of sheep and lambs as provided under the proposed legislation.

The National Wool Growers Association, therefore, endorses the principle of the legislation being considered here today. In the interest of the members of sheep industry whom we represent, we do, however, respectfully suggest that certain amendments be made in the proposed legislation.

First, since it is the intent of the livestock producers who want to see this legislation enacted, that promotion collections be made not only at the posted markets but at country points as well, we feel that it would strengthen the legislation and the cooperation of firms on posted markets if in some manner the legislation could set forth the intent of providing meat promotion collections not only on posted markets but also by packer buyers at country points. country buying commission firms, and auction sales not already posted. A reliable 1949 study revealed that almost three-fourths of the lambs produced in 11 western States, where nearly half of the United States lamb crop is grown, were sold at country points. We are advised by our sheep producers that an even larger share of the lamb crop is now sold direct in the country.

Of course, if it were possible to make collections mandatory both at posted markets and at country points, upon the signing of an agreement between the Secretary of Agriculture and the producer-sponsored organizations, subject to refund if the shipper objects, then funds would automatically be provided for a most effective promotion program. Also, practically all producers would then bear their fair share of the cost of the program, as is now being done in the lamb and wool promotion program made possible under section 708 of the National Wool Act.

Our second suggestion is that the proposed bill be amended to put the program on a national basis. As presently written, the deductions for meat promotion could be requested by 3 organizations representing cattle, sheep, and swine in each of the 48 States. This would greatly complicate the book work of the agencies making the deductions and curtail their willingness to cooperate. It can be avoided, we believe, if the deductions are remitted to one agency, such as the National Livestock and Meat Board, already set up, and that agency in turn disburses the proper amounts to each segment of the industry as may be directed by such segment. The National Livestock and Meat Board is suggested as the agency to receive the deductions because it is already functioning on funds collected at the markets from the sales of the various livestock species and undoubtedly will continue to be the recipient of part of the funds to be collected under the proposed legislation, as everyone in the livestock industry recognizes the value of the work the Meat Board has done in sponsoring meat research and promotion.

We also respectfully suggest that limitations on amounts to be deducted for the various species of livestock not be set up in the law. We suggest that the deduction to be made be fixed through agreements with the Secretary of Agri

culture and the organizations representing the various livestock segments. Specifically any deduction made from lamb sales must, in our opinion, be sufficient to cover wool promotion also. This is justified in view of the importance the value of the lamb pelt plays in prices paid by packers for live lambs. Therefore, we are not sure that the 5-cent limit now set in the bill will be sufficient to cover promotion programs for both lamb and wool.

We agree wholeheartedly with the provision in the bill permitting any producer to obtain a refund of the deduction made upon proper written request.

In conclusion, we wish again to endorse the principle of making possible selfhelp meat promotion programs and again request that sheep and lambs be included in the legislation so that it may be used, if necessary, to continue funds for our present very successful lamb and wool promotion program,

STATEMENT OF J. R. MILBURN, GRASS RANGE, MONT.

This morning I stated I would submit a statement to file with the House Agriculture Committee.

As my testimony has been ably submitted by Don Collins, president of American National Cattlemen's Association, and by Mr. Forrest Noel and Mrs. Asby Hardy, of Montana, I will not file a statement.

Mr. POAGE. The committee will now stand in recess until 2 o'clock this afternoon.

(Whereupon, at 12: 10 p. m., the committee recessed, to reconvene at 2 p. m., this day.)

AFTERNOON SESSION

Mr. POAGE. The committee will please come to order.

I think probably, in view of the situation we have on the floor, and members not knowing and I not knowing what the business is going to be, possibly it would be helpful all the way around if we would now hear from the opposition, not precluding anybody, not cutting anybody off, but unless we do, we might not get an opportunity of hearing all sides of the thing.

I do not know who is here in opposition, but I know there is some opposition.

How many witnesses are here in opposition to this?

(There was a showing of hands.)

Mr. POAGE. There are 4 that I see, 5.

Mr. NEUMANN. Mr. Chairman, we are not here in opposition, but we are here to present testimony from the National Livestock and Meat Board.

Mr. INGWERSEN. Mr. Chairman, the same holds true for me. I am representing the Chicago Livestock Exchange, and we are not here in opposition, but we would just like to have an opportunity of making

a statement.

Mr. HEINEMANN. I am representing the exchanges of several of the midwestern markets, and the same is true of us. We are not opposing the principle of the thing, but some of the mechanics.

Mr. POAGE. I think we all recognize we have got to go into the mechanics of the thing. Why do we not listen to those who have a different view from that we have been hearing, for the time being, and then we will pass back to the others so that we will be sure that we will have all the views submitted.

Mr. Shuman, would you like to start?

Mr. SHUMAN. All right, sir, be glad to.

STATEMENT OF CHARLES B. SHUMAN, PRESIDENT, THE AMERICAN FARM BUREAU FEDERATION

Mr. SHUMAN. Mr. Chairman, I would like to have four of our State presidents to come up here and make supplemental statements. Mr. POAGE. We will be glad to have them.

Mr. SHUMAN. Mr. Schenck

Mr. POAGE. You just call anybody you would like to come up here and appear with you at this time. We will be glad to hear them. Mr. SHUMAN (continuing). Mr. Hassil Schenck, president of the Indiana Farm Bureau and member of the board; Mr. Roy Davis, president of the Virginia Farm Bureau; Mr. Arthur L. Andersen, president of the Colorado Farm Bureau Federation; and Mr. Louis Rozzoni, president of the California Farm Bureau Federation.

Mr. POAGE. If you gentlemen will come up to the table here with Mr. Shuman, we will be glad to hear you.

Mr. SHUMAN. Mr. Chairman and members of the committee, my name is Charles B. Shuman, and I am president of the American Farm Bureau Federation, and would like to present a statement in opposition to these bills, H. R. 5244 and S. 646.

We appreciate the opportunity of presenting the views of the American Farm Bureau Federation on H. R. 5244 and S. 646 which would amend the Packers and Stockyard Act of 1921 to authorize a checkoff on sales of livestock at posted markets to finance activities of State livestock associations designated by the Secretary of Agriculture.

The American Farm Bureau Federation is strongly of the belief that promotional work is essential for agricultural commodities, and is stimulating interest among farmers to urge increased support for sound, well-coordinated programs to promote-without duplication of effort the increased sale and total consumption of farm products. We have a direct interest in this subject, inasmuch as a majority of our members have as their principal source of income the sale of hogs. sheep, beef, or dairy cattle.

The organization has aggressively supported the work of such national promotional groups as the American Dairy Association, the Poultry and Egg National Board, the United Fresh Fruit and Vegetable Association, and the National Livestock and Meat Board.

These groups have been specifically established to promote increased consumption of agricultural commodities on a well-coordinated national basis. More recently, these groups have been working together as a unit to coordinate their activities insofar as practical, not only on domestic promotional programs, but also on programs to increase exports of these commodities.

We are strongly opposed to H. R. 5244 and S. 646. It is our opinion that such legislation is both unnecessary and contrary to the best interests of livestock producers and feeders.

It would be a sad day, indeed, for American agriculture if the principle of the "checkoff procedure" were to be substituted for the voluntary method of membership acquisition to finance activities of commodity associations. Is it any more right in principle to employ this procedure for financing commodity programs than it is in the general farm organization field?

These bills, if enacted into law, would make it possible for the Secretary of Agriculture to authorize separate State livestock asso

ciations to receive funds deducted by marketing agencies on all livestock sold at posted markets for advertising and promotional purposes. This would result in a large number of separate State programs for the promotion of meat. S. 646 clearly contemplates separate State organizations for each species of slaughter livestock; that is, sheep, swine, and cattle. This could mean 144 separate State associations.

Moreover, a disagreement over policy or change in the administration of the United States Department of Agriculture could result in the cancellation of any and all authorizations for State livestock associations to receive funds and the designation of an entirely different group of associations.

This has serious political implications. We don't think any Secretary of Agriculture should be given such power over the efforts of producers to promote the sale of their products.

Separate State programs and possible separate programs for each individual species of livestock, would result in duplication of effort and consequent waste of livestock producers' funds. Such programs would tend to reduce the effective work of, and support for, the National Livestock and Meat Board, an industry-wide organization which has been doing outstanding work in research, education, and meat promotion for 33 years on a nationwide basis.

A national program is desirable inasmuch as the States with the greatest potential for increased meat consumption are not generally the ones with the greatest livestock production.

H. R. 5244 and S. 646 would require all marketing agencies making deductions on posted markets to keep detailed and voluminous records at considerable expense, which in turn would be passed on to livestock producers. The State of origin of every animal handled would have to be determined before deductions could be made and the funds transmitted to each authorized State association.

This not only would add unnecessarily to marketing costs of producers, but also would delay the payment of shipper's proceeds. In some cases where livestock had passed through several hands, it would be difficult or impossible to determine the State of origin.

It also would be most confusing, both to producers and to marketing agencies, if this legislation were to result in two separate deductionsone for the National Livestock and Meat Board, which the majority of marketing agencies are now making, and one deduction to be transmitted to State livestock associations,

The passage of this legislation would seriously jeopardize the continuation of the National Livestock and Meat Board's program. Subsection (d) of H. R. 5244 provides that

the Secretary of Agriculture is authorized to pass on the qualifications of and to designate not more than one producer-sponsored agency in each State as being the proper producer-sponsored organization or organizations to support such research and conduct such promotional work in such State or States and any agency so selected shall be authorized to cooperate with other like agencies in other States.

Since the Livestock and Meat Board is a national rather than a State organization, it presumably would be ineligible to receive funds collected pursuant to this legislation. Subsection (d) of S. 646 appears to have a similar effect and is even more explicit in its authoriza

tion and encouragement of checkoff financing for 144-that is, 3 for each of the 48 States-State commodity programs.

Marketing agencies in increasing numbers have been making deductions from shippers' proceeds on both posted and unposted markets for support of the National Livestock and Meat Board. As an industrywide organization serving the entire red meat industry, it has limited its activities to research and educational type programs.

In financing the work of the National Livestock and Meat Board program, livestock growers and feeders contribute at the rate of 2 cents per head on catle, two-thirds cent per head on hogs and calves, and two-fifths cent per head on sheep and lambs.

The collections are made by the livestock marketing interests at the time the animals are sold and are matched by the participating packers who slaughter the animals. In many instances where packers buy livestock direct from farmers, the packers make the deduction and then match it with their own funds.

There is no legal obstacle to the development of a truly voluntary checkoff for promotional activities on individual species of livestock if livestock producers want such a program. Under existing law, marketing agencies on both posted and unposted markets are free to make deductions from shippers' proceeds, provided they have prior consent of individual shippers.

The proposed checkoff legislation, in addition to encouraging separate promotional programs in each State for hogs, cattle, and sheep, also apparently contemplates development of large-scale paid advertising programs. Such proposals raise far-reaching questions that never have been raised by the National Livestock and Meat Board's industrywide program of research and education. There is good reason to believe that competitive advertising programs for beef, pork, and lamb would tend to offset each other to a considerable degree.

In addition, a paid advertising program would sharply reduce the enormous amount of free newspaper, TV, and radio publicity currently provided the livestock industry and its promotion programs. There also is danger that the development of producer-sponsored advertising programs would merely mean that a part of the cost of existing advertising would be transferred from processors and retailers to producers. Conservative estimates based on the most accurate figures available show that the Nation's meatpacking industry spent at least $50 million advertising meat in 1955, and that the Nation's 500,000 retail food stores spent a similar amount, to bring total expenditures for meat advertising up to at least $100 million a year. Some proponents of this legislation argue that the program of the National Livestock and Meat Board is too restrictive in that it deals primarily in the field of research and education to increase meat consumption and does not carry on research in quality improvement and control and eradication of livestock diseases and parasites. We would point out that the Congress and many State legislatures provide considerable funds for carrying on this type of research, and that the industry is presently well organized to carry on programs for the control and eradication of livestock diseases.

We would add further that great progress is being made through a well-coordinated industry program to increase the production and