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I have a considerable report here, Mr. Chairman. I would like to ask that the complete report be written into the record, but I would like to have the privilege of pointing out and emphasizing a few points in that statement.
Mr. MATTHEWS. We will be delighted to do that, sir. And without objection your complete statement will be inserted in the record.
Mr. WINDER. Yes, sir, thank you. Before I get into the statement I would like to say this, that the American Sheep Producers Council is a completely controlled and financed sheep growers' organization. It has one purpose and one purpose only. That is, to promote and advertise the products of the sheep.
You will note that there is a booklet accompanying this statement entitled "The Self-Help Program of the American Sheep Producers Council-the Key to Success."
This booklet is a detailed report to Congress, the Department of Agriculture and to the sheep growers of the activities and financial condition of the American Sheep Producers Council. A copy of this booklet has been mailed to every Congressman.
As you probably know the American Sheep Producers Council was formed in accordance with the provisions of section 708 of the Wool Act of 1954, and in my written testimony there is quoted a part of section 708, that portion providing for the formation of such an organization.
In this era of intensive advertising and promotion, it becomes increasingly necessary that agriculture merchandise its products through the modern business methods. In this day of heavy competition among all facets and business and industry the businesssmen of agriculture cannot any longer rely on the consumers basic need for food and clothing. He must, on the other hand, promote his products and make the consumer aware of the superiority of his products.
I might say here, Mr. Chairman, that for years and years we have attempted to work out strictly voluntary methods of collecting funds for advertising. I myself have been interested in it since 1936 and have made all kinds of efforts to collect funds and none of them have been successful. And so we are very happy that the Wool Act of 1954 provided the means for the sheep industry to set up a self-help program.
I will try to make this as short as possible.
On March 17, 1955, an agreement was entered into between the Secretary of Agriculture and the American Sheep Producers Council in accordance with section 708. And then in the report we present a complete copy of the agreement between the Secretary of Agriculture and the American Sheep Producers Council.
This agreement was the subject of a national referendum conducted among sheep growers during the summer of 1955 by the United States Department of Agriculture.
The referendum was completed with the results showing that 71.3 percent of producers and owners of 72 percent of the sheep represented by those voting in the referendum favored the establishment of the American Sheep Producers Council. This referendum provided the Secretary of Agriculture with positive proof that the majority of sheep producers favored such a promotion and advertising program.
The American Sheep Producers Council was formally activated on September 12, 1955, in accordance with the agreement executed on March 17, 1955.
At the present time, representation is determined on the basis of 1 delegate from a State or area sheep council for every $25,000 or major fraction thereof, paid into the promotion and advertising fund. One director is allowed for every $1,000 or major part thereof paid into the fund. And I might say here, Mr. Chairman, that the board of directors are the governing body in the American Sheep Producers Council. Every delegate and every director must be a sheep producer in his own right.
Because the sheep is a dual-product animal, the board of directors were faced with two distinct products to promote with entirely different problems. With respect to wool, there were already several established agencies working in the field of wool promotion and advertising, so in order to make a well coordinated program and to avoid duplication, we decided to work in conjunction with these agencies and to thus supplement the work that they were doing. In addition, joint advertising was worked out with several individual woolen mills. When it came to lamb we found an entirely different situation. There were no existing agencies set up to advertise and promote lamb except the National Livestock & Meat Board and they are concerned with all types of meat and could devote only that portion of their time and effort to lamb that lamb represents in the overall meat picture.
Further, the policy of the National Livestock & Meat Board prevents them from using any paid advertising.
I am quite familiar with the activities of the National Livestock & Meat Board, having served for 13 years on the board and was privileged to serve 3 years as chairman.
The sheep producers support the National Livestock & Meat Board today as they always have in the past.
Let me say here that all of our programs have been well coordinated with the meat board and their staff and facilities have been made available wherever and whenever they could be of assistance to us.
After careful investigation and study, we found three basic problems confronting us. One was the extremely distorted pattern of distribution and consumption of lamb. It was found that 70 percent of the lamb was consumed in 8 States that comprise only 30 percent of the population. These States were New York, the New England States, and California, which with the exception of California, are the areas where lamb is not raised in abundance.
Another problem was the amazing lack of knowledge of lamb on the part of consumers and meat retailers. Another was the unfounded prejudices regarding lamb in the minds of many people.
After careful consideration it was decided that in order to overcome these problems we would conduct an educational type advertising promotioa campaign in a selected group of metropolitan areas.
The statement gives the complete outline of the way that the advertising and promotion is carried on.
All segments of the livestock and meat industry have testified to the outstanding success of the lamb promotion program to date, and we print below a few samples which strongly indicate the success of this program. Those letters are from meatpackers, meat retailers, and other people interested in other segments of the industry.
I will not bore you with the reading of those testimonial letters contained in the paper.
Lamb prices show greater stability. One of the most serious problems confronting sheep producers in the past has been the severe price breaks encountered during the market year. Promotion and advertising has helped to stabilize lamb prices and level out, to a great extent, the ups and downs that often prove so drastic to sheep growers.
By intensifying its advertising and promotion effort during periods of peak supply, the American Sheep Producers Council has tended to eliminate drastic price breaks for the producer.
The task originally assigned to the American Sheep Producers Council presented numerous problems, many of which already have been overcome. Only time and the continued diligent attention to the task at hand will solve the sheep industry's problems. The American Sheep Producers Council believes that it is on the right path toward helping to establish a strong and self-reliant sheep industry in the United States.
It is understood that when the Wool Act is renewed, another referendum will be conducted to determine if growers favor the continuation of advertising and promotion program and desire to expend their own funds for creating a demand for their products.
Only by building a sound demand for its products can the sheep industry carry out the intent of the Wool Act as set forth by Congress.
On the bottom of page 23 is the budget for the fiscal year July 1, 1957, through June 30, 1958, showing the major items included in the budget and the percentage each category is of the total.
You will note that the wool promotion and lamb promotion funds allocated represent a trifle over 91 percent of the total budget. And if you take into consideration the other education and information part of the budget, those 3 items represent practically 95 percent of the entire budget.
On page 24 is a statement of assets and liabilities and the fund balance.
On page 25 is a complete report of the receipts and disbursements from the beginning on September 12, 1955, through December 31, 1957, and I want to draw your attention to the percentages in that particular statement with respect to the money actually going into the advertising and promotion activities. In fact, Mr. Chairman, as president of the American Sheep Producers Council, I am quite proud of the small amount of our total expenditures that has gone into administrative and other items in our budget, in our expenditures.
I will be most happy, Mr. Chairman, if there are any questions, to try to answer them.
Mr. MATTHEWs. I want to thank you for giving us this very informative and clear report. I want to assure you that I, and I know other members of this committee, will want to refer to this information from time to time because I think it will be helpful as we consider other self-promotion plans for other areas in the general livestock grouping. I appreciate the information that you have given us tremendously, and I want to thank you for it.
(The complete paper referred to is as follows:)
STATEMENT OF G. NORMAN WINDER, PRESIDENT, AMERICAN SHEEP PRODUCERS
Mr. Chairman and members of the committee, as president of the American Sheep Producers Council, I am happy to have the opportunity to appear before yo'l to give a detailed report regarding the functions and activities of the ASPC from September 12, 1955, through December 31, 1957.
You will note that there is a booklet accompanying this statement entitled “The Self-Help Program of the American Sheep Producers Council—The Key to Success.' This booklet is a detailed report to Congress, the Department of Agricultire and to the sheep growers of the activities and financial condition of the ASPC. A copy of this booklet has been mailed to each Congressman.
As you probably know, the American Sheep Producers Council was formed in accordance with the provisions of section 708 of the Wool Act of 1954. I am quoting here that portion of section 708 providing for the formation of such an organization.
"Sec. 708. The Secretary of Agriculture is authorized to enter into agreements with, or to approve agreements entered into between, marketing cooperatives, trade associations, or others engaged or whose members are engaged in the handling of wool, mohair, sheep, or goats or the products thereof for the purpose of developing and conducting on a National, State, or regional basis advertising and sales promotion programs for wool, mohair, sheep, or goats, or the products thereof. Provision may be made in such agreement to obtain the funds necessary to defray the expenses incurred thereunder through pro rata deductions from the payments made under section 704 of this title to producers within the production area he determines will be benefited by the agreement and for the assignment and transfer of the amounts so deducted to the person or agency designated in the agreement to receive such amounts for expenditure in accordance with the terms and conditions of the agreement."
DUAL USE OF TARIFFS
Rather than disrupt friendly relations with other countries by increasing tariff rates, the Congress decided to make dual use of present tariff duties. These duties are made available in the form of incentive payments to domestic woolgrowers. These payments help to compensate wool producers for the difference in the cost of production here and abroad; they also encourage increased production and better marketing of wool. In addition, deductions from these incentive payments by sheepmen to help to carry out the very intent of the act by permitting him to spend his own money for the express purpose of conducting a program of advertising and education in order to provide ample outlets for this anticipated increase in production.
In this era of intensive advertising and promotion, it becomes increasingly necessary that agriculture merchandise its products through the modern business methods. In this day of heavy competition among all facets of business and industry, the "businessmen of agriculture” can no longer rely on the consumers' basic need for food and clothing. He must, on the other hand, promote his products and make the consumer aware of the superiority of his products.
OTHER PROGRAMS FAILED
For many years, the sheep industry has realized the necessity of promoting its products, lamb and wool. In 1917, special efforts were made by sheepmen to conduct an educational program for the consumer, but insufficient funds doomed this project. Again in the early 1930's and in 1940, promotion programs were initiated, but died a sudden death for lack of funds. The extreme expense and difficulty of collecting adequate voluntary contributions for promotion and advertising caused these programs to fail.
The program of publicity, research, and information conducted by the National Livestock & Meat Board has been and is beneficial to the sheep industry as are programs of promotion and education sponsored by various sheepgrower organizations. Yet, these programs have proved inadequate as far as the sheep industry is concerned for the simple reason that sheep are dual purpose animals producing two prime agricultural commodities requiring an entirely different promotion approach than other types of livestock.
However, from these efforts grew plans for a promotion and advertising program which were incorporated in section 708 of the National Wool Act providing a method whereby sheepmen could contribute funds for a promotion and advertising program of their own.
While incentive payments from funds derived from import duties on foreign wool are vitally necessary at present, the sheep industry also has taken upon itself the duty and responsibility of helping itself through a program of promotion and advertising in order to encourage increased production. In establishing this self-help program, the sheepman has acknowledged his sincere intent and purpose to provide a sound foundation for the future.
Through the efforts of many woolgrower associations and other farm and live stock groups, a promotion organization was developed and organized in close cooperation with the United States Department of Agriculture.
Soon after the Wool Act was passed, the National Wool Growers Association took the lead in organizing the American Sheep Producers Council by inviting all the national farm organizations and national and regional sheep associations to participate. Two organizational meetings were held in 1955 at which NWGA, the National Farmers Union, the Grange, National Livestock Producers Association, the American Farm Bureau Federation, National Wool Marketing Corp., the National Lamb Feeders Association, the Pacific Wool Growers, and the Ohio Sheep Improvement Association participated. This group with the exception of the American Farm Bureau Federation became the member organizations making up the American Sheep Producers Council.
On March 17, 1955, an agreement was entered into between the Secretary of Agriculture and the American Sheep Producers Council in accordance with section 708. Following is the agreement between the Secretary of Agriculture and the American Sheep Producers Council: "Agreement made as of the 17th day of March 1955, between the United States
Secretary of Agriculture, Department of Agriculture, Washington 25, D. C. (hereinafter referred to as Secretary) and the American Sheep Producers Council, Inc. (hereinafter referred to as Council), a nonprofit, membership corporation organized under the laws of the State of Illinois "Whereas the Secretary, pursuant to the National Wool Act of 1954 (Title VII of the Agricultural Act of 1954, 68 Stat. 897), hereinafter referred to as the "Act” has announced a price support program for wool marketed during the year April 1, 1955, to March 31, 1956, by means of payments to be made by the Commodity Credit Corporation to the producers of such wool as soon as practicable after the close of such marketing year; and
"Whereas it is anticipated that similar programs will be instituted for subsequent marketing years under the Act; and
“Whereas section 708 of the Act authorizes the Secretary to enter into agreements with marketing cooperatives, trade associations or other organizations engaged or whose members are engaged in the handling of wool, sheep, and the products thereof for the purpose of developing and conducting on a National, State, or a regional basis advertising and sales promotion program for wool, sheep, and the products thereof; and
"Whereas it is desirable that there be instituted an advertising and sales promotion program or programs beneficial on a national basis, for wool, sheep, and products thereof to be financed by pro rata deductions from such price support payment to wool producers; and
Whereas the Council is qualified to conduct such a program, being so organized, having the necessary powers under its charter and bylaws, having for its members marketing cooperatives and other associations who are engaged in or whose members are engaged in handling wool, sheep, and products thereof, and who are represented at meetings of the Council's membership by wool and sheep producers selected on a basis affording nationwide representation, and having a board of directors who also are producers of wool and sheep selected to afford nationwide representation; "Now, therefore, the parties hereto agree as follows:
"1. This agreement shall become effective only upon determination by the Secretary that this agreement has approval of the producers as provided in section 708 of the Act. The Secretary will notify the Council in writing as to whether the producers have approved this agreement and as of what day the agreement shall become effective, such effective date to be not later than the 20th day after the date of the notification.
“2. The Council shall, from time to time, develop and submit to the Secretary for approval advertising and sales promotion programs and supporting budgets for wool and lambs and the products thereof and such amendments thereto as may be needed. Each such submission shall describe, among other things, the plan