It is the belief of the National Grange that, whenever practical, commodity programs should include a self-help provision. We believe further that programs of sales promotion are a proper function of commodity groups.

We must realize that agricultural products are competing for the consumer's dollar with the products and services of other segments of our economy, and that to enjoy our full share of consumer expenditures, we must aggressively promote and advertise our products. We, therefore, give our wholehearted endorsement to section 708 of the National Wool Act.

The committee-by the way, we want you to recognize this pointmay want to consider the advisability of changing the formula for earmarking tariff revenue from imported wool and woolen items used to finance this program in such a way as to provide slightly more money than is now provided.

That statement by the way was written before we had heard Congressman Fisher and others make specific suggestions in that regard.

And now to summarize, the Wool Act of 1954 is in accord with the farm program philosophy of the National Grange. During a short period of 3 years it has halted the liquidation of flocks, developed a strong demand for breeding stock, increased producer income, reduced Government cost, eliminated Government wool purchases and stocks previously acquired, returned wool market responsibilities to private trade, encouraged quality production and improved marketing procedures, and has provided producers with a self-financed mechanism to increase the consumption of wool and-lamb.

This is encouraging progress, and we believe that an extension of the act will be in the best interest of sheep producers, the general economy, and national welfare.

Thank you very much, Mr. Chairman.

Mr. POAGE. Your entire statement will be made a part of the record at this point.

(The statement referred to is as follows:)

STATEMENT OF C. W. JACKSON, DIRECTOR OF PUBLIC RELATIONS,
THE NATIONAL GRANGE

The National Grange supports the extension of the This support is based upon the action of our delegate session at Colorado Springs, Colo., in November 1957. adopted this resolution:

National Wool Act of 1954.. body assembled in annual At that time the delegates

"The Wool Act, enacted in 1954, will expire on March 31, 1959. We believe that this legislation has proved successful and should be renewed for the following

reasons:

"1. The Wool Act has met with acceptance by wool producers.

"2. The act provided a producers' financed fund to promote consumption of American produced wool and lamb through research and improved merchandising procedures.

"3. The act has encouraged improved wool-marketing practices including increased use of wool producers own cooperatives.

"4. The act has eliminated expenses involved in CCC wool purchases and has enabled the CCC to move almost all surplus stocks to channels of consumption.

5. The act permits use of American markets to sustain an American level of return on the basis of consumption by Americans while permitting normal trade channels to function so that prices are established in the market, utilizing American selling ingenuity and private initiative in market expansion and development." For many years the Grange has advocated the commodity-by-commodity approach to the farm problem. We have also recommended that self-help

mechanisms, wherever possible, should be a basic feature of farm program planning, and that programs should be designed to channel income to farmers from consumers rather than from Government.

The Wool Act of 1954 provides these features. The Grange, therefore, supported this legislation at the time it was proposed and passed. And, today, after 3 years of experience with the program our support continues. We are glad to join sheep and wool producer associations in their almost unanimous request for an extension of the act for at least another 4 years. We feel that the extension of the act is justified from the stand-point of producers and the public interest.

Primary objectives of the act are to (a) provide a measure of national security, (b) promote general economic welfare, (c) encourage the annual production of 300 million pounds of shorn wool-grease basis, (d) provide prices fair to both producers and consumers, (e) and to do all this in a manner that will have the least adverse effect upon foreign trade.

Encouraging progress toward each of these objectives has been made.

To properly evaluate the program, we must consider conditions existing at the time the act was passed. Between 1942 and 1954, sheep production in the United States dropped 45 percent. Producers, caught in a cost-price squeeze, were liquidating their flocks at a rate which threatened national security. This liquidation of flocks has been halted and we look for production to turn upward. During this period, while domestic producers were being forced to liquidate their flocks, wool imports were on the increase. Even though domestic consumption increased, more and more American wool was going into Government ownership at the taxpayer's expense, and by 1955 more than 150 million pounds of United States wool were under the control of the Commodity Credit Corporation. The program authorized by this act has permitted all domestic wool to go into regular channels of private trade. Furthermore, the trade has absorbed current production plus the 150 million pounds from CCC holdings, and since mid-December the Government has been out of the wool business.

All this represents excellent progress for a program which has been in operation less than 3 years.

One charge against the program has been that it has not increased sheep numbers or wool production. This charge fails to recognize many adverse and abnormal conditions_sheepmen have faced during the period this program has been in operation. It fails, for example, to recognize the impact of one of the most severe droughts ever to hit the major sheep producing areas of the West and Southwest. Those making this charge fail to point out that other livestock numbers were reduced sharply in those States where sheep production dropped an average of only 3 percent. The facts are that sheep numbers have increased by almost 6 percent in those 35 States not so severely affected by the drought. Furthermore, we must remember that current reports on sheep numbers are based largely upon surveys made while drought conditions still existed. The statistical reports give no indication of producer plans for the immediate future. current reports from the major sheep-producing areas indicate that flocks are being reestablished. The demand for ewe lambs and even for old ewes is stronger than it has been for many years. Section 708 of the act authorizes a self-help advertising and sales promotional program when approved by producers in a referendum to increase the demand of domestic wool and lamb and to provide a higher price in a free market.

But

It is the belief of the National Grange that, whenever practical, commodity programs should include a self-help provision. We believe further that programs of sales promotion are a proper function of commodity groups. We must realize that agricultural products are competing for the consumer's dollar with the products and services of other segments of our economy, and that to enjoy our full share of consumer expenditures, we must aggressively promote and advertise our products. We, therefore, give our wholehearted endorsement to section 708 of the National Wool Act.

The committee may well want to consider the advisability of changing the formula for earmarking tariff revenue from imported wool and woolen items used to finance this program in such a way as to provide slightly more money than is now provided.

If wool averages nationally slightly better than $0.50 per pound in the market place, the money provided by the act from tariff revenues will be sufficient to support a total income for wool at a national average of $0.62 per pound. There is a possibility, however, that wool will not average $0.50 per pound on the open market in the years ahead. Therefore, unless a modest increase in revenue is provided it will necessitate a cutback in the incentive payments.

To summarize, the Wool Act of 1954 is in accord with the farm program philosophy of the National Grange. During a short period of 3 years, it has (a) halted the liquidation of flocks, (b) developed a strong demand for breeding stock, (c) increased producer income, (d) reduced Government cost, (e) eliminated Government wool purchases and stocks previously acquired, (f) returned wool market responsibilities to private trade, (g) encouraged quality production and improved marketing procedures, and (h) has provided producers with a selffinanced mechanism to increase the consumption of wool and lamb.

This is encouraging progress, and we believe that an extension of the act will be in the best interest of sheep producers, the general economy, and national welfare.

Mr. POAGE. Mr. Jackson, I take it that you and your organization, National Grange, believe that the promotion program has been a success, and you would favor it being continued.

Mr. JACKSON. That is a feature of this program that has been very effective, we feel.

As a matter of fact, Congressman Poage, the Grange advocates, as I think you know, the use of any economic device or combination of devices that might help solve the problems of a particular or a specific commodity and that does not exclude the incentive payment.

Mr. POAGE. I know that you do, and I am glad to hear that the Grange recognizes that. I believe that you are doing a good job. The next witness is going to be Mr. Baker of the National Farmers Union.

Mr. FISHER. If I may, Mr. Chairman, while Mr. Jackson is here

Mr. POAGE. Yes, Mr. Fisher.

Mr. FISHER. I would like to point out to the committee, if I mayI would like to call attention to the fact that Mr. Jackson was recently sent to Washington by the National Grange.

He is a highly recognized authority on all phases of agriculture. He is a native of east Texas.

And I might add that he pointed out to me yesterday that in recent years there has been a definite trend toward an increase in small sheep herds on the smaller farms all over the country.

That seems to me to be a healthy and a desirable trend.

Thank you, Mr. Chairman.

I believe we are very fortunate in having Mr. Jackson speak before the committee. He knows the subject very well and I am sure that his testimony will be helpful.

Mr. POAGE. I want to concur in what you said, Mr. Fisher.

Mr. Jackson, we thank you.

Are there any questions?

(No response.)

Mr. POAGE. Then we do thank you again, Mr. Jackson.

(Witness excused.)

Mr. POAGE. Our next witness is Mr. Baker of the National Farmers Union.

STATEMENT OF J. A. BAKER, DIRECTOR, DIVISION OF LEGISLATIVE SERVICES, NATIONAL FARMERS UNION

Mr. BAKER. Mr. Chairman, it is always a pleasure to appear before this committee and each of its subcommittees. I am glad to be here this morning.

Mr. POAGE. And we are glad to have you here, Mr. Baker.

Will you proceed, please.

Mr. BAKER. The Farmers Union endorses the various bills that have been introduced to extend the Wool Act for 4 additional years. Members of your committee are thoroughly familiar with the implications to national welfare and security if the Wool Act is not extended. As you know, in the years ahead, without a continuation of the combination of import controls and parity income deficiency payments incorporated in the program for wool, market prices of wool in the United States will not rise above the world price, income of United States wool growers will drop drastically, and domestic wool production will almost disappear. The situation could, of course, be remedied with constructive action by the executive branch under the Agricultural Act of 1949, as amended, and section 22 of the Trade Act. But the only way we can be assured that necessary action will be taken to meet the clear and present danger of economic distress among wool growers is through enactment into law of the needed measure to extend the Wool Act.

The need for extending the Wool Act is matched by similar needs to improve the depressed farm income situation generally and to solve similar adverse conditions of various other farm commodities.

We present the following principles that we urge for your consideration in connection with your deliberations on extension of the Wool Act and on other proposed legislation to improve farm income:

1. Parity farm income should be the goal. Price parity formulas should be replaced by income parity formulas based on the definition in existing law.

2. The best chance farmers have to earn a parity of income is to acquire greater control over the price and supply of their commodities. This applies to wool as well as other commodities.

3. Farmers generally need and desire the assistance of Federal programs and devices such as the Wool Act to improve their market position and greatly strengthen their bargaining power in commodity markets.

4. Commodity programs for stronger bargaining power must be carefully tailored to the unique needs and characteristics of particular groups of economically related commodities, and of separate individual commodities. This has been done in the case of wool but has not been applied to lambs and mutton.

5. When several individual commodities are closely and economically interrelated, such as feed grains and livestock, they should be handled within a single integrated commodity-group program. The provisions of the Wool Act should be adopted in workable ways to

cotton.

6. The several individual-commodity and commodity-group programs should be brought together, as your committee contemplates, into a comprehensive one-package overall system of farm income improvement legislation and operations. Such a bill and program

would not be complete if extension of the Wool Act is omitted from the comprehensive farm income improvement program.

7. The law should spell out the specific lower limit of income protection below which farm income shall not be permitted to fall and the specific upper limit above which farmers would not be allowed to raise prices by exercise of their federally aided bargaining power. This is provided for wool in the Wool Act as now written.

8. Workable devices to enable farmers to keep market supplies in balance with demand are needed so that the income-protection program per se will operate without cost to the Federal Treasury, in years of full prosperity and full employment. Operation of the combination wool program is not a net cost to the United States Treasury. 9. Authority to use parity income deficiency, or other compensatory payments in workable combinations with price supporting loans and purchases is needed as a safeguard to consumers in periods when market demand drops from growing unemployment owing to economic recession or depression and to reduce the attraction of the United States market to unusual and unnecessary imports. Such payments are a central feature of the wool program.

10. The several phases of the system of commodity programs should be designed to fit the needs of economically adequate family farms but should not extend unlimited eligibility to larger than family size industrialized agricultural production units. This provision should, we feel, be added to the Wool Act, when it is extended. This could take the form of a maximum limitation upon the total wool payment to any one producer in any one year.

11. Safeguards should be provided to prevent destruction of the commodity programs by unlimited imports at prices less than the parity income equivalent level. This consideration is adequately fulfilled by the combination wool program under the act.

These principles, we are convinced, merit the broad support of taxpayers and consumers as well as farmers. As such, we believe that the legislative proposals which embody them will gain sufficient support in Congress to bring about ultimate enactment into law.

Farmers Union seeks to avoid unproductive controversy over details of legislative language and administrative mechanics. Our purpose is to concentrate on constructive action to improve farm income beginning this year. To allow the Wool Act to expire would be to reduce, not improve, farm income.

We are encouraged by the growing development of unity of purpose and action among representatives of farmers. We have been privileged to participate informally in joint efforts and meetings with the National Grange and with 35 or so individual-commodity producer groups of the conference of commodity organizations, including the woolgrowers association.

We extend to your committee our full cooperation to develop farm income improvement proposals, including an extension of the Wool Act, that can command the broad congressional support required for

enactment.

At this time, I have the privilege and pleasure to read you the statement on the Wool Act of Mr. Oren Wright, a member of Indiana Farmers Union and the National Farmers Union representative on the American Sheep Producers Council.

I am now going to read Mr. Wright's statement.

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