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questioning, even though my district normally grows more sheep than any other district in the country, during the drought it dropped down to at least 50 percent in total number, and except for the program undoubtedly would have dropped more.
I strongly support this program. I hope the committee finds it proper to handle the bill separately, since it does deal with a little different situation than most of the crops. But of course, it is for the committee to decide.
Mr. HILL. Let me ask you a question. What percentage of sheep actually were increased in numbers in your area because of this legislation?
Mr. FISHER. Of course, right at this time the fact that we have an incentive program is causing a lot of people to try to build up their flocks. They have some stability, something to look forward to.
Actually there is no way of knowing how much the drop would have been except for the program. But certainly there would have been more of a drop except for this program.
Mr. HILL. And it is increasing the number of sheep?
Mr. FISHER. Now that we have finally had rain, this program will have a lot to do with the sheep numbers in the district I represent. Mr. HILL. Then would you express an opinion of how long a time we should extend the program?
Mr. FISHER. I think it should be extended at least for the 4 years. Of course, personally, I prefer there be no expiration date, but I am aware of the fact that you usually, as a matter of practice, do not do those things. But if it could be done under the committee's policies, I would like to see no expiration date. But if there is one, I think it should at least be for the 4 years.
Mr. SIMPSON. According to your views, the legislation has been the means of keeping the sheep population from going further down?
Mr. FISHER. I do not think there is any question about it. I think there would have been a rather substantial reduction in sheep numbers and in wool production except for this program the last 3 years.
Mr. SIMPSON. I am not thoroughly familiar with this sheep program. When I saw that it has been in effect 4 years and has not raised the sheep population, it sort of excited my curiosity.
Mr. FISHER. We had a very abnormal situation the last 3 years, as has been developed here.
Mr. SIMPSON. You think the drought has been the main factor for the population not increasing?
Mr. FISHER. That certainly has been the only thing that has caused it in my area. And as I say, there the population dropped at least 50 percent during the drought.
Mr. HILL. I would like to ask one more question, if the chairman will permit. I think we ought to discuss, and no one has, the situation that might exist if we should let our sheep population and our production of wool drop very much toward the bottom. The reason I ask that, where would we replace the necessary wool if we fail to produce a third of what we use? I think that is about the limit. Now where would that replacement be imported from?
Mr. FISHER. Of course, obviously, that would be made up in imports, or turning more to synthetics.
Mr. HILL. However, if we really want wool, though, our greatest poundage always has been from where? Australia; isn't it?
Mr. FISHER. Australia and New Zealand.
Mr. HILL. That is a long way to ship wool. I just mention that because it is important to know where we get our supply.
Mr. POAGE. May I suggest in that connection, it seems clear to me that the same thing confronts wool that confronts cotton. I do not think there is any difference in the danger the industries face. The wool industry has not recognized the threat of synthetics as quickly as cotton has, but synthetics are being made that certainly are facing wool with serious competition. Wool faces exactly the same problem that cotton does in that respect.
If you simply rely, as was suggested here this morning, on protective tariffs, and simply try to run your price exceedingly high, high enough to make a profitable return to the producer, you will overprice your commodity in comparison with synthetics, which will inevitably move in and take your market.
Obviously, this is the only way that you are going to be able to stay in the wool business, that is by the use of a subsidy. You could keep every pound of wool from Australia, New Zealand, or anywhere else out of the United States, and you would then have a deficit. But it would not take 3 years for the synthetic people of the United States to be supplying every bit of that deficit, and they would probably be running every bit of wool out of the market because they would be producing cheaper than you could produce it.
Mr. SIMPSON. Will the gentleman yield?
You are definitely right, you cannot go downtown in Washington right now and buy the old-time seersucker cotton suit. They are all advertised with dacron-wool-wash and wear-throw it in the tub, dry it for an hour, and put it back on and wear it.
Mr. HILL. I might mention one place where they are not substituting synthetics for wool. Have you ever tried to wear them in 10° and 20° below zero, a synthetic shirt or synthetic suit? You certainly cannot. You can do it in the summertime, but if you are going to work up in the North Pole, 40° or 60° below zero, or fly above the earth, at 100° below zero, you are not going to put on synthetics, I am telling you that. It is wool you need and must have.
Mr. McINTIRE. I would like to ask Mr. Fisher if the program is equally effective as to mohair? I believe in your area there is a substantial amount
Mr. FISHER. In answer to the gentleman's question about mohair, I will explain for the record wild mohair is included in the wool program, the average price of mohair in the past 3 years has been selling above the incentive level.
Right at this time we are suffering from the low price of mohair and reductions in demand-and in the temporary situation we may have to go under the program during this marketing year. But it will be the first time in history that mohair has ever been under any kind of Government program.
Mr. McINTIRE. Then would it be your opinion, Mr. Fisher, that legislation should continue to be effective in that area as well as
Mr. FISHER. That is true. We are beginning to see a very pressing need at this time in the mohair.
Mr. POAGE. Any further questions?
Mr. QUIE. Mr. Chairman, does anyone know what the price of wool is in Australia, and then when it gets to this country at the dock, what it costs to the mill?
We are coming to that later on, I suppose.
Mr. POAGE. I believe so, yes.
Mr. QUIE. All right, I will wait.
Mr. POAGE. Are there any further questions of Mr. Fisher? If not, Mr. Fisher, we are very much obliged, and we would be glad to have you stay with us.
Are there any other Members of Congress who desire to be heard? If not, I will call Mr. E. C. Salyer. Is Mr. Salyer here?
STATEMENT OF MR. E. C. SALYER OF SALYER LAND CO., ACCOMPANIED BY MR. GORDON H. GARLAND, PUBLIC RELATIONS AND LEGISLATIVE COUNSEL
Mr. SALYER. Mr. Chairman, and members of the committee, I have with me Mr. Gordon Garland, a public relations man, and he has a prepared statement.
I would like to ask permission of the chairman to let Mr. Garland testify. I will be glad to make any comments that you would like to have me make, but he has prepared a statement, and I would like to have him testify on behalf of the Salyer Land Co., which I repre
Mr. POAGE. Would you tell us where that is located?
Mr. SALYER. Salyer Land Co. is in Corcoran, Calif., Kings County. Mr. POAGE. You want Mr. Garland to testify?
Mr. SALYER. I would appreciate it.
Mr. POAGE. We would like to hear him.
Before you proceed, Mr. Garland, the Chair would like to welcome this delegation from Arkansas. I do not know just exactly where they are from, but I can see by their looks that they are from northeastern Arkansas, and they are all deeply interested in cotton. Their Congressman is the chairman of the Cotton Subcommittee, and he is one of our outstanding members of this Agriculture Committee. Oh, he is right with you; isn't he?
We are delighted to have all of you with us, and hope you will stay with us as long as you see fit. Feel free to come and go as you see fit, and we will carry on the work of the committee.
Mr. GATHINGS. Thank you, Mr. Chairman.
Mr. POAGE. We are glad to have you.
Now, Mr. Garland, you may proceed.
Mr. GARLAND. Mr. Chairman and other distinguished members of your committee, and may I pay my particular respects to my own Congressman from my district in California, Congressman Hagen, a personal friend of mine for many years.
I have a prepared statement I would very much appreciate having the members of your committee follow, because we have endeavored to prepare the statement in such a manner that it may provoke questions which we hope will be helpful in finding a solution to this difficult problem.
The opportunity to present this statement in support of the proposed extension of the Wool Act of 1954 is deeply appreciated by both my client and myself.
The Salyer Land Co. is completely owned and operated by Mr. E. C. Salyer, who is present this morning, and his family.
Farming operations of the family are well diversified and include the production of feed and seed grains, cotton, sorghum grains, sugar beets, alfalfa, livestock breeding, and feeding of cattle, sheep, and hogs. Cursory study and examination of the transcript of testimony presented heretofore to this committee indicates that the Salyer Land Co. is in substantial agreement with the views expressed by the National Farmers Union, the National Grange, Mr. Don Clyde, and Mr. Edwin E. Marsh, president and secretary, respectively, of the National Wool Growers Association, all of which presentations have been in the interest of the producer.
We believe the statements by Congressmen Engle and Moss are particularly expressive of conditions, attitudes and opinion in California. The statements of the other distinguished Congressmen and Senators make the same reflections for their respective districts Their views all indicate almost complete approval of the proposed extension of the act.
Hon. Marvin McLain, Assistant Secretary of the Department of Agriculture, assisted by his staff members Mr. Frank W. Immasche and Mr. F. Richard Burke, has presented the position of the Department based on trial and error experience with the act in a very clear and cooperative manner. We are in complete accord with their findings and with their recommendations.
In addition to all of this testimony, however, we wish to place further emphasis on certain features of the problem and stress the singular importance of certain parts of the act.
Specifically, we want to stress the effect of the act on the price structure of sheep and wool (present and past), producer-operating credit stabilizing and increasing flock numbers and wool production, the effect of the act on the general economy, and the promise of further benefits through extension and continuity.
The short life of the Wool Act has demonstrated its value to the sheep and wool producers and has emphasized its importance to the national economy.
Important among the many advantages which have accrued to the credit of the act is the half in the declining number of sheep and producers which characterized the years preceding its adoption. Of equal significance and importance is the complete disposition of the large wool stocks accumulated in the hands of the Federal Government under former support practices. This inventory liquidation occurred simultaneously with the successful movement of current crops into channels of trade.
Possibly the most significant attribute of the Wool Act is that it has demonstrated and proved the feasibility and the practicability of successfully supporting an important segment of our farm economy without creating a surplus in inventory and without any serious disturbance to the import conditions under which friendly foreign countries continue to deal with us.
With further experience with the Wool Act on a trial-and-error basis, it is entirely possible that it may point the way to more success
ful and satisfactory methods of treating with the problems which continue to vex and burden other phases of our farm economy.
Just as the operation of the act has demonstrated its worth and usefulness to date and now clearly indicates great potential gains yet to come, so does the short trial-and-error period conclusively point to some needed refinements. This probability was prophetically suggested by this committee at the time the act was in the final stages of consideration just prior to its enactment.
It is our studied opinion that enactment of the Wool Act of 1954 on a permanent basis would provide greater stability of price structure for both wool and sheep than has been realized from term enactment. We submit the following data to support our claim.
The annual ram sale held in Sacramento, Calif., each year shows this significant difference in price range:
The average price received for lambs for slaughter during the 2 years shows a like difference:
Average price for May, 1957, 221⁄2 cents per pound.
Average difference $0.0087 or almost 1 cent per pound.
Price of wool April 15, 1957, 52.3 cents per pound or 80 percent of parity.
Price of wool April 15, 1958, 37.7 cents per pound or 53 percent of parity.
Mr. POAGE. Right there there appears there may be some misunderstanding on that. What did the producer receive?
Mr. GARLAND. The producer received the price that is provided through the support that comes to him through the funds available through the collection of tariffs.
Mr. POAGE. In other words, the future income was not hurt by the program?
Mr. GARLAND. That is correct. However, we believe this disparity in price structure, Mr. Chairman, indicates a weakening in the whole price structure as far as the local level of prices is concerned because of the uncertainty as to whether or not the act is to be reenacted.
Mr. SIMPSON. Would the gentlemen explain for the benefit of the committee why these prices did not affect the income of the producer? Mr. POAGE. Because a payment was made. The Government made up the difference.
Mr. SIMPSON. What did the program cost the Government?
The reason it was not a loss to the producer was because of Government subsidy.
Mr. GARLAND. That is correct.
Mr. HARVEY. Was the tariff changed as a result of this bill?
Mr. POAGE. No.