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Section 708 of the Wool Act, providing a method for industrywide participation in an educational and promotional campaign for the sheep industry, is providing us with the first workable method of bringing stabilization to our market.
Remember that a referendum was conducted to see whether or not the sheep producers and feeders wanted to spend some of their own money for a program of education to expand the market for their product. Approximately 72 percent of those who voted in the referendum wanted this program.
This was not a referendum comparable with those conducted to see if
growers wanted acreage controls to go parallel with a Government payment program, but instead of referendum where growers voted as to whether or not they wanted to spend their own money.
Because section 708 is new and different and designed to go hand in hand with the incentive payment provisions on shorn wool for products in deficient supply in the United States, there have been some criticisms of the program.
These critics have not come from within the sheep producing industry and they have based arguments primarily on the use of terminology rather than any failure on the part of the program. They use such terms as "checkoff," and the need for "voluntary contributions," and the prevention of "duplication of effort." "I am inclined personally, to brush these criticisms aside simply because they are not the thinking of the true sheep producer or lamb feeder. We find in this act an instrument whereby we can join other segments of our industry to stabilize our market to help ourselves to do a better job of distributing and marketing our products.
Beginning with the original programs of the Colorado-Nebraska Lamb Feeders Association to promote lamb over 40 years ago, our industry has tried every known method on a voluntary basis, but had never been able to devise a successful program until the Congress gave us this vehicle.
In our present program we have asked for ideas from every possible source to assure a well-coordinated program. We duplicate no other effort simply because much of the work being done under section 708 uses presently recognized organizations as a basis for expansion. I unhesitatingly challenge anyone to show that section 708 funds have been used in duplicating unnecessarily work being done elsewhere. We seek to augment-not to duplicate.
One of the things which we believe has helped make this work is is that those who contribute their money to the program know that all ideas are reviewed and all accounts are audited by the Department of Agriculture. We are thus assured that the funds put up by the growers and feeders are used within the framework of the intent of the act as passed by the Congress. This alleviates any fear that these funds might be used for any other purpose than for the good of the industry as a whole.
I assure you, gentlemen, that the lamb feeders will always be ready to accept constructive suggestions which will improve this program and we will just as readily resist any effort to unfairly discredit it.
The Wool Act has already helped us, in spite of its short life. This is a piece of legislation of which you gentlemen may be justly proud. As feeders we thank you for it, and respectfully ask that you extend it.
Mr. MATTHEWs. Thank you very much, Mr, Etchepare for your fine statement. I wonder if there are any questions?
Mr. Chairman, do you have any questions that you would like to ask?
Mr. Cooley. I want to clear up one thing. On these incentive payments, they amount to 24 percent, is that right?
Mr. ETCHEPARE. I believe that is about right,
Mr. COOLEY. In other words, for every thousand dollars you sell, the farmer receives $240.
Mr. ETCHEPARE. About 40 percent last year, I believe.
Mr. MATTHEWS. Excuse me, this gentleman did not give that particular testimony. I don't know whether he is particularly familiar with that or not.
Mr. COOLEY. I was looking at Mr. McLain's statement, to the net proceeds, that it was 24 percent, and therefore the payment would be $240. Last year, if I understand what you said it was 40 percent?
Mr. ETCHEPARE. That is right.
Mr. COOLEY. And this year under this program it will be $240. Is the Department recommending a change in the payment?
Mr. ETCHEPARE. I do not believe so.
Mr. IMMASCHE. I may help, if I may. I think that you are looking at the example in one of our exhibits. This example shows that if the average price received for shorn wool by all growers in a marketing year turns out to be 50 cents, and the incentive level is 62 cents, then we have an average of 12 cents, or 24 percent of the 50 cents received in the free market, to make payments to bring the returns of 50 cents up to a 62-cent incentive level.
Mr. COOLEY. That is right. I am sure that is right. That is in exhibit F. What was the situation in 1956?
Mr. IMMASCHE. Last year, the average price received in the free market was 44.3 cents. It took payments at the rate of 40 percent to bring this national average up to an incentive level of 62 cents.
Mr. COOLEY. Whenever a farmer receives a thousand dollars for wool he receives $400 in payments?
Mr. IMMASCHE. That is right for the 1956 marketing year. This year we think the price in the free market will average higher and the rate of payment will, of course, be correspondingly less.
That is for the 1957 marketing year we are in now.
Mr. COOLEY. Do you happen to know what the payments were in 1956?
Mr. IMMASCHE. The payments for the 1956 marketing year are expected to total around $53 million.
Mr. COOLEY. Thank you.
Now Mr. Lemmon, we will come back to you. We want to thank you for yielding to your partner, Mr. Etchepare.
STATEMENT OF JAMES H. LEMMON, PRESIDENT OF NATIONAL
WOOL MARKETING CORP., LEMMON, S. DAK.
Mr. LEMMON. I think that in the interest of time saving, that I will just read a portion of my statement and refer to it. I think I can save considerable time.
Mr. MATTHEWS. That will be very helpful because we would like to given everyone that we possibly can a chance to appear here.
Mr. LEMMON. Mr. Chairman, gentlemen of the committee, my name is James H. Lemmon and I live in Lemmon, S. Dak. I am president of the National Wool Marketing Corp. We are a national organization owned and operated by State and regional grower marketing organizations. Our board of directors at the national level is made up of one grower representative from each of our member associations. In the aggregate, there are 85,000 members who pool their wool at local and regional level and market through the national organization.
I believe that three of the gentlemen on your committee are from our respective States where we have members in Utah, Colorado, and Wisconsin. I observed that during the course of the morning.
Now, I want to say that we are giving our full and unqualiñed support to the statements made by Mr. Clyde, the president of the National Wool Growers Association. And that we have been working very closely with him and his organization in the effort to bring about the extension of this 1954 Wool Act.
I believe I could best serve the purpose of this hearing if I were to address myself primarily to the position of the smaller producer in terms of woolgrowers who use sheep as a part of an overall farm production program. Where it provides diversification and in many instances, a small source of cash family income twice a year, once when the grower sells his wool and the second time when he sells his lambs.
I am sure that most Members of Congress will remember that section 708, permitting the industry to advertise and promote its products, was made a part of the original Wool Act primarily because the problems facing the wool-producing industry are somewhat different from those of other commodity products. United States production is in deficient supply and thus Congress decided to treat wool on a separate basis, insofar as Government policy is concerned.
I would like to stress in that regard the problems we have found ourselves in. We do not just believe--we know we have a superior product in both wool and lamb. However, because of the fact that they are deficiency commodities, and we do not produce enough of them, we have neglected putting on promotion programs pointing out their superiority. As a result, our markets have narrowed. It is simply a case of resting on our laurels, thinking because we were underproducing it was not necessary for us to get out and tell the facts about, what we call, our superior product and we were gradually losing at the market place.
Very frankly, gentlemen, section 708 and the resulting grower promotion program is actually more important to our smaller producer members than the incentive payment feature. Notice that I said the smaller members. To a grower of 20 ewes on a tobacco farm in Kentucky or a grain farm in Indiana, the incentive payment for 1957
is hardly likely to be bigger than $18. But that same grower is willing to put up $2 of that money to promote his products to try to stabilize his prices in the free market place.
We feel that in doing this the American woolgrowers have shown this Government their sincerity in attempting to build a sound sheep economy and live as little as possible under a Government price support umbrella.
That is why we like to call this our self-help program. I want to say to you that it is my experience that these growers, who have small flocks, throughout these States are very wholeheartedly back of the self-help program.
Now if in your consideration of the need for extending the provisions of the National Wool Act, I hope you will take into consideration the fact that small farm flocks of sheep do play a very definite role in balancing farm operations.
On farms with small flocks of sheep, these animals do provide an additional source of revenue. It is very evident to all of us that if we can retain this 1954 Wool Act and the incentive payment that the greatest increase in production of sheep will take place in the small flock areas of the Middle West, East, and South.
We believe that most of the increased production which will be brought about by the National Wool Act will come in family sized farms rather than in range areas where other limiting factors might prevail.
I should like to conclude with this statement. I do not believe that I have ever seen such unanimous support for any program or law adopted by Congress as there is among sheep growers for this act. This has been true in every meeting I have attended and in all parts of the United States. It is true in range areas, and it is true in the areas where the smallest of the farm flock production predominates. We sincerely urge your approval of Senate bill 2861 and your cooperation in obtaining early enactment to provide us with a continuing stability in our economy.
I want to say that I highly appreciate the kindness of you gentlemen in holding this special session to give us an opportunity to testify while we were here. I thank you.
Mr. .MATTHEWS. Thank you so much. And the committee, particularly, appreciates your consideration, and if you will like, we will have your complete statement put in the record, the statement that you had prepared, so all of the committee can have it.
Mr. LEMMON. I would appreciate that.
Mr. MATTHEWS. Without objection we will include the complete statement in the record.
(The statement referred to is as follows:)
STATEMENT OF JAMES H. LEMMON OF LEMMON, S. DAK., PRESIDENT OF NATIONAL
WOOL MARKETING CORP. Mr. Chairman, gentlemen of the committee, my name is James H. Lemmon, and I live in Lemmon, S. Dak. I am president of the National Wool Marketing Corp. We are a national organization owned and operated by State and regional grower marketing organizations. Our board of directors at the national level is made up of one grower representative from each of our member associations. In the aggregate, there are 85,000 members who pool their wool at local and regional level and market through the national organization.
I emphasize this so that you might understand that in supporting the position of the National Wool Growers Association as the representatives of the industry, I shall attempt to not duplicate what Mr. Clyde has said to you, but bring you an additional viewpoint. I want you to know that we do endorse in its entirety the position taken by the National Wool Growers in support of the renewal of the Wool Act. While the membership of our organization parallels that of the National Wool Growers Association to some small degree, one of the purposes served by our organization is to provide a medium whereby the smaller growers of the United States might pool their wool and through grading and other handling practices market it to the best advantage of the producer. I have been president of this organization for 17 years and mention that personal reference only for you to understand that I have been in a position to follow developments in the market place of the American woolgrower throughout the period from before World War II up until today.
I think this committee can readily understand the position of a woolgrower whose operation is large enough that it is his major source or nearly so of total income. I believe I could best serve the purpose of this hearing if I were to address myself primarily to the position of the smaller producer in terms of wool growers who use sheep as a part of an overall farm production program, where it provides diversification and, in many instances, a small source of cash family income twice a year. Once when the grower sells his wool and the second time when he sells his lambs.
I am sure most Members of Congress will remember that section 708, permitting the industry to advertise and promote its products, was made a part of the original Wool Act primarily because the problems facing the wool producing industry are somewhat different from other commodity problems. United States production is in deficient supply and thus Congress decided to treat wool on a separate basis, insofar as Government policy is concerned.
I would like to stress in that regard the problems we have found ourselves in. We don't just believe-we know we have a superior product in both wool and lamb. However, because of the fact that they are deficiency commodities and we don't produce enough of them we have neglected putting on promotion programs pointing out their superiority. As a result, our markets have narrowed.
Take lamb for instance. We do not produce enough to satisfy the demands of the United States over a period of 12 months with a result that a new generation of housewives since World War II hardly consider it a part of their diet or household budget. That in turn resulted in our production going into a very narrow marketing field in places like Boston, New York, Washington, San Francisco, and Los Angeles. Then when the lambs did go to market in such a narrow purchasing area, we found ourselves facing an oversupply in these small market
It has taken promotion to begin to widen that market sufficiently to prevent the position of a surplus actually created by a short supply.
On January 21, 1958, the Agricultural Marketing Service, issued a report on the findings of a survey on lamb availability in the markets.' That survey showed that in 1955 only 39 percent of the retail stores handling fresh, red meats sold any lamb, either seasonally or on a year-round basis. I hope the Department of Agriculture has or will make available to this committee copies of that survey for it certainly points up the problem I have just mentioned.
Producing less than one-third of the wool used in the United States, we sat idly by while synthetics moved in with mass promotion programs. Already hard hit by imports of wool from low production cost countries, we saw the demand for our production lessen and we did nothing to tell the American consumer the superior qualities of wool.
If this Congress does recognize again this year, as they did in 1954, that as a deficient commodity wool needs to be treated according to the needs of the industry to sustain its economy, then I think this Congress should welcome the proof from the industry that they are willing to use their own money to help themselves by promoting the products. Wool and lamb have been used by the human race forever. Wool and lamb will sell, but until the Wool Act of 1954 was enacted permitting the growers to set up their own promotion program, the industry did not have a way in which they could join together to help themselves produce more income in the market place.
Very frankly, gentlemen, section 708 and the resulting grower promotion program is actually more important to our smaller producer members than the incentive-payment feature. To a grower of 20 ewes on a tobacco farm in Kentucky or a grain farmer in Indiana, the incentive payment for 1957 was hardly likely to be bigger than $18. But, that same grower is willing to put up $2 of that money to promote his products to try to stabilize his prices in the free market place. We feel that in doing this, the American woolgrowers have shown this Govern