I believe the United States Department of Agriculture and many of the other governmental agencies should be highly commended for their encouraging the use of milk products by Americans and the publicity they have given the vending and dispensing media of merchandisingthe dairy industry is grateful for this effort and certainly hopes that it will continue.

Comments on the meat phase of our dairy economy will be made by representatives of the California Farm Bureau Federation Livestock Department and other livestock organizations.

I am sure they will express the feelings of California's dairymen. I want to thank you for listening to my remarks-the ideas of a dairyman and the expression of the majority of California's dairymen as expressed through the California Farm Bureau Dairy Department. Once again, we feel that if you gentlemen in the Government will assist the dairy industry in seeing that research is carried on, that the merits of our products are known to all, that as many outlets as possible are available to us, both at home and abroad, that the Federal programs will not make for more production, then Americans will continue to exert every effort to solve their own problems and still retain as much of their independence as possible.

Thank you.

The CHAIRMAN. Thank you, Mr. Quist.

Will Mr. Hardie step forward, please.

Will Mr. W. L. Smith and J. R. Kennedy sit in the front row here? I will call them next.

Won't you give your name in full and your occupation?

STATEMENT OF DONALD M. HARDIE, PRESIDENT, MILK PRODUCERS ASSOCIATION OF CENTRAL CALIFORNIA, MODESTO, CALIF.

Mr. HARDIE. My name is Donald M. Hardie, a milk producer from Modesto, Calif. I am also president of the Milk Producers Association of Central California, a cooperative which engages in the manufacture, processing, and sale of evaporated milk, powdered milk, cottage cheese, butter, fresh milk, ice cream, ice cream mix as well as other allied products.

I am also authorized to speak on behalf of a number of other cooperative associations in the State of California, including the Challenge Cream & Butter Association which is by far the largest of its kind in the State.

It is probably well to inform you that in California approximately 70 percent of our milk production is used for grade A purposes while approximately 30 percent is used for manufacturing purposes. California is the third largest dairy State in the United States in terms of cash farm income from milk, has the largest production per cow in the United States, and boasts the first two largest producing counties in the United States with Los Angeles County first and my home. county, Stanislaus, second.

We feel that we have a substantial stake in the success of the dairy business and that our voice should be heard in determining an administrative policy.

Particularly over the past 2 years the dairy farmers whom I represent have been greatly concerned over the fact that their prices have dropped approximately 20 percent since 1952. They are also con

cerned because of the knowledge that a good portion of this was caused by a reduction in parity from 90 percent to 75 percent which was made effective April 1, 1954.

We recognize in part that the price decline was caused by the fact that even under the 90-percent program, the price to dairy farmers was actually less than the announced support level.

When we have asked higher supports for the dairy industry we are constantly reminded of the fact that we can have the same treatment as the basic crops if we will accept production controls. We believe that everyone concerned with the dairy business is aware of the exceedingly complex and difficult number of problems that would arise in administering a production control program.

We also believe that nearly everyone concerned, including the Department of Agriculture, recognizes that even without production controls the difficulties involved in producing milk, including the labor problems, tend to hold production within manageable bounds. It is interesting to note that when we had 90-percent supports, the dairy surplus never exceeded 8 percent of a year's production. In 1952 and 1953 when prices were over 100 percent of parity we experienced a milk shortage.

The real need of the dairy industry is stabilized prices at levels that will not only assure an adequate supply of high-quality milk, but a price that will give dairy farmers the purchasing power equivalent to that consistent with other segments of the national economy.

The CHAIRMAN. That is a very important question, and one for which we are seeking an answer.

Have you a program to offer this committee whereby what you say there can be acomplished?

Mr. HARDIE. I believe I have.

The CHAIRMAN. I wish you would state it to us as soon as you can. Mr. HARDIE. We believe that the agricultural policy has caused a constant decline in the income to dairy farmers as compared to other agricultural crops while at the same time the things that the dairy farmers buy have continued to increase.

We do not wish to be misunderstood. It is not our desire to have milk prices supported at levels substantially higher than that of other agricultural commodities. We do believe however, that 75 percent of parity does not keep us in that equal position.

To be equal with other agricultural commodities we believe that we should be at the level or slightly above the average level of the basic crops in order to achieve a proper balance between the dairy industry and all agriculture. This can be justified because of the high labor requirements in the production of milk on a 7-day-a-week basis, and the increase in support levels can be made without resulting in an excess production for the same reason.

We think that it is pertinent that we point out that the present parity formula for manufacturing milk has little meaning because it is subject to change by administrative ruling. Under the formula used by the Department of Agriculture, milk prices have remained the same while prices expressed as percent of parity get better and

better.

While parity is getting better and better, the dairy farmer gets less and less. This is because the surplus caused by the curtailment of wartime demands will adversely affect the parity equivalent price

for the next 10 years unless some adjustment is made to stabilize the meaning of the word as expressed in dollars and cents paid to farmers. While the above statement points out some of the depressing conditions facing the dairy farmer and some of the cause for these conditions, we do not believe that our problem can be entirely solved by even the adjustments we have suggested. We would like to go on record as being in support of a self-help program for stabilizing the dairy farm prices.

The self-help program as it is known was worked out by many dairy cooperatives which are members of the National Milk Producers Federation. The people whom I represent here today are also members of the National Milk Producers Federation. It is difficult for us to understand why the legislative bodies will not support a program that we as dairy farmers are willing to use as a means of lifting the responsibilities of surpluses from the taxpayer level.

When the Secretary of Agriculture in 1973 last supported prices at 90 percent of parity, he requested the industry to work out its own program for stabilizing prices. In the belief that he meant it, the self-help program was developed.

Most of the adverse publicity aimed at discrediting the price-support program, regardless of the party in power, has been centered on the dairy industry. This has not made it easy to increase the consumption of milk and dairy products even though in spite of this, substantial progress has been made by the dairy industry, particularly and principally through the dairy farmers themselves.

Dairy farmers are convinced that the support level of 75 percent of parity is too low for the good of the industry and the Nation.

In this connection I want to point out that we opposed the drop to 75 percent last year. We stated at that time that the proposed drop would not result in decreased milk production. Subsequent developments have proved that we were right. Milk production has not decreased. As a matter of fact, according to the Department of Agriculture milk production in 1955 will exceed the record production in 1954.

The CHAIRMAN. I stated that a while ago that I did not have the figures before me.

But is it not a fact that under the so-called flexible price supports milk production has increased? Do you know to what extent? Mr. HARDIE. I beg your pardon.

The CHAIRMAN. Have you the figures? Can you give us the figures?

Mr. HARDIE. I do not have the figures right here; no.

The CHAIRMAN. I now have them before me.

The total milk production on farms increased from 1952 when we had the 90-percent support, it was 121,149 million pounds; in 1954 it was 123,502 million pounds; and this year it is estimated that it will be 123,500,000 and some odd pounds.

Mr. HARDIE. Yes.

The CHAIRMAN. Apparently the flexible price supports did not have the tendency of decreasing the supply of milk.

Proceed.

Mr. HARDIE. Since the dairy farmers represent 95 percent of the investment in the entire dairy business, including the processing and distribution facilities, it becomes apparent that their request for

stabilizing and handling surpluses of their own product should receive serious consideration.

Under the self-help plan, dairy farmers would stabilize their own prices by buying the otherwise unmarketable surpluses and disposing of them at home and abroad without the restrictions that it has in Government operations. The cost will be borne by dairy farmers themselves through the payment of a stabilization fee collected against all milk sold in commercial channels.

The program would be operated by a 15-man stabilization board appointed by the President from nominees selected by the milk producers. It is only right that these nominees should be selected by milk producers since they are the ones who would carry the cost of this program and who represent the overwhelming investment in the business.

A summary of the self-help plan has been developed by the National Milk Producers Federation which we feel may be helpful to the committee. This plan has been submitted to Congress as H. R. 2686 (Westland), H. R. 3400 (Bow), H. R. 3483 (St. George), and S. 930 (Mundt).

We believe that this legislation merits the support of this committee. Its adoption would be a forward step toward bringing about permanent improvement in the economic conditions of the dairy farmer outside of the influence of partisan politics.

We know that you have presented a summary of this plan and we therefore forego attaching it to this report. We believe the selfhelp program would be a tremendous step forward in establishing the principle of free enterprise and nondependence upon the Govern

ment.

We believe that the taxpayer would look upon such a program with wholehearted enthusiasm. We believe that it would encourage other segments of the agricultural economy to adopt a principle of self-dependence.

It has been our desire to direct most of our attention to the present Agricultural Department policy regarding price supports and putting particular emphasis on the self-help program. We would like, however, to briefly point out that we, along with the National Milk Producers Federation representing dairy cooperatives, are vitally interested that section 22 of the Agricultural Adjustment Act remains unimpaired and that effective import controls be provided.

Since we believe that you have been given the supporting arguments on this subject, we only wish at this time to make sure that our support for these effective controls for section 22 of the Agricultural Act be noted.

We also wish to offer our commendation to the Congress for its foresightedness in authorizing $50 million for the last year and $50 million for the current year for the special school milk program. The success of the program has already been established with the thousands of schools and schoolchildren participating in the program and with substantial increases in milk consumption by schoolchildren during the school year.

Where possible this program should be intensified in order to accelerate the disposal of Commodity Credit Corporation's stock, thereby hastening the day when dairy producers of this country will no

longer have hanging over them the price-depressing influence of Government-owned stocks.

We would also like to join the dairy farmers of this country, represented by the National Milk Producers Federation, for the enactment of necessary legislation to permit the operation of a program designed to increase the consumption of foods, particularly dairy products, among low-income families.

We encourage Congress to authorize experimental programs by the United States Department of Agriculture to determine the feasibility of some type of family milk program. It is estimated that upward to 7 million persons would be eligible for a program of this type.

On the basis of an additional 1 quart of milk per week per person this could increase the consumption of fluid whole milk by upward of 700 million pounds of milk annually.

We further wish to commend Congress for authorizing the use of Commodity Credit Corporation's funds in the interest of expanding consumption of milk in our military establishments and in the facilities operated by the Veterans' Administration. The continuation of this program is urged upon the Congress.

When it is considered that some 2.5 million farm families in the United States derive all or the major part of their income from dairy cows, when dairying produces 19 percent of the gross national farm income, when we consider maintaining the tilth, health, and productivity of the soil is unmatched by any other agricultural commodity, and when we consider that dairying is a major segment of agriculture, an agriculture to which less than 15 percent of our Nation's population provides the food and fiber for all, 85 percent of our population is completely dependent on the 15 percent for being the best fed and clothed people in the world, it is difficult for us to understand why this segment of the economy of this Nation is placed in the present deplorable and depressed condition that now exists.

We therefore urge upon you to take note and serious consideration of these facts and take steps at the most rapid possible pace to improve the economic status of the dairy industry.

Thank you.

The CHAIRMAN. Just one moment.

You stated, I believe, or probably some other witnesses did, that when Mr. Benson took office in 1953 he reimposed the 90 percent parity support on dairy products; that is correct, is it not?

Mr. HARDIE. That is correct.

The CHAIRMAN. You also stated that he had asked farmers, dairy farmers, in the meantime, to try to help themselves in trying to dispose of more raw milk, fluid milk, and try to adjust their own business so that they could get along better.

Now, what did the dairy farmers do during that period. Did they try to help themselves? Did they initiate any new methods whereby they could sell more raw milk or follow the suggestions made by Mr. Benson?

Mr. HARDIE. We, in connection-I speak directly for the cooperatives-in conjunction with the other cooperatives, formulated this so-called self-help program.

The CHAIRMAN. I am getting to that. It was presented to the Congress; was it not?