(The tables following Mr. Reed's statement are as follows:)

TABLE 1.-Milk cows and milk production on farms, United States, 1940-54

1 Excludes milk sucked by calves and milk produced by cows not on farms. Preliminary.

Source: Reports of the Agricultural Marketing Service, USDA.

TABLE 2.-Per-capita consumption of major dairy products and oleomargarine, average, 1935-39, and annual, 1943-54

Source: U. S. Department of Agriculture, Agricultural Marketing Service, the Dairy Situation, October

1954.

TABLE 3.-Status of dairy price support purchases and utilization, Apr. 1, 1952, to May 31, 1955 [Pounds]

1 Butter total includes the following quantities of butter programed for conversion to butter oil for distribution through the 3 following outlets: 58,706,000 pounds for sec. 416; 18,937,500 pounds for noncommercial export, and 2,940,000 pounds for FOA.

Including 2,467,000 pounds of butter sold under title I. Public Law 480 (foreign currency).

3 Other uses include butter salvage sales, cocoa butter extender sales, butter sales and donations to the Veterans' Administration, donations of dry milk for research, and butter sold for liquid milk recombining. Source: USDA.

TABLE 4.-Number of farms reporting milk cows and number of milk cows, by size of herd, United States, 1950

TABLE 5.-Sales of milk and milk equivalent of butterfat in cream sold from farms in the United States, by size of herd, 1950

NOTE.-United States total is larger than totals listed by size of herd because of deletion of item represente/i by sales from farms previous year which had no cows at time of census tabulation. Source: Bureau of the Census, U. S. Department of Commerce.

Mr. REED. Mr. Chairman, may I make one comment with regard to this bill?

In the levying of the tax, our counsel spent considerable time studying how the tax could be levied and would not be subject to an increase or any great deal of manipulation by anyone except the Congress, and this bill provides that the Congress will levy a tax of 1 cent per pound of butterfat or 4 cents per hundredweight of milk delivered at the point of first processing. That is it. But it also provides that in case the Secretary and the Advisory Committee find that they do not need that $40 million, that they could not use that amount effectively, the Secretary would be authorized to suspend it or to cut it down and reduce it. But there is no way under this bill that the Secretary or anybody else can levy any more of a tax than that actually specified in the law.

The CHAIRMAN. Now, this tax would be imposed on the person who first processes it, for any purpose?

Mr. REED. That is right; at the point of first purchase from the farmer.

The CHAIRMAN. I see.

Mr. REED. In other words, when the check was written for the farmer's milk, 4 cents a hundredweight would be taken off.

The CHAIRMAN. Suppose he sells direct to the consumer. would be done then?

What

Mr. REED. On that, then he pays direct, if he is a producer-distributor.

The CHAIRMAN. So the purpose is to impose a tax on all milk that is obtained from the cow?

Mr. REED. That is correct; all that is sold from the farm; all the commercial milk.

The CHAIRMAN. And it will be based on butterfat content? Mr. REED. Per pound of butterfat, or 4 cents per hundredweight of milk. That balances out, just about. The average test of milk in the United States is almost 4 percent fat.

The CHAIRMAN. And then the bill stipulates how that fund is to be used?

Mr. REED. Yes, sir.

The CHAIRMAN. And it is more or less for promotion purposes? Mr. REED. Yes, sir; entirely. It is promotion, advertising, and marketing research work.

The CHAIRMAN. All right.

Do you want that printed in the record?

Mr. REED. Please, sir. It is an appendix of this statement. The CHAIRMAN. It will be placed in the record at this point. (The proposed bill is as follows :)

A PRODUCER-FINANCED PROGRAM FOR THE EXPANSION OF CONSUMPTION OF MILK AND DAIRY PRODUCTS IN THE UNITED STATES

A BILL To provide for a nationwide program for the expansion of consumption of milk and dairy products; to improve the health and well-being of the population; to promote an expanded program of research in dairy marketing; to impose a program fee on the production for sale of milk or butterfat; and for other purposes

Be it enacted by the Senate and House of Representatives of the United States in Congress assembled:

SECTION 1. This Act may be cited as the Dairy Promotion, Marketing and Research Act of 1955.

SEC. 2. LEGISLATIVE FINDING.-Milk and dairy products represent one of the most important sources of foods needed for a highly nutritious diet for the people of the United States. At present, the people of the United States are lagging far behind the people of some other nations in their consumption per capita of milk and dairy products. It is in the national interest that farms of this country produce milk and dairy products in sufficient volume for the population to have available adequate supplies of milk and dairy products, and to aid in developing a pattern of use of agriculural resources designed to maintain the soil resources of the country. It is equally in the national interest that consumers have available full information as to the benefits to health and wellbeing to be derived from increased consumption of milk and dairy products, and that there be undertaken an expanded program of market research which will aid in improving quality of milk and dairy products and in making more efficient the system of processing and delivering milk and dairy products from farms and plants to consumers.

SEC. 3. DECLARATION OF POLICY.-It is hereby declared to be the policy of the Congress to promote a more stable balance between supply of and demand for dairy products in the United States through an expanded program designed to (a) promote more effective merchandising of milk and dairy products, (b) expand the health and education work with consumer groups, (c) promote efficiency in marketing and utilization of milk and dairy products through an expanded program of marketing research, and (d) to provide the means whereby dairy farmers of the United States can finance the program designed to increase consumption of milk and butterfat, and research in improved marketing and merchandising practices through the payment of a program fee levied at the point of first purchase of milk and butterfat.

SEC. 4. DEFINITIONS.

(a) "Milk", "butterfat", and "dairy products" mean milk, butterfat, and all products of milk and butterfat commercially produced and marketed in the United States.

(b) The term "Secretary" means the Secretary of Agriculture, and the term "Department" means the United States Department of Agriculture.

(c) The term "person" means any individual, partnership, corporation, association, or any other business entity duly organized and operating under the laws of the United States or the several States and Territories.

(d) "Milk producer", or "producer" means any person engaged in the production of milk or butterfat for sale.

(e) The term "Board" means the Dairy Advisory Board.

(f) "Program fee" means the excise tax levied on the sale of milk and butterfat and collected at the point of first purchase to finance the programs authorized by this Act.

SEC. 5. DAIRY ADVISORY BOARD.-There is hereby established a Dairy Advisory Board consisting of twenty members, to be appointed by the President. Twelve members of the Board shall be producers of milk or butterfat except that six of the producer members of the Board may be officers or employees of cooperative associations meeting the requirements of the Capper-Volstead Act (7 U. S. C. A. secs. 291–292); five members shall be processors of milk and dairy products other than producers or cooperative associations of producers; and three members shall be appointed as public members representing the public at large: Provided, however, That no person shall have more than one representative on the Board. The Secretary, or his designated representative, shall be an ex-officio member of the Board. In appointing the producer and processor members of the Board, the President shall:

(a) Endeavor to secure appropriate regional representation from the several important dairy regions of the United States.

(b) Endeavor to secure appropriate representation of the several major products produced from milk and butterfat, including, but not limited to, fluid milk, butter, cheese, dry milk solids, frozen products, and condensed and evaporated milk products.

SEC. 6. TERMS OF BOARD MEMBERS.-Terms of Board members shall be two calendar years, and members may be reappointed for only one additional twoyear term at the discretion of the President.

SEC. 7. The Board shall meet at the call of the Secretary, or upon call of the Chairman. Each Board member shall be entitled to receive a per diem of $50 for each day's attendance at Board meetings and while traveling to and from such meetings, and travel, subsistence, and other expenses as incurred in discharging their duties as directed by the Board.

SEC. 8. DUTIES OF THE BOARD.-The Board shall serve in an advisory capacity to the Secretary in the conduct of the Secretary's duties in administering the powers conferred upon him by this Act, including but not limited to the following:

(a) Advice as to agencies with which the Secretary may contract in carrying out the promotion, merchandising, and research activities authorized by this Act;

(b) Advice as to the suspension, in whole or in part, of the program fee levied under this Act;

(c) Advice as to the allocation and expenditure of funds collected from the program fees among the several activities authorized by this Act.

SEC. 9. POWERS OF THE SECRETARY.-The Secretary shall have the following powers under this Act:

(a) To allocate the moneys collected from the program fee among the several program activities authorized by this Act and recommended by the Board; (b) To contract with nongovernmental organizations or firms which may include but are not limited to the American Dairy Association and the National Dairy Council, to carry out programs approved by the Board and the Secretary: Provided, however, That none of the funds collected pursuant to the provisions of this Act shall be used to promote any brand of any person, or any other brand name that might be applied to milk or any of its products.

(c) In the conduct of the powers and duties conferred on the Secretary of Agriculture by this section, it is intended that he shall, with the advice and assistance of the Board, have general supervisory control over the allocation of program funds and expenditures thereof, to agencies selected by him to conduct the operational details of the several programs: Provided, That it is not the intent of this section that the Secretary or the Department assume the direction of operational details of authorized programs, such as the media or persons to be used in promotion campaigns, or the format, makeup, or production of promotional and merchandising material: And provided further, That none of the funds allocated to research programs hereunder shall be considered to be in replacement or in lieu of funds appropriated by the Congress for research under the Agricultural Marketing Act of 1946, as amended (7 U. S. C. A., secs. 1621-1629).

(d) To report and account fully to the President and the Congress the results of operations annually, together with an evaluation of the programs authorized and operated pursuant to this Act.