STATEMENT OF CHRISTOPHER B. SYKES, VICE PRESIDENT, NORTH WORCESTER COUNTY DAIRYMEN'S ASSOCIATION, ASHBURNHAM, MASS.; ALSO REPRESENTING CENTRAL MASSACHUSETTS DAIRY ASSOCIATION, SOUTHEAST QUALITY MILK PRODUCERS' ASSOCIATION, NORTH CENTRAL MASSACHUSETTS DAIRYMEN'S ASSOCIATION, AND SOUTHEAST WORCESTER COUNTY DAIRYMEN'S ASSOCIATION

Mr. SYKES. Mr. Chairman and gentlemen, my name is Christopher B. Sykes, Ashburnham, Mass. I own and operate a dairy farm in Ashburnham, where the 1955 tax rate is $74 per thousand of valuation, and this year I have paid about $900 in real estate and personal property taxes to the town. This means that each one of my present milking herd of 32 Jerseys must produce nearly $30 worth of milk per year year to pay the taxes alone. The attractiveness of high industrial wages in large nearby communities keeps the available supply of farm labor at very low levels and creates a correspondingly high level of farm wage rates if good labor can be found. I mention my own high fixed costs only as an example, but I can assure you that they are typical of dairy farmers everywhere in Massachusetts.

I am here today to represent about 700 dairy farmers whose milk is marketed under controls administered by the Milk Control Commission of the Commonwealth of Massachusetts. This is by no means the total number of such farmers, but is rather the number represented by the 5 associations who have since a year ago last April opposed the attempt to extend the area covered by 3 of the 5 Federal order milk markets in Massachusetts.

These associations are: Central Massachusetts Dairy Association of which Arthur Schofield, president, and Fred R. Jones, director, are present; Southeast Quality Milk Producers' Association, Inc.; NorthCentral Massachusetts Dairymen's Association, Inc., of which Edward Baronas, secretary, is present; Southeast Worcester County Dairymen's Association; and North Worcester County Dairymen's Association of which I am the vice president and which is also represented here by Toivo Lamsa, treasurer.

I should first like to comment on the ballot which was mailed in the recent referendum held after the United States Department of Agriculture's decision to extend the Boston Federal market to include the towns of Framingham, Natick, Weston, and Wayland. Recipients of this ballot were asked to vote not on the question of whether or not the Boston order should be extended, but rather on whether or not there should be an extended Boston market. I have been told that, in the opinion of the Boston Market administrator, if there had been 33.4 percent "No" votes, the Secretary of Agriculture would have been obliged to suspend the entire Boston order. In other words, the referendum was not held on the real issue, which was and is extension of the Boston market and not its continued existence. I do not believe that anyone questions the necessity of the Boston order, and it would have been ridiculous to suppose that the outcome of the referendum could have been other than it was, overwhelmingly in favor. In addition, all amendments to the Boston and other orders were voted on as a group and not as individual issues, and I submit that, if such referenda.

are to have any significance whatsoever, the ballots should be so drawn up as to permit a vote on each question separately.

The CHAIRMAN. Was the procedure that was used in accordance with law?

Mr. SYKES. It is an interpretation of the law, sir.

The CHAIRMAN. Who did the interpretation?

Mr. SYKES. The United States Department of Agriculture.
The CHAIRMAN. Do you think the interpretation is wrong?

Mr. SYKES. We are contesting it in the Federal district court in Washington at present.

The CHAIRMAN. We will soon find out, I hope.

Mr. SYKES. Yes.

With further reference to voting procedure, we have serious doubts as to the validity of the United States Department of Agriculture's present interpretation of the provisions of the Agricultural Marketing Agreements Act of 1937, as amended, in that it permits all producers shipping milk to an already established Federal market to vote on its extension together with the producers who ship to the area which is marked for annexation.

It is also my understanding that, during the qualifying month of April 1955, a loose sales connection between country plants and certain distributors in Massachusetts was enough to establish the eligibility to vote, in this recent referendum, of large numbers of producers shipping to these country plants when in fact it was doubtful if even a small percentage of their production was sold in the area proposed for extension.

It is our contention that the eligibility to vote on such extensions should be confined to those producers all of whose sales of milk are initially made in the area which the extension proposes to include. An identical position was taken only last Wednesday, November 16, by the delegate body at the annual meeting of the Massachusetts Farm Bureau Federation in a resolution of which I shall quote the pertinent part:

Be it further resolved, That the Massachusetts Farm Bureau shall press for such amendments as may be necessary to prevent the extension of a Federal market into a new district unless such extension is approved by at least twothirds of the dairy farmers whose entire milk sales are initially sold on a regular and continuous basis in that district.

We were confident enough of our convictions in this matter so that, on September 19, 1955, the Central Massachusetts Dairy Association, backed by the other associations I have mentioned, filed a bill of equity in Federal district court in Washington, D. C., which has justly resulted in the placing of a restraining order upon the United States Department of Agriculture which prevents them from proceeding with the proposed extension of the Boston market until such time as a hearing on the merits of the case and the voting procedure can be held.

Senator HOLLAND. Would you permit a question there?

Mr. SYKES. Certainly.

Senator HOLLAND. This is new to me. I think it may be new to other members of the committee. Does it mean that the Boston milkshed does not include some of the lesser but important markets in Massachusetts?

Mr. SYKES. Very definitely, sir.

Senator HOLLAND. And that those are lesser but important milksheds that are serviced by milk producers that are in the State of Massachusetts?

Mr. SYKES. Or very close to it, sir.

Senator HOLLAND. I see. And you are serving them under State marketing orders rather than Federal marketing orders?

Mr. SYKES. That is correct.

Senator HOLLAND. What are some of the cities that are served that way under State marketing orders, and principally by Massachusetts dairy producers?

Mr. SYKES. Well, the cities would be few in number, but there are quite a number of fairly sizable towns, I mean, I was want to distinguish. When you say city, I do not know how properly to answer that question. Fitchburg is one, Gardner and Leominster are others. Those are the ones with which I am most familiar, because that is the section from which I come.

Senator HOLLAND. I believe that you stated that you represent about 700 milk producers

Mr. SYKES. That is correct.

Senator HOLLAND. In the State of Massachusetts who are furnishing milk now, you say, to these lesser but important markets? Mr. SYKES. That is correct, sir.

Senator HOLLAND. Am I to understand that the thing that you object to is that when the Boston Milk Agreement and Order was proposed to be extended, not as to time but as to the area of Coverage

Mr. SYKES. That is correct.

Senator HOLLAND. Not only were the milk producers in the new area opposed to the coverage allowed to those but also other milk producers in the entire Boston milkshed as existing under the old agreement?

Mr. SYKES. That is correct, sir.

Senator HOLLAND. That is the principle that you object to?
Mr. SYKES. That is correct, sir.

Senator HOLLAND. Thank you.

As proponents of democratic principles, we also strongly believe that block voting does not reflect the voice of the individual dairy farmer. The right to vote in accordance with his own convictions is one of the most important of the rights of man and any abrogation of such rights, no matter what the circumstances, is contrary to those principles. In illustration, I state as a fact that the petition to extend the Boston order was made over the express and unanimous objection of all the members of the petitioning cooperative who are shipping their milk to the area intended for inclusion in the Boston market and who were dismayed, to say the least, at the thought of losing approximately 60 cents per hundredweight on their milk.

It is also our opinion that Federal milk markets encourage overproduction. In this connection, I should like to draw the subcommittee's attention to the fact that, from 1945 to 1954, the total receipts of milk in the Boston market rose nearly 260 million pounds while the percentage of class I sales to total reecipts dropped more than 13 percent.

Figures for the intervening years are readily available, but it is sufficient to say that a downward trend in percentage of class I sales

is quite apparent. Not does the establishment of Federal markets, where State control formerly existed, necessarily improve the percentage of class I sales to total receipts. In the Springfield area which is substantially the same as that now covered by the Springfield order, the percentage of class I sales to total receipts dropped from 82.67 percent in 1949 to 78.1 percent in 1954.

Senator HOLLAND. Will you permit another question there? Do we understand in addition to the Boston milkshed served by the Boston Marketing Agreement there are other Federal marketing agreements, say, in force as to some of the principal cities of Massachusetts? Mr. SYKES. There are four additional ones.

The Merrimac Valley Order, which embraces the cities of Lowell, Lawrence, and Haverhill, which is slightly different from the other in that it is a joint order.

There is Fall River, which is an individual dealer pool, which is distinguished from the marketwide pool.

The other three are marketwide pools, Boston, Worcester, and Springfield.

Senator HOLLAND. And the thing that you are particularly interested in now is saving the markets which are not included in any of those Federal milksheds as served by the Federal Marketing Agreement and Order?

Mr. SYKES. That is correct, sir.

Senator HOLLAND. Thank you.

The CHAIRMAN. Would that result in more of the milk produced in Massachusetts being sold in Massachusetts and keep out other milk from other States?

Mr. SYKES. We believe that that is a good possibility; yes, sir. The CHAIRMAN. That is really why you think this change ought to be made?

Mr. SYKES. It is partially that. I have one further statement here that I think will help clarify that question.

The CHAIRMAN. Yes, sir. Thank you.

Mr. SYKES. In the Worcester area, the same comparison shows a drop from 93.91 percent to 85.5 percent. The following quotation from a bulletin prepared by Leland Spencer and S. Kent Christensen and published by Cornell University in September 1954, is pertinent. While admitting the advisability of marketwide pools under certain conditions, the bulletin states:

The principal disadvantages of this plan is that it weakens or destroys the incentive to maintain a close balance between milk supplies and fluid sales. Equalized markets tend to attract more than their proportionate shares of surplus milk to the consequent disadvantage of producers who would normally supply them. Marketwide equalization also weakens the handlers' incentive to use the milk they receive in ways that yield the highest returns for producers. We therefore respectfully recommend to this subcommittee that an effort be made to incorporate some practical method of production control, such as the base rating plan, into the framework of present Federal milk-market administration. Through rating plans or voluntary cooperation with dealers, producers in the State-controlled markets of Massachusetts have achieved a point where their production during the months of May and June exceed by very little their production in the months of October and November.

As an example, in 1954, producer receipts at 7 dairies in northern Worcester County in the 2 flush months were only 7.1 percent more than they were in the 2 fall months, while in the Worcester and Boston markets, the same comparison shows 26.2 percent and 56.1 percent of excess production.

Finally, we wish to question the advisability of the eight seasonal price changes which are part of the present pricing formula. As producers and producer-dealers whose milk is often sold to neighbors and friends, we are subjected to complaints about milk-price increases, and it is a matter of record that the milk control commission of our Commonwealth is of the opinion that both dealers and consumers throughout the State are dissatisfied with the present system. It is equally true that dairy farmers have yet to understand what basis there can be for reducing the price paid to the producer in January when, if anything, milk is harder and more costly to produce than at any other time of the year.

While, it is common practice to label Massachusetts an industrial State, it is a fact that we still keep 127,000 dairy animals 2 or more years old and that the gross income from dairying in our State in 1954 was just short of $50 million.

The opinions and suggestions set forth above are intended for the benefit of dairy farmers everywhere for it is only through cooperation that we will be able to solve the problems that confront us.

We are grateful to the subcommittee for the time allowed us to present our views.

The CHAIRMAN. Thank you. Are there any further questions? Senator AIKEN. Do you produce considerable milk yourself, Mr. Sykes?

Mr. SYKES. I produce Jersey milk, varying in quantity from about 6 to 8 cans, 40-quart jugs.

Senator AIKEN. Can you tell us about what percentage of the milk used in these four towns in controversy is produced locally?

Mr. SYKES. I cannot, sir, I am sorry.

Senator AIKEN. Would you say it was about one-third?

Mr. SYKES. Senator, I would far prefer to have Mr. Schofield, who is president of the association, answer that question.

Senator AIKEN. I was trying to get your side of it. Do you understand that it is the practice of handlers to go into the other order markets and buy class 2 milk and then take it into these four towns and sell it at the full price of class I milk price?

Mr. SYKES. I never heard that statement made about class 2 milk, Senator. I have heard that remark made with referenceSenator AIKEN. Surplus milk.

Mr. SYKES. This milk that is called unregulated milk.

Senator AIKEN. Yes, that is right. You have heard of that. If that is true, would you not say the 12,000 or 13,000 producers for the Boston milkshed would be justified in trying to get a little better value out of what they ship into the Boston market than the unregulated price?

Mr. SYKES. I am afraid I have a slightly different viewpoint to yours on that, perhaps naturally.

Senator AIKEN. I have heard one viewpoint but I was trying to get your viewpoint.