Secretary FREEMAN. It would provide this amount of money to a maximum of $7,500 to supplement the administrative money that the State currently has appropriated itself.

The CHAIRMAN. Why is that necessary?

That is what I tried to get from you a while ago. I thought that this sum was necessary, because of the new programs.

Secretary FREEMAN. Yes, sir. The whole idea is that the States who do have considerable administrative burdens to carry now would respond more quickly and carry this program forward more promptly if some additional funds were made available for administrative purposes.

The CHAIRMAN. Do I understand that under no condition will these funds be used in areas where the State is already providing for facilities and for food and cooperating 100 percent?

Secretary FREEMAN. That is correct. This would be in addition, and not in replacement of.

Senator MONTOYA. You mentioned $7,500. Is that the sum to which the States will be entitled under this provision?

Secretary FREEMAN. That is the maximum; yes.

Senator MONTOYA. So that $7,500 is for the 50 States?
Secretary FREEMAN. $7,500 per State maximum amount.

Senator MONTOYA. Yes; $7,500 for the 50 States. Is that the minimum or the maximum?

Secretary FREEMAN. I stand corrected. I misread this myself. There is a formula here in the bill, as you will recall, and that formula would apply to the maximum appropriation here of $3.7 million, and the $7,500 figure would be the minimum figure. Because of the States, otherwise, would have fallen down below that figure.

Senator MONTOYA. Are the additional administrative funds required by virtue of the breakfast and free lunch programs?

Secretary FREEMAN. It would be required because of the expensive actions that would be required of the State to establish programs to develop the necessary leadership, to provide the equipment facilities, to establish new programs in these areas, to set up pilot breakfast programs. It will represent a very significant increase in their administrative responsibilities.

Senator MONTOYA. What do you encompass or contemplate in the breakfast program? Is it just milk?

Secretary FREEMAN. No.

Senator MONTOYA. Is it a full breakfast?

Secretary FREEMAN. It is a full breakfast program for the child. Senator MONTOYA. Then, would I assume that where the breakfast program is in operation, the school district would have to provide additional facilities?

Secretary FREEMAN. They would have to cover the program.

Senator MONTOYA. Is there any provision in the bill for helping those school districts to meet the additional administrative expense? Secretary FREEMAN. In this instance, the amount to be made available out of the $6 million would indirectly provide that kind of assistance through help in buying the food proper.

Senator MONTOYA. The administrative expenses at the local level? Secretary FREEMAN. In that sense, it is, yes.

Senator MONTOYA. Thank you.

The CHAIRMAN. Are there any further questions?

If not, we thank you very much, Mr. Secretary.

Secretary FREEMAN. Thank you, Mr. Chairman.

The CHAIRMAN. We will next hear from Mr. Patrick Healy, assistant secretary of the National Milk Producers Federation.

STATEMENT OF PATRICK B. HEALY, ASSISTANT SECRETARY, NATIONAL MILK PRODUCERS FEDERATION

Mr. HEALY. Mr. Chairman and members of the committee, I would like to file my statement for the record and to make some very brief comments.

The CHAIRMAN. Very well, your whole statement will be put into the record at this point.

(The prepared statement of Mr. Healy follows:)

Mr. Chairman, members of the Committee, I am Patrick B. Healy, assistant secretary of the National Milk Producers Federation, with offices at 30 F Street, N.W., Washington, D.C.

The Federation represents cooperatives whose membership is made up of dairy farmers over the Nation. The Federation, therefore, speaks for milk producers.

We appreciate this opportunity to express the views of the Nation's dairy farmers with reference to S. 3467, a bill to amend the National School Lunch Act, as amended, to strengthen and expand food service programs for children. In its essence this bill would amend the National School Lunch Act by adding provisions which would:

(1) bring the Special Milk Program for Children under the School Lunch Act and provide authorization for its operation through 1970;

(2) provide for a pilot breakfast program for needy children; and

(3) provide for certain non-food assistance to schools in areas in which poor economic conditions exist.

The National Milk Producers Federation appeared before the Subcommittee on Agricultural Production, Marketing, and Stabilization of Prices of this Senate Committee on Agriculture and Forestry on May 12, 1966, in full support of S. 2921, a bill to provide a Special Milk Program for Children. At that time we

stated that:

"The objective of this program, as set forth by Congress, now is being realized. The stated purpose was to encourage children in schools and other nonprofit institutions to consume more milk to improve their diets, as well as helping dairy farmers by providing a market for fluid milk.

"Continuation of the program also means that the acquisition of dairy products by the Commodity Credit Corporation is directly decreased, so that the costs for purchasing and storing dairy products under the price support program are

reduced.

"This program has expanded each year since 1954 when the first school in the Nation to come under the program-a school in Lodi, Wisconsin-served milk to its 530 pupils. Since that time the number of schools and child-care centers participating has grown rapidly. In 1955, the program reimbursed 41,094 institutions for 449.8 million half-pints of milk. Participation increased to 92,005 outlets in 1965 and the use of nearly 3 billion half-pints of milk.

"Certainly, this program which grew so quickly has received overall public acceptance. It will continue to grow if the Congress will provide the needed funds and make the program permanent.

We do not

"When a program works as well as this, it should be continued. need a new program. Years of successful operation have already proven the

worth of this one.

"Over the years the Special Milk Program for Children has grown at the rate of approximately 5 percent per year. This is due to increased school enrollment and added participation. If the present growth rate continues, more funds will be required each year. This bill provides authorization to meet such future needs. "Sufficient funds are not available under the present program to reimburse the schools now taking part. The rate of payment to schools was cut to 95 percent in 1965, and was cut again to 90 percent in February of this year as a result of the impounding by the Bureau of the Budget of $3 million which Congress had appropriated. These cuts have resulted in either a higher cost of milk to children,

or to fewer children drinking milk, or both. The health and welfare of the children taking part in the program are too important to be sacrificed.

"By making this law permanent as provided in S. 2921, schools can plan their programs for this year and for succeeding years. Now is the time to make this program permanent, as this modest investment in the health of our children should not be provided by a temporary program nor should it be limited for lack of funds.

"While this program is primarily a nutritional program, it also has helped raise the income of the dairy farmer by encouraging the consumption of fluid milk thereby bringing about a balance between supply and demand. The income of dairy farmers is too low, and as a result many are selling their herds and diverting their farm resources to other alternatives, or taking jobs in industry.

"By improving the market for milk through enactment of S. 2921, we are making an investment in a strong dairy industry, which will be needed if this country is to supply the increasing needs of the American consumer in coming years.

"Milk production has been dropping at an alarming rate, in April it was 3.8 percent below April of a year ago; in March down 4.6 percent; in February down 5.8 percent; and in January down 5.3 percent. The decline in the number of dairy cows points to an industry decision to leave dairying. As of January 1 of this year, there were 6 percent fewer dairy cows on U.S. farms, the smallest total since 1900, and of equal importance, 6.8 percent fewer heifers, the replacement stock. Any bill which will help reverse this trend is of benefit to the entire Nation. "During fiscal 1965, children drank nearly 3 billion half-pints of milk under the program. This amounts to 1.6 billion pounds of milk, about 3 percent of the total nonfarm consumption in this country. This milk represents the balancing factor which provided for badly needed increased farm income during the fall and winter months of 1965-66. It would be necessary for Commodity Credit Corporation to purchase this milk in the form of manufactured dairy products, if the program were impaired, with the government paying for the dairy products, as well as the storage bill. Surely, the Children's Special Milk Act provides a wiser course to follow.

"Another important provision of S. 2921 is that the bill authorizes the Secretary of Agriculture to re-allocate funds when it appears that a participating state would not be able to fully use the funds allocated to it, thereby providing for maximum utilization of available funds and encouraging optimum participation by children. "Many children of destitute families receive milk they otherwise could not afford because of this program. More will benefit in the future if this bill is passed. Prices for dairy products will be stabilized because of a continued market for the milk used by the children. The farmer, who has been forced to accept low prices in the past, will be sure of this market for fluid milk.

"To continue this program, which already has received such wide acceptance, and to provide for adequate financing, we support S. 2921. In authorizing the funds for the fiscal year ending June 30, 1967, and thereafter, this bill will insure that all nonprofit school and nonprofit nursery schools, child-care centers, settlement houses, summer camps, and similar nonprofit institutions devoted to the care and training of children can continue to provide for them the nutritional benefits available under the program."

The National Milk Producers Federation sincerely appreciates the interest of this Committee and its chairman in this further study of the Special Milk Program for Children, and it appreciates the efforts of this Committee which are evidenced by this study to provide the best possible legislative authority for this program. It is our judgment, however, that the program can best be administered and provide the most good for the greatest number of children if it remains separate from the National School Lunch Act. While there are a great number of institutions which provide both food under the School Lunch Act and milk under the Special Milk Program for Children, there are many which have adopted only one or the other of these programs. If the Special Milk Program is made a part of the School Lunch Act, in all probability there will be an effort on the part of the administrators of this program to require schools and other institutions to use both programs if they want either; and then of course, there will be in all probability an effort made to combine the programs. In our judgment this eventuality would serve to limit the consumption of milk and other foods which in turn would reduce the level of child nutrition in this country. We, therefore, continue in support of the legislation now pending before this Committee which would provide continuing authority for the Special Milk Program for Children as a separate program under separate Congressional authority and funded separately.

In essence, what we are recommending is a continuation of a program which has enjoyed tremendous success as it is now instituted. We, of course, believe that there must be a continuing increase in authority for funds sufficient to meet the growing demands, such as was provided for in S. 2921.

The National Milk Producers Federation has great concern for the poverty stricken people in the United States and it, without reservation, will support sound and effective measures which will provide needed assistance for this group of our people. In this regard it may be that the judgment of this Committee will result in provisions for exploration of pilot feeding programs in destitute areas and provisions for grants in aid which will allow schools located in economically depressed areas to take advantage of the School Lunch Program and the Special Milk Program for Children as they are now operated without impairing funds appropriated for the purchase of food under either of these programs.

May we again express our appreciation to this Committee for its concern over these programs which provide so vital a part in the development of a national sound nutrition program for children.

Mr. HEALY. I am Patrick B. Healy, Assistant Secretary of the National Milk Producers Federation with offices at 30 F Street NW., Washington, D.C.

The Federation represents cooperatives whose membership is made up of dairy farmers over the Nation. The Federation speaks for milk producers, and, therefore, the views of the Federation represents the only true consensus of dairy farmers' thinking available.

We appreciate this opportunity to express the views of the Nation's dairy farmers with reference to S. 3467, a bill to amend the National School Lunch Act, as amended, to strengthen and expand food service programs for children.

In its essence this bill would amend the National School Lunch Act by adding provisions which would:

(1) bring the special milk program for children under the School Lunch Act and provides authorization for its operation through 1970;

(2) provide for a pilot breakfast program for needy children; and

(3) provide for certain nonfood assistance to schools in areas in which poor economic conditions exist.

On May 12, 1966, the National Milk Producers Federation appeared before the Subcommittee on Agricultural Production, Marketing, and Stabilization of Prices of this Senate Committee on Agriculture and Forestry. At that time we appeared in full support of S. 2921, which was a bill to make permanent and authorize appropriations for a special milk program for children. At that time, we testified regarding the remarkable growth of the special milk program, and this growth. in our judgment, is attributable to the way the program is established in legislation, to the way in which it has been administered, and to its acceptance by those who participate as well as by those who supply it.

The National Milk Producers Federation appreciates the interest of this committee in its further consideration of the special milk program. It is our judgment, however, that the program can provide the most good for the greatest number of people if it remains a separate program and is properly funded.

The CHAIRMAN. Just a minute, now. Who administers it now? Mr. HEALY. It is administered by the Department of Agriculture.

The CHAIRMAN. There is no change under this; it would be the same thing.

Mr. HEALY. Under separate legislative authority.

The CHAIRMAN. I say that it would be administered by the same people.

Mr. HEALY. It would be administered by the same people; yes, sir, but we are fearful that the closer we bring the school milk program and school programs of other kinds together, the more certain we are that they eventually will be combined, and, then, there will be less. milk and less other foods made available to children, such a thing, of course, would result in detriment to the two programs which have operated in a most highly successful way and have been among the most well-accepted programs that have come out of the Congress.

The rate of growth in both the school lunch program and the school milk program certainly speaks well for the way they have been operated in the past dozen years, during which time both of them have been on the books. And anything, any action, which this Congress or which the administration would take which would disturb the balance that has been created through careful assessment of these programs would be wrong.

The CHAIRMAN. Mr. Healy, you understand very well that the special milk program was for the producer, rather than a program to assist the children?

Mr. HEALY. Yes, sir. In its inception, it was.

The CHAIRMAN. And it was done in order to get rid of enormous surpluses.

Mr. HEALY. Yes, sir.

The CHAIRMAN. And now we want to make it permanent. Of course, I am not quarreling about that, but since the program has been administered by the Department of Agriculture and since it is going to be administered by the same Department, I thought that you would be for that 100 percent, because that is where the milk will go, that is, for the school milk program.

Mr. HEALY. Well, Mr. Chairman, for the past 12 years we have had both programs, and the Congress has been able to look at the appropriations for the school lunch program and to look at the appropriations for the school milk program and decide how it wants the money spent and how the program can best be operated but if we put these programs together, eventually they will be funded. together, and we will have a lot more money in one package, and then some of the money that was originally used to promote the consumption of milk in the schools and among the schoolchildren will drift over to some other purpose under the Lunch Act.

The CHAIRMAN. Your authorization would be the same, it would be a special one for milk. I cannot agree with you that it will be a separate appropriation. If you combine it, I would agree with you, but in the bill that is now before you, the bill that Senator Holland considered is almost verbatim to this, except for a few limitations I have suggested, and, of course, that matter will have to be submitted to the committee as a whole, particularly in connection with