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Mr. BYRNES. As I understand it the assessment is based on the total amount of milk going into the market.

Mr. WALTER COTTON. The $141 million is the purchase cost of 3 billion pounds of milk equivalent and the assessment of 14 cents is spread over the 100 billion pounds marketed.

Mr. BYRNES. So that means an assessment equivalent of $140 million?

Mr. WALTER COTTON. That is right.

Mr. BYRNES. That is going to support your program and support also the purchase under your self-help, whatever may be necessary, your 3 billion pounds of surplus, at a cost of only $140 million?

Mr. WALTZ. It would not provide, however, for the cost of operating the Board which would be nominal. Neither would it provide for any contributions on a cooperative basis or direct basis for sales and advertising programs. So it could run in excess of that.

Mr. BYRNES. What would you estimate to be the cost of the present Government program supporting dairy products at 100 percent of parity with the 3 billion pounds of surplus? It would be considerably in excess of $140 million, would it not?

Mr. WALTZ. We think we can do a more efficient job. Mr. BYRNES. That is what I was trying to get at, how you could do this job in a sense so much more cheaply than the Government operation.

Mr. WALTZ. Due to restrictions in Government operations it would seem that costs that could be avoided are built up. That is no criticism of Government operation at all because I presume you have to have certain restrictions in Government operations that you would not have to have, that we do not have at least in private operations. We believe that this Board can do its job more economically than a governmental body can do it.

Mr. BYRNES. Your assessment figure that you use in your tables here then does not take into consideration administrative factors nor promotional factors or anything of that nature?

Mr. WALTZ. The only trouble with that comparison is that you will see in that table that we have assumed the very worst thing, and that is 100 percent losses.

Mr. BYRNES. Still it would only cost under this $140 million?

Mr. WALTZ. That is right. If we recovered 25 percent or 50 percent of the purchase price on the inventories, then

Mr. BYRNES. Then it would be $70 million?

Mr. WALTZ. That is right. Plus administrative and advertising costs. You have to keep all those factors in mind.

Mr. BYRNES. What strikes me is that it is such a low figure.

Mr. WALTZ. That is right.

Mr. BYRNES. Even if you assume 100 percent loss on your purchases. I do not see how. I have difficulty in seeing how you can get by with that low loss.

Mr. WALTZ. Using the Government's own figures of estimated production and consumption, also their own present method of calculating percentage of parity.

Mr. BYRNES. Thank you, Mr. Chairman.
Mr. ANDRESEN. Mr. Davis?
Mr. DAVIS. I have nothing.

Mr. ANDRESEN. Mr. Talle?

Mr. TALLE. No questions, Mr. Chairman.

Mr. ANDRESEN. Mr. Williams?

Mr. WILLIAMs. Thank you, Mr. Chairman.

Mr. ANDRESEN. I think it would be well to include in here a somewhat more detailed statement explaining what the assessment would be to the producers. Generally, you would have to sell this idea to the producers. If you can amplify your statement for the record, showing how much 1 cent assessment will add or take away from the farmer, and the producers, who are going to pay the bill under the proposed plan, will know something about what it will cost them. Mr. WALTZ. May I make a short statement on that?


Mr. WALTZ. I saw some figures developed that if an assessment of 1 cent per pound butterfat had been made on all milk produced from 1938 to the end of 1952, that all losses on Government purchases could have been absorbed out of that assessment and have left over $7 million a year for advertising and promotion. In relation to the acceptance of this program by producers we presented this program to 1,060 delegates at the federation convention in Houston. I took more time and described it in more detail than I did here today. Following that there were questions for at least three-quarters of an hour, and there were no adverse comments regarding the proposed bill at that large meeting. We gave everybody in attendance a copy of the bill itself, a summary of the bill and the tables showing costs. Two days later the delegate body voted on a resolution advocating that the federation work to get this bill enacted into legislation. There was not a single dissenting vote.

So producers had a wonderful opportunity at Houston to preview this bill, and if they did not like it and did not want to pay their own costs they could have said so. Since that time it has been my privilege to attend four producer meetings, one of which happened to be in the territory that you are quite familiar with, Mr. Chairman, Rochester, Minn., last Saturday. I went through this self-help program very carefully at the Rochester dairy cooperative meeting and while there was no time for questions I heard a great many favorable comments on it following the meeting.

Mr. ANDRESEN. I will probably be hearing from them.

If there are no other questions we want to thank you, Mr. Waltz, for your presentation.

The committee stands adjourned.

(Whereupon, at 12:10 p. m., the committee was adjourned.)


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