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and imports of cheese in excess of the established quota, would have the effects set forth above. We see no reason in the facts now current that would necessitate a different finding by the Secretary. This is an official finding, and can be modified at any time by the Secretary and at his discretion-thereby imparting a great deal of flexibility into the administration of the import-control order.

Unlimited imports would lead to the destruction of the price support program. There can be no doubt that permitting large scale imports during the conduct of the price support program would operate to the extreme disadvantage of that program--causing unnecessary, expenditures, and losses in disposition of the commodities purchased It is nonsense to place a floor under prices of milk and butterfat through the purchase of butter, cheese, and nonfat dry milk solids, and then turn around and permit imports to keep prices driven down to price support levels.

The result of such an operation would be that the price support program of the United States Department of Agriculture would in effect operate as a price support program for all the exportable surpluses of the world. I doubt that the Congress is yet ready to. underwrite the price levels for dairy products throughout the world.

While price support purchases this last year were relatively small, in 1949 and 1950 they were quite large. During the 3-year period January 1949, through December 1951, over 242 million pounds of butter were purchased. About 142 million pounds of this was resold to the trade in this country, and the remainder was sold, through school lunch, or was donated to domestic and foreign welfare organizations, or sold for nominal prices to foreign governments--prices. that in some instances were as low as 15 cents per pound.

Cheese purchases during the period were about 135 million pounds, of which about 73 million was donated to domestic and foreign welfare agencies, or through negotiated sales to foreign purchasers--at prices representing a fraction of its cost.

About 731 million pounds of nonfat dry milk solids were acquired under the price support program, of which about 336 million pounds were disposed of through negotiated export sales, and 150 million pounds were donated to domestic and foreign relief agencies. (Approximately 103 million pounds were sent abroad for feed at very low prices.)

In view of this record of the costs of the price-support program, it is obvious that permitting large scale imports would merely result in unnecessary expenditures under the price-support program and therefore be in violation of the standard set forth in section 104.

Other laws do not offer sufficient protection. Those who argue that there are other laws which offer adequate protection to the American dairy farmer are in error for the following reasons:

(a) Section 22 of the Agricultural Adjustment Act authorizes control of imports if the Secretary of Agriculture believes imports will interfere with price support programs instituted under the Agricultural Adjustment Act. It is our belief that the procedures involved in invoking section 22 are so complex and time consuming that the damage would be done before it were possible to establish control over imports under this section.

(6) Section 7 of the Trade Agreements Act authorizes import controls when serious injury is threatened by increased imports resulting

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from concessions granted in a trade agreement. However, the Tariff Commission under the procedure is allowed a year to make an investigation of the matter, and even then, the President has the right to decide not to control imports, but is required to report his reasons for his failure to act to the Congress.

(c) Section 101 of the Defense Production Act is not adequate. Under a similar provision of the Second War Powers Act, butter imports had been prohibited until the act expired July 31, 1951. At the time of the expiration of the act, however, the Department of Agriculture had decided that it could no longer control butter imports under such a provision.

Under trade agreements, it is provided that, when imports are controlled, domestic production must be controlled in the same ratio as the control of imports. There is no authority to control the production of milk and butterfat, so this provision is worthless. Even if there were authority for production control of milk and butterfat, dairy farmers would not stand for it. They refused a production control program offered them by the United States Department of Agriculture during the depths of the depression in 1934. There is even less reason to believe that they would approve production control now.

Other arguments for the repeal of section 104 are unimpressive. I hope you will indulge me while I make a few brief comments as to the validity of other arguments advanced by proponents of repeal of section 104, as follows:

(a) The dairy farmer gains because this country exports more than it imports. This argument must be taken with a whole shaker full of salt. Prior to the war, exports were negligible. During the war and since the inception of the Marshall plan they have been large. In 1951 our dairy exports amounted to about $117 million whereas our imports in 1950 amounted to a little over $34 million. (See tables 5 and 6, appendix.)

The large increase in exports postwar was due to two major factors, these being:

(1) The European dairy industry had been severely damaged, and

(2) Our exports were financed very largely by grants of either the commodity or dollars.

Since the inception of the Marshall plan a large portion of our agricultural exports have been financed by this country by outright grants of commodities and dollars. From April 3, 1948, through November 30, 1951, procurement authorizations for purchases with Marshall plan dollars amounted to about $3,360 million for food, feed, and fertilizer, about $1,433 million for cotton, and about $451 million for tobacco. Procurement authorizations for bread grains alone were about $1,663 million. (For details see tables 8 and 9, appendix.)

For dairy products, purchase authorizations were $108 million from United States supplies, plus $10 million to be purchased in Canada.

Procurement authorizations for food and other agricultural commodities during the period April 3, 1948, through November 30, 1951, were about $5,245,000,000. Procurement authorizations for supplies to be secured in the United States amounted to $4,128,000,000 during the same period.

Our total agricultural exports during the 3-year period July 1948 through June 1951 were about $10,228,000,000. Although not pre

cisely comparable because of the slight differences in time periods involved, it is obvious that a very large portion of our exports is trade that we in this country have financed ourselves.

We realize that some farm commodities have large export markets. However, we do not think it desirable to wreck the dairy industry, larger than any other except meat animals to gain and hold such markets.

It seems to me that the figures and information I have just given should be sufficient to indicate the fallacy of the argument that the dairy farmer stands to gain by permitting large scale imports because he has such good export markets. It is submitted that an export market which depends upon the exporting country furnishing the financing to pay for such exports is indeed unsound. Yet these are the exports which the proponents of repeal of section 104 hold up as a shining example of the benefits our dairymen may expect if unlimited imports are permitted.

I wish to thank the committee for its courtesy in listening to my statement.

Mr. Chairman, I have appended to my statement some charts and tables which I would like to have included in the record.

The CHAIRMAN. Without objection, that may be done. (The information is as follows:)

CAART 1. -NUMBERS OF MILK COWS AND HEIFERS
2 YEARS OLD AND OVER KEPT FOR MILK ON FARMS
AND NU BERS OF MEAT ANIMALS, EXPRESSED AS
PERCENTAGES OF THE 1935-1939 AVERAGE NUMBERS--
JANUARY 1, 1910-1952.

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YEARS
MILK COW NUMBERS ORDINARILY FOLLOW THE
SAME GENERAL CYCLE AS BEEF CATTLE NUMBERS.
Now, WITH BEEF PRICES SO HIGH AS CONPARED TO
MILK PRICES, THE DAIRY HERD IS DECREASING AND
THE BEEF CATTLE HERD 18 INCREASING.

CHART 2. -NUMBER OF COWS AND BEIFERS ELIMINATED
FROM UNITED STATES DAIRY HERDS DURING THE YEAR,

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NUMBER OF COWS AND HEIFERS ELIMINATED DURING YEAR - PER 100 COWS.

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THE NUMBER OF COWS AND FEIFERS ELIMINATED FROM U. S. DAIRY HERDS DURING THE YEAR, PER 100 COWS FIRST OF THE YEAR, IS RUNNING AT HIGH LEVELS, CAUSING F.EDUCTIONS IN TOTAL NUMBER OF MILK. COWS.

CHART 3. UNITED STATES AVERAGE FARM PRICES OF BEEF
CATTLE AND MILK SOLD WHOLESALE FROM FARMS, EXPRESSED
AS PERCENTAGES OF PARITY PRICES, 1937-1951.

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BEEF CATTLE PRICES HAVE BEEN RELATIVELY HIGHER THAN MILK AND BUTTERFAT PRICES FOR SOME YEARS, THIS DISPARITY IS THE REASON DAIRY FAREILS ARE DISPOSING OF THEIR MILK COWS AND TURNING TO BEEF CATTLE.

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