17 



would amend, was enacted in 1974. The American Egg Board pro- 

 gram has a proud tradition. In the 1970's it had one of the most 

 successful commodity promotion programs of any agricultural com- 

 modity. In fact, American Egg Board's success in those early years 

 was an inspiration for other commodity groups to seek approval for 

 their own generic promotion programs. 



National advertisements for the "incredible, edible eg^' encour- 

 aged consumers to look more favorably on eggs and to increase per 

 capita consumption of eggs. Unfortunately, the funding level that 

 the statutory rate of assessment provided, $0.05 per case, was not 

 enough for the American Egg Board to continue a significant na- 

 tional advertising campaign. In the face of double-digit inflation, 

 cost increases were such that our industry could no longer afford 

 to keep its campaign afloat. 



In 1988, with the help of this subcommittee, our authorizing leg- 

 islation was amended to eliminate the refund provision. This step 

 was supported by over 90 percent of the egg production in the Unit- 

 ed States. As a result, our program now has an annual budget of 

 a little over $7 million, which has significantly contributed to its 

 added success in recent years. Unfortunately, $7 million is not 

 enough to allow for an effective national advertising campaign. If 

 the egg industry is to halt the slide in per capita consumption of 

 eggs, it must have the advertising and promotional dollars to com- 

 pete with breakfast cereals and other foods. The producers of these 

 products spend millions of dollars on a regular basis to encourage 

 people to buy more expensive and less nutritional products than 

 eggs. 



H.R. 1637 would give egg producers the ability to vote to increase 

 their assessments to a level they think appropriate to get the job 

 done. The legislation would authorize the American Egg Board to 

 request that the Secretary conduct a referendum on any increase 

 in the assessment. The American Egg Board would make its re- 

 quest for such an increase based on scientific studies, market anal- 

 yses, and other evidence, such as producer polls which would indi- 

 cate support for such an increase. A vote could be requested to 

 move to any level of assessment up to $0.30 per case of commercial 

 eggs, or the equivalent. 



The change in the assessment rate could take place only if ap- 

 proved by at least two-thirds of the producers voting in the referen- 

 dum, or by a majority of the producers who produce not less than 

 two-thirds of all commercial eggs produced by those voting in the 

 referendum. 



Mr. Chairman, the upper limit of $0.30 per case for assessment 

 should provide plenty of flexibility for the egg industry. It is not ex- 

 pected that the American Egg Board will request a referendum to 

 raise the assessment from $0.05 per case to $0.30 per case all at 

 once. It is expected that the industry will increase their rate of as- 

 sessment gradually. 



However, we feel that the authority to move up to $0.30 per case 

 should be provided in the law so that we, as an industry, do not 

 have to come back to Congress each time we might wish to increase 

 the assessment. 



We feel that the referendum mechanism provides proper assur- 

 ances that assessment increases can only be made if the industry 



