Section 32 funds are used to encourage exportation and domestic consumption of agricultural products and to stabilize market prices either through announcements that the Department stands ready to enter the market, or by actual participation in the market. The extent to which funds actually will be obligated and expended, for perishables and other surplus removal programs will depend upon the market situation which develops as harvest seasons approach. The type of program to be developed also will depend upon the kind and volume of the surpluses which exist at the time and the potential outlets. Generally, surpluses are removed from the market through purchases, which are then donated to schools, institutions, and needy persons. The following table summarizes the estimated total funds available for section 32 activities and the estimated balance carried forward for fiscal years 1963, 1964, and 1965. BIOGRAPHICAL SKETCH Mr. WHITTEN. According to the custom in connection with initial appearances before the subcommittee, we should be glad to have inserted in the record at this point a brief biographical sketch, Dr. Mehren. We would be glad to have that put into the record and also we should like for you to tell us something about yourself orally, if you will. (The material referred to follows:) BIOGRAPHIC STATEMENT-GEORGE L. MEHREN, JANUARY 1964 U.S. Government posts Assistant Secretary of Agriculture, 1963- Member of Board of Directors of Commodity Credit Corporation, 1963- Consultant and collaborator, U.S. Department of Agriculture, various times, 1949 to date. Assistant Director, Food and Restaurant Division, Office of Price Stabilization, Washington, 1951. Director, Food and Restaurant Division, Office of Price Stabilization, Washington, 1951-52. Acting Director, Office of Price Operations, Office of Price Stabilization, Washington, 1952. Consultant, Economic Stabilization Administration, Washington, 1952. Consultant, Foreign Operations Administration and Mutual Security Administration, Washington, 1952-53. Member, National Defense Executive Reserve, Executive Office of the President, Washington, 1957 to date. Consultant, Office of Emergency Planning, Washington, and predecessor agencies, 1957 to date. Consultant, International Cooperation Administration, Washington, 1961. Consultant, U.S. Operations Mission to Korea, 1961. Consultant or adviser, California Department of Agriculture, various times, 1950 to date. Expert witness, various committees of the U.S. Congress and of the California Legislature, 1957 to date. Expert witness, U.S. Tariff Commission, Federal Trade Commission, and Interstate Commerce Commission, 1959 to date. tract consultant: U.S. Foreign Agricultural Service, California Department of Agriculture, California Prune Advisory Board (Western Europe), 1962. Foreign posts Con Adviser or consultant, United Kingdom Ministry of Agriculture and Fisheries, London, and Secretary of State for Scotland, Edinburgh, 1952-53. Ministry of Livestock and Agriculture, Republic of Venezuela, Caracas, 1953-54. Ministry of Agriculture and Forestry, Republic of Italy, Rome, 1956. Ministry of Agriculture and Forestry and Office of Marine Affairs, Republic of Korea, Seoul, 1961. Consultant, Consejo de Bienestar Rural, Caracas, 1953-54. Consultant, Food and Agriculture Organization of the United Nations, Rome, 1956. Dean of economics and professor of agricultural economics in the Special International Center for Training and Statistics, Agricultural Economics, sponsored by the University of Rome, the Republic of Italy, and the Food and Agriculture Organization of the United Nations, Rome, 1956. Founding Administrative Board, Center for Specialization and Research in Agricultural Economics, University of Naples (sponsored by University of Naples, Republic of Italy, Ford Foundation and Giannini Foundation), 1959-62. Professional posts Editor in chief, the Journal of Marketing, 1957-58. Managing editor, the Journal of Marketing, 1955-57. General editorial board, the Journal of Marketing, 1952-55. Board of directors, American Marketing Association, 1957-58. University posts Professor of agricultural economics and agricultural economist in the Experiment Station and on the Giannini Foundation, 1952 to date. Director, Giannini Foundation of Agricultural Economics. Chairman, department of agricultural economics, statewide, University of California. Chairman, statewide curriculum in agricultural business management, 1957-62. Associate professor of agricultural economics and associate agricultural economist on the Giannini Foundation and in the Experiment Station, 1948-51. Assistant professor of agricultural economics and assistant agricultural economist on the Giannini foundation and in the Experiment Station, 1946-47 (U.S. Navy, 1942-45). Instructor in agricultural economics, 1942. Associate in agricultural economics, 1940. Research assistant on the Giannini Foundation, 1940. Teaching assistant in agricultural economics, 1938-39. Member, executive or advisory committees: Institute of International Studies, School of Business Administration, Institute of Industrial Relations, Water Resources Center, Wildland Research Center, various times, 1957-62. University Senate Committee on University Welfare, 1960–62. Representative Assembly, 1961. Member American Farm Economic Association, Western Farm Economics Association, and Alpha Zeta. Governor's Export and Import Advisory Committees, Sacra mento, Calif., 1962 Commercial consultant Various food and agricultural companies, transportation companies, and law firms. Publications More than 200 journal articles, bulletins, research reports, and other publications in the areas of economic and marketing theory, price analysis, and general policy. General background Born, Sacramento, Calif. Bachelor's degree in economics, with honors, University of California, 1938. Ph. D. in agricultural economics, University of California, 1942. Dr. MEHREN. My name is George L. Mehren. I am Assistant Secretary of Agriculture for Marketing and Consumer Services. I have been with the Department in this job since late August. I worked with many of the AMS people before over the years and in fact once worked for the predecessor agency of AMS. I have worked all of my professional career in agricultural marketing, so I have a very deep interest in what goes on here today. I think that what I have seen in the past few months actually fortifies the very high respect I have had for the Agricultural Marketing Service over the years. I want to thank you for letting me participate in these hearings as Administrator Smith presents his budget request. Mr. WHITTEN. Thank you, sir. You may proceed, Mr. Smith. GENERAL STATEMENT Mr. SMITH. Mr. Chairman, I would like to ask for guidance and counsel. I am prepared to go through my statement or Mr. WHITTEN. Mr. Smith, if it suits you just as well, we might have your statement. We probably may save time thereby. Frequently when we ask questions, they are covered in the statement. might proceed that way. Mr. SMITH. All right, sir. Thank you. So you It is again a pleasure to appear before this committee to discuss the budget of the Agricultural Marketing Service, which is responsible for the major marketing programs of the Department. The Agricultural Marketing Service has at least three distinguishing characteristics with which this committee is familiar but which are not generally understood and recognized. I would like to make brief reference to them at this juncture. First, it is an agency whose aggregate of activities are many and varied. The second relates to the fact that through collection of fees and charges AMS is self-supporting to the extent of between 40 to 45 percent of its yearend employment and total administrative and operating expense budget in fiscal year 1964. The third characteristic I want to point up is that we have very extensive cooperative working relationships with State agencies, such as departments of agriculture, public welfare, and education. These joint endeavors result in substantial Federal savings in both money and manpower for administration of programs for which AMS has responsibility. This year the Agricultural Marketing Service embarks upon a second half century of providing services to the Nation's agriculture and the American consumer. We do so in anticipation of being confronted in the days ahead with increasingly significant and challenging changes in the production and marketing system and in the demands which will be made upon us by farmers, marketers, and consumers. The In reflecting on the past, there are two important developments which have occurred with respect to marketing services performed by the Department. Both are quite significant and should give this committee and the Department a deep sense of satisfaction. first is the extent to which the services have had to be expanded and made responsive to changes which have occurred in the last half century in our marketing system and the Nation's growth. The second is the evolution of the services from an initially almost exclusively farm-oriented group of activities to services which also provide substantial direct benefit to the American consumer and the general public. In terms of the farm community, we enter the second half century with a nationwide market reporting and market news network that is the envy of all countries. We are providing farmers and the distributive system with the nationwide inspection and grading system backdropped with workable sets of Federal standards of quality for all major and most minor crops. We are providing producers and the distributive system with important research results which enable all concerned to maintain a highly efficient and a more competitive marketing system. We are seeking to maintain an open and competitive marketing system in major product areas through the administration of a series of regulatory acts. We have established and are maintaining a high degree of coordination with State agencies in order to effectively carry out marketing service programs of mutual interest, and to avoid duplication on the part of our respective agencies. We have continually underway, in one form or another, programs designed to expand market outlets for agricultural products and to maintain price stability for those perishable commodities subject to wide seasonal supply and demand fluctuations. We, moreover, enter the next half century with a significant array of services which, while serving the interests of producers, also have become increasingly important to consumers and the general public. Unfortunately, the availability and degree of benefits such services provide are not fully recognized or appreciated by the general public. For example, it is unlikely that the general public fully understands the extent to which these services make it possible for the American consumer to enjoy the abundance of high-quality, wholesome, and nutritious foods which are so readily available at the retail stores each day of the year. Few consumers seem to know about the extent to which these services enable the marketing system to function in a 31-088-64-pt. 3- -2 manner so efficient that it and our production efficiencies require the expenditure of only 19 cents of their dollar for food. Increasingly, however, consumers are reflecting their interest and need for the buying guidelines and protection provided them in terms of standards of quality, labeling, and the wholesomeness inspection program which we carry on. There is general acceptance of the impact that the school lunch program which we administer is having on our Nation's schoolchildren. The hot lunch supplied through this program provides the participating children with at least one-third of their daily nutritional requirements. There is sympathetic public support and understanding for our efforts to make this program increasingly available to remote schools and needy children generally. There is also a growing awareness and acceptance of our efforts in providing surplus foods to approximately 6 million needy persons in about one-half of the counties of the Nation. The pilot food stamp program continues to prove successful with many additional communities requesting the program for their areas. OVERALL AMS BUDGET The budget proposed for 1965 is designed to enable AMS to continue a level of program activity consistent with the agency's overall objectives and with the underlying objectives of the administration, including that of holding expenditures and personnel to the minimum. Within this context, the budget includes both increases and decreases. In past years this committee has indicated the desirability of redirecting resources to more urgent needs and the desirability of phasing out those activities which may have passed their peak of usefulness. Our budget proposals for 1965 include such redirections of available resources in some of our marketing and distribution activities. In addition to these program changes, provision is made in the budget to meet increased pay costs and the mandatory payments to the Bureau of Employment Compensation. Other minor adjustments are generally technical rather than substantive in character. The substantive changes being proposed may be grouped under several major program categories. To facilitate presentation and discussion, these groupings follow the general order of the budget and also the organizational assignments to my associates within AMS. With the committee's permission, I propose to call on them; but at this time I shall summarize briefly the budget proposals for each of these program groupings. MARKETING RESEARCH Before asking Dr. Omer Herrmann to discuss details of the appropriation item for marketing research and the requested increase for work related to insect damage to products in marketing channels, I believe it appropriate to discuss with you a proposed reduction in marketing research which is attracting considerable attention. This is an item of $862,000 which currently supports our research activities in market facility planning, efficiencies in wholesaling and retailing, |