agricultural attaché in the destination country is provided with advance information about the shipments and is required to verify on a test check basis the arrival of the commodities and the validity of the customs receipts.

These specific controls are supplemented by periodic reports from agricultural attachés showing imports and exports of agricultural commodities by the countries in which they are stationed. The attaché reports are reviewed in Washington by the Foreign Agricultural Service and compared and collated with program data and available market intelligence to insure further against commodity export irregularities.

The formalized system now appears in the "Foreign Agricultural Services Regulations"; title 10, "Economic and Program Compliance Reporting"; chapter 4, "Procedure for Checking on Exports and Entry of Imports of Agricultural Commodities Under Barter Contracts," as follows:

TITLE 10-ECONOMIC AND PROGRAM COMPLIANCE REPORTING CHAPTER 4-PROCEDURE FOR CHECKING ON EXPORTS AND ENTRY OF IMPORTS OF AGRICULTURE COMMODITIES UNDER BARTER CONTRACTS

400 PURPOSE

To prescribe instructions and assign responsibilities for ascertaining that agricultural commodities acquired by an exporter or his agent under contracts between the Commodity Credit Corporation and a barter contractor are exported to arrive in eligible countries of ultimate destination.

The principal statutes authorizing the barter or exchange of agricultural commodities for strategic and other materials and for materials, goods, equipment, and services being procured abroad by the various departments and agencies of the U.S. Government are the CCC Charter Act, Sections 4(h), 5(d) and (f), as amended; and Public Law 480, Sections 302 and 303, as amended. Eligible destinations for bartered commodities are established periodically by the Secretary of Agriculture.

402.1 The Barter and Stockpiling Manager of the Foreign Agricultural Service, Washington is responsible for determining that exports of bartered commodities are imported into eligible countries.

402.2 Agricultural Attaché or Designated Officer from the Embassy or Consulate. In countries where an Agricultural Attaché is resident he shall carry out the functions set forth in parts (1) - (5) of this sub-paragraph. In countries where no agricultural attaché is resident or in countries where an Agricultural Attaché is resident but temporarily absent from his post, the designated officer shall perform these functions. In countries where a P.L. 480, Title I or Title IV program is in effect, the designated officer shall be the officer designated under arrangements between the Department of State and Department of Agriculture to carry out the reporting functions on Title I and Title IV set forth in Chapter III, Title 10 of the Foreign Agricultural Service Regulations. In countries where there is no Title I Or Title IV program in effect, the designated officer shall be the officer designated by the principal officer of the post for barter and Commodity Credit Corporation credit sales as such programs become effective.

The Agricultural Attaché or designated officer shall:

(1) When requested by the Office of Barter and Stockpiling, Foreign Agricultural Service, Washington:

a. Determine the adequacy and validity of Customs import certificates. b. Investigate any discrepancies between the commodities shipped and those received and report through channels to the Office of Barter and Stockpiling.

c. Observe the unloading of commodities exported under the barter program and report through channels to the Office of Barter and Stockpiling, Foreign Agricultural Service, Washington.

d. Visit importers of bartered commodities to inquire into the distribution the importer made of the commodities and report through channels to the Office of Barter and Stockpiling.

(2) When bartered commodities are being imported into the country, report through channels to the Office of Barter and Stockpiling for each calendar quarter within 30 days after the end of the quarter or as soon thereafter as the data are available the quantity and value of all exports and imports by destination and origin of the same or like commodities imported under barter with an explanation of the reason for the exports. Subsequent statements should be in a form permitting these data to be cumulated. Coordinate this reporting with that under Foreign Agricultural Service Regulation Title 10 Chapter 3, sub-paragraph 304.62 (1)c and Chapter 5, sub-paragraph 502.2 (2).

(3) In addition to regular reporting requirements on import policy, report through channels to the Office of Barter and Stockpiling any change in import quotas which in his judgment might affect imports of United States commodities under barter. Coordinate this reporting with that under Title 10 Chapter 3 paragraph 305 and Chapter 5 sub-paragraph 502.2 (3).

(4) Report through channels to the Office of Barter and Stockpiling as soon as possible any information, including that obtained from other U.S. government officials, local government officials, trade sources and press reports, indicating the diversion of bartered commodities before arrival in the country or the export after arrival in the country.

(5) Establish and maintain a current file of all records on the barter program in such a manner that if necessary an analysis and review of barter imports into their countries can be made.

402.3 Reports Officer in the Office of the Assistant Administrator for Agricultural Attachés, Foreign Agricultural Service, Washington. The Reports Officer shall:

(1) Transmit through channels to the Agricultural Attaché or designated officer all requests made by the Office of Barter and Stockpiling for reports from the Attaché or designated officer.

(2) Keep a record of these requests and take the necessary follow-up action to see that the reports are filed.

402.4 The Office of Barter and Stockpiling Contract Administration Staff shall:

(1) Receive, collate, reconcile, and post to contract control records information received pursuant to Agricultural Stabilization and Conservation Service (ASCS) Instruction 109 FI, as amended, from the ASCS Commodity Offices covering sales, deliveries, and export of agricultural commodities applied to barter contracts.

(2) Obtain from barter contractors or their agents two copies of an export certification on forms prescribed by the Office of Barter and Stockpiling and two copies of the bill of lading for each shipment. Send promptly by Air Mail one copy of each export certification with a copy of the applicable bill of lading to the Agricultural Attaché or designated officer in the country of ultimate destination to advise him of impending importations of bartered commodities.

(3) Collate and reconcile the information contained in the export certification and supporting bill of lading with commodity sales, delivery, and export information received from the ASCS Commodity Offices, and post to the contract control records.

(4) Obtain from barter contractors or their agents for each barter shipment as evidenced by an export certificate and an ocean bill of lading, a certificate signed or authenticated by a duly authorized Customs official of the importing country attesting to the importation of the commodities shown on the export certificate and ocean bill of lading.

(5) Check and reconcile the information provided by the Customs import certificate with that detailed in the appropriate export certification and bill of lading and post to the contract control record.

(6) If necessary request the Agricultural Attaché or designated officer to investigate discrepancies, take indicated action, and report.

(7) Explain and record in writing all discrepancies reconciled in (1), (3) and (5) of this subparagraph and keep a written record of actions taken with respect to discrepancies which cannot be reconciled.

(8) Send to the Agricultural Attaché or designated officer copies of selected Customs import certificates for determining the adequacy and validity of the certificates.

(9) Request the Agricultural Attaché or designated officer on selected shipments to observe the unloading of the cargo and report.

(10) Request the Agricultural Attaché or designated officer no selected shipments to visit the importer to inquire into the distribution which the importer made of the commodities.

(11) Prepare and send to the Agricultural Attaché or designated officer each calendar quarter a summary for the country to which he is assigned showing the agricultural commodities shipped under barter contracts and the imports of commodities as evidenced by the Customs import certificates received.

402.5 The Office of Barter and Stockpiling Program Analysis Staff shall notify the Agricultural Attachés or other designated officers in the countries affected of pending bilateral barter transactions. A bilateral barter transaction is one requiring delivery of agricultural commodities to the country which supplies the material.

TRANSPORTATION AND FACILITIES RESEARCH

Mr. WHITTEN. Now there is another matter, Mr. Secretary, in which the chairman of the Committee on Agriculture, Mr. Cooley of North Carolina, has gone into great detail in a letter to the Presi dent. He points out the real loss which would occur in his opinion if funds were left out of the budget for Transporation and Facilities Research Division of the Agricultural Marketing Service.

In this letter, from which I shall put excerpts in the record, attention is called to the work that would be eliminated in the event these funds were not restored. I am doing this because Mr. Cooley and I are in such thorough agreement as to the value of carrying on these activities, though we might have a different view as to just how much money might be needed to continue them.

If you would comment on those points, we would appreciate that,

too.

(Excerpts from the letter follows:)

Under your recommendation, money would be denied for research done through the Transportation and Facilities Research Division, Agricultural Marketing Service, in the Department of Agriculture.

This recommendation is so obscured in the overall budget presentation that I am sure it did not come to your personal attention prior to your submission of the budget message. I just now have been made aware of its significance, through protests I am receiving from over the country.

I am entirely persuaded that you were uninformed of this budget item by the very fact that it is contrary to your own expressions, in this and other messages, of interest in consumers and in research.

Marketing research is, indeed, important to agriculture, but it is of far greater urgency to consumers. In this connection I call your attention to the fact that the farm value of food purchased by civilian consumers in the United States increased only from $18.7 billion in 1947 to $21.3 billion in 1963, while the marketing costs on this same food jumped from $20.7 billion in 1947 to $45.7 billion in 1963. And it is reasonable to assume that these marketing costs would have been several billions of dollars greater except for efficiencies encouraged and promoted through the research done by the Transportation and Facilities Research Division of the Agricultural Marketing Service.

The Congress, in the Agricultural Marketing Act of 1946, unanimously approved by both the House and the Senate, declared "that a sound, efficient, and privately operated system for distributing and marketing agricultural products is essential to a prosperous agriculture and is indispensable to the maintenance of full employment and to the welfare, prosperity, and health of the Nation." It further declared it to be the policy of Congress to promote through research, study, experimentation, and through cooperation among Federal and State agencies, farm organizations, and private industry a scientific approach to the problems of marketing, transportation, and distribution of agricultural products

similar to the scientific methods which have been utilized so successfully in the production of agricultural products."

Under this legislation the Secretary of Agriculture was directed "to conduct, assist, and foster research, investigation, and experimentation to determine the best methods of processing, preparation for market, packaging, handling, transporting, storing, distributing, and marketing agricultural products *** to foster and assist in the development and establishment of more efficient marketing methods, practices, and facilities for the purpose of bringing about more efficient and orderly marketing, and reducing the price spread between the producer and the consumer *** and to determine the needs and develop or assist in the development of plans for efficient facilities and methods of operating such facilities for the proper assembly, processing, transportation, storage, distribution, and handling of agricultural products."

These functions are being performed by the Transportation and Facilities Research Division in cooperation with marketing firms and associations and State agencies.

Denial of funds for these functions would, in effect, repeal a significant part of the Agricultural Marketing Act of 1946.

When I became aware of the budget recommendation on marketing research, I requested the staff of the Committee on Agriculture to look into the effect, and I am advised the proposed reduction in funds would eliminate the following work which has been highly effective in reducing the cost of getting farm and food products from farms to consumers:

1. Developing plans for and bringing about the construction of new wholesale food marketing facilities in many large cities, including Boston, Springfield, New Bedford, Providence, New Haven, New York, Newark, Philadelphia, Pittsburgh, Detroit, Chicago, San Juan, and Milwaukee. In most of these cities urban renewal programs are dependent upon the completion of plans for relocating the wholesale food industry out of blighted areas. Annual savings in food handling costs resulting from this work are great. For example, if the facilities being planned in New York City, one $36,500,000 section of which is now under construction, can be satisfactorily completed and properly used, the savings in food handling costs in 2 months will equal all the Federal funds that have been appropriated for this type of research since the program began. The current appropriation for this type of work is about $250,000.

2. The assistance given through State extension services and State departments of agriculture in developing new, and improving old, marketing facilities in producing areas for such operations as assembling and packing eggs, processing poultry, assembling and slaughtering livestock, fruit and vegetable assembly and packing, and the storage of grain. With an appropriation of $100,000 per year plans for 200 new facilities in 30 States have been developed during the past 5 years with annual benefits in lowered marketing costs amounting to many times the expenditure for the research.

3. Research to reduce the cost of handling cotton in warehouses which is saving about $5 million per year with a research expenditure of less than $25,000. 4. The research programs being conducted at East Grand Forks, Minn., and Presque Isle, Maine, to improve the work methods, equipment, and facilities for handling and storing potatoes.

5. The work being done in Georgia to solve problems of drying, conditioning, handling, storage, and shelling of peanuts.

6. The work being done at Orlando, Fla., Fresno, Calif., and Yakima, Wash., to develop and evaluate shipping containers and consumer packages for many kinds of fresh fruits and vegetables.

7. A portion of the work being done to improve refrigerated transportation equipment for the handling of frozen foods and to find lower cost methods of transporting products from farms to consumers.

8. The program of improving the handling methods, equipment, facilities for grocery wholesaling, which has been instrumental in reducing gross margins 50 percent for these distributors and in making it possible for them to compete successfully with corporate chains.

9. The work to improve the efficiency of handling meat in retail stores which has been an important factor in doubling the quantity of meat sales per manhour of labor and offers promise of increasing labor efficiency by an additional 25 to 30 percent and bringing significant savings in the amount of equipment and space needed for performing the cutting, packaging, and price-marketing function.

10. The research to improve the handling of fresh fruits and vegetables in retail stores that has helped increased labor efficiency by 25 percent and which promises significant additional savings in the future.

11. The recently inaugurated program to reduce the cost of handling food through institutional wholesalers and public feeding establishments.

I mentioned earlier that this budget recommendation is contrary to your expressions upon research and consumer interests. I respectfully suggest also that it does not harmonize with your concern, expressed in the message on agriculture, about the concentration of control over the marketing of food in the hands of a few large firms. This reduction in funds for marketing research would eliminate the work being done by the Department of Agriculture to improve the efficiency of medium- and small-size operators so that they may compete and remain in business.

(The Department's comments follow:)

DEPARTMENT COMMENTS ON PROPOSED REDUCTION IN TRANSPORTATION AND FACILITIES RESEARCH

The reduction proposed in the budget would eliminate research on market facility planning and wholesaling and retailing operations and, by terminating the work at a number of field locations, would reduce research on other physical handling of farm products in marketing channels. In total, the work of the Transportation and Facilities Research Division would not be eliminated but would be reduced by $862,000 or to approximately one-half of the 1964 level.

These budget reductions are among many being proposed within the Department and throughout the Government in a sincere effort to reduce Federal expenditures and personnel levels. It is not possible to effect reductions of this scope without eliminating or reducing services which some groups or segments of the economy find useful and helpful. The Department is hopeful, however, that where the services involved in these reductions are recognized as being highly valuable, private industry or local government agencies will be stimulated to assume responsibility for them.

As reflected in Congressman Cooley's letter, widespread interest has been evidenced in the work of this Division and much of this work has, over the years, been performed in cooperation with marketing firms and associations and State agencies. Also, there are private research firms which have had experience in some phases of this work. Several have, for example, participated with the Department through contracts in conducting marketing facilities studies in some of our major cities. Thus, as a result of the work that has been done by the Department, not only is a substantial amount of research information available, but also considerable interest and experience has been generated outside the Federal Government. Interest has been particularly widespread in the work proposed for reduction in this Division due to the benefits directly apparent to specific groups. We are hopeful, therefore, that considerable work of the type affected by the budget reduction will continue without direct Federal funds.

ACTIONS TO PREVENT IRREGULARITIES UNDER DEPARTMENT PROGRAMS

Mr. WHITTEN. Mr. Secretary, I always believe a good policeman is one that makes himself seen around from time to time, so folks don't get into trouble, even unknowingly.

This committee is more interested in pointing out some of the dangers that might exist, instead of waiting until something really happens. I have reference to the fact that under the soil bank, from two or three investigations by this committee, we found some terrible examples of waste of public money such as paying large rentals for land that really did not produce. We found in some instances, people rented Federal Government land and then in turn rented it back to the Government at greatly increased rates. We found any number of things, many of which I don't recall, but they were just unbelievable.

We found many places where the individuals divided land up between members of their family, so as to defeat limitations. I am sure