Mr. HORAN. Of course, it excludes then private research?

Dr. BYERLY. That is correct, and it does not include that which the U.S. Department of Agriculture does.

Mr. HORAN. Oh, it does not?

Dr. BYERLY. No, this is the experiment stations, including the Federal grant funds, but not including those funds expended directly or cooperatively by the Department of Agriculture itself.

But on this basis then, one one-hundredth of a cent on the capital investment or one-tenth of a cent on the imputed return, which would be at a 5-percent rate, roughly that.

I am not saying to you that this is too much or too little. It seems to me a nice number to tie together just how we are allocating our resources, and on these resources it amounts to that.

The next one, please. And then there is another one that we are inclined to forget because it is not a matter of cash receipts. The farm and the country are still places to live, and it is still an important item. The gross rental value, an imputed value, of course, of farm dwellings and the value of home consumption on farms amounts to about $3 billion a year. It has fallen somewhat as farm population has fallen. But $3 billion a year from farm dwellings and from the value of home consumption is still a very substantial amount. Here, too, on the whole we are spending about a tenth of a cent on the dollar value, which is about the same as on the general resource area, and I simply wanted to call this very important area to your attention. It is relevant, of course, to one of the areas of increase that we are asking.

Mr. HORAN. Farm people income is one figure, rural non farm people is another. Nonmoney income.

Dr. BYERLY. Nonmoney income consists of the value of home consumption. That is crops and livestock and other products used at home, plus the gross rental value of the farm dwelling. That is the nonmoney income. This got into a small hassle with the man drawing the charts because I used the word "prerequisites," and he said that is what you paid the hired man. So I used the word "nonmoney income."

The reason I put in the rural nonfarm people is again for comparative purposes. They outnumber the farm people everywhere in all of the regions, in some of them very sharply so. There are still an awful lot of people who live in the country, and it is still a very important area of responsibility that we have.

(The map referred to follows:)

*

U. S. DEPARTMENT OF AGRICULTURE

NEG. CSRS 7-64 (3) COOPERATIVE STATE RESEARCH SERVICE

PESTS, PESTICIDES, AND PESTICIDE RESIDUES

Dr. BYERLY. I should like to dwell very briefly on a problem that has been before you before and I am sure has been brought out to you this week, the matter of pests and pesticides and pesticide residues.

New pests appear and many old ones continue to inflict losses on crops, livestock, forest, and farm and forest products. Among the new ones, the cereal leaf beetle provides a threat to cereal crops in the Middle West.

And I remember, Mr. Chairman, one day when you and I tried to tell Congressman Santangelo what a boll weevil looked like, and we supplied a picture finally. In this case the Michigan Experiment Station has sent in a cereal leaf beetle so you and I may both know what a cereal leaf beetle looks like. It is not an impressive beast, but as the ARS people have told you, a voracious pest to cereal crops.

The committee has heard from ARS witnesses about this new pest. I wish only to add that the experiment stations in the principally affected States have initiated research on this insect.

Research during the past year was designed to obtain a method of control that, although temporary, would provide relief to farmers until a more satisfactory and permanent type of control can be devised. Four states, Indiana, Ohio, Michigan, and Wisconsin, have now combined their efforts through Regional Project NC 73 to learn more about the life history and habits of this new insect pest, what natural controls tend to reduce its numbers, varieties of cereal plants that are resistant to or tolerant of attack by the insect and the establishment of new safer methods of chemical control. This research is coordinated with that also being undertaken by the Agriculture Research Service, USDA.

(The material referred to follows:)

ALONG THE VITAL LIFELINE

A joint publication, with the above title, by the Cooperative Extension Service and the Massachusetts Agricultural Experiment Station describes the processes, functions, and characteristics of marketing, processing, and distribution of food and other agricultural products in Massachusetts.

Major changes in the marketing of agricultural products in Massachusetts

Yesterday. Great and dramatic changes have revolutionized the marketing of agricultural products in Massachusetts. Gone are the slow-moving, qualitylosing, geography-limited methods of the horse and wagon, the icebox, the small crowded store, inefficient sales methods, unrefined products, the bulk container, and to a considerable extent, the crowded, congested wholesale markets. In 1863, Boston was the market center for a small area. It was supplied mostly from nearby farming communities, plus the trade which brought ships to the port of Boston. There were several small market sections in the city to which farmers brought their products by horse and wagon.

Today.-Technological progress has brought speed, protection, and efficiency to the marketing of agricultural products. The gasoline engine, the diesel engine, superhighways, modern refrigeration equipment, new building materials and techniques, and applications of electricity have put modernity into stores, transportation, and the wholesale markets. Better products, longer retention of quality, wider choice, and more efficiency have been among the results. Boston is a regional wholesale food marketing center, supplying most of New England and parts of Canada. At least 10 to 15 million consumers are supplied through marketing channels radiating from Boston. Large amounts of agricultural products come to Boston from other parts of the country and the world for dis

tribution. Some undergo processing in Massachusetts before moving along the marketing channels. Agricultural products from Bay State farms also enter the processing and distribution system through the Boston market outlets. Products such as cranberries, hatching eggs, apples, and baby chicks go from Boston to distant places.

Tomorrow. That there will be more and drastic changes in the marketing of agricultural products in Massachusetts is certain. New findings from research, new equipment, new types of buildings, new and aggressive merchandising, will all make far-reaching contributions.

Other tomorrows. As technological progress continues there will be more change. Freeze-drying, irradiation, and newer sterilization techniques will give us still better foods, easier to store and prepare. Food scientists are working on instant meals without loss of freshness, nutritive value, or flavor.

Marketing of agricultural products provides jobs, payrolls, and has large part in State's economy

Jobs and payrolls.-There are more than 22,000 firms in Massachusetts which assemble, process, and distribute food; and they provide substantial numbers of jobs and many millions of dollars of payroll each year.

(a) About 19,000 people are employed in assembling and wholesaling farm and food products. They receive in wages and salaries about $87 million.

(b) Another 55,000 people work in food processing business, and their payrolls amount to $205 million.

(c) More than 46,000 are employed in retailing food with payrolls amounting to $114 million.

(d) About 47,000 people provide food services and they receive more than $90 million in salaries and wages.

The total of these jobs comes close to 166,000 and the combined annual payroll amounts to more than $492 million.

Sales. The value added to food and forest products by Massachusetts processors amounts to about $350 million in the course of a year. This is 8 percent of all the value added in manufacturing of all types in Massachusetts.

Sales of farm and food products by wholesalers amount to approximately $2,350 million a year. This total represents 27 percent of all wholesale sales made in the State.

Sales of food and food products to consumers at retail amount to more than $2 billion annually, which is 32 percent of all retail sales in Massachusetts.

Of these retail sales of food and food products, approximately $400 million are accounted for by the sales of meals in restaurants, hotels, industrial plants, and other food-service establishments.

Business operations.-Some 1,000 farmer-operated roadside stands provide about $30 million worth of products to consumers each year. These stands have an average capital investment of about $6,000 per stand, and their operation requires employment of the equivalent of 2,000 people for a 20-week period each year.

Exact data is not available on the 115 sawmills and 123 planing mills that convert Massachusetts trees to lumber, nor on the 24 logging camps and contractors, nor the 453 lumber and wood products operators, and the 123 firms performing millwork and producing related products.

Nor is specific data available for the nearly 1,000 furniture stores with more than 5,000 employees and annual sales of approximately $130 million a year. Neither can a precise picture be drawn of the 1,463 drugstores with fountains that play a part in retailing food, nor 47 garden supply stores, and 679 florists. But these firms all play a part in the marketing, processing, and distribution of food and agricultural products; and their daily operations contribute greatly to the economic health of Massachusetts.

Functions of the modern marketing system encompass many things

(1) Moves desired kinds of products to consumers in the forms desired, under conditions that maintain quality, and at low cost.

(2) Provides a living for the many people involved in it, and yields reasonable returns to the capital and management skills invested in it.

(3) Finds and develops markets for new products, better products, and more

of old products to supply consumers here and abroad.

Many people, groups, and firms perform marketing functions in Massachusetts Jobs, payrolls, incomes, profits, returns on investment are all derived from the day-to-day functioning of the many business firms which market, process, and distribute food and other agricultural products. These firms include:

(a) Farmers who sell at the side of the road the products they produce, or move them to processors, wholesale markets, and retailers.

(b) Packagers who put agricultural products into consumer and institutional size packages and distribute them to wholesalers and retailers.

(c) Processors and manufacturers who transform food and other commodities into a myriad of products.

(d) Storage operators who hold products under conditions that retain quality until outlets are found.

(e) Wholesalers who assemble and distribute the food and other agricultural products that go through the marketing channels.

(f) Transportation firms which move food and other agricultural products to where they are needed.

(g) Retailers whose supermarkets and other types of stores bring together thousands of items for consumers.

(h) Food service operators who supply meals in restaurants, industrial cafeterias, hospitals, and other eating places.

(i) Landscapers who use nursery products to beautify home grounds, parks, and roadways.

(j) Manufacturers who use forest products to make useful articles for the State's consumers.

Massachusetts Department of Agriculture has important role in marketing of products

The Massachusetts Department of Agriculture plays a vital role in the marketing of food and other agicultural products in the Bay State.

(a) Graders check food and certify its grade for vendors or purchasers who want specific qualities.

(b) Market reporters obtain data on supplies, prices, demand, and quality for producers and handlers.

(c) Inspectors check retail offerings to insure compliance with grade and label laws.

(d) Control officials insure high quality in milk and help stabilize prices to producers to insure orderly marketing of milk.

(e) Other department personnel promote use of Bay State farm products, control diseases, and support agicultural fairs.

The Agricultural Marketing Act provided spur to increased efficiencies in marketing

The Agricultural Marketing Act of 1946 declared the policy of Congress to be that "a sound, efficient, and privately operated system for distributing and marketing agricultural products is essential to the prosperous agriculture; is indispensable to the maintenance of full employment and to the welfare, prosperity, and health of the Nation."

This legislation brought increased attention to the problems in the marketing and distribution of agricultural products and provided funds for a coordinated attack on these problems.

In 1962, Congress appropriated $38,039,500 (under provisions of the Agricultural Marketing Act) for research and service work in connection with various aspects of the marketing of agricultural products includingPreparation for market

Grading

Distributing

Processing

Transporting
Retailing
Packaging

Handling
Consuming

What better maketing means to Massachusetts consumers

Research, educational programs, and the management decisions of the food marketing industry have made the processing and the distribution of food and other agricultural products more efficient, more valuable, and more satisfying. For Massachusetts consumers, nearly 5 million strong, this has meant higher living standards. It means better eating with more services and conveniences for a smaller proportion of the income.

More specifically, it means:

(a) Better eating in the sense that what we spend today for food brings a greater proportion of the higher quality items such as steaks, poultry, dairy