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and asking for this market, and farm groups were very interested in modernization and new facilities in New York City. State Department of Markets of the New York Department of Agriculture assisted in the preliminary market studies. So that there was much official interest and sponsorship for inaugurating a new facility in New York City.

Mr. ADDABBO. What was the total Federal contribution to these facilities?

Mr. SMITH. In terms of money expended in erecting these facilities? There are no Federal funds involved.

Mr. ADDABBO. This is all city and private funds? Is there any State contribution, do you know?

Mr. SMITH. There were no State or private funds involved. It is being financed by the city government and administered by the New York City Department of Markets.

Mr. LENNARTSON. In some instances they set up public corporations but this was not the case in the New York project.

Dr. HERRMANN. Mr. Chairman, I have a point on cost as far as the Department of Agriculture is concerned. Taking all of the markets in which we have been involved, not just New York, our people have estimated that the cost to the Department of Agriculture was less than one-half of 1 percent of the total estimated construction cost. This is clear across the board and over a period of years.

Mr. ADDABBO. This would purely be in the planning.

Dr. HERRMANN. That is right.

Mr. SMITH. Technical assistance and planning.

Mr. ADDABBO. New York being one of the if not the-largest cities in the country, and I see we are just getting to the program at this time, would this be due to the fact that the city or State had failed to request the service, or the Department had just overlooked the city of New York.

Mr. SMITH. Do you mean in the passage of time before this took place?

Mr. ADDABBO. Yes.

Mr. SMITH. This was largely due to differences of opinion within the environs of the city itself and the merchants involved.

As a matter of fact, my tenure in the Department of Agriculture dates back about 29 years, and this subject was under discussion by the Port Authority of New York City when I first came with the Department.

This is one of the difficulties that are encountered in modernizing food facilities in a terminal market, that there are interests that prompt them to take a position in favor of doing nothing, the matter of real estate values, and property values, are involved, where to locate the new facility in terms of convenience and all.

They all become subject to local argument, differences of opinion, and discussion. And in some instances how to finance the new facility becomes a problem.

There are many obstacles that arise that contribute to delay.

As I indicated in my earlier comment, our work with the New York area has extended over quite a period of time. They have changed their mind several times, as I remember, as to just where the facility should be located and what the facility should include.

Mr. ADDABBO. The final location of the facilities was the choice of the city of New York?

Mr. SMITH. Yes.

GRAIN INSPECTION UNDER U.S. GRAIN STANDARDS ACT

Mr. ADDABBO. Going back to your statement, Mr. Smith, on page 4, you speak of savings in administrative costs and the savings or cutback of several clerical positions. Has there also involved a cutback in supervisory positions, or is the supervisor held on at just a lower level.

Mr. GRANGE. This is clerical only.

Mr. HOLMAAS. In this particular instance this concerns itself with the administration of the Grain Standards Act which basically involves supervision of licensed, inspectors. What was done here was to streamline some of the reports and some of the administrative detail involved in keeping track of the work being done by these people. So as a result, there was a reduction in administrative costs and elimination of some of these clerical positions to make it possible to place more emphasis on the basic purpose, which is the supervisory job of supervising licensees in the grain inspection field and handling appeals and this type of thing.

So, yes, these are clerical positions that have been cut out.

Mr. ADDABBO. Could you give us for the record how many positions were cut out by those savings?

Mr. HOLMAAS. There were 13 positions eliminated in the field, and four in Washington by this rearragement.

Mr. ADDABBO. What would be the dollar saving?

Mr. HOLMAAS. That would approximate $70,000.

Mr. ADDABBO. Was this elimination anticipated in the 1963 budget? Mr. HOLMAAS. This was in process, in part, at the time of the 1963 budget. It was part of the plan for strengthening the work on grain supervision which was discussed in last year's hearings.

Mr. ADDABBO. Was this money then used toward the grain supervision?

Mr. HOLMAAS. Yes.

Mr. ADDABBO. Was additional help put on with this $70,000?

Mr. HOLMAAS. Travel and equipment and other things are involved in this. These supervisory inspectors have to have grain probes, sieves and specialized equipment in checking the samples. Most of this money went into that type of thing, rather than into additional people.

Mr. ADDABBO. The entire $70,000?

Mr. HOLMAAS. I would think that just about the entire $70,000 would go into recurring expenses for equipment-type items, travel, and necessary other angles of the supervisory grain inspector's jobs.

FEDERAL-STATE COOPERATION

Mr. ADDABBO. On page 5, again on Federal-State cooperation, there is a saving there, I believe, to reduce Federal employment and reduce administrative cost.

Will you tell us what the saving there was? Pages 5 and 6 of the statement.

Mr. LENNARTSON. What we are reflecting there, Mr. Congressman, is that over the years we have promoted a Federal-State type of venture. In other words, to be specific, rather than hiring a large group of vegetable inspectors as Federal employees, we used State employees on the State payroll, having adequate technical training to do the work. This becomes quite a substantial number in terms of all the different commodities. We do this on grain, fruit and vegetables, dairy, poultry, and so forth.

This has the effect of diminishing substantially the growth in the number of employees on Federal payrolls required to do this job. It also has the very fine effect of developing a cooperative working relationship with the State agency which is likewise responsible for this function at the States level. It avoids duplication and creates a much better environment in terms of getting the job done effectively. Mr. ADDABBO. Was there any dollar saving, other than the gradual working out over the past year, in 1963?

Mr. LENNARTSON. Yes. This would have to be measured out over a period of years. If we required additional Federal employees, this would require additional Federal appropriation, versus the appropriation we now have.

LOCATION OF PEANUT LABORATORY

Mr. ADDABBO. Getting back to our problem of peanut research, are we agreed that we are talking about a peanut research facility to be placed in Georgia, if it is approved?

Mr. LENNARTSON. Yes.

Mr. ADDABBO. Will we need specific legislation passed as to location, or will the Department itself, after this appropriation is given, be able by itself to choose this location in Georgia?

Mr. SMITH. The proposed location, Mr. Congressman-the location has been selected and work has been done in connection with drawing up the building plans which are covered by funds made available by Congress in the appropriation covering fiscal year 1962. Mr. ADDABBO. Was the location chosen by the Department? It wasn't by legislation?

be

Mr. SMITH. It was chosen by the Department.

Mr. ADDABBO. Has there been any analysis of whether there would any saving either by one facility, such as contemplated in the construction of this facility, or by the continuation of the work, possibly with additional authorization, for the continuation of the research at the various locations instead of a central location?

Mr. SMITH. We feel very definitely that by pulling our staff together that the work that they would do would be much more productive and we would have a much more efficient operation, rather than having them as widely dispersed as we have at the present time, and in the type of facilities which they have available to them to do

research.

Mr. GRANT. Mr. Addabbo, in this connection I think I would like to make this statement for the record. The Department has basic authority to construct buildings and facilities when provision is made for those facilities in appropriation acts. Therefore, no specific legislation is necessary, only the appropriation of funds for the particular facility or laboratory involved.

Mr. ADDABBO. And the Department has general authority to place it where they think it is needed.

Mr. GRANT. That is correct.

PROPOSED USE OF 1964 INCREASE FOR U.S. WAREHOUSE ACT

Mr. ADDABBO. Under the Warehouse Act, the hiring of additional men, how many more men do you anticipate you would hire under the program increase of $155,900?

Mr. HOLMAAS. This would provide for 15 additional positions, for an estimated employment of 11, on an annual average basis.

Mr. ADDABBO. None of these would be in supergrades?

Mr. HOLMAAS. No.

Mr. LENNARTSON. They would be primarily located in the field. Mr. HOLMAAS. This provides for 11 grade 5 warehouse examiners, and then there are 3 supervisory examiners at about the grade 12 level, and 1 clerk, which gives you the 15 positions.

Mr. ADDABBO. I have no further questions, Mr. Chairman.
Mr. NATCHER. Mr. Horan ?

AMS APPROPRIATION INCREASES SINCE 1955

Mr. HORAN. Mr. Chairman, of course we are reviewing this budget at a time when we are talking about tax reductions and reform, and, for this coming year, a known deficit.

On Monday hearings begin before the Banking and Currency Committee, I believe, to repeal the Silver Purchase Act. It is going to have repercussions. It is something that I think all of us should be concerned about.

It is in that light that I begin to ask questions regarding the budget that is before us.

In the Agricultural Marketing Service we upped your appropriation in 1955 to $14,234,945. How much of that is for pay?

Mr. HOLMAAS. The estimate includes $1,331,000 under "Marketing research and service" for increased pay costs in 1963.

Mr. HORAN. That is a comparatively small percentage.

Mr. HOLMAAS. I'm sorry. That is the amount we are now asking for to cover 1963 increased pay costs. We are asking for $1,532,000 in 1964 for pay and postage increases.

Mr. HORAN. What has been the increase since 1955 percentagewise? Mr. GRANT. The increase in salary costs has been approximately 25 percent in total.

Mr. HORAN. More or less like the others?

Mr. GRANT. Yes. They all run about the same. fact, the same law was applicable to all employees.

As a matter of

Mr. HORAN. Would it be too much trouble to indicate the reasons for the other increases?

Mr. GRANT. Not at all. Poultry inspection is one of the major

ones.

Mr. HORAN. I know. We want something that Congress can read, if they will.

Mr. HERRELL. That is the difference from 1955.

Mr. HORAN. I won't go back any further than that unless it is indicated here.

(The material requested follows:)

Marketing research and service appropriation changes 1955-63 Available, 1955___.

Program changes:

For research on the market quality of agricultural commodities designed to prevent waste and spoilage, such as, cotton quality evaluation, peanut marketing, maintenance of citrus quality under mechanical harvesting, and harvest maturity as related to apple quality-

For research directed toward improving physical facilities, equipment and methods for assembling, packing, packaging, handling, storing, transporting, wholesaling and retailing farm and food products to increase the efficiency of marketing..

Total, marketing research___.

For expanding and improving the market news service includ-
ing the modernization of the leased wire service, establishing
service on fruits and vegetables, grains, livestock, meat, and
dairy and poultry products at several important marketing
points, and strengthening the services at several established
points--

For compulsory poultry inspection under the Poultry Products
Inspection Act, approved Aug. 28, 1957.
For work on developing U.S. quality standards for various
agricultural commodities and revising them as necessary to
keep pace with changes in marketing practices and consumer
needs_-_.

For grain inspection work under the U.S. Grain Standards Act,
particularly at ports, to assure that exports meet the specifi-
cations of the buyers---

For tobacco inspection at 4 newly designated auction markets-To implement the Federal Seed Act amendment, approved Aug. 1, 1958, in relation to "treated seed" and to handle the increased laboratory workload on imports----

For administration of the Packers and Stockyards Act, prin-
cipally since the amendment to the act approved Sept.
2, 1958---

For increased workload under the U.S. Warehouse Act_-_-
Reductions for savings----

Net program change_.

Other changes:

For additional costs on the base program due to increased rates required by various statutes and administrative directives during the period 1955 through 1963:

Pay-

Postage..

$14, 234, 945

918, 600

421, 000

1, 339, 600

743, 400

11, 559, 100

94, 200

362, 050 37,000

47, 200

1, 121, 550 134, 355 -177, 200

+15, 261, 255

Travel

Veterinarian position reclassification.
Teletype (leased wire service)_.

Employer retirement contribution, formerly paid from central fund in Civil Service Commission but decentralized by Public Law 84-854 effective July 1, 1957---.

6, 052, 000

311, 000

323, 300

500, 000

65, 000

1, 541, 800

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