COMMITTEE ON APPROPRIATIONS

CLARENCE CANNON, Missouri, Chairman

KENNETH SPRANKLE, Clerk and Staff Director

105

DEPARTMENT OF AGRICULTURE APPROPRIATIONS

FOR 1960

THURSDAY, MARCH 5, 1959.

AGRICULTURAL MARKETING SERVICE

WITNESSES

CLARENCE L. MILLER, ASSISTANT SECRETARY OF AGRICULTURE 0. V. WELLS, ADMINISTRATOR, AGRICULTURAL MARKETING SERVICE

ROY W. LENNARTSON, DEPUTY ADMINISTRATOR, MARKETING SERVICES

OMER W. HERRMANN, DEPUTY ADMINISTRATOR, MARKETING RESEARCH AND STATISTICS

HENRY G. HERRELL, ASSISTANT ADMINISTRATOR FOR MANAGEMENT

ARTHUR J. HOLMAAS, DIRECTOR, BUDGET AND FINANCE DIVISION
DR. HARRY C. TRELOGAN, DIRECTOR, MARKETING RESEARCH DIVI-
SION

S. R. NEWELL, DIRECTOR, AGRICULTURAL ESTIMATES DIVISION
MARTIN D. GARBER, DIRECTOR, FOOD DISTRIBUTION DIVISION
HERMON I. MILLER, DIRECTOR, POULTRY DIVISION

JOHN J. KAMINSKI, CHIEF, BUDGET BRANCH, BUDGET AND
FINANCE DIVISION

W. C. CROW, LIAISON, COMMISSIONERS OF AGRICULTURE
HOWARD P. DOWS, DEPUTY DIRECTOR, FOOD DISTRIBUTION DIVI-
SION

CHARLES L. GRANT, DIRECTOR OF FINANCE AND BUDGET OFFICER,
DEPARTMENT OF AGRICULTURE

LEE A. DASHNER, DEPUTY DIRECTOR OF FINANCE, DEPARTMENT OF AGRICULTURE

Mr. WHITTEN. Gentlemen, we have with us now Mr. Clarence L. Miller, Assistant Secretary of Agriculture, Mr. Wells, Mr. Lennartson, and their associates.

We are glad to have you gentlemen before us.

I have been requested by my colleague from Kentucky to yield to him at this point.

Mr. NATCHER. Thank you, Mr. Chairman.

Mr. Chairman, this is the first time that we have had the privilege of having our friend, Clarence L. Miller, before us in his present capacity as one of the Assistant Secretaries of Agriculture.

Friend Clarence Miller is from the great State of Kentucky. He is from Shelby County, Ky., and although we are of different political parties, we agree on a great many things. We both believe

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in American agriculture and that the American farmer's interest should be fully protected. Mr. Miller is a successful farmer, and I am delighted to have him before us today and I know that Í speak for the other members of our committee. By the way, Mr. Chairman, he has a lovely wife.

Since this is his first appearance as an Assistant Secretary of Agriculture, I just wanted to make this observation, Mr. Chairman. Mr. WHITTEN. We all join, Mr. Miller, in the statement made by Mr. Natcher.

We will be glad to have your general statement.

JUSTIFICATION OF THE ESTIMATE

First, I believe I will put pages 1 through 4 of the justification, volume II, in the record.

(The material follows:)

PURPOSE STATEMENT

The Agricultural Marketing Service was established by the Secretary of Agriculture on November 2, 1953, under the authority of section 161, Revised Statutes (5 U.S.C. 22), Reorganization Plan No. 2 of 1953, and other authorities. The Service aids in advancing the orderly and efficient marketing and the effective distribution of products from the Nation's farms. The domestic marketing and distribution functions of the Department are centered in this Service. The Administrator of the Service is also responsible for the coordination of all statistical work of the Department.

The Agricultural Marketing Service carries on the following principal programs:

1. RESEARCH AND AGRICULTURAL ESTIMATES

These functions include

(a) marketing research directed toward the development of practical answers to problems encountered in moving agricultural products from the farm to the consumer, including expanded outlets for new and established products, reduced costs, improved product quality, and improved market equipment and facilities;

(b) analyses of the economic situation and outlook for farm products, including factors affecting price, supply, and consumption; and statistical studies on farm population, costs, prices, and income in their relation to agriculture including causes for variations and trends; and

(c) crop and livestock estimates including acreages, yields, production, stocks, values, and utilization of farm crops; numbers, production, value, and utilization of livestock and livestock products and such related data on prices received and paid by farmers.

2. MARKETING SERVICES

These activities contribute to the efficient and orderly marketing of agricultural commodities through—

(a) market news service which provides timely and reliable market reports on all major agricultural commodities to help farmers determine when, where, and at what price to sell their products;

(b) inspection, grading, classing, and standardization services to develop standards of quality and conditions for agricultural commodities and to use them in providing an impartial inspection, classing, and grading service; (c) freight rate service to assist in obtaining and maintaining equitable transportation rates and services on farm supplies and products; and

(d) regulatory activities covering administration of laws aimed at protecting farmers and others from financial loss resulting from deceptive, careless, and fraudulent marketing practices.

3. PAYMENTS TO STATES

The Service administers the matched fund program for marketing activities carried out through cooperative arrangements by State departments of agriculture, bureaus of markets, and similar State agencies.

4. SCHOOL LUNCH PROGRAM

Federal assistance is provided to States and Territories for use in serving nutritious midday meals to children attending schools of high-school grades or under in order to improve the health and well-being of the Nation's children, and broaden the market for agricultural food commodities.

5. REMOVAL OF SURPLUS AGRICULTURAL COMMODITIES AND MARKETING AGREEMENTS AND ORDERS

These activities directly or indirectly tend to maintain prices received by farmers and establish and maintain orderly marketing conditions through-

(a) removing from the market surplus agricultural commodities through purchase and donation to eligible recipients, export and diversion payments, and distribution of Commodity Credit Corporation donated commodities to eligible outlets authorized under section 416;

(b) administration of marketing agreements and orders; and

(c) cooperation with the food trade and others to encourage greater consumption of abundant foods.

6. RESEARCH UNDER SECTION 104 (K) OF PUBLIC LAW 480

The Service reviews and appraises for technical adequacy marketing research projects beneficial to the United States which can be advantageously conducted overseas through grants and contracts with foreign research institutions and universities by means of foreign currencies available under section 104 (k) of Public Law 480, the Agricultural Trade Development and Assistance Act of 1954, as amended. The expenses of the AMS in connection with this work are paid from this appropriation.

A full discussion of the marketing research activities conducted under Public Law 480 is included in these explanatory notes in the section entitled "Use of Foreign Currencies for the Conduct of Research Abroad Under Sections 104 (a) and (k) of Title I, Public Law 480" under the Agricultural Research Service.

7. WORK PERFORMED FOR OTHERS

The Agricultural Marketing Service also performs other services for Federal, State, and private agencies, on a reimbursable or advance-payment basis. These include, among others, the special milk program, food planning for defense emergency conditions, and administration of section 708 of the National Wool Act of 1954 dealing with advertising and sales promotion programs.

The Agricultural Marketing Service maintains its central office in Washington, D.C., but a large part of the program is carried on through State offices for agricultural estimates, and functional field branch offices of the several Washington commodity and functional divisions located in over 225 cities and towns in the United States, Hawaii, Puerto Rico, Cuba, and Spain (an inspection office at the U.S. Naval Base, Rota, Spain).

On November 30, 1958 (excluding the offices of the Milk Marketing Administrators), there were approximately 7,825 full-time employees, distributed about 1,968 in the District of Columbia metropolitan area and the remainder in the field. In addition there were about 1,062 part-time and intermittent employees primarily in the field. A substantial portion of Agricultural Marketing Service employment is financed through revenue from fees, charges, or other assessments and through joint financing or other arrangements with States and private cooperators.

In addition, the 1959 appropriation act provided that $35,000,000 shall be transferred from section 32 funds for purchase of agricultural commodities for distribution to schools aparticipating in the national school lunch program.

Summary of appropriations, 1959 and estimates, 1960

In addition, $35,000,000 is available by transfer from "Removal of surplus agricultural commodities." In addition, an unobligated balance of $394,627 is available in fiscal year 1959, and $361,327 is estimated to be carried forward into 1960.

In addition, an unobligated balance of $300,000,000 is available in fiscal year 1959, and $300,000,000 is estimated to be carried forward into 1960.

GENERAL STATEMENT

Mr. MILLER. Thank you, Mr. Chairman, gentlemen of the committee, Congressman Natcher, for your very kind remarks. I appreciate them greatly.

I have been Director of the Tobacco Division in years past in the Department of Agriculture, and in that capacity I have worked very closely with Congressman Natcher and other members of the committee in years gone by.

I am in a somewhat new and diffierent field at the present time, as Mr. Natcher has pointed out. It is one that isn't wholly strange to me. I have been engaged in agriculture for many years.

I welcome the opportunity of making my first appearance before this committee to discuss with you the proposed Agricultural Marketing Service budget for 1960.

As this is my initial appearance before you in this capacity, I would like to give you a brief summary of my background in agriculture. Although born in Louisville, Ky., I moved to a farm at the age of 12. I took over operation of the family farm-producing beef cattle, sheep, and burley tobacco-when about 18 years old. I have operated it ever since, and during the depression years, I might add, Mr. Chairman.

I attended the University of Kentucky and Western Kentucky State College.