covered, and when we are familiar with the meat inspection situation in some of the Eastern States, I have a great hesitancy to seeing the Office of the Inspector General split up at this time. There again I certainly do not think they should run rampant and be free of any control or counsel or advice from the Secretary, but there should be a degree of independence which perhaps can come only with a separate appropriation. OFFICE OF MANAGEMENT SERVICES There is also some real questions in my mind, having made a little further study, as to whether in breaking up the Office of Management Services, whether you may have chosen the right place to assign some of the work, whether you may be having competitors going over that with which they compete. PUBLIC RELATIONS ACTIVITIES I am not an auditor. I had a little accountancy, that is all, back in school. But I do think that we do not need Mr. Gifford to be completely dominated by the Secretary, not that the Secretary would intend to, but I would feel that the appropriation for the public relations activities of the Department should be protected to some degree so they can go on about their business without always looking over their shoulder to make sure their money is still there. I was personally upset with the Office of Management and Budget when they froze half the funds that we gave the Office of Communication extra last year. CONCLUSION I repeat again: Investigations of the Department should be like Caesar's wife; they should be above reproach. I think the General Counsel should be tied to the law. They should not have their money taken away and devoted to other purposes. Thank you very much. Mr. WRIGHT. Thank you for your comments. When I came in the Department the Secretary told me this committee would be a good committee to work with because it does have agriculture at heart. I think every remark that has been made and every conversation I have engaged in with this committee demonstrate that he was correct. Mr. WHITTEN. Thank you. We appreciate that. TUESDAY, MARCH 26, 1974. ANIMAL AND PLANT HEALTH INSPECTION SERVICE WITNESSES CLAYTON YEUTTER, ASSISTANT SECRETARY OF AGRICULTURE F. J. MULHERN, ADMINISTRATOR, ANIMAL AND PLANT HEALTH INSPECTION SERVICE G. H. WISE, ASSOCIATE ADMINISTRATOR, ANIMAL AND PLANT HEALTH INSPECTION SERVICE JOHN K. ATWELL, ACTING ASSISTANT DEPUTY ADMINISTRATOR, VETERINARY SERVICES, ANIMAL AND PLANT HEALTH INSPECTION SERVICE LEO G. K. IVERSON, DEPUTY ADMINISTRATOR, PLANT PROTECTION AND QUARANTINE, ANIMAL AND PLANT HEALTH INSPECTION SERVICE F. J. FULLERTON, DEPUTY ADMINISTRATOR, MEAT AND POULTRY INSPECTION, FIELD OPERATIONS, ANIMAL AND PLANT HEALTH INSPECTION SERVICE H. C. MUSSMAN, DEPUTY ADMINISTRATOR, MEAT AND POULTRY INSPECTION, SCIENTIFIC AND TECHNICAL SERVICES, ANIMAL AND PLANT HEALTH INSPECTION SERVICE JOHN E. CARSON, DEPUTY ADMINISTRATOR, ADMINISTRATIVE MANAGEMENT, ANIMAL AND PLANT HEALTH INSPECTION SERVICE A. C. HUTCHINSON, DIRECTOR, BUDGET AND FINANCE DIVISION, ANIMAL AND PLANT HEALTH INSPECTION SERVICE JEROME A. MILES, DIRECTOR OF FINANCE, DEPARTMENT OF AGRICULTURE Mr. WHITTEN. Gentlemen, the committee will come to order. ORGANIZATION OF APHIS We have with us today the Animal and Plant Health Inspection Service. When was this agency, as it is now constituted, created, Dr. Mulhern? Dr. MULHERN. April, 1972. Mr. WHITTEN. And what were the major changes that were made at that time? Dr. MULHERN. The Animal and Plant Health Service programs which were formerly in the Agricultural Research Service were combined with the meat and poultry inspection program from what was called, at that time, the Consumer and Marketing Service. Mr. WHITTEN. That is within the Department. Earlier, you had had a part of your activities transferred outside the Department of Agriculture. Dr. MULHERN. One part of our regulatory service was the Pesticide Regulation Division. That was transferred to the Environmental Protection Agency. DIELDRIN CONTAMINATION OF POULTRY Mr. WHITTEN. You come before us at a time when you have been having some problems in my State in connection with dieldrin that was discovered in poultry. I have had a number of calls from the press and news media. My answer in each case has been that so far as I was concerned, I had no knowledge of the matter other than what I had read and heard, and that I trusted that those having to deal with the matter would do so in accordance with the facts and that they would be certain of their facts, of course. Does this come within the purview of your agency? Dr. MULHERN. Yes; part of it does. It affects three agencies, the Food and Drug Administration, Environmental Protection Agency, and my agency. Mr. WHITTEN. So your agency is familiar with what occurred in that area? Dr. MULHERN. Yes, Mr. Chairman. Mr. WHITTEN. At a later time, I think I will want to find out just what is involved and what information you have as of this moment. I have an interest in what is involved here. I have talked with various people, both with regard to Dieldrin and with regard to what the situation is healthwise, with regard to the Delaney amendment. I have also talked to folks as to whether cooking would make any difference. There is much discussion at the present time through the regular agencies of the Government, to determine what should be done. I personally do not know what ought to be done. PAYMENT TO CRANBERRY GROWERS UNDER SECTION 32 I do recall to you, and I am sure you will remember, that when this committee first got into this area was back at a time when just before Thanksgiving the Department had withdrawn the use of certain chemicals used by the cranberry growers. The statements issued to the press came after the Department had acted to take these chemicals off the market. The result was that they destroyed the cranberry market that year. At that time they came to me as chairman of the subcommittee to see if there was anything that could be done to compensate the producers who were injured, not because of that which had been condemned but because of the adverse publicity that followed from it. If you will recall, the Department paid out about $8.6 million to restore the cranberry industry. That is when they first came up, as I recall it, with cranberry juice. I do not mean it was unknown, but incident to trying to restore the industry, they started pushing cranberry juice, and now I think it has a very extensive market. That was what first stirred the interest of this committee, because that $8.6 million was paid under a little known and seldom used provision of section 32. I speak from memory, subject to being corrected. Under that section, there is authority for payments to be made to maintain the income of agricultural producers. And when this payment was made, I think it was the second time in history it had been used for that purpose. Insofar as I know, that section still remains in the law. At this point in the record we shall insert a summary of actions taken in connection with Federal procurement of cranberries and chicken to assist producers whose products had been taken off the market. [The information follows:] USE OF SECTION 32 TO MAKE INDEMNITY PAYMENTS TO GROWERS OF CRANBERRIES Background situation. In 1958 the "Delaney" amendments (Public Law 85-929) to the Food, Drug and Cosmetic Act (21 U.S.C. 201 et. seq.) provided that carcinogentic substances could not be "added" to food. Although this provision was intended to apply to food additives such as coloring it was interpreted by FDA to include chemicals that may have been used in the production or processing of food. [Other examples of controversial chemicals are: PCB's and DES.] FDA announced on November 9, 1959, that traces of aminotriazale, a weed killer, had been found in cranberries produced in Washington and Oregon and “urged that no further sales be made *** until the cranberry industry has submitted a workable plan to separate the contaminated berries * * *. Sales plummeted as a result of this scare, although only a small part of the crop was actually contaminated. Use of section 32 Funds. It was proposed that section 32 funds (7 U.S.C. 612c) be used to make indemnity payments to cranberry growers who held marketable noncontaminated berries. The authority contained in clause (3) allows the Secretary to "reestablish farmers' purchasing power by making payments in connection with the normal production of any agricultural commodity for domestic consumption." Amounts appropriated under section 32 were to be expended “at such times, in such manner, and in such amounts as the Secretary of Agriculture finds will effectuate substantial accomplishment of any one or more of the purposes of section 32." Determinations by the Secretary as to "what constitutes normal production for domestic consumption shall be final." The train of reason, therefore, was: 1. The payments were being made to reestablish farmers' incomes. 2. The 1959 crop was near the historically normal production. 3. Cranberries were produced for domestic consumption. 4. The Secretary made the required findings final determinations. However, these 1960 payments were made to the entire cranberry industry (not to specific producers) and only for uncontaminated products for which the market had been destroyed. The authorities cited above are contained in current legislation. The USDA asked for and received the concurrence of the Comptroller General on this interpretation of the law. House hearings weer held on the proposal-Department of Agriculture appropriations for 1961: Hearings before the Committee on Appropriations, House of Representatives, 86th Congress, first session, part 5, “Indemnity Payments to Growers of Cranberries and Caponettes,” March 30, 1960. The subcommittee expressed the sense that while the Federal Government was obligated to make payments to the growers for destroyed markets because of the "scare," the use of section 32 funds was questionable. Senator Russell also disagreed with this use of section 32 funds-agriculture appropriations for 1961: Hearings before the Subcommittee of the Committee on Appropriations, U.S. Senate, 86th Congress, second session on H.R. 12117, April 20, 1969, page 295.) Procedure. Only 1959 crop berries which were uncontaminated, harvested, cleaned, packed and presented for sales were to be eligible for indemnity pay. bents. The payment was to be calculated as follows: Average salvage value of berries per 100 lbs---- $2.32 8.02 Historically calculated fair market value of 100 lb. barrel---------- 10.34 An immediate payment of $40 per barrel was to be made to the grower for qualifying berries. The grower would keep the berries on hand and attempt to sell them until the end of the 1959 crop year (September 1960). At that time a second payment would be made. COSTS USE OF SECTION 32 TO PURCHASE CAPONETTES WHICH HAD BEEN TREATED WITH STILBESTROL Background. In 1959 the FDA decided that the chemical female hormone "stilbestrol" which was in common use as a growth promotant in cattle and as a desexer in caponette production should be eliminated from chicken production. On December 10, 1959, FDA announced that stilbestrol was being removed from use in the poultry industry and that the drug industry had voluntarily agreed to comply. It was simultaneously announced that the USDA would purchase caponettes which were under production and had been treated with the drug. About one percent of domestic poultry production was involved. Use of section 32. Section 32 funds were used because the caponettes were not subject to seizure but were voluntarily withdrawn from the market. The purchase of the poultry would encourage the consumption of all chicken because failure to remove these birds from normal trade channels work have a serious adverse affect on the market for all poultry. Because it was intended that this product be used in the normal commodity donation programs of the Department, the purchase was not as controversial as the cranberry indemnity and a complicated legal reasoning was not developed. Procedure. The USDA issued an offer to purchase "frozen ready-to-cook poultry which has been treated with diethylstilbestrol ***." The Government was to re ceive these products in a processed form from which the DES contaminated parts (skin, livers, kidneys) would have been removed. These products could then be distributed through the food donation programs. Cost. About 13 million pounds of processed chicken was purchased at an aver age price of 45 cents per pound. The total cost was $6 million. Mr. WHITTEN. This most recent chicken incident does not happen to be in my immediate area--but from what I hear the dieldrin appar ently is traceable to feed. POULTRY GROWERS NOT AT FAULT Then the question arises, where did the feed come from? If the feed was contaminated, how did it get that way? If the Government is going to indemnify this loss we would be interested in knowing it occurred through no fault of the grower. We will go into further details of this matter later in the hearing. We shall insert the justifications in the record at this point. [The justifications follow:] |