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The increase for 1966 provides for inspection of an increased volume of poultry and for laboratory work on harmful pesticides or other chemical residues in poultry meat. Legislation will be proposed to place the service on a self-supporting basis resulting in a reduction of $17,567 thousand for 1966.

(b). Other inspection, grading, classing, and standardization.-Nationally uniform standards of quality for agricultural products are established and applied to specific lots of produce to promote confidence between buyers and sellers; reduce hazards in marketing due to misunderstandings and disputes arising from the use of nonstandard descriptions; encourage better preparation of uniform quality products for market; and furnish consumers with more definite information on the quality of products they buy. The standards are applied by or under the supervision of Federal employees at the request of any interested party, and generally for a fee. Approximately 80% of the total cost of this work was offset by fees and other revenue in 1964, which are shown principally under Agricultural Marketing Service trust funds in part II of the Budget Appendix. The increase for 1966 provides for assistance to States in applying livestock standards and for mandatory reimbursement to Employees Compensation Fund. Legislation will be proposed to (1) amend the U.S. Grain Standards Act which would include placing on a voluntary basis the grain inspection in domestic trade and establishing fees to recover the cost of that portion of the service which is of special benefit to the users of the service; (2) amend the Tobacco Inspection Act and the Cotton Statistics and Estimates Act to recover in fees the full

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INSPECTION, GRADING, AND CLASSING ACTIVITIES UNDER APPROPRIATED FUNDS

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1,513

294

Seed samples tested..
Transportation services:
Formal litigation..........
Informal negotiations..

1964 actual

1963

actual

3. Regulatory activities.-These include the administration of regulatory laws such as Packers and Stockyards, Standard Container, United States Warehouse, and Federal Seed Acts, to assure fair play in the marketplace; to protect producers and handlers of agricultural commodities from financial loss due to careless or fraudulent marketing practices; and to preserve free and open competition in the marketing of farm products. Assistance is also provided to farmers and others in obtaining and maintaining equitable and reasonable transportation rates and services on farm products and supplies. The increase for 1966 would be used to provide for more effective administration of the Packers and Stockyards and U.S. Warehouse Acts. Legislation will be proposed to amend the U.S. Warehouse Act to recover the full cost of that portion of the service which is of special benefit to the users of the service and to repeal the Naval Stores Act, the Tobacco Seed and Plant Exportation Act, and the two Standard Container Acts resulting in a reduction of $690 thousand for 1966.

1,490 290

1964 actual

1965 estimate

1.78

1.56

13,098

914

528 16,341 44

71

19,612,838 19,500,000 19,500,000 3,384,824 3,250,000 3,250,000 7,446,123 6,791,000 6,750,000 175 175 175 2,357 2,150 2,050 236 236 236

1965 estimate

1964 actual

1.454 311

1.70

1.50

16,000

750

750 20,750

45

70

1966 estimate

16,809 17,900 19,000 2,575 2,900 3,100 13,195 14,000 14,500 338 475 495

1,824

1,850

1,875

1.359 1.440 14.7

1,490

15.1

15.3

1966 estimate

1.90

1.70

16,000

750

750 20,750

45 70

4. Administration and coordination of State payments.This covers the Federal activity required in administering and coordinating the marketing service work performed by the States and financed jointly by State funds, and Federal funds provided by the appropriation Payments to States and possessions. In 1965 this work will be carried on in 43 States with 142 work projects.

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Under proposed legislation, 1966.-A reducti $25,936 thousand is anticipated for 1966 under legis being proposed as follows: (1) amendment to the Grain Standards Act which would include placing voluntary basis the inspection of grain in domestic and establishing fees to recover the full cost of that p of the service which is of special benefit to the users service; (2) to amend the Poultry Products Insp Act, the Cotton Statistics and Estimates Act, the To Inspection Act and the U.S. Warehouse Act to re the full cost of that portion of these services which special benefit to the users; and (3) to repeal the Stores Act, Tobacco Seed and Plant Exportation Wool Standards Act and two Standard Container 4 This reduction in the Marketing services appropr will be partially offset by a need for an appropriation million to provide operating capital until sufficien are collected to permit the poultry inspection and house programs to function on a self-supporting bas

Identification code 05-32-2501-0-1-355

PAYMENTS TO STATES AND POSSESSIONS

For payments to departments of agriculture, bureaus and c ments of markets, and similar agencies for marketing activities section 204(b) of the Agricultural Marketing Act of 1946 (7 1623(b)), $1,500,000. (Department of Agriculture and Agencies Appropriation Act, 1965.)

Program and Financing (in thousands of dollars)

Program by activities:

10 Payment for marketing service work (sec. 204(b) of the Agricultural Marketing Act of 1946) (costs-obligations) (object class 41.0)..

1964 actual

Financing:

40 New obligational authority (appropriation).

Relation of obligations to expenditures:

71 Total obligations (affecting expenditures).

90

Expenditures.

1964 actual

1965 estimate

1,500

1,500

1965 estimate ef

1,500

1,500

1,500

1,500

1,500 1,500

Payments are made on a matching fund basis to -25.936 marketing agencies for carrying out specifically app 5,000 marketing service programs designed to bring improved marketing. Under this activity, mark -20,936 specialists work with farmers, marketing firms, and cies in solving marketing problems and in putting t marketing research results.

This program covers such projects as methods of taining and improving the quality of products; waj reducing marketing costs; expanding outlets for su products; the collection and dissemination of s State and local market information and statistics;

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improving the organizational structure of the marketing
system. Through this cooperative approach, the Federal
Government's leadership and money are coupled with
State resources and experience to aid in the solution of
the most urgent local and area marketing problems.
In 1965 43 States are conducting about 142 projects
under this program.

SPECIAL MILK PROGRAM

For necessary expenses to carry out the Special Milk Program, as authorized by the Act of August 8, 1961 (7 U.S.C. 1446, note), [$103,000,000, of which $51,500,000 shall be derived by transfer from funds available under section 32 of the Act of August 24, 1935 (7 U.S.C. 612): Provided, That hereafter appropriations under this head shall be made in accordance with the provisions of Public Law 87-128 $100,000,000. (Department of Agriculture and Related Agencies Appropriation Act, 1965.)

Program and Financing (in thousands of dollars)

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1964

1963 prelim- 1965 1966 actual inary estimate estimate 90,486 91,890 94,000 96,000 2,765.6 2,917.9 3,093.0 3,278.6 3.386 3.40¢ 3.316 3.036

Personnel Summary

Total number of permanent positions..
Average number of all employees..
Average GS grade..

Average GS salary..

Average salary ungraded positions....

1964

1965 1966 actual estimate estimate

457 1

458

34

33

2 15

9

5

99,255

99,822

74 66

7.8 $7,200

$5,187

512

1

513

38

30

1

13

+4

512 1

513

3338

30

1

13

8

4

102,385 99,385

103,000

100,000

71 69

71 69 8.0 $7.787 $5,179 $5.179

8.0 $7,710

AGRICULTURAL MARKETING SERVICE-Con.

General and special funds—Continued

SCHOOL LUNCH PROGRAM

For necessary expenses to carry out the provisions of the National School Lunch Act, as amended (42 U.S.C. 1751–1760), [$146,400,000 $157,000,000, including $2,000,000 for special assistance to needy schools, as authorized by law: Provided, That no part of this appropriation shall be used for nonfood assistance under section 5 of said Act: Provided further, That $45,000,000 shall be transferred to this appropriation from funds available under section 32 of the Act of August 24, 1935, for purchase and distribution of agricultural commodities and other foods pursuant to section 6 of the National School Lunch Act. (Department of Agriculture and Related Agencies Appropriation Act, 1965.)

Program and Financing (in thousands of dollars)

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1965 1966 estimate estimate

0

181,133
373

129,990 138,590

2,000 59,325

2,085

202,000

191,400

137,000 146,400

191,400

0

45,000 45,000

45,000 45,000

191,400

181,506
793
-1,572
-63

180,664 190,900

191,400
1,572
-2.072

This appropriation is also used to purchase food for distribution to the schools to help meet the nutritional requirements of the lunches. Transfers are made to this appropriation from the fund Removal of Surplus Agricultural Commodities for the purchase and distribution of agricultural commodities and other foods. Further, commodities acquired under price support and surplus removal programs are available to the schools. The volume of surplus commodities distributed to schools, however, depends upon market conditions.

The program during the peak month in 1964 provided lunches to over 34% of the approximately 46.9 million 202,000 school children in the country. The number of lunches served increased approximately 5.63% over 1963. Participation in the program in December 1963 reached 16.0 million children in 68,534 schools and an appreciable increase is expected in 1965 and 1966.

During 1964 about $883 million worth of agricultural commodities and other foods were used in the program. Over 22% of this amount represented commodities contributed under Section 6 of the School Lunch Act and the Federal surplus removal and price support program. About 78% of the food used in the program was purchased 45,000 by the schools through local suppliers.

45,000

Participation in the program from 1963 through 1966 is as follows:

202,000

157,000

0

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1 Includes capital outlay as follows: 1964. $3 thousand: 1965, $24 thousand 1966, $24 thousand; excludes downward adjustment of $63 thousand in prior year costs.

as follows: unpaid undelivered orders, 2 Selected resources as of June 30 are 1963, $25 thousand; 1964, $91 thousand; 1965, $91 thousand; 1966, $91 thousand.

and the average United States per capita income. The
amendment to the Act, effective July 1, 1962, changed
the formula to include participation in place of school-age
population. A new provision is also included in the
amendment for providing special cash assistance to needy
schools in serving free or reduced price lunches.

1. Food assistance, in the form of both funds and food, is provided to the States and possessions in serving lunches to school children. Each State's portion of the funds available was determined by a statutory formula through fiscal year 1962. The formula took into account the number of school-age children in the State and the relationship between the per capita income of the State

The increase for 1966 would provide for normal growth in the program, and for initiating a program of special assistance to needy schools.

The program is operated under an agreement entered into by the State educational agency and the Department of Agriculture. Funds are advanced under letters of schools. Schools make application to the State agency credit to State agencies for use in reimbursing participating and if accepted are reimbursed for a part of the food cost of each meal served. In 1964, the States contributed to this program $1,011 million, most of which came from payments by children. This was far in excess of the statutory matching requirement of $3 for each Federal dollar of cash payment.

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2. Operating expenses consist of overall administration of the program including policy formulation and administrative reviews; administrative and technical assistance to State agencies and participating schools; and administering the program directly in over 3,000 private schools where the State educational agency is prohibited by law from disbursing funds.

10

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Identification code 05-32-2505-0-1-659

Total number of permanent positions..
Average number of all employees.

Average GS grade..

Average GS salary.

Average salary ungraded positions..

Personnel Summary

Program by activities:

1. Program costs..

2. Operating expenses.
program costs, funded 1
Change in selected resources

Total

2

Total obligations..

New obligational authority:

Current authorization: 40 Appropriation..........

990

1

57

93

10

243

13 58,788

2 120,808

181,133

991

72

54

2

145

133

7.8

$7,200 $5,187

DEPARTMENT OF AGRICULTURE

1964

actual

Financing:

16 Comparative transfers from other accounts. -30,507

New obligational authority..

1965 1966 estimate estimate

1,268
5

80

100

56

250

35 59,325 35 129,990

191,400

FOOD STAMP PROGRAM

For necessary expenses of the food stamp program pursuant to the Food Stamp Act of 1964, [$25,000,000 $100,000,000. (78 Stat. 703; Supplemental Appropriation Act, 1965.)

Program and Financing (in thousands of dollars)

1,273

96

150

10

185

160

8.0 $7,710 $5,179

60,000

1,357

99

122

10

80

95

52

245

15 59,325 10 140,590

202,000

25,000

1,352

5

185

170

$7.787 $5,179

1965 1966 estimate estimate

60,000 100,000

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Operations were started on a pilot basis late in 1961. By June 30, 1964, pilot programs, with financing from section 32 funds, were reaching over 360,000 needy persons in 22 States. The Food Stamp Act (Public Law 88-525) was enacted on August 31, 1964, providing for financing

29,190 58,115 97,720 from direct appropriations. The act provides for ex

1,098 1,885 2,280
30,288 60,000 100,000
219
30,507

60,000 100,000

100,000

400 -800

99,600

1 Includes capital outlay as follows: 1964, $1 thousand; 1965, $15 thousand; 1966, $17 thousand.

2 Selected resources as of June 30 are as follows: 1963, $0; 1964, $219 thousand; 1965, $219 thousand; 1966, $219 thousand.

This program aims at making more effective use of our abundance of food and at providing additional nutrition to those in need. Food coupons which may be used in retail stores for the purchase of commercial brand foods are issued to needy households that qualify to participate.

The Department determines-based on income, food needs and other factors-the allotment of coupons for each household unit, including the portion to be purchased. The participant's normal food expenditure is maintained by requiring that, based on family size and income, recipients will purchase a specific value of coupons. The supplemental or bonus coupons, provided free-ofcharge, permit the family or person to upgrade its diet.

Coupons are issued by a non-Federal issuing office. Cash paid for the coupons by participants is deposited periodically in a designated Federal Depository. Food stores receive cash or credit for the coupons from any commercial bank which must accept them at face value. The coupons then flow through regular banking channels to the Federal Reserve banks where they are redeemed and subsequently destroyed.

pansion of the program through appropriation authorizations of $75 million, $100 million and $200 million for fiscal years 1965, 1966 and 1967 respectively. Designation of new areas to be affected is required to be based on recommendations from States desiring to participate.

The 1965 Supplemental Appropriation Act makes available $25 million in addition to the $35 million of section 32 funds authorized for the program in the regular 1965 100,000 Appropriation Act. This will provide for the areas in operation on July 1, 1964 and permit expansion during 1965 to reach an additional 640,000 persons in other areas. The increase for 1966 would provide for financing on a 100,000 full-year basis the program level expected by June 30, 1965

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