to get it from Agricultural Research Service, just what activity it is that they do at New Orleans under the other branch of the same research setup in the same Department of the same Government.

Mr. SMITH. Mr. Chairman, I have some information on that, done hurriedly.

Mr. WHITTEN. We would like to have what you have. May I say again, feel free to enlarge on it where you are not able to give the full story. Could you give it to us briefly now?

Mr. SMITH. From the information that we have and this was worked out with the folks in the Agricultural Research Service-they have at the present time three projects dealing with new and extended uses for peanuts. The first one, entitled "Investigations of the Constituents and Their Modification by Processing That Influence Nutritive Properties and Consumer Acceptance of Processed Peanut Products."

The objective is to determine the interrelationships between constituents, including minor constituents, and nutritive properties and consumer acceptance of processed peanut products needed as a guide in developing new and improved processes to obtain superior edible products to expand peanut utilization.

The second project is entitled "Development of Hydrogenation Techniques Which Will Produce the Least Possible Isomerization in Edible Fat Products Prepared From Cottonseed Oil and Peanut Oil." The objective of this project is to devise hydrogenation procedures suitable for converting cottonseed and peanut oils into new and improved edible products containing the smallest possible amounts of positional and geometrical isomers of oleoyl and linoleoyl groups. The third one is "Investigation of the Flavor and Aroma Components in Processed Peanut Products." The purpose of the project is to isolate, identify, and characterize constituents of processed peanut products to form the basis for producing improved peanut products of greater consumer acceptability.

The first two utilization projects listed above were being carried out by three professional scientists at the Southern Utilization Research and Development Laboratory in fiscal 1962. During that fiscal year, a total of $69,000 was allocated to peanut utilization research at that laboratory. The third project listed above was added in fiscal 1963 and the allocation was increased by $100,000, plus pay act increases, bringing the total for peanut utilization research to approximately $173,000. No additional personnel have been recruited. Some of the added funds will be used for contracts. Mr. WHITTEN. In that work they cover the three major types of peanuts?

Mr. SMITH. As far as I know, they do.

LOCATION OF PROPOSED PEANUT RESEARCH LABORATORY

Mr. WHITTEN. I am advised that they do. I am seeking some neutral ground in this area. Much of your research could be done in Chicago, Borneo, or most anywhere else if it is work inside a laboratory. To have your scientists close to other scientists, to have them close to other folks with related problems, and to have them where you could discuss a community of interest, means you should put it where other people in like work are available.

95910-63-pt. 3—16

But insofar as that which is done inside a laboratory, it doesn't make much difference on which side of the river you might locate the laboratory. But there is value,, in the type of research that you do, in being associated with others with related problems and working on the same project and trying their best to sell more peanuts. It would strike me that the fellow working with quality ought to be there with the fellow who is trying to improve the quality so he can use it. Does that make sense?

Mr. SMITH. Yes.

I

Mr. WHITTEN. Mr. Smith, we have taken up a considerable amount of time with this problem. I think it is appropriate that we do. should like for you now to continue your discussion.

Mr. HORAN. Mr. Chairman, I have some questions to ask on pea

nuts.

Mr. WHITTEN. Mr. Horan.

Mr. HORAN. As a matter of refreshing my mind on this matter, I don't recall, in the 1962 appropriation hearings, any discussion on this side with regard to the location of any peanut research laboratory. Mr. SMITH. The matter of location was not discussed, Mr. Horan. Mr. HORAN. I want to clear this up, Mr. Chairman, because I think it affects the integrity of the work of all of us, I assume not only on this side of the table, but you gentlemen are also interested in it. Your statement says:

The proposed program and laboratory consistent with the presentation made to the Congress by the peanut industry during the appropriations hearings on 1962 budget.

In accordance with the authorization contained in the 1962 appropriations, the development of plans and specifications for the laboratory will be completed at an early date. Accordingly, invitations to bid on the construction can be released when construction funds are authorized.

I assume that perhaps the word "allowed" would have been better. Mr. HERRELL. The construction of buildings takes specific authorization in the language of the appropriation act. That is why this word "authorized." The same action would also appropriate the funds for it, so that the authorized and allowed will both be in order.

Mr. HORAN. Isn't it true that it was in the conference report in 1962?

Mr. HERRELL. We were authorized at that time to develop plans for it.

Mr. HORAN. July 17, 1961.

Mr. HERRELL. That is correct.

Mr. HORAN. Amendment No. 14, "Marketing research," appropriates $4,740,000 instead of $4,515,000 as proposed by the House and $4,870,000 as proposed by the Senate. The amount agreed to includes the following increases over the House bill: $130,000 to develop plans and specifications for a research facility for peanuts to accelerate marketing research on peanuts. Isn't that the basis?

Mr. HERRELL. That is correct, sir. We were authorized to develop the plans.

Mr. HORAN. It was not in the actual bill. It was in the report. Mr. HERRELL. That is correct.

Mr. HORAN. On that basis, isn't it true that in the 1963 budget you had on page 66 "construction of facilities and acquisition of the necessary land therefor as authorized by law, $1,600,000 to remain available until expended"?

Mr. HERRELL. That was not in the final legislation. As you know, it was proposed, but not approved.

Mr. HORAN. I know. I was there. And below that, the proposed appropriation would provide for construction of a marketing research facility at Dawson, Ga., principally for peanut marketing research. In spite of the fact that that was not allowed by the conferees, did that have any effect on its status as a line item in this bill?

Mr. SMITH. The plans were authorized the previous year.

Mr. HORAN. But no location?

Mr. SMITH. In order to develop your plans you have to have a location, Mr. Horan.

Mr. HORAN. I understand.

Mr. SMITH. Part of your construction

Mr. HORAN. I understand completely.

Mr. SMITH. The plans and specifications relate to that. The location is involved in that operation.

Mr. HORAN. That is the basis of our difficulty. Of course, I just wanted to have the record show that this was a little bit irregular as far as authorization is concerned, and I believe it is a little irregular.

I have had a lot of stuff put in the reports myself that I thought were important. They certainly didn't get this treatment. I think it is true that what is in the report is considered to have the effect of law. But inasmuch as this language was not in the bill as passed, to me at least has a little relationship to what should be in the estimates for 1964. I suppose that is a good question and it should be determined by someone other than ourselves.

I did, Mr. Chairman, want to have that particular point cleared up because I think it has its effect upon the condition of our activities on the subcommittee.

Mr. WHITTEN. The gentlemen raised a point that nowhere in the hearings did it appear where this laboratory was to be located. But if it didn't appear in the hearing, it is about the best known secret that I ever heard of as to what the Department had agreed upon.

Somebody had given a lot of assurance, without calling any names, and somebody had received them without calling any names, and we took the brunt of it without calling any names when the problem was with other Members of Congress from peanut-growing areas and from the peanut associations and organizations themselves. That is where the hitch was, as I have tried to point out in the record.

Unless there are further questions, you might proceed with your discussion.

Mr. HORAN. That is all that I wanted.

INSPECTION, GRADING, CLASSING AND STANDARDIZATION

POULTRY INSPECTION

Mr. SMITH. Poultry inspection: The trend in poultry production. continues to be upward, subject to short-term fluctuation from time to time. The 1963 appropriation included an increase of some $700,000 to provide for the additional workload this year.

We are requesting a further program increase of $350,000 in the budget for this work in 1964 to assure that the bird-by-bird inspection requirements of the act can continue to keep pace with the expanding production. Pages 78, 79, and 81 of the justifications containing additional information on this program may be inserted in the record at this point.

(The matter referred to follows:)

POULTRY INSPECTION

The compulsory poultry inspection program continues to increase in all phases; 1962 was the fourth full year of operation under the Poultry Products Inspection Act and in that period the program has almost tripled. In 1958 there were 356 plants under inspection and in 1962 there were 984. The growth in volume of work has been even greater-about 2 billion pounds inspected in 1958 and over 9 billion in 1962. This growth is due to several factors such as the increase in poultry production from 2.1 billion head in 1958 to 2.4 billion head in 1961; and the increase in percent of this production inspected-from 31 percent in 1958 to 85 percent in 1961. Here again the evolution taking place in agricultural marketing affects the service. The vertical integration, formation of a few large companies in place of individual producers and handlers makes for more interstate shipment and, consequently, a larger volume of poultry to be inspected. The recruiting program for veterinary inspectors received increased impetus through a program prepared jointly by the Agricultural Marketing Service and the Agricultural Research Service for presentation at the veterinary colleges. In addition, training officers met with professors who teach veterinary public health to discuss ways and means of improving the education that veterinarians receive in this area of the curriculum. Veterinarians from cach of the six areas lectured at the veterinary colleges on the application of the veterinary sciences to poultry food hygiene, and printed training material has been distributed to all such colleges.

Evidence developed in the course of the year resulted in 209 letters of warning and 10 letters of intent to prosecute under the Poultry Products Inspection Act, and 41 "informal show cause" letters to various firms concerning alleged violations of the Agricultural Marketing Act and the Poultry Products Inspection Act. Nineteen cases were submitted to the Office of the General Counsel with recommendations that such cases be closed with letters of warning. The Office of the General Counsel referred 23 cases of violations to the Department of Justice for criminal prosecution. Eleven cases resulted in court convictions for violations of the Poultry Products Inspection Act and the regulations thereunder. Poultry inspection service was terminated at one establishment for failure to comply with the regulations under the Poultry Products Inspection Act.

A total of 428 import requests and examinations were made at various ports of entry throughout the country. A total of 40,022 pounds of such poultry was determined to be ineligible and was refused entry.

Poultry products exported to foreign countries continued to increase as evidenced by the issuance of 21,952 export certificates, representing an estimated 302 million pounds of product.

Activity under the Poultry Products Inspection Act, fiscal years 1962-64

Mr. SMITH. In January 1962 the Civil Service Commission initiated a survey study of the present published position classification standards for meat and poultry inspectors other than veterinarians. This survey was completed in the early part of September. It indicates the need for upgrading these positions to a level commensurate with other positions in Government service having similar responsibilities. Based on recent discussions with the Civil Service Commission, it is evident that classification standards for these inspectors will be revised. Publication of the new standards is expected sometime during the last quarter of this fiscal year. After publication, use of these position standards will be mandatory. Nearly 1,500 nonveterinarian poultry inspector positions would be affected. Therefore, a supplemental request for funds will likely be necessary at a later date to meet these additional costs in 1964.

REGULATORY ACTIVITIES

WAREHOUSE ACT

Warehousing of agricultural commodities is an essential part of a sound marketing program. Numerous risks and hazards are inherent in this type of activity, both to the owners of the products stored and to warehouse operators.

Events during the past year in the grain storage area have pointed up the need for strengthening the work of the U.S. Warehouse Act, both in Washington and in the field. Procedures involving financial analyses of warehousemen need further strengthening; methods of bond determinations need added tightening and the frequency of periodic warehouse examinations needs to be increased. Some progress has been made as a result of the $60,000 increase contained in the 1963 Appropriation Act. An additional program increase of