REGULATORY ACTIVITIES

CURRENT ACTIVITIES

Several regulatory laws are administered under this project. These include the Federal Seed Act, Packers and Stockyards Act, U.S. Warehouse Act, the two Standard Container Acts, Export Grape and Plum Act, Tobacco Seed and Plant Exportation Act and the regulatory aspects of the Naval Stores Act. These laws regulate various marketing activities and the administration of each includes two or more of the following:

(1) Licensing or registration;

(2) Supervision of operations of licensees or registrants;

(3) Collection and testing of samples;

(4) Handling of violations.

This project also includes assistance in obtaining and maintaining equitable and reasonable transportation rates and services on farm products and supplies

SELECTED EXAMPLES OF RECENT PROGRESS AND TRENDS

1. Federal Seed Act

This law applies to agricultural and vegetable seeds. It requires truthful labeling; prohibits false advertising; restricts the dissemination of noxious-weed seeds; and establishes germination standards for vegetable seed in interstate commerce. The act requires also that seed imported into the United States meet minimum standards of quality before being admitted into U.S. commerce. act was amended in 1962 to require that importers submit with entry papers a declaration of the labeling appearing on the bags.

The

Under memorandum of agreement, State seed inspectors report to AMS seed testing laboratories any apparent violations which they detect in their routine sampling and testing of interstate shipments, for compliance with State seed laws. Findings of Federal tests and investigations of these State reports are the basis for action against violators.

The U.S. customs Service draws samples of seed offered for importation which are sent to AMS seed testing laboratories to be tested for compliance with the Federal Seed Act. Imports which do not meet the minimum quality standards are denied entry unless the defect can be corrected.

Apparent violations of the interstate provisions of the act were reported by 32 States in 1962. Four hundred and thirty State officials were authorized to inspect seed subject to the act.

(a) Factors involved in reported violations during the past 4 years are shown as follows:

(b) The extent of compliance with State seed laws and the Federal Seed Act in recent years is summarized below:

(c) Interstate investigations and actions.-Complaints of violation of interstate provisions of the act increased 2 percent over 1961 and over the average of the past 5 years. A survey of State agencies revealed that there were 2,222 known violations of which 994 or 45 percent were reported to AMS. A summary of work in this aspect of the law is shown in the following table:

(d) Import activities.-A total of 264.8 million pounds of seed valued at over $23 million were offered for importation during the year. This represents a decrease of 101.5 million pounds under 1961, due primarily to the reduction of 113 million pounds of wheat from Canada caused probably by the drought. Indications are that this year's wheat crop in Canada will be normal and the estimated work for 1963 and 1964 shows an increase based on the increased trend in recent years. The work performed in connection with these imports in recent years and estimated for 1963 and 1964 are shown in the following table:

Includes action taken on lots rejected once and acted on again after cleaning, etc.

(e) Seed testing.-The volume of testing work done on seed of both foreign and domestic origin is shown in the following table:

Work under this project includes administration of two laws: (a) Naval Stores Act. The regulatory aspect of this law protects users of naval stores particularly at the retail level, against adulteration or misleading labeling as well as against short weight. Samples of turpentine and related products moving in interstate commerce are tested and the labels examined to assure their accuracy.

A total of 1,827 samples were examined in 1962 representing 75 shippers. This was an increase of 1,303 samples over 1961. In addition, 357 samples were collected from wholesaler and retailer outlets for testing and analysis. Of the total samples examined 20 violations were found-13 minor infractions which were corrected after warning or informal notification and 7 of which are pending collection of further data.

(b) Tobacco Seed and Plant Exportation Act.-This law prohibits the exportation of domestic tobacco seed and live tobacco plants from the United States except for experimental purposes. In 1962, 58 certificates were issued for the export of tobacco seed to be used for experimental purposes.

3. Packers and Stockyards Act

This program is designed to assure free, open, and fair competition, and fair practices in the marketing of livestock, live poultry, meat, and dressed poultry. It protects consumers against unfair business practices in the marketing of meat and poultry. It protects members of the livestock marketing and meat industries from unfair, deceptive, unjustly discriminatory, and monopolistic practices of competitors.

The meatpacking and poultry industries are undergoing vast changes in marketing structure including concentration of buying power, increased vertical integration and new merchandising and pricing practices as well as new procurement methods. These practices are analyzed and their economic effects upon competitive conditions in the livestock, poultry, and meat industries evaluated to determine their compliance with the act.

Investigations are conducted to determine that the operations of packers and retail organizations do not involve unfair, unjustly discriminatory, monopolistic, or deceptive practices. Through the use of required annual and special reports, as well as audits, the financial stability of these organizations are determined to guard against loss to persons and firms dealing with them. When violations or insolvencies are established, procedures to obtain cease and desist orders are initiated to prevent future violations.

Operations of stockyards, market agencies, and dealers are supervised, investigated, and audited to assure that their business practices are fair, in free open competition, and that they are financially sound.

To assure accurate weights, AMS supervises the testing, maintenance, and operation of scales used in transactions subject to the act.

The law also provides for reparations for anyone injured financially as a result of a violation by a stockyard owner, market agency, or dealer.

(a) Hearings conducted on lamb marketing practices. The extended investigation into the marketing of live and dressed sheep and lamb was completed in 1962, and a complaint issued against seven major meatpackers, three nationwide food chain organizations, and two lamb dealers. The first two hearings in this case

were held in Colorado during March 1962, and three additional hearings have already been held in 1963 in Idaho and California. Additional hearings will be held in 1963. The next one scheduled is to be in Denver in the spring of 1963. (b) Investigations conducted.—(a) The major portion of a complex investigation of certain hog-buying practices in the Iowa-Minnesota direct buying area was completed. The facts developed in this investigation are under review. (b) The first formal administrative action against a poultry processor was instituted in 1962. (c) Several investigations were completed and a number are continuing including practices involving such things as failure to pay for livestock and meat purchases, packers owning and controlling stockyards or auction markets, packer feeding activities, discriminatory pricing of meat, preferential discounts, misrepresentation of meat grades, quality, inspection, etc.

(c) Important rate case nears completion.-The St. Paul Union Stockyards rate case, which has been of major concern for a number of years, was placed in the hands of the judicial officer in 1962. This case grew out of an application for tariff increase at the St. Paul market in 1957. The case has introduced new principles to be applied to the determination of rates at the more than 2,300 posted stockyards. The decision of the judicial officer rendered in November 1962 does, in effect, establish current criteria for determining both property value and a fair rate of return for operators of posted stockyards.

(d) Improved operating procedures.-Several new procedures were adopted in 1962 which make for improved operations and reduced costs of operations. For example, review of packer annual reports, previously made by 25 different field offices is now centralized in Washington. This results in a more expeditious, less expensive process with a more comprehensive picture of insolvencies and other violations of the act. Also, a questionnaire was developed to secure information necessary in investigations. This has resulted in significant savings in Federal travel funds and man-hours.

(e) Meetings with industry groups. Several meetings were held with representative industry groups to bring about closer relationships and promote mutual understanding between the Department and industry.

(f) Bonding.-Of the 16,983 persons registered under the act on June 30, 1962, 12, 299 were bonded in the total amount of $150 million. The remaining 4,784 registrants are classified as "packer buyers" who are not required to furnish bond coverage. H.R. 417, a bill requiring that meatpackers be bonded, is now before Congress. The Department testified at hearings on a similar bill in the preceding Congress and strongly recommends that it be enacted.

(g) Scales and weighing. During 1962, three electronic scales were installed at livestock auction markets. This system of weighing is new to the livestock industry and established methods of testing have not proven conclusive in determining the accuracy of the scales. More frequent testing will be made at these installations until such time as performance records indicate the reliability of these scales.

(h) Posting and registration activities. These activities are reflected in the following table for the years 1957 and 1960 through 1964.

There follows an analysis of formal proceedings under the act for the years 1957 and 1960 through 1964.

(1) Analysis of formal proceedings under the Packers and Stockyards Act

(j) Plans for 1963 include (1) Study of the economic aspects of the concen tration of buying power in fewer hands and the effects of this concentration on producers and the entire industry. (2) Intensified supervision of packer buying practices to determine whether undue concentration of buying power exists which results in restraint of trade, restriction of competition, or manipulation of prices. (3) Study and investigation of feeding operations of packers and chain organizations. (4) More active enforcement of provisions of the act relating to live poultry handlers and dealers. (5) Determination of adequacy of present bonds. (6) Acceleration of property valuations at posted stock yards. Series of meetings with producers and other representatives of the livestock and poultry industries to seek solutions to the major problems in these industries; to appraise existing regulations and required program modifications; and to evaluate marketing trends.

4. Standard container acts

(7)

The two laws administered under this project are designed to standardize containers used for small fruits, berries, and vegetables and veneer baskets of larger sizes. The laws specify the size and type of berry boxes, till baskets. round stave and splint baskets, and hampers that can be made. The principal benefit derived from this legislation is protection of the public against loss because of short measure or deceptive containers for certain fruits and vegetables. The objectives are attained largely through the cooperation of manufacturers who stanchly support the purpose of the act and through systematic inspection and testing of containers at the factory or in the Washington laboratory. Where requested, certificates of approval are issued by the Department for containers that meet the requirements of the act.

During 1962 sample containers were obtained from 100 factories. Capacity examinations were made of 399 items involving 2,544 sample containers, an increase of 25 items and 52 samples over 1961. Ninety-seven items required correction and corrections were made in 66 instances. Certifications of approval

were issued for 17 items.

6. Freight rate services

This program is aimed at the establishment of better transportation service and reasonable rates and charges for farm products that move to storage, processing plants, and to the markets as well as on-farm production supplies that move to the farms. It is authorized by the Agricultural Adjustment Act of 1938 and the Agricultural Marketing Act of 1946. The work is carried on in cooperation with farm organizations, producers, and shippers of agricultural products; with other Government agencies; and with carriers. Efforts are directed primarily toward obtaining the most advantageous transportation environment for the agricultural community. Attention is also given to the needs of the carriers-rail, highway, water, and air-as outlined in the national transportation policy.

(a) Cases requiring departmental participation.-During 1962, the Department participated in two important cases involving the transportation of grain and grain products. One of these cases results from proposed reductions in rates by railroads serving the Southeastern States carrying grain products from various river ports. The rates were suspended by the Interstate Commerce Commission