not produce sufficient revenue to cover costs. Consideration will be given to a further increase in fees as may be necessary. Pages 142145 of the justifications covering this program are offered for the record at this point.

(The pages follow:)

Current activities

STATUS OF PROGRAM

This special fund, comprised of annual license fees, is used for the administration of the Perishable Agricultural Commodities Act and the Produce Agency Act. The enactment of Public Law 87-725 on October 1, 1962, withdrew from this fund financing of the Export Apple and Pear Act. These laws are designed to (1) protect producers, distributors, consumers, and others from unfair and fraudulent practices in the marketing of perishable agricultural commodities; (2) prevent the unwarranted destruction or dumping of farm products handled for and on behalf of others; and (3) promote foreign trade in apples and pears.

Commission merchants, dealers, and brokers subject to the act who handle fresh or frozen fruits and vegetables in interstate and foreign commerce must be licensed under the Perishable Agricultural Commodities Act. In addition, certain retailers are subject to the act and are required to be licensed. Those who handle produce for the account of others are required to give a true and correct accounting to their principal for commodities sent for sale in the market. Buyers and sellers must live up to the terms of their contracts. False or misleading statements, misbranding, etc., are prohibited.

Any interested party or agency may request the assistance of the Department in settling disputes under the act. When there is an apparent violation of the act, the Department will promptly communicate with the respondent party; make necessary investigation; and endeavor to bring about an amicable informal settlement. Where informal settlement of disputes cannot be arranged the opportunity to file and pursue formal complaint under the law is given to the complaining party. In formal proceedings each party has an opportunity to present his side fully. The Department determines whether a violation existed, the loss or amount of damages to be paid, and issues a formal order calling for reparation where appropriate. If violations are repeated or flagrant, disciplinary action may be taken by the Department seeking to suspend or revoke the offender's license. The majority of cases involve questions of quality and condition. Evidence consists principally of inspection certificates and other pertinent documents furnished by complainants and respondents.

Most settlements of disputes are made on the basis of precedents established by experience gained from handling previous disputes, and from a knowledge of marketing principles and practices and application of the provisions of the law. When formal decisions are handed down by the Secretary they are published and made available to the produce industry, and are used by the industry as a basis for avoiding disputes in the future and for settling disputes which do arise without the necessity for filing a complaint with the Department. Cases referred to the Department are, in general, those which are most difficult and which the parties are unable to settle themselves.

Activities under these acts include licensing, collecting fees, investigating and handling complaints, and working with growers, shippers, and receivers to correct and prevent misbranding of produce, thereby reducing the number of potential complaints.

Financing

License fees.--Annual license fees, together with arrearage fees, and appropriations, if any, for this work are deposited into a special fund. With the exception of legal services (which are provided from the appropriation to the Office of the General Counsel), all expenses for administration of the Perishable Agricultural Commodities and Produce Agency Acts are paid from this fund. The enactment of Public Law 87-725 on October 1, 1962, transfers to the "Marketing research and service" appropriation the financing of the Export Apple and Pear Act which previously had been financed from this fund. The amendment also authorizes an increase in the annual PACA license fee from $25 to a maximum of $50 and increases the number exempt from license. The Department plans to increase the license fee effective January 1, 1963.

SELECTED EXAMPLES OF RECENT PROGRESS AND TRENDS

1. Perishable Agricultural Commodities Act

(a) PACA-industry conference.-The Fifth PACA-Industry Conference of USDA and produce industry representatives was held in New York City in February 1962. The purpose of these annual conferences is to give industry representatives an opportunity to discuss with Department officials problems in connection with the administration of the Perishable Agricultural Commodities Act. Most of the discussion at the 1962 conference was concerned with the proposed amendments to the act and with the question of licensing retailers and frozen food brokers. There was also considerable discussion of the amendment to the regulations under the act providing a good delivery standard for lettuce, disciplinary actions, and the educational program conducted by the Department for the purpose of encouraging cooperation between industry and government. (b) Licenses.-The number of licenses in effect on June 30 decreased from 25,336 in 1961 to 24,661 at the end of the 1962 fiscal year. This decrease is a reflection of the financial difficulties of some segments of the industry.

(c) Comparison of 1962 complaints and reparation awards to past years and estimates for 1963 and 1964

In addition to actual complaints filed, thousands of inquiries from receivers, brokers, shippers, and other sources seeking counsel and advice were handled. Suggestions and recommendations in these cases have resulted in the settlement of numerous disputes and eliminated the necessity of filing complaints with the Department.

(d) Informal complaints and settlements.-Of the 2,706 cases to be handled, 2,223 were closed including 930 amicable settlements which resulted in payment of $980,338 in reparations-an increase of 28 amicable settlements over fiscal year 1961. Included in the above total cases handled are 346 disciplinary complaints, 279 of which were concerned with misbranding. This represents a substantial reduction from the 323 misbranding cases handled last year. The remaining 67 disciplinary complaints involved failure to pay promptly for produce purchased, failing to maintain adequate records, questioning of applicant's fitness for license under the act and violations in other categories. Sixteen cases were disposed of by formal decision of the Secretary, and four cases were disposed of through the courts.

(e) Formal reparation complaints.-A total of 323 formal reparation complaints were referred to the Office of the General Counsel in 1962-70 fewer than last year. Formal orders issued included 263 reparation awards amounting to $622,712. These awards resulted in the payment to complainants of $199,505. Because of refusal or failure to pay reparation awards 55 licenses were suspended and 47 additional licensees permitted their licenses to expire before reparation orders issued against them became final. Some 127 reparation cases were pending in the Office of the General Counsel on June 30, 1962, compared to 140 cases on the same date a year ago.

(f) Good delivery standards for lettuce.-The good delivery standards for lettuce became effective in March 1962. These standards established tolerances for the amount of damage and decay at destination under different types of free-on-board contracts. The good delivery standards are entirely separate from the tolerances provided in the U.S. standards for grades of lettuce. The proposed standards were previously published for the information of the industry and were modified on the basis of comments received. It is expected that as soon as the industry becomes fully familiar with these standards, disputes in connection with shipments of lettuce will be reduced.

2. Produce Agency Act

(a) Cases handled.-There were 8 cases pending under the act at the close of fiscal year 1962 as compared to 26 cases the previous year. A total of 44 new cases were filed in 1962 and 62 cases were closed. Amicable settlements were effected in 24 cases compared to 14 amicable settlements in fiscal year 1961. Personal investigations of 24 complaints were conducted during the year. 3. Export Apple and Pear Act

One

(a) Compliance surveys.-Surveys for compliance with the act were made of carriers and exporters in Boston, Miami, New York, Portland, Seattle, and San Francisco. The records of export shipments of 50 carriers and 50 exporters were checked and it was found that they were generally complying with the act. violation involving the export of a shipment of apples which had failed to meet the requirements prescribed by the act was referred to the Department of Justice. The violator was found guilty and fined. The enactment of Public Law 87-725 transferred the administration of this act to the "Marketing research and service" appropriation, effective October 1, 1962.

Mr. SMITH. This concludes my general statement, Mr. Chairman, and members of the committee. We will be happy to respond to questions that you may have and to discuss other phases of the work of the Agricultural Marketing Service.

MARKET FACILITIES STUDIES

Mr. WHITTEN. Thank you, Mr. Smith. Congress made several increases last year, in rather small amounts. First we made a provision for the market study for the city of Chicago. This was following up steps we had taken in past years having to do with Philadelphia and Boston, two that I recall. I would like for you to tell

us in what other cities you have made this same type of study. I might say, for the record, that the reason the committee has recommended, and Congress approved, this type of study is that in many of the older cities the handling of produce and various commodities is somewhat hamstrung by antiquated facilities, locations, et cetera. As a result, and at the request of the local people in all instances including their Representatives in the Congress, we have set out to try to do something about it. In how many cities have you made these studies at this time?

Mr. SMITH. During the current fiscal year

Mr. WHITTEN. I mean back through the years.

Mr. SMITH. Our notes indicate the number. It is quite a large number.

Mr. WHITTEN. You might supply the number here.

(The material requested follows:)

CITIES IN WHICH MARKET FACILITY PLANNING STUDIES HAVE BEEN
MADE OR REQUESTED

1. Studies completed-construction underway or completed:

1. Studies completed-construction underway or completed...

2. Studies completed-construction not started..

3. Studies underway-construction not started.

4. Outstanding requests for assistance...

Total...

1 Meat section completed in early 1950.

23

21

8

58

CHICAGO MARKET STUDY

Mr. WHITTEN. In the past year what have you done in this area, including the directive for the city of Chicago?

Mr. SMITH. The major project areas for the current fiscal year involve a market study in Boston, Mass., one in Chicago which is well underway, we have a study completed and plans for construction are underway for Detroit, work carried over in 1963 on that.

To respond more specifically to your questions, Mr. Chairman, pertaining to the Chicago project, I would like to outline briefly where it stands as of now.

Preliminary investigations show that the counties of Cook, Kane, Du Page, Lake, Will, McHenry, and Kendall in Illinois, and Porter and Lake in Indiana should comprise the study area. The wholesale markets in the area that handle meat; poultry; fruits and vegetables; frozen foods; butter, eggs, cheese, and margarine; and dry groceries will be studied.

It has been determined that a contract for collecting the data required on commodity movement into, through and out of the markets, and the costs of handling during these movements would materially accelerate the program of work. The contract is being reviewed and should be awarded within the next 60 days. It is estimated to cost about $50,000 and will require about 9 months to complete.

Fieldwork by the Department began during this month. This includes a survey of space utilization, location, sites, taxes, real estate costs, etc. During the remainder of this fiscal year it is expected that 1.5 man-years will be devoted to this project. During fiscal 1964 it is estimated that 4 man-years will be utilized. In 1965 it is estimated that 2.5 man-years will be required. Time required after this will depend upon the action of Chicago authorities.

One that we have worked on for quite some time seems to be in the final stages of resolution, land purchase and construction is in New York City, a major undertaking.

NEW YORK CITY MARKET

Mr. ADDABBO. With reference to the marketing service studies being made, can you give us the situation in New York?

Mr. SMITH. I will be glad to. First we have published a report covering facilities for fruits and vegetables, which recommended certain facilities be constructed and which are under construction at the present time. That is at Hunts Point, and occupancy is planned for late 1964.

We issued another report covering facilities for meat and poultry. This report recommended also new facilities for both wholesale meat and poultry market. Private engineers and architects are preparing preliminary plans for this at the present time.

It appears that this market will be relocated at Hunts Point adjacent to the site of the fruit and vegetable market.

Another report we published on butter, eggs, cheese, and margarine, which recommended new facilites for this important industry in New York City, and here again the same architects are preparing preliminary plans for this at the present time. It appears that this market will also be relocated at Hunts Point. The study has been completed and the report has been published. It recommends new and improved facilities.