products, such as livers, hearts, tongues, and head meat, at an increase in cost of 40 man-years. The savings referred to is a net figure. The new way of inspecting cattle carcasses for cleanliness is essentially a substitution of a statistically determined random sample in the coolers for the 100 percent inspection of cattle carcasses at the time of slaughter. The savings would occur in cattle slaughter plants large enough to require at least one full-time inspector. During this year, the sampling method has been extensively field tested-work that had to precede elimination of this inspection work during slaughter. Industry acceptance of the new procedure has generally been good. One remaining obstacle to full implementation is that in some plants it will be necessary to remove the kidneys for review by postmortem inspectors because of the layouts of the slaughtering departments. We anticipate some industry opposition to this, essentially because it interferes with the common practice of marketing carcasses with the kidneys attached. The new offal inspection procedure is to replace the present nonrandom inspection methods with a statistically determined random selection procedure which includes the application of standard criteria for product acceptance. The new procedure encourages the plant to assume responsibility for the quality of its offal products, it provides a basis for uniform inspection and it provides a basis for measuring the effectiveness of inspection. Mr. MICHEL. Do you have any preliminary results from the plant surveys which you initiated with regard to meat inspection in the 14 States and Puerto Rico? That is, do you have any basis upon which you could give our committee an estimate of what it will cost to place plants in these 14 States and Puerto Rico under Federal meat inspection? What has it cost in North Dakota? Could you supply for the record a list of these 14 States and the number of plants in each? Mr. YEUTTER. Based on our experience in North Dakota, and estimates of plants in the designated States, the annual cost for Federal inspection in the 14 States and Puerto Rico will amount to $17-$18 million. The estimates are, of course, very tentative at this time. The annual estimated cost for Federal inspection in North Dakota is $500,000. Designated States and number of plants Mr. MICHEL. In your poultry inspection program, is the $948,000 you request a direct or indirect result of the requirements of the Wholesome Poultry Products Act? Do you, at this time, have any preliminary basis for estimating the costs for Federal assumption of inspection in the 13 States you refer to on page 4 of your statement? Could you provide us with a list of these States and the number of plants in each? Mr. YEUTTER. $948,000 is for inspection of poultry plants switching from intrastate to interstate commerce. This is due to the requirement in the Wholesome Poultry Products Act enacted in August 1968, that intrastate inspection systems must be comparable to the Federal operation at the end of 3 years after the passage of the act. It is estimated that many large State poultry plants in these.comparable States will request Federal inspection in order to ship their products in intertsate inspection. Our preliminary estimate for Federal poultry inspection in the 13 designated States is $650,000 to $750,000. The estimate is, of course, very tentative at this time. Mr. MICHEL. You are requesting funds for administration of two new programs-Egg products inspection and plant variety protection. In your meat and poultry inspection programs additional funds will be required for changes necessitated by our meat and poultry inspection laws. Could you provide for the record a rough breakdown of your budget in terms of what portion will be spent for these new programs and expansion of activities required by law, and what portion will be spent for ongoing activities? Mr. YEUTTER. The budget includes funds for two new programs$3,387,000 for the Egg Products Inspection Act and $300,000 for the Plant Variety Protection Act. An increase of $4,870,000 is requested for Federal inspection of meat and poultry plants which will be switching from intrastate commerce to interstate commerce. In States which have been declared equal to, some of the larger plants will elect to apply for Federal inspection to get the benefits of interstate commerce. Other meat and poultry inspection increases, totaling $6,675,000, are needed for regular program growth in Federal inspection. Mr. WHITTEN. Thank you, gentlemen, for a fine presentation. I also want to thank my colleagues for developing matters here that certainly need to be developed. In this overall picture of wholesome meat we have our hands full. I know these hearings certainly call our attention to many of the problems, and I trust they will be as beneficial to you as they are to the committee. Thank you a whole lot. Mr. YEUTTER. Thank you very much. It has been a pleasure to meet all of you. THURSDAY, MARCH 25, 1971. PACKERS AND STOCKYARDS ADMINISTRATION WITNESSES RICHARD E. LYNG, ASSISTANT SECRETARY OF AGRICULTURE ODIN LANGEN, ADMINISTRATOR, PACKERS AND STOCKYARDS ADMINISTRATION GLENN G. BIERMAN, ASSOCIATE ADMINISTRATOR, PACKERS AND STOCKYARDS ADMINISTRATION JOHN T. COYNE, EXECUTIVE ASSISTANT TO THE ADMINISTRATOR, PACKERS AND STOCKYARDS ADMINISTRATION RICHARD E. BALLARD, CHIEF, DIVISION OF BUDGET AND FINANCE, OFFICE OF MANAGEMENT SERVICES CHARLES L. GRANT, DIRECTOR OF FINANCE, DEPARTMENT OF AGRICULTURE Mr. WHITTEN. The committee will come to order. We now take up the Packers and Stockyards Administration. I want to say for the record, it is a real pleasure for me, and I am sure to all of our colleagues on this committee, to visit with our very good friend, the Honorable Odin Langen, who now heads this activity. In my service in the Congress I do not know of anyone more respected or anyone who has devoted himself more to the service of his district and of his State and of the Nation, particularly in connection with the work that this subcommittee has done. Odin, we all know of this fine work that you have done here through the years and we know that you are continuing this work in your new capacity, where not only are you well-trained because of your splendid background, but where you will carry forward the fine job that can be done through your agency for those engaged in the packers and stockyards business. As well as for traders and consumers who, in the final analysis, are the ones who buy from those who produce and who sell. I would say more except it might be taken that I was going overboard. But we mean every word of it. It is a pleasure to have you here and a pleasure to visit with you. We would be glad to hear from you in your own way at this time. But preceding that, I would like pages 14 through 16 of volume 3 of the justification material inserted in the record. (The pages follow :) PACKERS AND STOCKYARDS ADMINISTRATION Purpose Statement The Packers and Stockyards Administration was established by Secretary's Memorandum No. 1613, Supplement 1, of May 8, 1967. The Agency administers the Packers and Stockyards Act of 1921, as amended, as well as the Truth in Lending Act and the Fair Credit Reporting Act as these statutes relate to persons and firms subject to the Packers and Stockyards Act. The main objective of the Act is to assist in the maintenance of fair competitive practices in the marketing of livestock, meat, and poultry. It operates currently to suppress monopoly, fraud, or restraints on trade in the marketing of $15 billion worth of livestock and nearly $2 billion of live poultry, which represents approximately 1/3 of the cash income of U.S. farmers, and $20 billion worth of meat and dressed poultry annually, which is about 1/3 of consumer expenditures for food in the U.S. The principal programs carried out in administering the Act are: 1. Investigation of packer meat merchandising and chain store buying practices in order to maintain prices established by fair and competitive marketing practices and conditions. 2. Investigation of livestock procurement methods by packers and dealers to assure that unfair trade practices detrimental to producers and the industry are not in use. 3. Surveillance of marketing methods at public markets to foster and maintain fair and effective competition. 4. Investigation of complaints regarding poultry marketing practices to identify and correct those which are injurious to producers and operators in the industry. 5. Carrying out weighing investigations to eliminate false and careless weighing to the maximum extent possible. 6. Investigation of custodial accounts to determine that shippers' proceeds are safeguarded and otherwise handled in conformance with existing regulations. 7. Investigation of financial condition of registrants and others subject to the Act to determine that they are financially sound and capable of meeting their obligations, and requiring bonds of auction operators, commission firms and dealers. 8. A poultry scale testing program and extension of livestock and monorail scale testing efforts to assure accurate scale facilities. 9. Study of services and facilities at public markets to determine that they are adequate. 10. Review of stockyard rates to determine that they are reasonable and commensurate with the services and facilities provided. 11. Investigation and providing for hearings and settlement of reparation camplaints for money damages. 12. Registration of dealers and market agencies and posting stockyards. These functions are carried out through a Washington, D.C. office, and 13 field 59-584 O 71 pt. 3 - 55 |