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Project statement

1958 (esti- || Increase (+) 1959 (estiProject 1957 mated) or de- mated) crease (–) Licensing dealers and handling complaints----- $525, 353 $664,700 +$14,900 $679,600 Unobligated balance brought forward---------- –304, 401 –311,738 +2, 700 –309,038 Unobligated balance carried forward---- - 311,738 309,038 |-------------- +309,038 Total appropriation or estimate---------- 532,690 662,000 +17,600 679,600 INCREASE

(1) An increase of $14,900 in obligations to place on a full year basis the earpansion made in 1958 to carry out the provisions of the Perishable Agricultural Commodities Act, as amended Need for increase.—Public Law 842, approved July 30, 1956, amended the Perishable Agricultural Commodities Act to correct certain deficiencies which had become apparent in the administration of the act. The additional workload resulting from these amendments is in connection with— (a) Broadened authority of the Department to deny licenses; (b) Authority to investigate in order to uncover misbranding and misrepresentation ; and (c) Authority to take corrective action. Additional technical and clerical personnel were recruited in the latter part of 1957 to handle this increased workload under the act, as amended. The expansion is to be completed early in 1958. The increase in 1959 will provide on a full-year basis for the program level expected to be reached in 1958. The annual license fee of $25 will provide the necessary funds.

st ATUS OF THE PROGRAM Current activities This special fund, comprised principally of annual license fees, is used for the administration of the Perishable Agricultural Commodities, Produce Agency, and Export Apple and Pear Acts. 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. All commission merchants, dealers, and brokers who handle fresh or frozen fruits and vegetables in interstate and foreign commerce must be licensed under the Perishable Agricultural Commodities Act. Handlers are required to give shippers a true and correct accounting 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 law. The Department will promptly communicate with the respondent party; make necessary investigation; endeavor to bring about an amicable informal settlement; take formal action, if necessary; give each party an opportunity to present his side fully; determine the loss or amount of damage to be paid; and issue a formal order calling for payment of reparation. 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 documentary evidence furnished by complainants and respondents. Activities under these acts include licensing, collecting fees, investigating and handling complaints and violations, and working with growers and shippers to correct and prevent misbranding of produce, thereby reducing the number of potential complaints. Financing.—Annual license fees, together with arrearage fees, and appropriations, if any, for this work are deposited into a special fund. All expenses, except legal services, for administration of the Perishable Agricultural Commodi

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ties, Produce Agency, and Export Apple and Pear Acts are paid from this fund. During most of 1957 the license fee was $15. Public Law 842, approved July 30, 1956, authorized an increase in the fee to a maximum of $25. Effective February 1, 1957, the fee was set at $25.

Revenue and obligations

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Selected eramples of recent progress and trends-Perishable Agricultural

Commodities Act Act amended.In addition to authorizing an increase in the license fee, Public Law 842 strengthened the misbranding provisions of the act; granted the Secretary more authority with respect to the denial of licenses to unfit applicants; and permitted more Federal control over the employment by licensees of persons found guilty of prior violations.

Enforcement program strengthened.—With the strengthened misbranding provisions of the amendment, a more vigorous enforcement program was begun in April 1957. Initial efforts were concentrated in the producing areas of Florida, North and South Carolina, Virginia, Delaware, New Jersey, New York, and Maryland. Spot checks were conducted at various shipping points to determine if produce being prepared for shipment carried accurate markings as to grade, size, region of origin, and weight. This type of investigation requires the full cooperation and support of growers and shippers. To attain this cooperation, meetings with growers and shippers are arranged in the shipping area before beginning the investigation. The program is explained and the procedure to be followed is outlined. To encourage compliance, and to emphasize the benefits of the program to responsible shippers and dealers, it is pointed out that shipment and sale of misbranded produce has a tendency to depress the market, lower respect for the established grades, and undermine confidence between the shipper and dealers on distant markets.

When misbranded produce is located at the packing shed, the shipper is notified and afforded an opportunity to correct the deficiencies. In practically all cases encountered to date, shippers have cooperated and cases were considered closed with a warning to the shipper to exercise greater care in the future. Reports received from shippers and their associations indicate that this method has reduced the number of complaints involving misbranding.

Regulations revised.-Proposed revised regulations under the act were developed. The regulations had not been revised for a number of years and many changes needed to be incorporated based on administrative and court decisions as well as to reflect changes in industry practices. Great interest was displayed by all segments of the industry and comments and suggestions were received from practically all of the important associations as well as from firms and individuals. These comments and suggestions are being analyzed and evaluated prior to further consideration by the industry.

Licensing down.-Licenses in effect as of June 30, 1956, totaled 25,987 as compared with 26,838 a year earlier. The decrease in the number of licenses is due principally to the unfavorable marketing season for watermelons in Florida, Georgia, and Texas during 1957. The licensing activity and number of licenses in effect at the end of the past 3 years and estimated for 1958 and 1959 are as

follows:

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Complaints decrease and reparations increase.—Informal advice and counsel given the industry were instrumental in the settlement of numerous disputes before they reached the complaint state. This assistance is reflected in the reduction in the number of complaints filed during 1957. The 2,654 complaints handled in 1957 included 692 from fiscal year 1956 and 43 reopened during 1957. A total of 1,917 of these cases were settled during 1957, leaving 737 cases to be handled during 1958.

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Basis for settlements.—Most settlements are made on the basis of precedents established by Secreatry's orders in previous cases handled. These decisions, published and made available to members of the produce industry, are used by them as the basis for settling disputes informally. Cases referred to the Department are, in general, those which are difficult and which the interested parties are unable to settle among themselves. In fiscal year 1957 there were 223 formal decisions, a decrease of 65 from the previous year.

Investigations made and settlements reached.-Investigations were conducted in 769 of the 2,654 cases handled. 1,917 of these were closed, and 17 submitted to arbitration, a reduction from the 41 cases submitted in fiscal year 1956.

The reduction from 2,208 in 1956 to 1,917 in 1957 in the number of complaints closed; and the reduction from 859 to 769 in number of personal investigations conducted are attributed to several factors: (1) There were 6 investigators assigned to license work on roadblock stations in Florida and Georgia for a period of 5 weeks. (2) Since the misbranding program was inaugurated in April 1957, 4 investigators have devoted a considerable portion of their time to the misbranding program.

Several complicated disciplinary actions were handled and, at 1 time, 5 injunction proceedings were being conducted simultaneously by the New York office. Considerable time may be required in settlement of these cases and it was estimated that one of these disciplinary cases required a total of 686 manhours.

Produce Agency Act cases handled.—There were 48 new cases filed compared with 38 in the preceding year; 28 cases were carried over making a total of 76 cases handled during 1957. There were 48 cases closed, compared with 39 during 1956; 28 of the cases closed were by amicable settlement and 20 because of insufficient evidence, lack of jurisdiction, or withdrawn by complainants. There were 28 cases pending at close of the fiscal year. The product involved in most complaints was cut flowers. At the close of the fiscal year, 2 cases were awaiting trial in Federal court and 2 were pending in the Department of Justice. No court penalties were imposed under the Produce Agency Act during fiscal year 1957.

Export Apple and Pear Act.-A proposed amendment is presently under consideration, requiring that, except for early varieties, the minimum grade for apples to be exported shall be U. S. No. 1 Cookers instead of U. S. Utility grade. Since 1933, no changes have been made in the grades required for apples shipped under this act. The Utility grade is one of the poorest grades established under U.S. Standard and information received from the industry indicates that apples of such quality are generally not acceptable in foreign markets.

No complaints were filed under this Act during the 1957 fiscal year.

QU'ESTION OF WHEN THE FEDERAL GOVERNMENT SHOULD ENTER THE

MARKET

Mr. WHITTEN. There is one other statement I would like to make, Dr. Paarlberg

You know, there is enough room in agriculture for everybody to have different viewpoints, so I do not mean to be critical of you.

However, following what you said earlier, the price of eggs is down to 26 cents or about 50 percent of parity, but you are not going to go in there and support because of the surplus.

Now, if you are not going to support that commodity by purchases of some of the surplus because there might be a bigger surplus next year, it strikes me that you never could justify a purchase under section 32. In the first instance there would be a surplus because you did not purchase. Then you could not afford to strengthen the market because it would lead to a bigger surplus next year. On that basis you would end up where you never could move.

Mr. PAARLBERG. No, sir. In the first place, eggs are not 50 percent of parity, eggs are 84 percent of parity.

Mr. WHITTEN. That is the national average. You do not have to buy over the whole country, you can buy in the local markets as you see fit.

Mr. PAARLBERG. Let me try to explain.
Mr. WHITTEN. And 26 cents is not 84 percent of parity.

Mr. PAARLBERG. No, and neither is it 50 percent of parity. Parity is a national figure. We do not have a parity in Minnesota and another parity in New Jersey and another parity in California, we have a national average and that is the only concept of parity that there is.

If eggs are well, whatever you want, 28 cents is what they were in mid-February in Minnesota, I would judge that probably that is related to the whole Minnesota average in about the same way that the United States average price is related to the United States base.

So with eggs on a national basis at 84 percent of parity, I would judge that if we had a separate parity for Minnesota, that would be close to that figure or somewhere near to it on a national basis, if eggs got to 50 percent of parity, we would not be here arguing, we

would be in the market buying eggs—and if that time ever comes, you can read this back to me from this record. Mr. WHITTEN: What I am getting at is, when you see a turn in that direction, then is the time to get in so that it will never reach that point. - Mr. PAARLBERG. Well, we have to admit, and this came out in the discussion with Mr. Horan, that we do not have a great big weapon with this program and the places where we can put the commodities that we buy are limited. It is more a limitation than the dollar sums that are available to us. So we have this weapon which we have to use carefully and make the best possible use of. If we shoot all of our ammunition before the enemy is in sight then when he is right next to us we have got nothing left to shoot with. This is the reason why we sometimes seem to you to wait too long, longer than we should. And we do grant that sometimes we do wait longer than we should and sometimes we move sooner than we should— but the timing of the thing is the essence of the matter. We have a relatively weak weapon, but a critical weapon, I believe, in these direct purchases to stabilize the prices of these tremendous quantities of perishable products. We have been talking about purchase programs for pork, for beefthere we can find room for about $100 million worth but, now, how much meat is produced and sold in the United States in a year, pork and beef together? I think it runs around $5 billion, so it is not a great big weapon, you see. We have got to use it carefully, we have got to husband it until the time comes when we can make it the most effective. Mr. WHITTEN. Well, I can see your reasoning. But the point I am making is that where your funds are limited— Mr. PAARLBERG. Not funds, but outlets. Mr. WHITTEN. I wish that you would go to the school-lunch folks and ask them how many eggs they could use. I would like to have that information. See what their estimate is. Here is what I am trying to say again it comes back to the point that I was trying to make earlier. In connection with meat for instance, where as you say it looks like it will probably run to $5 billion overall, then by that very fact, if you are going to have any influence at all you have got to move in there fast. You cannot take a half a million dollars and lift it up to save your neck. So if you are going to do any good at all, you are going to have to anticipate what is going to o If it starts going down then you will have to act and act quickly. I might say again that when I have been expressing my differences with the way that the Department has handled the program, that is because of the way I see it and nothing else is intended. Mr. PAARLBERG. I respect that and I grant that there have been times when we may have delayed overlong. Mr. WHITTEN. As I said before, I do not want the Secretary's job because it is a lot easier to find fault than to run things. But there are certain things—for instance the time when we had this drought that struck the cattle in Texas and they were flooding the market with cattle and I begged and tried to persuade the Secretary under those conditions that the thing to do was to make the feed

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