STATEMENT OF MR. SI CORLEY

Mr. S. W. Box, director of the division of markets representing commissioner of agriculture of Mississippi, Si Corley.

Mr. Box. I don't want to take up your time. Mr. Corley was sorry he couldn't be here, and he has prepared this paper on the need for this type of work in the different States.

(The prepared statement of Si Corley is as follows :)

THE NEED FOR MARKETING SERVICE WORK IN THE STATES

With the abundance of agricultural production the major problems of agriculture at this time lie in the field of marketing. In many States production patterns are changing. Farmers are curtailing production of some commodities and going into production of others. In some States the size and location of farms is changing. Such changes in production patterns bring marketing problems. Market information must be provided. Both growers and handlers must be shown how to grade and handle new products. Marketing facilities must be established, proper equipment installed and operators shown how to use it. Markets must be found for the increasing production, and handlers shown how to maintain the quality of the product until it reaches the consumer.

The problem of finding outlets for surplus products is particularly difficult, especially in connection with perishable commodities. Timely organization of an effort to move a seasonal surplus of peaches, apples, or tomatoes or a temporary oversupply of eggs, or pork can bring great benefits to the growers in an area, and reduce pressure for governmental action.

Rising marketing costs are putting a squeeze on both the farmer and the consumer. To meet the problem of reduced returns to growers without hurting consumers, action is needed to hold down marketing costs. This can be done by showing growers and handlers what kind of equipment to use and how to use it; how to reduce the costs of packaging; how to move products into, within, and out of buildings at the lowest cost; and how to minimize transportation cost. Growers and marketing firms must also be shown how to adjust their operations to changing marketing techniques. Shifts from rail to truck, increased use of consumer packages, use of fiberboard containers, more extensive processing in marketing channels, growth of large-scale operations of marketing firms, changes in marketing channels, increased determination of prices in producing areas, more standardization of products, and changes in functions performed by marketing agencies are only a few of the changes in marketing practices which require adjustments by both growers and handlers,

To deal with problems of this kind the Congress enacted the Agricultural Marketing Act of 1946. That legislation authorized marketing research to find solutions to marketing problems and marketing service to put these research results to use. The research undertaken since that act was passed has developed many ways to make marketing more efficient. The departments of agriculture of 43 States and Territories are taking these research results to individual marketing operators and showing them what they are, and how to use them. These same marketing service specialists in the States are urging the less-efficient operators to adopt the methods of the more efficient. They are showing people how to maintain quality, how to grade and pack to greatest advantage, and are spearheading industry efforts to find outlets for agricultural products. To find information needed as a basis for developing marketing service programs, we are collecting and disseminating information on local market prices, production by counties and varieties, and even on the basis of information on plantings forecasting production at a time when such information can reduce or increase plantings to meet market demands (Florida).

A review of the reports of the States in this marketing service program reveals many outstanding results. In one State (West Virginia) an organized effort to move surplus apples increased growers' income by more than a million dollars 1 year. In another (North Carolina) annual income from grain has been increased by several million dollars by getting proper storage facilities built and causing trading to be done on the basis of grades. By showing ginners what to do to keep their equipment from damaging cotton, the percentage of gin damaged cotton in the State has been reduced from 16 percent to less than 1 percent, increasing returns by at least $1 million per year. Several States

have done outstanding work detecting causes of off-quality or off-flavor milk, butter and cheese. In one State (Mississippi) the quality of over half its milk production has been improved. Many States have programs to improve egg handling and encourage sale by grades, often implementing their service program with new egg-grading laws. Some States report average increases in egg prices of 7 cents per dozen as a result of this work. Another State by reporting hog prices at interior yards has enabled producers using these facilities to increase their returns by as much as 50 cents per hundred. Three States are making excellent progress in programs designed to stop the sale of virus-infected nursery stock. These results illustrate how the marketing service program is helping solve local marketing problems.

When the Agricultural Marketing Act was passed it was obvious to all that the first emphasis should be placed on marketing research to get the answers, and that marketing service to get the changes made should follow. We now have 11 years of marketing research results, and the time has come when the marketing service program should be stepped up. The commissioners of agriculture did not appear before your committee last year to request increased funds for payments to States. We were busy improving our program and getting State funds to meet the matching requirements of the Federal act. The States, seeing the practical results of the program we have been carrying on, obtained more than $12 million for this new marketing service work, expecting Federal funds to match. Hence, more than $300,000 went unmatched. We have

a real problem in a joint program of this kind getting the State funds and the Federal funds to come at the same time. To meet the matching requirements for worthy projects we need a Federal appropriation of $1,600,000 for the coming fiscal year. The States undoubtedly are ready to match this amount now without any further increases in their own funds. Some States are already putting twice as much money into their program as is received from the Federal Government.

It is obvious that a great deal of the work required to solve marketing problems must be done in the States. Research may often be done more effectively on a base broader than a State, but after the answers have been found, the work with the individual operator to get the desired changes made must be done where he is in the States. That is the function of this matching fund marketing service program. Through the Federal participation we get a coordinated program on the problems needing attention most. Where joint action is needed the States are brought together. The research work and the service work are coordinated with each other and with the educational activities of the Extension Service. The Agricultural Marketing Service in administering this program brings to each State the experience of other States in solving similar problems.

This marketing program, set up by the Congress, is a very effective way to get coordinated attack by Federal, State, and industry people on marketing problems. It is also an excellent way to tie together the research effort spent on finding answers to problems and the effort of the service people in getting these findings applied. This is an orderly approach to marketing problems. It helps to get them solved at their source, by the private firms engaged in marketing. Its values are more lasting than buying surpluses and disposing of them. To the extent that these problems can be solved at their source the demand for Federal action is reduced. Relatively small expenditures in this type of activity can take the place of much larger expenditures on purchase programs.

We appreciate the foresight of the Congress in establishing this program. We appreciate the fine support it has had from this committee and urge that you do all you can to make available to us for next year the $1,600,000 Federal funds which will bring forth an even larger amount of State funds to be used in solving our mutual problems in the marketing field.

Mr. WHITTEN. Mr. Box, we are glad to have you. I hope you will express my personal regrets that Mr. Corley couldn't be here.

Mr. Box. Surely. You know why he couldn't be here. We have our legislature in session.

STATEMENT OF MR. RICHARD D. CHUMNEY

Mr. BALLENTINE. Mr. Chairman, with your indulgence, we will hear from Mr. Richard D. Chumney, from Virginia, representing Mr. Brinkley, commissioner of agriculture.

Mr. CHUMNEY. Mr. Chairman, members of the committee, it is a pleasure to have an opportunity to appear before you. I am representing Commissioner Brinkley who would have been here but had to be at home recovering from a recent operation.

Federal RMA funds we have used since 1947, have totaled $382,000, but our record indicates that this money has come back to our farm people in the form of many millions of dollars of income.

Our fields of concentrated effort in market service have been livestock, hay and grain, poultry and eggs, processed foods, fruits, and vegetables, and market information.

We had planned this work to solve local problems in the main, using local facilities and local people. These projects have been kept within the framework of private enterprise system. The Government has been used only as a catalyst promoting and guiding the actions at the grassroots level. Just two examples of the effectiveness of this work.

We have recently this past year started and on the farm grading program of fat cattle and based on a conservative estimate, we feel that this one program alone has meant an additional income to our farm people of at least $15,000 just on the sale of graded fat cattle. In the field of fruit production, strawberries in particular, this money has been used to make a study of the proper packaging and shipping of strawberries from the eastern shore. Again a conservative estimate indicates to us that this has meant an additional $15,000 income to our strawberry producers.

For the past several years, our legislature has been appropriating more money than we have been able to get as RMA matching funds. This year, we have $60,000 appropriated by the State legislature and only $47,000 in Federal funds.

We were a little disappointed to see the legislature just recently approve only about $50,000 for such purposes next year.

We feel that our legislature will go along with most any reasonable appropriation, but I think they feel that such money should be matched in Federal funds.

We feel that this money as used comes back to our people many, many times in a most effective manner.

It is nice to appear before you.

(The prepared statement of Mr. Chumney is as follows:)

STATEMENT OF RICHARD D. CHUMNEY, ASSISTANT COMMISSIONER OF AGRICULTURE, VIRGINIA DEPARTMENT OF AGRICULTURE

Federal RMA funds totaling $382,000 have been used by the market expansion section of the Virginia Department of Agriculture since we signed cooperative agreements with the USDA in 1947.

From that investment in personnel, equipment, ideas, time, and work Virginia farmers have pocketed over $350 million.

Plus that, estimated savings from improved marketing methods have amounted to nearly a million dollars.

Our fields of concentrated effort in market service have been livestock, hay and grain, poultry and eggs, processed foods, fruits and vegetables, and market information.

We have planned this work to solve local problems—using local facilities—and local people. Projects were kept within the framework of the private-enterprise system. Government was used only as a catalyst promoting and guiding actions at the grassroots level. Buyers and sellers have been brought together in mutual understanding for the mutual benefit of all.

During the past year, the market expansion section has moved forward with projects started in former years. May I illustrate:

In the livestock field--we have $150 million worth of livestock on our farms. We have used RMA funds to promote and develop yearling feeder cattle sales, slaughter cattle sales, developed a program of hog grading to establish a merit system of selling hogs, have organized special graded ewe sales in the mountainous area of our State.

A survey of meatpackers distributing meat in Virginia and nearby States revealed a sizable market for good and choice beef. These packers also expressed an interest in our local supplies. The livestock marketing agent of our de partment established an on-the-farm grading service for producers to grade cattle on feed in the feed lot. These agents and our livestock graders visited the cattle farms upon request by the producer and marked the choice and good grade cattle on the farm. In this development, producers in 2 different areas of the State affiliated themselves into 2 groups to organize special sales for fat cattle. Since this development, 15 slaughter cattle sales have been held at which 1,900 head have been sold, netting farmers $415,000. This is $12,620 more than these cattle would have brought if they had been sold over our regular auction markets. The demand for this service is steadily on the increase and is expected to grow in proportion as cattle on feed become available.

Example No. 2: Marketing agents working with strawberry producers in the commercial vegetable producing area of our State known as the Eastern Shore, Va., introduced the corrugated container with slated plastic baskets for strawberries. Even though the producers met rather intense opposition by some local buyers to this new container for berries, nearly 20,000 corrugated strawberry trays were shipped the first year to New York and Philadelphia. Since this project was initiated, we have shipped to market approximately 75,000 trays. Farmers have netted approximately 5 cents a quart more above cost. This has yielded the farmers a little over $15,000 income as a result of this marketing effort. This 1 project alone has returned to our farmers the total cost that we placed into 1 year's program of our fruit and vegetable marketing work. Mr. WHITTEN. Thank you.

Mr. BALLENTINE. Thank you, Mr. Chumney.

STATEMENT OF MR. C. HAROLD BRAY

Mr. Chairman, Mr. Bray has a statement. That concludes our statement with one exception that you know that I would like to make.

Mr. NATCHER. Mr. Chairman, Kentucky is fortunate to have as its commissioner of agriculture my friend Ben Butler. He is an outstanding farmer and has served as county agent of Fayette County for a number of years. The Kentucky legislature, Mr. Chairman, is also in session and for that reason, Mr. Butler cannot be here today. He is well represented by two of his assistants, C. Harold Bray and Leonard Rouse.

As a member of this committee, I want to welcome both of you, and I know it applies to other members of the committee.

Mr. WHITTEN. We realize you Kentuckians are all interested in agriculture as evidenced by our friends and colleague, Mr. Natcher, here.

Mr. BRAY. Mr. Chairman, I would like to turn my statement in to our Congressman Natcher, and would like for it to be in the record. Mr. NATCHER. Mr. Chairman, with your permission, it will be incorporated at this point.

Mr. WHITTEN. We will be glad to.

(The prepared statement of Mr. C. Harold Bray is as follows:)

My name is Harold Bray, Director of the Division of Markets, Kentucky Department of Agriculture. Upon appearing before this committee I am representing Commissioner Ben J. Butler as well as agricultural and marketing agencies throughout the State.

My concern and interest in the program has developed over a period of years and did not simply occur as a result of my becoming associated with the Kentucky Department of Agriculture.

Since the Agricultural Marketing Act first provided for matched funds projects with States, I have been familiar with the work and service it provided for farmers, handlers of agricultural products and consumers. As a market manager and sales agent for one of the largest farm marketing cooperative associations in Kentucky, I feel that I am in an excellent position to see the real benefits that the matched funds program provides.

Therefore, I believe you see that I not only speak in behalf of this program as administrator, but also as a man of the trade and a farmer who sees and realizes the marketing program and improvements that have been derived from joining our forces in teamwork between States and with the Federal Government.

The broad field in which all of us are interested is the improvement in the distribution of food and farm products from producers to consumers. I am confident that a large portion of our agricultural problems are to be found in the field of marketing. These problems are multiplying and becoming more significant, which demands added emphasis both from Federal and State level.

The solution of these problems does not simply lie with research although this is imperative to discover the answer to many problems and direct all progress. After the groundwork for marketing progress is laid by educational programs, service programs start as a result of the matched fund programs of the Agricultural Marketing Act takes over and assists the industry by improved techniques. This results in many new marketing services with the financial responsibility being assumed by other agencies, industry, or the State.

If you will permit me, I would like to point out some of the accomplishments in my State made possible by this program as well as some of the needs for expanded marketing service work in Kentucky.

Strawberries are one of the principal fruits and vegetables produced. Production is located in several scattered and isolated localities, serviced by small cooperatives and buyers. This program provided the first resources to organized picking, packing, and handling demonstrations throughout the State to improve the acceptance of Kentucky strawberries. It also made available for the first time current market information that provided market managers with the facts that enabled them to do a better job in moving the production for farmers. The acceptance of this work gradually expanded until similar projects had been set up for other fruits and vegetables commercially grown in our State.

In addition, it is very evident that as a result of the service performed by the Department to improve the quality of eggs produced on our farms and offered to consumers, and the improvement realized in marketing facilities, Kentucky was able to obtain our first egg marketing law in the 1956 session of the legislature. It was the most forward step in egg marketing that has been realized in Kentucky. The law now necessitates that adding emphasis on service work be planned and conducted.

Sorghum molasses is also a commodity that has been dealt with and by introducing new facilities, marketing cooperatives and new techniques, consumer acceptance has been greatly improved.

Many opportunities for realizing improvement in agriculture marketing lie ahead of us. To secure these benefits for our farmers, the traders, and consumers it necessitates that we apply the results of research at the earliest possible time. We must not hesitate to use every measure to see that improvements are made available for a segment of our agricultural program that was neglected in former years and must be adequately financed to bolster a sagging rural economy. This appropriation can mean greater cooperation between research, service, and education to solve very perplexing problems for agriculture and increasing consumer costs. It can also mean greater encouragement for the State to provide added resources for the task.

Mr. BALLENTINE. Mr. Chairman, we are most grateful to you and members of this committee for this warm and cordial reception you