COMMITTEE ON APPROPRIATIONS

JAMIE L. WHITTEN, Mississippi, Chairman

KEITH F. MAINLAND, Clerk and Staff Director

(II)

AGRICULTURE, RURAL DEVELOPMENT AND RELATED AGENCIES APPROPRIATIONS FOR 1983

THURSDAY, MARCH 11, 1982.

AGRICULTURAL MARKETING SERVICE

WITNESSES

C. W. MCMILLAN, ASSISTANT SECRETARY FOR MARKETING AND INSPECTION SERVICES

MILDRED THYMIAN, ADMINISTRATOR, AGRICULTURAL MARKETING SERVICE

WILLIAM T. MANLEY DEPUTY ADMINISTRATOR, MARKETING PROGRAMS EDDIE F. KIMBRELL, ASSOCIATE DEPUTY ADMINISTRATOR, MARKETING PROGRAMS

IRVING W. THOMAS, DEPUTY ADMINISTRATOR FOR MANAGEMENT JOSEPH A. ROEDER, ACTING DIRECTOR, FINANCIAL MANAGEMENT DIVISION

ROBERT SHERMAN, DEPUTY BUDGET OFFICER, DEPARTMENT OF AGRICULTURE

OPENING REMARKS

Mr. WHITTEN. The meeting will come to order.

We have with us today the Agricultural Marketing Service, and also the Office of Transportation. We will take up first the Marketing Service. We have Administrator Mildred Thymian, and asso

ciates.

We are glad to have you here. We will have your biographical sketches put in the record. You may proceed as you wish. [The biographical sketches follow:]

MILDRED THYMIAN

Mildred Thymian, Minnesota dairy farmer and former U.S. senatorial assistant, came to the U.S. Department of Agriculture as Administrator of the Agricultural Marketing Service in February 1981.

For a number of years, Mrs. Thymian has worked as a consultant in farming and communications. Since 1975, she has been vice president of the New York-based United Church Board for Homeland Ministries, where she previously held various management positions and served on numerous communications workshops and committees.

She received a Bachelor of Science degree in theory of speech communications and human organizations from the University of Minnesota.

EDDIE F. KImbrell

Eddie F. Kimbrell, Associate Deputy Administrator, Program Operations, Agricultural Marketing Service, U.S. Department of Agriculture. B.S. Oklahoma State University, 1955; Graduate Assistant, Oklahoma State University, 1955-56; USDA meat grader, 1959–60; Agricultural Marketing Specialist, 1960 to 1972; Deputy Administrator, Food Safety and Quality Service, 1977-1981; recipient of the Career Education Award awarded by the National Institute of Public Affairs with a year's study in Public Administration at Stanford University, Palo Alto, California, 196869.

As Associate Deputy Administrator for Program Operations, responsible for directing and coordinating USDA food grading and standardization programs and for

the procurement of foods purchased by USDA for distribution in school lunch and other feeding programs. Food grading, standardization, and procurement programs include those for meat, poultry, dairy, and fruits and vegetables. Also, responsible for directing Government-wide activities related to quality assurance for food procured by Government agencies, and for U.S. activities to develop international food standards.

JOSEPH A. ROEDER

Mr. Roeder was named Deputy Director of the Financial Management Division in June, 1981 and is currently serving as Acting Director of the Division. He is a native of Pennsylvania and received his Bachelor's Degree from the Catholic University of America in Washington, D.C. He served three years in the Army as an Officer. Mr. Roeder began his Federal career in January, 1971 when he was employed by the Financial Management Division as a budget analyst. He has worked in the Division since that time and was named a Branch Chief in August, 1978. Mr. Roeder and his wife, Carol Jo, have three sons, J. Adam, Matthew and Jonathan.

ASSISTANT SECRETARY'S REMARKS

Mr. MCMILLAN. Mr. Chairman, I will open it, if you please, and introduce, as you already have, Mildred Thymian, the Administrator of the Agricultural Marketing Service. Accompanying us are Bill Manley, Deputy Administrator; Eddie Kimbrell, Associate Deputy Administrator; Irv Thomas, who is the Deputy Administrator for Management; and Joe Roeder, Acting Director of the Financial Management Division.

The Agricultural Marketing Service is a broad-based agency within the Department, having a wide range of responsibilities in the marketing area. I would like to have Mrs. Thymian now present the budget request for AMS.

Mr. WHITTEN. We would be glad to have you proceed.

[CLERK'S NOTE.-The full text of Mrs. Thymian's prepared statement appears on pages 104 through 114. The Explanatory Notes appear on pages 115 through 171.]

ADMINISTRATOR'S STATEMENT

Mrs. THYMIAN. Thank you, Mr. Chairman. I appreciate the opportunity to be here. As you know this is my first time before your Committee, and I have been looking forward to this hearing for a long time.

In October of 1981 the Secretary announced a significant reorganization in the Department which directly affected the Agricultural Marketing Service. That reorganization resulted in the transfer to AMS from the Food Safety and Quality Service responsibility for egg products inspection; standardization and grading of livestock and meat, dairy products, fruits and vegetables, and poultry and eggs; and administration of the Section 32 fund. This reorganization also took out of the Agricultural Marketing Service responsibility for Administration of the Packers and Stockyards Act. The Packers and Stockyards administration is now a separate agency. These organizational changes were really meant to bring together again most Departmental marketing programs in one agency. This realignment really makes it much easier for farmers and others in the marketing chain to get a coordinated response to their marketing needs.

MARKET NEWS

One of our major programs is market news. We all think this is one of the most important marketing programs, covering as it does all of the major commodities. The timeliness and accuracy of our market news reports has a great deal to do with the efficiency of the marketing system in this country.

I am especially concerned about getting timely market news to those people who are in production agriculture. We have taken some rather innovative steps to meet this concern. We have initiated a pilot project with the Public Broadcasting System to disseminate market news over public television in five cities spanning all geographical areas of the country. We think this project offers great promise in getting needed information to users in a timely fashion and in the form that is most usable by them, to assist them in making more informed marketing decisions.

Our analysis of the cost of disseminating printed market news reports indicates that this is our most costly way of information distribution. To reduce our costs without reducing information availability we are planning to implement a user charge to cover the costs of printing, mailing and handling for those people requesting printed market news reports.

EGG PRODUCTS INSPECTION

Another of our most prominent activities is the egg products inspection program. We are submitting legislation which will provide us with the flexibility to determine how often to inspect shell egg operations. Currently we are required by law to inspect each shell egg establishment at least once on a quarterly basis. This proposed legislation will make it possible for us to use our scarce resources more effectively by depending more on industry quality control programs in plants where our history shows compliance with our regulations. This would not preclude us from inspecting plants more than once where we feel it is warranted. It would also allow us to provide less than continuous inspection in certain stages of the egg processing operation. It will not, however, change our continuous inspection requirement during egg-breaking operations.

COMMODITY GRADING AND STANDARDS

Another activity that we have is the commodity grading and standards program. Most of these programs are paid for by the people who request our services. Effective October 1st, 1981, AMS implemented a user fee program for the grading of cotton, tobacco, naval stores and for warehouse examination. We think we have made a rather successful transition to user fees for these programs as required by the Omnibus Reconciliation Act of 1981. As you know, these programs were funded through appropriations prior to FY 1982.

TOBACCO GRADING USER FEE PROGRAM

The tobacco grading program in particular has made a very smooth transition to the user fee program, with revenues coming

in at projected levels. The tobacco inspection fee was set at 45 cents per hundredweight.

COTTON GRADING USER FEE PROGRAM

The cotton grading program is one that we are watching very closely. As you know, we set the user fee for cotton at 60 cents per bale. It is too early in the program to tell how successful we are going to be in collecting the user fees, but at this point it looks like we are going to be relatively successful. One of the problems we have experienced is the fall in the price of cotton which has lowered the revenues we expected to collect from the sale of cotton samples.

In earlier discussions with the cotton ginners about 90 percent of those ginners agreed to collect grading fees from the producers at the end of the ginning season. We feel that this agreement contributed significantly to the success of the transition to user_fees, making it both less costly and administratively less complex. Those producers not billed by ginners will be billed directly by AMS.

WAREHOUSE EXAMINATION USER FEE PROGRAM

In the warehouse program the early indicators point towards a successful transition to user fees. We have worked out a cost sharing agreement with CCC which will hold the license fee paid by the warehouseman down in the $250 to $1250 a year range.

The Commodity Credit Corporation is currently reimbursing AMS for one-half the cost of the operation of the U.S. Warehouse Act program. We will keep the committee informed of the progress of these user fee programs. I can assure you that I am personally watching them very closely because I think it will give us an indication of how successful we might be with user fees in other program areas.

BEEF GRADE STANDARDS

One of the things about which we are most concerned is the proposed change in beef grade standards. Last month I personally conducted a series of five hearings throughout the country. The comment period on those proposed standards changes is open until the 31st of March.

After reviewing these comments very carefully, we will decide what, if any, changes may be needed in beef grade standards.

MARKET PROTECTION AND PROMOTION

Another of our activities is the market protection and promotion. programs. Under these programs, we administer the Federal Seed Act, the Plant Variety Protection Program, and various research and promotion programs.

WHOLESALE MARKET DEVELOPMENT

The wholesale market development program has performed research in cooperation with other government agencies and the private sector. This program will continue during operation in fiscal