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slaughterers are seldom understood by hog producers and result in unsound marketing decisions. Plans are being finalized for a comprehensive review of major hog slaughtering firms' procurement programs to be completed in fiscal year 1982. The objective is twofold:

1. Assist the industry in developing a uniform method of pricing
equitable to both buyers and sellers, and

2. Determine packer compliance with the P&S Act and regulations. P&SA
will cooperate with representatives of industry and Government in
defining areas where improvement is desirable and achievable.
Implementation of these changes in the marketing system for hogs
will be a major item in fiscal year 1983.

Obligations and Staff Years by State: The following is a distribution of obligations by State for the administration of the Packers and Stockyards Act:

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TUESDAY, MARCH 16, 1982.

AGRICULTURAL COOPERATIVE SERVICE

WITNESSES

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

RANDALL E. TORGERSON, ADMINISTRATOR, AGRICULTURAL COOPERATIVE SERVICE

JACK H. ARMSTRONG, DEPUTY ADMINISTRATOR

RONALD L. NUNNERY, SUPERVISORY BUDGET ANALYST

STEPHEN B. DEWHURST, BUDGET OFFICER, DEPARTMENT OF AGRICULTURE

OPENING REMARKS

Mr. WHITTEN. We turn now to the Agricultural Cooperative Service.

Dr. Torgerson, we are glad to have you with us today. Since you have been here before, we will let you have the honor of presenting any new people.

ASSISTANT SECRETARY'S REMARKS

Mr. MCMILLAN. Let me say, Mr. Chairman, that this is the last of my seven agencies testifying before you and I am honored to introduce Randall Torgerson, the Administrator of the Agricultural Cooperative Service, accompanied by Jack Armstrong, Deputy Administrator; Ronald Nunnery, Supervisory Budget Analyst, Agricultural Marketing Service, and once again, the inevitable, Steve Dewhurst.

Mr. WHITTEN. Glad to have you here.

You may proceed.

[The biographical sketch of Mr. Nunnery follows:]

RONALD L. NUNNERY

A native of Virginia, Mr. Nunnery took his undergraduate degree in political science from the University of Virginia and has done graduate work in public administration at Boston College and the University of Virginia.

Mr. Nunnery first joined USDA in 1977 and is currently a supervisory budget analyst in the Financial Management Division, Agricultural Marketing Service.

ADMINISTRATOR'S COMMENTS

Dr. TORGERSON. Thank you, Mr. Chairman. It is a pleasure to appear before the distinguished chairman and other members of this subcommittee and to present to you the fiscal year 1983 budget for the Agricultural Cooperative Service.

The Agricultural Cooperative Service has been operating as an independent agency since September 1980 as it did from 1953 to 1978 as the Farmer Cooperative Service.

The agency carries out major functions assigned to it by the Secretary and closely follows the missions defined by Congress in the Cooperative Marketing Act of 1926.

Mr. Chairman, if it is all right with you I will enter my complete statement for the record.

Mr. WHITTEN. We will be glad to have you do that.

Dr. TORGERSON. I will just paraphrase a few highlights from my statement.

ACS MISSIONS

The Agricultural Cooperative Service is the focal point for research and policy analysis and for providing technical assistance to agricultural cooperatives. The agency's programs are directed toward five basic missions. These are technical assistance, cooperative development, research, collection of cooperative statistics and cooperative education and information.

Our technical advisory assistance is provided in response to requests coming directly from farmers, or through boards of directors of cooperatives. The agency provided technical assistance to more than 50 producer groups and developing cooperatives in fiscal year 1981.

Research on cooperative issues is conducted to give farmers and policymakers accurate and relevant data on problems relating to cooperatives. One of our recent financial studies, as an example, shows that equity capital of the largest cooperatives fell from 52.4 percent of total assets in 1962 to 28.6 percent in 1980.

In the statistical area, our statistics data on cooperatives is collected annually to detect changes in structure and operations as well as growth trends. Last year we identified 6,445 farmer cooperatives in the United States. Recent data also shows cooperatives increased their share of farmers' marketing volume from 26 percent in 1970 to 28 percent in 1979.

In the farm supplies area, producers increased their share of supplies purchased through cooperatives from 15 percent in 1969-1970 to 19 percent in 1979.

The agency also serves as a national focal point for educational information on farmer cooperatives. In fiscal 1981 we distributed more than 150,000 copies of publications in response to about 2500 requests.

ISSUES AND PROBLEMS FACING COOPERATIVES

Now, a word on some issues and problems facing cooperatives. The nature and scope of problems facing farmer cooperatives have become increasingly broad and complex because of changes throughout the food production and marketing system.

A major focus today is on developing cooperative business systems that meet farmers' and ranchers' needs and on positioning farmer-owned cooperatives so they can effectively compete in an increasingly concentrated food and fiber industry.

Capital formation will be a key issue for these organizations in the years ahead.

Factors affecting the operation of agricultural cooperatives have included changes in the business structure of agriculture, changes in transportation modes and services, a dynamic environment situation, the high cost of debt and associated problems of investments and increasing growth and importance of agricultural exports.

Farmers have extended their cooperatives from local organizations simply negotiating terms or selling their pooled products to multi-cooperative linkage systems at the regional, inter-regional, and in a limited number of cases even at the international levels.

As an agency, it is our mission to assist farmers in the organization and development of economically strong farmer cooperatives and thereby to improve farm income and foster competition in the food industry. In 1979, combined sales of the Nation's farmer cooperatives reached a record $56.3 billion.

1983 BUDGET REQUEST

As a result of budget constraints, Mr. Chairman, we are pursuing reductions in selected portions of our research and technical assistance programs to focus on the broader problems affecting the entire agricultural community.

As a result of this assessment, our budget request for 1983 is $3,683,000, a decrease of $956,000 from our 1982 appropriation. That concludes my statement.

[CLERK'S NOTE: The Administrator's statement appears on pages 380 to 386. The ACS explanatory notes are on pages 387 to 399.]

Mr. WHITTEN. We on the Committee are familiar with cooperatives. In many respects, cooperatives seem to be the answer to a lot of problems in agriculture.

With all of the benefits it might at the same time be considered dangerous if all of the farmers could belong to a single cooperative and get control of the food supply. On the other hand, it seems to be an impossibility that that could ever happen.

Maybe the fact that farmers can't organize on a larger scale and have more influence, is the reason that they only get about 31 percent of the income dollar instead of 51 percent as they did some years ago.

Be that as it may, questions arise about your research program in cooperatives. What has it accomplished through the years? What have you accomplished with the people you have for last year? What is the effect of losing the $1 million of research funds? How many cooperatives presently exist?

Dr. TORGERSON. Six thousand.

Mr. WHITTEN. Six thousand?

How much injury will be done if we omit the research part of it for a year or two? What have you been doing that you won't be able to do?

RESEARCH EFFORTS

Dr. TORGERSON. Mr. Chairman, the research program we described comprises one of five missions of the agency. Most research is done in-house, although a substantial amount is done through co

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