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CONTENTS

8

1

Statement of -

Belcher, Carl W., Chief, general crimes section, Criminal Division,

Department of Justice

Boldúc, J. P., Deputy Assistant Secretary for Administration, U.S.

Department of Agriculture.-

Campbell, Hon. J. Phil, Under Secretary, U.S. Department of

Agriculture.

Clark, Hon. Dick, a U.S. Senator from the State of Iowa -

Collins, Otto, Deputy Assistant Director, Office of Investigation,

U.S. Department of Agriculture

Dole, Hon. Robert, a U.S. Senator from the State of Kansas --
Huddleston, Hon. Walter D., a U.S. Senator from the State of Ken-

tucky.
Humphrey, Ilon. Hubert H., a U.S. Senator from the State of Minne-

sota

Galliart, David, Director, Grain Division, Agricultural Marketing

Service, U.S. Department of Agriculture..

McGovern, Hon. George, a U.S. Senator from the State of South

Dakota---

Pence, Charles, International Marketing Director for Grain and Feed,

Foreign Agricultural Service, U.S. Department of Agriculture -

Peterson, Ervin L., Administrator, Agricultural Marketing Service,

U.S. Department of Agriculture---

Miscellaneous documents--

S.J. Res. 88..

Staff explanation of S.J. Res. 88.

Grain Division replies to questions asked by Senator Dole---

Complaint from Nicaragua on the quality of corn imported from the

United States...

Report by John A. Browning as a member of the U.S. Corn and

Sorghum Situation Team visiting the United Kingdom and West-

ern Europe, January 7 to 23, 1969.

Private trade agreement with Korea-Cargill Co., Ltd..

Audit Report, Agricultural Marketing Service, Grain Division,

Grain inspection Branch, U.S. Department of Agriculture..

Series of newspaper articles, regarding grain shipments, from the

Des Moines Register.

(III)

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GRAIN INSPECTION

THURSDAY, JUNE 19, 1975

U.S. SENATE, SUBCOMMITTEE ON

FOREIGN AGRICULTURAL POLICY, AND
SUBCOMMITTEE ON AGRICULTURAL PRODUCTION,

MARKETING AND STABILIZATION OF PRICES
OF THE COMMITTEE ON AGRICULTURE AND FORESTRY,

Washington, D.C. The subcommittees met, pursuant to notice, at 10:08 a.m., in room 324, Russell Senate Office Building, Hon. Hubert H. Humphrey presiding

Present: Senators Humphrey, Huddleston, McGovern, Clark, Dole, Helms, and Bellmon.

STATEMENT OF HON. HUBERT HUMPHREY, A U.S. SENATOR FROM

THE STATE OF MINNESOTA

Senator HUMPHREY. We will call the hearing of the Subcommittee on Foreign Agricultural Policy to order.

We are also including in the hearings the Subcommittee on Agricultural Production, Marketing, and Stabilization of Prices that is chaired by Senator Huddleston, and we will be examining, of course, not only the ports of export, but later the total structure and the movement of our grain supply. Therefore, the two subcommittees will be working in cooperation.

The hearings which we are beginning today are of extreme importance to our agricultural economy, our exporters, our farmers and of course, the national economy.

In 1974, the United States shipped 3.4 billion bushels of grain worth an estimated $12.5 billion. Exports of this volume are not to be taken lightly or to be taken for granted. Those exports represent a very substantial part of our foreign trade, and those exports mean a great deal to the producers of food and fiber in the American agricultural economy.

The work at hand, in my view, is to quickly come to grips with the problem which has unfolded before us. We need to develop the facts and the dimensions of the problem that relate to the grain inspection services as they pertain to our agricultural exports.

I have introduced emergency legislation, Senate Joint Resolution 88, which will enable the Department of Agriculture to clear up this problem in an expeditious fashion. [S.J. Res. 88 and a staff explanation follows:]

(1)

(S.J. Res. 88, 94th Cong. Ist sess.) JOINT RESOLUTION To provide emergency authority to the Secretary of Agricultura to restore confi

dence in the United States grain inspection system, and for other purposes Resolved by the Senale and House of Representatives of the United States of America in Congress assembled,

SECTION 1. This Act may be cited as the "Emergency Grain Standards Amendments of 1975".

Sec. 2. Section 1114 of title 18 of the United States Code, as amended, is hereby amended by (1) deleting the phrase "any employee of the Bureau of Animal Industry of the Department of Agriculture," and (2) inserting immediately after the phrase "or of the Department of Labor'' the words ", or of the Department of Agriculture”.

SEC. 3. The United States Grain Standards Act (82 Stat. 761-770; 7 U.S.C. 71, 74-79, 84-87, and 87a-87h) is amended by adding immediately after section 19 the following new section:

“SEC. 20. Any person, firm, or corporation, or any agent or employee of any person, firm, or corporation who shall give, pay, or offer, directly or indirectly, to any official inspection personnel as defined by section 3(j) of this Act or to any officer or employee of the United States authorized to perform any of the duties prescribed by this Act, or by the rules and regulations of Secretary, any money or other thing of value, with intent to influence said official inspection personnel or officer or employee of the United States in the discharge of any duty provided for in this Act, or by rules and regulations of the Secretary, shall be deemed guilty of a felony, and, upon conviction thereof, shall be punished by a fine not less than $5,000 nor more than $10,000 and by imprisonment not less than one year nor more than three years. Any official inspection personnel as defined by section 3(j) of this Act or any officer or employee of the United States authorized to perform any of the duties prescribed by this Act, or by the rules and regulations of the Secretary, who shall accept any money, gift, or other thing of value from any person, firm, or corporation, or officers, agents, or employees thereof, given with intent to influence his official action, shall be deemed guilty of a felony and shall, upon conviction thereof, be summarily discharged from ofice and shall be punished by a fine not less than $1,000 nor more than $10,000 and by imprisonment not less than one year nor more than three years.".

SEC. 4. Notwithstanding any other provision of law, the Secretary of Agriculture mar, for a period of one year after the date of enactment of this Act, hire such additional personnel as he may deem necessary to properly implement the provisions of this Act and the United States Grain Standards Act. Any funds needed for the purposes of this Act and the United States Grain Standards Act shall be reimbursed from funds of the Commodity Credit Corporation. The Secretary may, under such regulations as he may prescribe, charge and collect reasonable fees to cover the estimated total cost to the Department of Agriculture incident to the performance of oilicial inspection, except when the inspection is performed by employees of an official inspection agency or other licensed person. The fees authorized by this para graph shall, as nearly as practicable and after taking into consideration any proceeds from the sale of samples, cover the costs of the Department of Agriculture incident to the performance of official inspection services in the United States and on United States grain in Canadian ports for which the fees are collected, including supervisory and administrative costs: Such fees, and the proceeds from the sale of samples obtained for purposes of official inspection which become the property of the United States, shall be deposited into the Commodity Credit Corporation and such funds shall be available without fiscal year limitation for the expenses of the Depariment of Agriculture incident to providing official inspection services.

Sec. 5. Notwithstanding any oiher provision of law, the Secretary of Agriculture is authorized, for a period of one year after the date enactment of this Act, to hire additional personnel to be stationed in foreign nations which are substantial importers of grain from the United States. These personnel shall inspect United States grain upon its entry into the importing nation to determine whether such grain is of the same kind, class, quality, and condition that it was certified to be upon official inspection in the United States.

Sec. 6. Notwithstanding any other provision of law, the Secretary of Agriculture is authorized, for a period of one year after the date of enactment of this Act, to suspend or revoke the designation of an official inspection agency, whenever, after affording the agency an opportunity for a hearing, the Secretary determines

that sucn agency has failed to comply with any of the provisions of the United States Grain Standards Act or regulations issued pursuant to such Act:

Provided, That the Secretary may, without first affording the agency an opportunity for hearing, suspend any designation temporarily pending final determination, whenever the Secretary deems such action to be in the best interest of the official inspection system under the Act.

Sec. 7. Notwithstanding any other provision of law, the Secretary of Agriculture is authorized, for a period of one year after the date of enactment of this Act, to revoke the designation of an official inspection agency that is owned, controlled, or operated by a board of trade or any other business entity whose owners, stockholders, officers, employees, or committee members own or operate a grain elevator or warehouse, or whose owners, stockholders, officers, employees, or committee members are currently engaged in the merchandising of grain.

SEC: 8. Notwithstanding any other provision of law, the Secretary of Agriculture may, for a period of one year after the date of enactment of this Act, authorize any competent employee of the Department of Agriculture to perform all or specified original inspection or reinspection functions involved in official inspection of grain in the United States: Provided, That the use of authorized Department employees to perform original inspection and reinspection functions involved in official inspection of grain in the United States will be on an interim basis, (i) pending designation of an official inspection agency, (ii) during any period of suspension of the designation of an official inspection agency under this Act, or (iii) whenever the Secretary determines that no official inspection is available to provide needed inspection services,

Sec. 9. Notwithstanding any other provision of law, the Secretary of Agriculture is authorized, for a period of one year after the date of enactment of this Act, under such regulations as he may prescribe, to require (i) that all grain shipped from the United States to any place outside thereof be graded under standards effective under section 4 of the United States Grain Standards Act, and (ii) that no clearance shall be given to any vessel having on board grain as defined by section 3(g) of the United States Grain Standards Act for export to a foreign country until the owner or shipper of such grain has an official certificate showing the official grade designation of such grain as prescribed by regulations of the Secretary. . Sec. 10. Notwithstanding any other provision of law, the Secretary is authorized, for a period of one year after the date of enactment of this Act; to issue such regulations as he may deem necessary in regard to improved sampling equipment in export elevators, and installation of electrical monitoring equipment in export elevators.

Sec. 11. Notwithstanding any other provision of law, the Secretary is authorized, for a period of one year after the date of enactment of this. Act, to establish standards and procedures for loading export grain to control the activities of elevator employees, longshoremen, grain trimmers, and others who participate in the loading of export grain.

SEC. 12. The Secretary shall submit a written report to the Senate Committee on Agriculture and Forestry and the House Committee on Agriculture sixty days after enactment of this Act and every sixty days thereafter for a one-year period after enactment of this Act. The Secretary shall include in these reports (i) the steps being taken by the Secretary to implement this Act and improve the grain inspection system, (ii) any legislative recommendations the Secretary may have to strengthen the grain export system, and (iii) the current status of Federal investigations of the grain export scandal.

EXPLANATION OF EMERGENCY GRAIN STANDARDS AMENDMENTS The hill takes a two-fold approach:

(1) It makes certain permanent changes in the law to protect Federal grain inspectors and to make bribery of an inspector a felony.

(2) It provides one-year, emergency authority for the Secretary of Agricul.. ture to take certain actions to strengthen the grain inspection system of the

Department of Agriculture. Specifically, the bill would:

(1) amend the Federal Criminal Code, to make it a Federal crime to kill, assault, intimidate, impede, or interfere with a Department of Agriculture employee engaged in the performance of his official duties; and

(2) make it a felony for both parties to a bribe to engage in bribery of grain inspection personnel. For one year only, the bill would:

(1) authorize the Secretary to hire additional Federal inspection personnel with Commodity Credit Corporation funds;

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