COMMITTEE ON AGRICULTURE AND FORESTRY HERMAN E. TALMADGE, Georgia, Chairman JAMES O. EASTLAND, Mississippi RICHARD B. STONE, Florida PATRICK J. LEAHY, Vermont ROBERT DOLE, Kansas MILTON R. YOUNG, North Dakota MICHAEL R. MCLEOD, General Counsel and Staff Director GEORGE MCGOVERN, South Dakota RICHARD B. STONE, Florida HENRY BELLMON, Oklahoma EX OFFICIO MEMBER HERMAN E. TALMADGE, Georgia SUBCOMMITTEE ON AGRICULTURAL PRODUCTION, MARKETING, AND CONTENTS Barrios, Barry Charles, Metairie, La... Clark, Hon. Dick, a U.S. Senator from the State of Iowa.. Clark, Glenn Willett, professor of law, Drake University Law School, Cosby, John T., Field Office Supervisor, Grain Division, Agricultural Marketing Service, U.S. Department of Agriculture, Cedar Rapids, Cross, Delwin, master, Iowa State Grange, Killduff, Iowa.. Ekis, Belmer, Field Office Supervisor, Grain Division, Agricultural Feldmann, Thomas, manager, Farmers Cooperative Association, Goeppinger, Walter, chairman of the board, National Corn Growers Groot, Merlyn, president, Iowa Soybean Association, Manson, Iowa. - Hall, Argie, director, facilities and technical services, Farmers Grain 1, 81 77 54 Hartman, Edward S., chairman, National Legislative Committee, 145 Johnson, Thatcher, deputy secretary of agriculture, State of Iowa, Des 74 Krebs, Howard, executive vice president, Iowa Corn Growers Associa- Shaff, Hon. Roger J., Iowa State Senator, Davenport, Iowa. 164 Taylor, Glen, director, public policy division, Iowa Farm Bureau Tomlinson, Fred, general manager, Alleman Cooperative Co., (III) Miscellaneous documents: Letter from Kenneth L. Ludlow, executive director, Iowa Feed and Resolution of the American Soybean Association__ Page 4 7 48 GRAIN INSPECTION (Part 3) THURSDAY, AUGUST 14, 1975 U.S. SENATE, SUBCOMMITTEE ON FOREIGN AGRICULTURAL POLICY, The subcommittee met at 9:30 a.m., in the auditorium of the Bondurant-Farrar Community Schools, Bondurant, Iowa. Hon. Dick Clark, presiding. Present: Senator Clark. STATEMENT OF HON. DICK CLARK, A U.S. SENATOR FROM THE STATE OF IOWA Senator CLARK. The hearing will please come to order. This morning we begin 2 days of hearings on the inspection and weighing of grain produced in the United States. We will be receiving testimony on the subject from the people who produce the grain, the farmers; from the people who first purchase grain after it leaves the farm, namely, the country grain elevators; from the people who established the grade, or quality of grain, the licensed inspectors; and the people who supervise those inspectors, the employees of the Department of Agriculture Grain Division; and from farm, commodity and trade groups. We will also be receiving the first public testimony to be given before the Senate Agriculture Committee, by people who personally have been involved on both sides of the grain inspection and weighing scandal in New Orleans. With us this morning are Mr. Harlan Ryan, Chief Supervisory Officer for the U.S. Department of Agriculture Grain Division in New Orleans-he will be our first witness-and Mr. Barry Barrios, formerly a licensed grain inspector with the Destrehan Board of Trade, who pled guilty to one count of bribery, and who has since been cooperating with the Federal investigators, and he has been kind enough to appear here this morning, and this has been done, I might say-and it is important to say-with the full cooperation of U.S. attorney Gerald Gallinghouse and Assistant U.S. attorney Cornelius Heusel, who have been doing a very outstanding job of conducting the New Orleans investigation. I think if this matter is cleared up, the problems of grain inspection, it is going to be due more to the fine offices of the U.S. attorney in New Orleans than anyone else in the country. Some people have asked why we are holding hearings in Iowa which deal-at least in part-with the grain trade corruption in New Orleans. Others have questioned why those of us here in Iowa would be concerned at all with what some people see as an isolated scandal. The answer is simple. The grain trade scandal in New Orleans, which is already spreading to other gulf ports as well, is of vital importance to the continued health of Iowa's economy, and indeed to the economy of the whole country. Iowa, in particular, leads the Nation in the production of corn, and it is second in the production of soybeans. I might add that it is first in overall farm income among the States in the United States. About 20 percent of Iowa's grain is sold for export, and much of it is shipped out of the New Orleans port, the port of departure for more than onethird of our Nation's grain exports. In fact, I think some 38 percent of all the grain that is shipped out of this country goes out of the port of New Orleans. In other words, when grain has been short-weighed, misgraded, adulterated, and mishandled at the New Orleans export terminals, much of that grain has been Iowa produced. It has not been just the foreign buyer who has been cheated, but the Iowa producer and elevator. The corrupt practices being brought to light in New Orleans and elsewhere must be at least partly responsible for the increasingly widespread dissatisfaction among our overseas customers with the quality of the United States grain exports. I might say that we had, at the Senate Agriculture Committeee several weeks ago, buyers from each of the European countries, who sat down with us and talked about the declining grade of American grain over the years, as they have seen it, and it was somewhat disappointing and shocking to hear them say that they buy American grain last, after they have bought grain from every other country. There is no reason to believe that the grain we produce is in any way inferior to that of other grain producing countries. There is every reason to believe that through the years it has become superior and, yet, we know that overseas buyers are turning to other sources whenever they can. That is the most important reason, I think, that we don't simply sweep this under the table, but that we get to the bottom of it, and we correct it, and we deliver the high quality grain that we are producing in this country. Now, the corrupt practices being brought to light, as I said, in New Orleans and elsewhere, must be at least partly responsible for the increasingly widespread dissatisfaction among our overseas customers with the quality of U.S. grain, as I said, and as I reported after my trips to New Orleans in early July, the pervasiveness of the problems in the grain trade there at least lead me to believe that little grain has left New Orleans in recent years without having been misgraded or short-weighed, or both. That is a pretty strong statement, that most of the grain that has left New Orleans has been misgraded or misweighed. and I hope that the witnesses who are in a better position to make |