The CHAIRMAN. Ordinarily, I would call on the Department to put that information in the record, but I think that it is already in the record of the committee and is available to us in the future.

Thank you very much.

Mr. KING. Speaking of documentation, I wonder if Mr. Baker could give us any documentation supporting his statement that these proposed marketing facilities will raise farmers' prices and incomes. Do you have any indication that the wholesaler is going to charge any less commission or brokerage?

Mr. BAKER. As I understood Mr. Crow's testimony earlier this morning, Mr. King, he has that documentation which I have suggested to the committee should be placed in the record.

I agree with you that that should be in the record.

Mr. KING. The documentation that shows that the farmers get more for their produce when these markets are built?

Mr. BAKER. I understood that was the implication of his testimony, yes, sir.

Mr. KING. It may have been an implication, but I do not see how it could be that.

Mr. BAKER. I would suggest that you request that be placed in the record of your hearings.

Apparently there is a controversy on whether these improvements were desired. I thought that we were all agreed on that subject, that improving the efficiency of these terminal markets is a desirable thing.

As I understood, the only thing we are disagreeing on is whether the Government should make insured credit available to improve the markets, or whether the Government should depend on the New York bankers to take the initiative.

Mr. KING. I have not heard it even implied any agreement on the point as to who is going to get the benefit of the reduction. You are talking about increasing the present employment situation by building these markets, and yet the whole purpose of building these markets is to reduce labor, because labor is the big cost of handling in these terminal markets.

I have not seen any indication anywhere that the commission merchant would cut down his commission, or that the broker would reduce his brokerage, all of which comes out of the farmers' pocket.

Even if you will admit their expenses are less, that the buyers' expenses are less, coming in together, the price on these things is always determined by competition based on supply, and competition will drive these prices down as low as they can with terminal market facilities, the same at best and the same as when bad.

I do not believe there is any basis at all for saying that these facilities will automatically increase the price to the farmers. Mr. BAKER. In other words, you are in disagreement with the Department's testimony. And I respect your view.

Mr. KING. I am not.

Mr. BAKER. Your willingness to disagree with the Department, that part of the Department's testimony. I would add also one other factor. I do not know whether you ever have or not, but anyone who has ever eaten a head of lettuce that has sat in a truck for 10 hours in the sun waiting to be unloaded at one of these docks will realize that the consumer, and directly also, the farmer that produces it, has a very direct interest in trying to get those facilities set up, so that that

truck can get unloaded without sitting in the sun for 10 hours, because that head of lettuce is hardly fit to eat after it is out in the shining sun for 10 hours, whether there is a tarpaulin over the top of the truck or not.

Mr. KING. Is that the practice now?

Mr. BAKER. I have actually seen the trucks standing a block long at the New York market, and at the Philadelphia market.

The CHAIRMAN. It would take somebody all night to unload it. Mr. BAKER. The Philadelphia market, I have seen photograph after photograph that the mayor brought down. This is one of the places where the spread between what the farmer gets and the consumer pays can be reduced without hurting anybody, and also come out with a higher quality product that the consumer has to eat.

Mr. KING. I agree with you. How would that be?

Mr. BAKER. By lower cost of the entire operation.

Mr. KING. Cost to the shipper?

Mr. BAKER. The cost of the truck delivery, for example, standing in the line.

You are not willing to assume that there is any charge on that truck standing in line 10 hours? Who pays that in the present situation? Mr. KING. I do not know of any shippers who send trucks that wait in line that way.

The CHAIRMAN. Will you yield?

Mr. KING. Yes.

The CHAIRMAN. All of the Department's testimony has indicated that there would be a substantial saving. They have actually estimated the savings that would be made in different cities throughout the country, because of the fact that they eliminate all of this waste. and delay.

Anybody could go to the Washington Street market, like I did 10 years ago, and see the trucks moving by inches. It would take hours for them to get to the place where they were going to unload.

Mr. KING. I am not denying the inefficiencies or the savings. I was interested in documentation, how he could document his statement that the prices would be higher to the farmers.

Mr. BAKER. I requested that the committee request that documentation.

The CHAIRMAN. Here are 300 pages of the testimony, if you want to read it.

Mr. KING. I have not heard anything from the Department that they could document that statement, because I do not expect that the Department could determine that.

The CHAIRMAN. They have documented it. They can present the statement. Whether it is accurate or not, you would have to call on the Department.

Mr. KING. As to who is going to get the savings.

The CHAIRMAN. Certainly, and how much will be saved in any particular area.

Mr. KING. I do not know how they could do it.

Mr. McINTIRE. There is one thing in this statement by Mr. Baker that I would like to have clarified in my own mind, because it is more by implication that I need the clarification. It is on the last page, page 2. Mr. Baker, you refer there as follows:

On the other hand, the initial amount required should be sufficient to insure that the municipality, public corporation, or other political subdivision would give top priority to planning, management, and promotion of the facilities that will be built.

Do you mean that the record should show that it is the position of your organization that under this legislation that preferential treatment should be given to political subdivisions?

Mr. BAKER. No.

Mr. MCINTIRE. Municipalities or public corporations, as contrasted with those of private capital?

Mr. BAKER. Not at all; no, sir.

Mr. McINTIRE. I think the point needs to be clarified. It is not your intention that this legislation would give any preferential treatment?

Mr. BAKER. No, sir.

Mr. McINTIRE. Whatsoever?

Mr. BAKER. What we want to see in this, Mr. McIntire, is to get the more efficient market, to modernize the market, so that the dock that you unload the truck at is the same level as the truck bed so that you do not have to hand it down, and then hand it up again.

You have seen actually more of these docks than I have, but as you remember and will recall, sometimes the dock is 2 feet above the truck bed, and the other one is 2 feet below it. There is all of that handling up and down.

In this period of the world when we are talking about automation, we are still operating in the Middle Ages on some of these terminal markets.

Mr. McINTIRE. Your statement does not mean any implication whatsoever that the provisions provided in this bill shall be preferential as to public construction or private construction?

Mr. BAKER. No, sir; that was just a slip in my hillbilly longhand writing. I do not put that in. You could list, I presume, 25 people that are eligible to borrow insurance loans of this kind. There is no thought on our part of limiting it to any particular type of borrowing that will undertake the initiative to get one of these things started.

The main point was that whoever it is to take that local initiative ought to put up enough earnest money in effect to show that he is really serious about what he is going to do, to get the project into operation. Mr. KING. Do you believe that the Federal Government should put up 85 percent or less?

Mr. BAKER. I would suggest that the 15 percent is all right in that regard for it. That is a technical matter that I do not know too much about, on this insuring of a mortgage. We found in some of the other insured loan programs-Mr. Hill and I discussed this 2 years agowith respect to the soil conservation loans that no one creditor actually needs 100 percent insurance or guaranty on his entire portfolio.

It might be here that you could in effect guarantee the top two-thirds of 85 percent of each one and in effect give him 100 percent protection for his portfolio, but at the same time reduce or limit the total liability of the Federal Government.

I was pretty clumsy in the way I said that. The point is, the $100 million will stretch a lot farther than it looks just by eighth-grade arithmetic.

Mr. McINTIRE. It is whether a man's equity is the top or bottom 15 percent?

Mr. BAKER. That is it. There will not ever actually be 100 percent loss on any of this. If anything else, there is a resale value of it.

The CHAIRMAN. May I say this before you leave the stand. Looking at this record, made back in 1950, here is a statement from Mr. Crow indicating that they had visited one particular place in New York, went to a warehouse or a wholesale building that was located on the railroad tracks. The floors were at the height of a railroad car, which is as they should be. We checked the cars at that place, the cost of unloading the cars of that wholesale house, and the cost was $9 a car for the unloading operation, whereas in other places in the same city it cost $110.

Mr. KING. Who got the $110?

The CHAIRMAN. If it goes to the Washington Street market area it bas $45 charges unloading on the pier; about $50 for trucking to the area; and about $15 for portage. That is the evidence.

Mr. KING. There is no doubt about the efficiency of this thing.

Mr. BAKER. On other cases you and I have had cross-examination discussion back and forth, Mr. King, with respect to this spread between the price the farmers receive and the farmers pay.

As I recall your point of view it was that the reason that the farmer does not get any larger percentage of the consumer dollar than he gets is because of all of these necessary costs that have to be paid. Maybe I am incorrect in attributing that directly to you.

Mr. KING. Sure.

Mr. BAKER. It is said that the fact that the farmer gets 42 percent of the consumer dollar now compared with 58 cents that he got 4 or 5 years ago is because all of these costs of handling, processing, have increased. You are saying if you decrease those the farmer still is not going to get any higher percent of the consumer's dollar. Do I understand you correctly?

Mr. KING. I am not going to say that he is going to get a higher percent. Even if he gets a higher percent by reason of less cost of distribution, the price that he gets may not be any higher than he would get otherwise, because there is only one thing that sets price on the farmer's produce, particularly perishable produce, and that is the competitive buying in relation to the supply. I do not care whether it is fine terminal facilities or otherwise.

Mr. BAKER. But when I was a boy in Logan County, the county agent decided we ought to grow some cabbage that year. I remember several carloads of that cabbage was sent to New York City. By the time it got unloaded and the man had graded it, with all of the deterioration that took place, they sent him a bill for part of the freight. Mr. KING. Quite often that should be done.

Mr. BAKER. If you could get that to a point and unload it and have it handled and sold to the consumer before it starts to deteriorate, just that one quality factor alone would mean at least that we would not have to pay the freight up there.

Mr. KING. In the long run that would not even affect the prices. There would be just that much more cabbage going on to the market. The only thing that sets price that the farmer gets is the demand for the stuff in relation to the supply.

The CHAIRMAN. It does not make any difference whether you pay 50 cents an hour or $5 for farm labor, is that it? You said that it would not affect what the farmer gets at all?

Mr. KING. It would not affect the price that he gets for his stuff. You will quit growing, of course, and that will affect the supply. The CHAIRMAN. Would you just as soon pay $110 to unload the car as to pay $9?

Thank you very much, Mr. Baker.

Mr. BAKER. Thank you.

The CHAIRMAN. We will next hear from Mr. Matt Triggs, of the American Farm Bureau Federation.

STATEMENT OF MATT TRIGGS, THE AMERICAN FARM
BUREAU FEDERATION

Mr. TRIGGS. Mr. Chairman and gentlemen of the committee, the American Farm Bureau Federation favors the enactment of H. R. 4054. Our policy in this connection is based upon the following resolution approved by the official voting delegates of the member State Farm Bureaus:

One of agriculture's basic needs is improvement in the efficiency of marketing. This is particularly true in the case of fresh produce. We, therefore, support legislation to provide mortgage insurance on a sound business basis for the construction of modern, efficient market facilities, with emphasis on local financing and self-liquidation.

Although tremendous progress has been made toward increasing the efficiency of production and marketing of perishable agricultural commodities, in many of our major markets these products must still move through antiquated and obsolete wholesale market facilities originally constructed many decades ago. In many instances these facilities are not even served by rail sidings located within the market area. Facilities that may have been suitable 30 years ago are now crowded and congested. Excessive delay in moving produce into and out of such markets involves waste of manpower and equipment, thus increasing costs of marketing.

Needless to say, these obsolete facilities take an unnecessary toll of all produce passing through the markets. The costs of such waste are shared by producers and consumers.

In the past few years an increasing number of large retail food distribution firms have built their own wholesale warehouse facilities to handle perishable agricultural commodities. In some cases this was no doubt done because of the inadequacy of present marketing facilities. Independent retailers and small chains have a cost disadvantage because they are dependent upon the higher cost produce markets for their supplies of produce.

In planning new marketing facilities in many areas the need may be for the development of a food-distribution center, rather than a produce market. We believe this could be done under the proposed legislation.

The problems to be overcome in the development of modern wholesale markets are many and varied. The difficulty of financing more adequate facilities is one of the problems to be considered in each instance. The enactment of H. R. 4054 would help to minimize this particular difficulty by authorizing mortgage insurance.