of your committee here to initiate this legislation for the reason that it may be the instrument that will induce private capital, if anyone wants to use private capital in the development of these facilities for service purposes. I have told you about the story.

The CHAIRMAN. We appreciate your appearance and your interest in this problem. I fully appreciate the importance of the assembly markets that you have referred to, but I was wondering if you did not believe that matter could be left more or less to the State agricultural commissioners and to the marketing divisions of the several State departments of agriculture in encouraging these assembly plants where educational work can be carried on in the art of marketing produce, rather than to bring it into this bill, because I am afraid that if we broaden the scope so as to embrace local assembly plants, you might be going far afield from the original objective of this bill, which is to encourage the improvement of marketing facilities in the great industrial areas.

Mr. MCLAUGHLIN. I think you are essentially right, but one of the grand programs that you have in operation in most of the States now is research and marketing.

The CHAIRMAN. I know that is true, but could we not, through the Research and Marketing Administration devise some sort of plans for these local assembly plants and for instructions to be given to farmers in methods of marketing their produce?

For instance, I have in mind in North Carolina. If some hotel there had a large banquet scheduled, I do not know that they could go into any market there and buy 400 or 500 chickens of the same size and classified in the same way, that they could in some of the larger markets. Consequently, a lot of the produce in North Carolina is shipped north for repacking and shipped back into North Carolina. Mr. MCLAUGHLIN. That is right.

The CHAIRMAN. The Governor, former commissioner of agriculture, has tried to do something about it, but it is a long drawn-out educational process. The farmers have to know something about the art of marketing. He brings one chicken in that weighs 5 pounds and another one 21⁄2 pounds. They have to be classified in such a way that the ordinary farmer probably is not a large enough operator to classify the chickens on his own farm properly.

Mr. MCLAUGHLIN. You are talking about something that is very dear to my heart. Let me point out just one other thing. Our independent grocers are complaining right much to me from the standpoint that our farmers do not package their products so that they can meet competition by the big chains. The independent grocers are the big business in our State when you take them all combined. I think it is as much our duty and responsibility, I as commissioner and working on these programs, to provide some facilities in an assembly set-up that will do the very thing that you have just said, that we can classify and package those products so that you will have a more direct way of going right to that retailer, or if you go onto the hotel, that is the end of consumption. It is those things that I have in mind, Mr. Chairman, that I am talking about this minute, that will be the big impetus to the successful operation of these bigger markets in the consumer centers.

The CHAIRMAN. I see the importance of what you are saying as related to the ultimate sale of the produce, but I do not think that

assembly-point markets really are what we have in mind here, although I am not saying that I am opposed to broadening the scope of the bill. I think we will do well to get this part of it through, and then, if this works successfully, and well, it may then become necessary to broaden We could do that at a later date.

it.

I think that we have a great problem where farmers are forced to ship into certain markets only to have their produce again shipped out of those markets and in many instances right back to the point of origin. If there is any way we could stop that, certainly we would be shortening the distance between the producer and the ultimate consumer, and we would be saving the people of the country, both producers and consumers, money.

Mr. MCLAUGHLIN. I will give you another example. We have our livestock marketing program set-up in West Virginia in which we are operating it in every angle and they are public markets. They are under the authority of the Commissioner of Agriculture, and we handle them pretty much in the same way that our public service commission handles the services in the cities, and throughout the State. Here is what we are confronted with:

We do not have the packing plants. Therefore, we are sending our best livestock and a large majority of it, the largest majority, I would say, to far off places, say Baltimore, Philadelphia, Pittsburgh, Columbus, and Chicago, and Cincinnati, only to have that processing operation performed, and then turn right around with the same high freight, hauling it back into our State to find a market.

Those are some of the things that I want to shorten and correct. The CHAIRMAN. I agree with you.

Mr. ANDRESEN. Of course, you are not advocating that this bill should encourage or finance packing plants to process meat so that you would set up a new system of marketing financed by the country in the meat line.

Mr. MCLAUGHLIN. I did not say meat.

Mr. ANDRESEN. As I understand you, you said your good cattle were being shipped to distant points, and then coming back in as processed meat.

Along the line of your thinking, I just cite one commodity. That is tomatoes. The members of this committee will find that in visiting the different markets, the dealers will buy tomatoes at $1 a bushel, and invariably find with the good dealers that they will package those tomatoes after they get them and put four or five or half a dozen in a package with cellophane paper around them, and an attractive package, and probably get $6 or $7 a bushel for the tomatoes, when they are sold to the trade.

Out in California they have the packaging organization that puts up the grapes and citrus fruits and things like that in appetizing packages. Is that something you had in mind for assembly points, to put the commodities up in packages?

Mr. MCLAUGHLIN. Yes, sir, that is exactly it. Instead of $7 or $8 for tomatoes, we are paying at certain periods of the year $15 a bushel for tomatoes being produced in the South.

Mr. ANDRESEN. That is a part of the marketing system. When we put through the Hope-Flanagan Research and Marketing Act, one intention back of that was that they would do something in the Department with the $19,000,000 they are getting a year to improve the

marketing of farm commodities, and going through some experience here on potatoes and eggs, why, I am frank to confess that I do not see any results from what they have done with the money they have spent to improve our marketing system. I think that under that law, and under the various other branches that we have in the Department of Agriculture, there could be a coordination of activity so as to bring the information out and what is necessary to improve this marketing system and shorten the distance you might say between the producer and the consumer so that the producer would get a larger share of the consumer's dollar. Whether it be suitable in this bill or not, I am not sure, but I think it ties into the merchandising system of farm commodities and should be considered by this committee.

Mr. MCLAUGHLIN. I do not want to get into an argument about this, but you have not tried the Hope-Flanagan research and marketing long enough. You are spending and have been spending millions of dollars on production. We are finding out through research and marketing and going into all of the phases of it, that we do not know much about production yet. That is best exemplified that we are right now finding out that instead of 25 different varities of tomatoes, maybe two are enough, and on sweet potatoes, with all that anyone could produce, we are getting down to about two varieties. You give research and marketing a fair trial for the next 5 or 6 years and watch the marked difference that it has made in production, in quality, in merchandising, in orderly or systematic marketing. In my judgment it is the most important piece of legislation that this Congress has put into effect in a long time, if you will give it a fair trial. You cannot do it on $19,000,000. That is a mere pittance. And the tremendous amounts of money that are being spent for production, I think that not over 1 percent or 2 percent has ever been used in orderly distribution or marketing.

Mr. ANDRESEN. You referred to apples, that your State grows; I remember, and I used to work in a grocery store, when we used to sell a barrel of applies to nearly every home, in the fall, Wealthies or Jonathans or Greenings or some of those, Baldwins, and so on, at $1.75 and $2.50 a barrel. Now, you buy apples by the box, wrapped in nice paper, and uniform in size, but you have to pay around $4 or $5 or $6 a box to get those apples.

We had a man not so long ago appear here who said they packed 36 apples to a box, and that the producer had to get around $2.75 a hundred to meet his cost of production. Well, the price element is a very material thing in disposing of the commodity because people are not buying apples like they used to, where they will have to pay 25 cents for four or five apples. The same thing has happened in coal. You mentioned that commodity. Well, the price gets too high and people go to other commodities and other fuels. I am interested to find out where you are going to put all of these people to work in your State when they get out of the production of coal. You have to sell it. If you are going to pay these people $8 or $10 or $12 a day, that adds on to the cost and then there are new methods of fertilizing the trees and the soil and other improved methods, it seems to me that you have to consider the price element in it in order to dispose of the commodity, however good the package looks.

Mr. MCLAUGHLIN. I have checked that thing in some of the larger or commonly called the supermarkets, in talking about apples. Here

they are in the bin. Here they are wrapped up, four or five of them in a cellophane package. The grandmothers are not doing the marketing any more. It is the young matrons of which I have a daughter in law that I followed through this supermarket. When she came to the apple bin, she was not interested in those apples, but when they came over to the cellophane package, she reached over there and picked up a couple of packs and took them home with her. That tells the whole story.

In our operation, in our handling of this food, the stuff that is produced on the farm, we have to be as modern as these new buyers are, and they are going to be the buyers in the future. Here the trouble with our food distribution, especially fresh fruits and vegetables, is that the vast majority of it is in the hands of the hawker and peddler, and there are so many services tacked onto those products before they ultimately reach the consumer that the farmer's share will run about 28 or 30 cents out of the dollar. What we are trying to do, and the thing I am thinking about, and the thing I am going to work at, regardless of the outcome of this bill, is going to try to get back a few more cents to that producer, or he will not be a fertilizer buyer, he will not be a machinery buyer, he will not be a purchaser in your department store or any of those places. That is our big problem. That is what I mean by orderly and systematic distribution.

Mr. ANDRESEN. I might say that is the prime objective of this committee, to get the biggest share of the dollar back to the producer. That is what we have worked for ever since I have been on the committee.

Mr. McLaughlin. I do not want to take too much time. I do want to say this, I want to commend you for having initiated this bill and in proposing it to Congress. I do not see how any Congressman, especially in a State like mine, or in any other State, could oppose this, because it is bound to help the two groups that are at the mercy of the racketeers, and those are the producers on one side, and the consumers on the other.

The CHAIRMAN. Thank you very much, Mr. McLaughlin.
Mr. MCLAUGHLIN. Thank you.

The CHAIRMAN. We will hear from Mr. Raymon Colon-Torres, Commissioner of Agriculture, Puerto Rico.

STATEMENT OF RAMON COLON-TORRES, COMMISSIONER OF AGRICULTURE AND COMMERCE OF PUERTO RICO

Mr. COLON-TORRES. I am Ramon Colon-Torres, Commissioner of Agriculture and Commerce of Puerto Rico.

In the first place, and as a person deeply interested in the problems of agriculture and in the correct solution thereof, I must declare that I am outspokenly in favor of the objectives and proposals of H. R. 8320. The creation and improvement of marketing facilities for the handling of perishable agricultural products is a long felt need which must be taken care of if we are to shape a marketing structure as this bill so aptly puts it, conducive to an orderly and efficient distribution, increased consumption and a eduction in the spread between the prices paid by consumers and those received by farmers. And, extending these objectives further, to a marketing structure that may effectively contribute to expand agricultural production.

The current lack of means for financing marketing facilities definitely hampers, as stated in the bill, the establishment of such a marketing structure.

As Commissioner of Agriculture of Puerto Rico I must inform the members of this committee that the conditions of the marketing system in that territory demand wider and more far-reaching improvement than those needed in any other area of the Nation.

As the members of this committee well know, the resources of Puerto Rico are very limited. The island's economy is principally agricultural. Our economic structure has been based mostly on sugarcane and to a minor extent on tobacco nad coffee. Then the progress and expansion of these three enterprises has been arrested, either by conditions of supply and demand which have made advisable the establishment of marketing quotas, by consumers' haibts, or by concessions made to competing areas outside the boundaries of the Nation.

On the other hand, the island is in dire need of increasing its productive capacity to provide for the necessities of living-if possible at more satisfactory levels than those prevailing hereto-to a constantly increasing population. This means that we must find and develop new sources of income. In the face of our limited natural resources, such new activities as we must develop should be of a high income yielding capacity and should provide a high level of employ

ment.

In the field of agriculture the development of these activities is hindered by the existence of a primitive marketing system for agricultural produce. One of the principal deficiencies of such a system is the lack of marketing facilities. Suffice it to say that in the metropolitan area of San Juan, with a population count to over half a million inhabitants, the only wholesale marketing facility for agricultural produce now existing was established over a hundred years ago. The evils of congestion, spoilage, deterioration, and unfair trading practices in this market are beyond description. Mr. Nathan Koenig, special executive assistant to the Secretary of Agriculture, visiting this market a year or so ago, described it thus: "This is the worst market slum I have ever seen in my life.'

It goes without saying that this situation demands immediate correction. I must inform the members of this committee that action is already being taken to remedy this situation. The improvement of the marketing system for agricultural produce in the island has been established as one of the principal activities to be developed under the work programs of the present Commissioner of Agriculture of Puerto Rico. We are already embarked, with the cooperation and aid of the Federal Department of Agriculture, in providing marketing news information, marketing inspection services, and the promotion of better handling and trading practices for agricultural produce.

The improvement of marketing facilities is one of the most important aspects of this program. A year ago, contacts were established with the Marketing and Facilities Research Branch of the United States Department of Agriculture to have the activities of this branch extended to Puerto Rico under the Research and Marketing Act of 1946. A project was outlined to study and plan for needed agricultural wholesale marketing facilities in metropolitan San Juan. This project is being conducted under the directorship of Mr. Caleb J. Otten,