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In other decisions, realistic business expenses which had been

allowed by the IRS and were considered normal business accounting

procedures were disallowed by the P & S in determining the justness

of a proposed rate change.

Markets only a few miles apart have been granted such widely

differing tariffs that some were given a very unfair advantage

over the others.

This naturally would result in business increaing

greatly for some markets, while others could hardly survive.

We do not understand the P & S rationale in these matters and we

don't believe anyone else could either.

The Thornton Bill would

assure these practices could not continue.

The government does not find it unfair to the country farmers

when their farms are sold by real estate agents for a percentage

fee; or when a farmer pays his banker a percentage interest rate

on his borrowed money.

Indeed, in these and many other cases

throughout business life, a percentage charge is deemed fairest

of all.

How then, can it be unfair to sell the farmers livestock

at a market charging him a percentage fee?

Our interest in this bill, as livestock auction operators, is

obvious.

We think it is significant, however, that nationally

the Farm Bureau has resisted attempts of P & S representatives

to gain support for their current policies.

In areas where the

situation has been fully explained, local and state Farm Bureau

chapters have passed resolutions supporting the markets.

We may

assume from this that these producers are acutely aware of the

value to them of the services provided by localized markets.

It is our wholehearted belief that if livestock markets are

allowed to operate as any other business in the United States,

employing competition and free enterprise to its greatest

advantage; while allowing the P & S to assure the industry, the

producer and the consumer that everyone at each market is being

treated equally and without discrimination, the industry will

grow and the services provided by these markets will be better

and better for all.

It a market fails in this country, it

should be because of poor management or unwise decisions, not

because it was forced out of business by the Federal government.

Thank you.

Mr. HIGHTOWER. Thank you, Mr. Peterson. We appreciate your being here to present this statement.

Mr. Harkin was delayed in the full committee, or he would have been here to have presented you.

Mr. HARKIN. Mr. Chairman, I knew that was not Mr. Bowman sitting there. I knew Tom very well.

Mr. HIGHTOWER. Our next witness is Mr. Bill Jones, vice president, policy development, of the National Cattlemen's Association.

Mr. THONE. Mr. Chairman, let me take this brief opportunity to apologize for not being here for the entire hearing. As you know, we are meeting next door on the budget for the Agriculture Department

now.

I would like to very briefly welcome to the subcommittee my good, longtime friend Bill Jones. He is as knowledgeable and effective a person in this area of agriculture as I know. He certainly knows a lot about the Packers and Stockyards Act.

You will remember, Mr. Chairman and members of the subcommittee, that it was Bill Jones who had a lot to do with the rejuvenation of the P. & S. Act when we worked on the credit aspect of this about a year or so ago.

Mr. HIGHTOWER. Thank you, Mr. Thone. I certainly concur in what you say about Bill Jones.

We are glad to have you, Bill.
[The prepared statement submitted by Mr. Jones follows:]

STATEMENT

of the

NATIONAL CATTLEMEN'S ASSOCIATION

H.R. 9482

And Related Bills
Amendments to the Packers and Stockyards Act

The National Cattlemen's Association approves the
deregulation of ratemaking at public livestock mar-
kets, subject to the Secretary of Agriculture retain-
ing review authority to assure uniform and non-
discriminatory application of such rates.

Cattlemen were involved in the original passage of the Packers and Stockyards Act, which brought major public livestock markets under utility-type rate regulation. In contrast to that period, however, the NCA membership has now said, in effect, that competition among public livestock markets has reached the point at which regulation of rates within the framework of the public utility concept is no longer justified.

The Association is also concerned that the resources of the agency be directed primarily to other enforcement activities which are currently of more important consequence to livestock producers.

In the policy position adopted at the January 26, 1978, Annual Business Meeting, the NCA Membership did not call for complete deregulation of rates. Rather, the policy calls for the Secretary of Agriculture to retain review authority over rates to assure uniform and non-discriminatory applications of such rates.

Resolving the ratemaking issues at hand by following the NCA recommendations would render moot such controversial questions as the percent-of-value or the per hundredweight method of charges vs. the flat-rate-per-head method. Also, such changes in P & S supervision of rates could be accomplished by administrative action, making it unnecessary to follow the legislative route outlined in H.R. 9482 and related bills.

In essence, H.R. 9482 provides for limiting the ratemaking authority of the Secretary of Agriculture to stockyards (public livestock markets) with an annual sales volume in excess of 100,000 animal units and those with over 20,000 animal units which are located 75 miles from the nearest competitive stockyard.

Again, following the NCA recommendations would make it unnecessary to establish what can be viewed as arbitrary size categories for regulatory purposes and the expenditure of resources to make such determinations under conditions of fluctuating individual market sales volumes.

It is our understanding that U. S. Department of Agriculture officials are receptive to making changes in the present system of supervising rates at public livestock markets, taking into consideration the recommendations received at the various field hearings held by the Department--at least on a trial basis.

• Withdrawal from the more or less day-to-day supervision of rates by the Packers and Stockyards Administration would permit additional resources to be directed toward enforcement activities currently of more consequence to livestock producers, such as the prompt payment and trust provisions of the Act.

Under the recommendations proposed by the NCA, the Administration would still be in a position to respond to and take action on complaints received from livestock producers with respect to the application of rates for services rendered.

In summary, the National Cattlemen's Association recommends that the Packers and Stockyards Administration withdraw from the present system of more or less, day-to-day, public-utility-type rate supervision at public livestock markets but retain review authority to assure uniform and non-discriminatory application of such rates. It is also recommended that this be accomplished through administrative action, rather than resorting to legislative amendments to the Packers and Stockyards Act itself.

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