when would the rate making authority of the Secretary become effective ? After it became effective, how long does it last ? These are questions to which the bill does not address itself. They are questions which must be answered.

Today, no livestock market is either so large or so isolated that it is without effective competition either from another market or from the competition of direct marketing. The decentralization of livestock marketing in recent years has provided competition in one form or another literally in every corner of this nation and wherever there are livestock to be marketed. There are no markets which can even remotely by any stretch of one's imagination be considered today as public utilities or so affected with a public interest that they require rate regulation in the public interest. The posted stockyards under the supervision of the Secretary of Agriculture have neither franchise nor monopoly, which are the attributes of a public utility. Neither does the Packers and Stockyards Act of 1921, as amended, prescribe any entry requirements.

In 1921 practically all livestock moved to market by rail or else were driven on foot. As a result, livestock markets were concentrated at railroad terminals and numbered less than 100 then. No marketing alternatives existed, so the livestock markets in operation at that time were deemed to be affected with a public interest and as such necessary to be regulated as to their rates and charges for stockyard services.

Times have changed a lot since 1921. Today, practically no livestock moves by rail, but instead by motor carrier.

Now, there

are nearly 2,000 posted stockyards or livestock markets under the supervision of the Secretary of Agriculture.

While we are in sympathy with the intent of the proposed legislation, we cannot support H. R. 9482 in its present form. We are informed by the Packers and Stockyards AMS that they estimate that approximately only 100 livestock markets will continue to be subject to the rate making authority of the Packers and Stockyards Act of 1921, as amended, in the event that H. R. 9482 should be

enacted into law. Such action would be grossly discriminatory, unfair and unreasonable as to those approximately 100 markets. They are entitled to receive equal treatment and consideration. For these reasons, in its present form, we are opposed to H. R. 9482, as well as to H. R. 9639, H. R. 9822, H. R. 10016 and H. R. 10666, respectively.

Rather than attack the subject of rate making piecemeal, we recommend that serious consideration be given to amending this bill, as well as the several similar bills, so as to remove from the Packers and Stockyards Act of 1921, as amended, all supervision or control over the level of rates and charges for stockyard services. Necessarily, this recommendation should be subject to the retention of the following four safeguards for the benefit of both market customers and the posted stockyards themselves:

(a)

(b)

(၁)

(d)

any change in any tariff charge should continue

to be filed with the Packers and Stockyards
AMS ten (10) days in advance of its becoming
effective, as at present;

any change in any charge for stockyard services
should be published by posting at the market
for not less than ten (10) days, as at present;
the rates and charges of all commission agencies
doing business at the same market must be uniform
and identical, as at present; and

all tariff charges must be applied uniformly
and without discrimination, as at present.

We believe that this is the only correct approach to the solution
of this problem. It is non-discriminatory in its application
and deserved by a highly competitive industry.

The existence of active competition effectively serves in its self to monitor the rate levels for stockyard services at posted stockyards. The very number of markets and other marketing choices insures the livestock owner a choice at a price he is willing to pay. result, we believe that a program of rate regulation of posted

As a

stockyards is no longer necessary in the public interest, in view of the changed circumstances since 1921 and the livestock marketing conditions existing today.

Thank you for the opportunity to present our views on H. R. 9482.

March 14, 1978

Mr. HIGHTOWER. Thank you, sir, and if you can wait for just a little, we have one more witness, Mr. Lemmy Wilson, president of the Tennessee Livestock Association of Newport, Tenn.

STATEMENT OF LEMMY WILSON, PRESIDENT, TENNESSEE
LIVESTOCK ASSOCIATION

Mr. WILSON. My name is Lemmy Wilson of Newport, Tenn. Presently, I am priviledge to serve as president of the Tennessee Livestock Association, an 8,000 member producer group, on whose behalf I offer my remarks.

In addition to my endeavors as a livestock producer, I am actively involed in the agricultural industry as a cattle feeder, a registered livestock dealer, and as a livestock marketing businessman.

I own and operate Wilson Livestock Market of Newport, Tenn., which is subject to the regulatory authority of the Packers and Stockyards Act. Hence, my background provides me with a broad perspective of the livestock industry.

In speaking for the producers, let me remind you that each of us is a businessman who very much values and respects an open and competitive marketplace for our products. We value our ability to make the decisions that lead to profitable and successful endeavors. We seriously question intrusions of our Government through various regulatory schemes which interrupt or impair a competitive marketplace.

We recognize that we are the customers of a livestock market, both as buyers and sellers. We recognize, too, that we can market our livestock without utilizing an auction market, or an auction stockyard, or even a marketing business.

We support deregulation with respect to the present rate policies of the Packers and Stockyards-AMS. We support the right of a marketing business to conduct its endeavors in accordance with good business judgment, personal and business integrity and commonsense. We point out that a very capable and accurate "first line" test of any marketing business will be its ability to have satisfied customers.

In summary, we ask that this subcommittee take a careful look at the present rate policy of the Packers and Stockyards-AMS to determine its applicability to the livestock industry today. We do not believe that such extensive rate regulation is applicable and supports deregulation efforts.

Thank you for the opportunity to appear and present this statement. Your concern and efforts at deregulation are very much endorsed and appreciated by the Tennessee Livestock Association.

Mr. HIGHTOWER. Thank you very much, Mr. Wilson.

If you will remain at the table, we would like to ask the other witnesses now if they will return to the counsel table so that they can be in a position to respond.

I had thought that some other members of the subcommittee would join us before this time. It is very unfortunate that we are having so many conflicts at this particular time.

I know that you have sacrificed your time to be here, and we want to make the best use of your expertise in this area.

I do have a few questions that I will ask, but before I do that, Con

gressman Richard H. Ichord of the Eighth District of Missouri has given us a prepared statement to be included in the record. We also have a statement by the Texas and Southwestern Cattle Raisers Association, and without objection this will also appear in the record at this point.

[The statements referred to above follow:]

STATEMENT OF HON. RICHARD H. ICHORD, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF MISSOURI

Mr. Chairman, I am pleased to have this opportunity to submit testimony in support of H.R. 9482 which would amend the Packers and Stockyards' Act to exempt small country auction barns from rate regulations by the U.S. Department of Agriculture.

I have been concerned for quite some time about the effect of the rate-making practices upon country auction barns and can well understand the difficulty in producing sufficient income to meet operating expenses let alone the expenses incurred due to reporting requirements. In my judgment, there is no valid reason for the Secretary of Agriculture to continue to regulate the rates and changes of small rural auction barns. The burdensome and costly Federal ratemaking procedures and standards which presently apply to the small auction barns will drive many of these needed markets out of business.

This legislation will not disturb the Secretary's authority over the reasonableness of rates at stockyards which either have annual sales volumes in excess of 100,000 animal marketing unit or have annual sales volumes in excess of 20,000 animal marketing units and are located more than 75 miles from the nearest independently owned and operated stockyard. In many instances, competition for business between small auction barns is fierce and these barns serve hundreds of thousands of livestock producers each year.

This legislation is geared to assist the many small auction barns in the United States. Mr. Chairman, I respectfully request that my colleagues give serious consideration to this,proposal.