that this situation has changed. The frozen food industry continues to be

highly competitive.

Companies in the industry were subjected to massive manpower

and expense burdens in responding to the information demands of the original National Commission on Food Marketing. They currently face the same burdens in complying with government investigations and inquiries such as those cited above. In view of these circumstances, there is no justification for selecting the food industry from among other industries in the economy, as the target for a national investigatory commission. Any new investigations should be directed to government programs which hamper rather than enhance competition. For example, marketing orders, administered by the United States Department of Agriculture, allow agricultural producers to combine in establishing their terms of sale, conduct which would clearly be prohibited to handlers or processors of these agricultural products. The National

Labor Relations Act allows employees to join together to bargain for restrictive work rules, conduct which would never be allowed among processors. Pursuant to the Interstate Commerce Act, truck and rail transportation rates are limited but the Interstate Commerce Commission restricts the amount of

competition among truckers and railroads and prevents the entry of new 2. National Commission on Food Marketing, Tech. Study No. 4, supra, 221.

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competitors. These are only illustrative of situations in which Congress or the federal agencies have made a conscious decision that competition should be limited in favor of regulation. Any investigation of competition in the food industry ought to focus on those areas where competition has been unduly hampered by government edict.

By the same token, investigation into food costs and price increases should examine the cost impact of the regulatory programs of the Environmental Protection Agency and the Occupational Safety and Health Administration. The Environmental Protection Agency aggressively assert s that its programs are creating jobs and not putting people out of work. But the jobs being created are not in food processing. For example, EPA and OSHA have joined together to propose new standards for employee exposure to noise. The standards advocated by the Environmental Protection Agency are even more strict than those advocated by the Occupational Safety and Health Administration. The EPA recommendations not only call for lower noise levels without scientific documentation, but also would require the use of costly engineering noise controls, rather than less costly protective devices such as ear plugs and muffs.

A consultant survey commissioned by OSHA shows that the

cost of complying with the noise levels advocated by EPA would be in

excess of $30 billion. This is only the cost of a single aspect of the OSHA

70-413 O 76-8

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program. The food processor

who can bear these costs

must either pass

them on to his customers or go out of business. These factors have been ignored in previous investigations of pricing and concentration in the food industry.

There are other areas where over-regulation adds to the cost of food. Currently a number of states have net weight compliance criteria which differ from those recommended by the National Bureau of Standards. The net weight criteria used by federal agencies

-

the Food and Drug

Administration (HEW), the Animal and Plant Health Inspection Service

(USDA), and the National Bureau of Fisheries

differ from each other.

This extreme degree of non-standardization is costly to the food industry

and an unnecessary form of over-regulation.

The Food and Drug Administration's nutritional labeling

program, 21 C.F.R. §1.17, will not allow processors to use standard nutritional values developed by the Agricultural Research Service of USDA. Processors must incur the cost of developing their own nutritional data

with no discernible benefit to consumers.

Both the Food and Drug Administration and USDA establish complex and detailed regulatory requirements without any clear demonstration of benefits to consumers. FDA is about to propose Good Manufacturing

Practice regulations for frozen foodș, even though Public Health Service

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statistics show frozen foods have an excellent safety record. FDA has proposed micro-quality standards for frozen cream pies, which are based on technically weak assumptions and therefore will insure added cost but not better quality. The meat and poultry inspection program at USDA requires that every label for a meat or poultry product be submitted and approved in Washington. In each of these three cited examples, the benefits to taxpayers and consumers are negligible, but the cost to citizens as

taxpayers and consumers is substantial.

Whatever investigations may be authorized, if any, the

investigators should be charged strictly to respect the confidentiality of data obtained from private individuals and firms. Both H.R.11998 and H.R.12104 would authorize broad disclosure of information which would apparently cover data obtained under traditional guarantees of confidentiality by bodies such as the Census Bureau and grand juries. The broad disclosure authorized in these bills could well deter individuals and firms from cooperating with any Commission. This type of disclosure would only serve those who intend to wait on the sidelines and criticize a Commission's work product. The only reason to appoint a Commission is to obtain incisive and timely recommendations. The disclosure provisions of H.R.11998 and H.R.12104 would insure that a Commission would become a focal point for countercharge and accusation, rather than action.

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In summary, the food industry has been over-investigated.

If further investigation is appropriate, that investigation should examine the anti-competitive restrictions contained in certain marketing orders and in labor and transportation statutes, together with the costly activities of existing regulatory agencies. Any investigation should accord confidentiality to data provided by private individuals and firms. Broad disclosure of

such data will frustrate investigation and cloud the resulting recommendation