middle man, and the consumer were carried on which promoted orderly marketing in the public interest. It is our understanding that the intent of H. R. 5496 is to permit and to authorize operation of Federal marketing agreements regardless of whether or not prices are above parity, for the purpose of establishing and maintaining such minimum standards as will effectuate such orderly marketing as will be in the public interest. A heavy majority of all domestic hop growers are members of this association, and have indicated in recent meetings held throughout producing districts that they favor enactment of an act which will permit them to reestablish a hopmarketing agreement for at least limited functions while prices are above parity, partly in order that machinery may be available for prompt use in the event that more extensive control is needed. In connection with the maintenance of some minimum standards under the terms of this bill as written, the hop industry would also wish to gather, compile. maintain, and disseminate statistics relating to the production and disposition of hops, as was provided for in former hop-marketing agreements. It is felt that this information is desirable and proper in connection with any efforts under this proposed amendment, designed to effectuate such orderly marketing of hops as will be in the public interest. We request that H. R. 5496 receive the favorable consideration of your committee, and that it be enacted in such form and with such expression of intent as to authorize operation of marketing agreements under its provisions even when prices are above parity, and to authorize the gathering and maintenance of acreage, crop, and marketing statistics for proper operation of such marketing agreements. We shall be glad to submit these recommendations in the form of a brief for the hearing to be held in connection with H. R. 5496 if you feel that it is desirable to have us do so, and if it should appear to you to be necessary for proper presentation, we would attempt to arrange for verbal testimony before your committee. Yours very truly, PAUL T. ROWELL, CALIFORNIA FRUIT GROWERS EXCHANGE, Hon. JOHN W. FLANNAGAN, Chairman, House Agricultural Committee, DEAR CONGRESSMAN FLANNAGAN: At the time of the hearing on April 3 on your bill to amend the Marketing Agreements Act, H. R. 5496, I was present for the purpose of testifying but other witnesses from out of town required all the time that was available on that date. I had intended to testify on behalf of the California Fruit Growers Exchange in support of the bill and also to present a statement on behalf of Mr. W. C. Tesche, of the California Walnut Growers Association. At the time of the adjournment of the hearing it was indicated that there would be further hearings and it was my intention to appear at such further hearings and also to have Mr. Tesche come east for the purpose of a personal appearance if he could do so. We now understand that the request of the National Cooperative Milk Producers Federation for further hearing has been withdrawn and that Mr. Ogg, of the American Farm Bureau Federation, has presented certain suggested amendments to your bill which meet the approval of the milk people. We also are in agreement with these proposed amendments. Therefore it would seem that further hearings may be unnecessary and we would not want to ask a further hearing for our appearance alone. Attached hereto is the statement which Mr. Tesche, of the California Walnut Growers Association, had intended to submit and, if possible, I would appreciate it very much if it could be incorporated in the record of the hearings. Also attached is copy of a letter from Oregon Nut Growers, Inc., a cooperative marketing association of Newburg, Oreg., dated March 29, 1946, addressed to Mr. Tesche and a telegram of March 30, 1946, from North Pacific Nut Growers Co-op, a cooperative marketing association of Dundee, Oreg., also addressed to Mr. Tesche. Both of these communications support the bill and we would appreciate having them incorporated in the record if that can be done. We very much hope that the hearings can be closed and that the bill, with the suggested amendments as presented by Mr. Ogg, can be favorably reported at an early date. It is exceedingly important that the amendments incorporated in the first section of the bill be enacted into law at an early date so that those features of the marketing-agreement programs, which do not tend to increase price, may be continued during periods of temporary price levels above parity. If commodities in large supply like citrus fruit and walnuts should temporarily go above parity in price, we all feel sure that we cannot expect any such price level to continue and that with the large surpluses we will have to market, we will soon be faced with disastrously low prices and the urgent necessity for resumption of the marketing order programs to effect orderly marketing for these large crops. Such future programs will be much more effective, if during the temporary period of prices above parity, the organization of the industry can be kept intact and there can be continued such minimum standards of quality and maturity and such grading and inspection requirements as will effectuate orderly marketing of the agricultural commodities subject to these programs. We therefore earnestly urge that the bill be moved forward as promptly as possible. Very truly yours, KARL D. Loos. STATEMENT IN SUPPORT OF H. R. 5496 BY CALIFORNIA WALNUT GROWERS ASSOCIATION (Submitted to House Committee on Agriculture by W. C. Tesche) The California Walnut Growers Association submits this statement in support of H. R. 5496 and respectfully urges that the bill be approved by your committee and the Congress. It should be explained at the outset that the association consists of over 9,000 California walnut growers who market cooperatively 83 percent of the California merchantable walnut crop and about 75 percent of the entire American production of so-called English walnuts, the 1945 farm value of which was approximately $35,000,000. It was this association which initiated the walnut-marketing agreement and order in 1933 shortly after enactment of the Agricultural Adjustment Act, and which gave major support to the program until its suspension in 1943 when walnut prices had attained parity and Food Distribution Order 82 was invoked in its stead. From its inception the program also enjoyed the enthusiastic support of the walnut-marketing cooperatives in Oregon-Washington, and practically complete compliance by the so-called independent or commercial factors who marketed about 20 percent of the total production. Administrators and field agents of the Department of Agriculture will agree that it was outstandingly successful among the various programs under the act. Because these operations literally saved the industry from bankruptcy during the critical depression years, you can readily appreciate the reasons for the association's keen interest in H. R. 5496 or any other proposal to extend the usefulness of the Marketing Agreements Act during these days of economic readjustment and in anticipation of the more difficult times ahead when control of surpluses and regulation of flow to market again become imperative. During the 1933-42 period a total of 814,000,000 pounds of merchantable walnuts were subjected to control under the act, of which 594,000,000 pounds in shell were allotted to the domestic market at an average of 15 cents per pound, and 220,000,000 pounds were declared surplus and disposed of by the shelling (byproducting) of 143,000,000 pounds and the exporting of 77,000,000 pounds at an average return for all this surplus of 9 cents per pound. The net effect of this two-price system of market stabilization was to return an average of 13.4 cents per pound for merchantable walnuts. In addition, section 32 diversion payments averaged over the entire 10-year period added nine-tenths cent per pound, bringing the over-all average to about 14.3 cents per pound. Had it not been for this industry-wide control, prices on all walnuts would have dropped to the lowest possible level, which was the world or export price of about 9 cents per pound. The 14.3-cent return, while appreciably below the parity objective of the program and about one-half of today's average, nevertheless kept the industry from bankruptcy, and added $35,000,000 to walnut growers' returns during those difficult years, according to reliable estimates. Meanwhile, domestic markets received dependable and adequate supplies at very reasonable price levels. The whole economy benefited. Secondary accomplishments were the establishment of good export markets and expansion in the output and domestic demand for shelled walnuts. Also, and here we approach a major objective of the bill under discussion, high standards of quality were applied to the industry, and its output of merchantable walnuts was rigidly inspected and certified as to grade before shipment to consuming markets. By the conclusion of the 1942 crop marketing season, prices had reached parity It so happened, and the Secretary was required by law to suspend the order. however, that wartime circumstances justified the issuance of a food distribution order which required the set-aside of 10 percent of the merchantable crop for shelling, and the continuation of grade inspection and certification. The same packer-grower committee from the industry and the same management staff which administered the marketing agreement and order were utilized to manage the food order. Thus, a continuity of grading, inspection, and record keeping, and a skilled management staff which has now had 13 years of experience were maintained throughout the war years. When price ceilings were imposed on walnuts in 1943, a ready-made set of grade standards and a system of grade certification were available to OPA upon which to apply maximum pricing. By reference, the food distribution order grades which were borrowed from the suspended marketing agreement and order program were made a part of Maximum Price Regulation 490. The association fully agrees that as long as prices are at or above parity the act should not permit the operation under it of surplus pools or the regulation of volume marketed. However, it believes that even though there be no price or surplus problems, grade inspection and certification programs should be permitted in the interest of an industry's integrity and for consumer protection. Practically, the walnut industry will find itself in this predicament, assuming the emergency food distribution order is lifted within the next few weeks or months, prices are at or above parity, and the prewar marketing agreement and order remain suspended or are revoked: 1. The time-tested grade inspection under which in-shell walnuts have been marketed for 13 years, and the protection thus afforded the trade and consumers thereby will necessarily be abandoned. California State grades are not so comprehensive and inspection is completely inadequate. Under the control programs of the past 13 years, each lot shipped was inspected for conformance with official grading requirements, a certificate was issued by the control board, and a metal seal placed upon each individual bag as evidence that the lot had been properly cleared. The industry paid all costs. 2. In the event of another year of price control, OPA will have no trustworthy basis for maximum pricing by grade. 3. The small but highly skilled management staff which has served the industry for 13 years would be disbanded, and continuity of records (more complete and accurate than are gathered and maintained by other Government agencies) would be broken. If the end of the industry's problems were in sight, the foregoing matters would be of little concern. However, with domestic nut production at high levels and certain to increase further, with the possibility of heavy competitive imports, and with the inevitable decline in consumer purchasing power within the next few years, it seems certain that the walnut industry will again find itself struggling with surpluses at prices below parity. When that time comes, operation under the volume control provisions of the act will again be applicable. If in the interim the industry has been forced to drop its program completely, the problem of devising a new order, referring it back to producers for approval, holding the necessary hearings, and rehiring and training a new administrative staff will throw a heavy burden on both the industry and the Government. If on the the other hand the act is amended by passage of H. R. 5496, the marketing agreement and order for walnuts which is now in complete suspension can be reactivated, the surplus-control provisions resuspended as long as prices are at or above parity, and the grade and inspection provisions applied and enforced just as they have been for 13 years. Whenever the Secretary of Agriculture finds that the demand-supply situation has forced prices below parity, the volume-control provisions can be reinvoked. Necessarily the California Walnut Growers Association must appraise the existing Marketing Agreement Act primarily from the standpoint of the walnut industry's needs. However, we are convinced that its amendment is equally important to many other industries and respectfully urge the Congress to pass H. R. 5496. Mr. W. C. TESCHE, Sales Promotion Manager, California Walnut Growers Association, Washington, D. C.: DEAR BILL: It is our understanding that the House Agricultural Committee expects to have a hearing on H. R. 5496 as introduced by Congressman Flannagan, such hearing to be on Wednesday, April 3. I am glad that you are flying to Washington to testify for this bill on behalf of your organization, the California Walnut Growers Association. OREGON NUT GROWERS, INC., Newburg, Oreg., March 29, 1946. You have our authority and instructions to support this bill on our behalf also. Like your organization, we, too, are a cooperative, and we feel that Congressman Flannagan's proposed legislation will fit into our picture very nicely. It should have the unquestioned support of the entire Pacific coast walnut industry. The effect of Congressman Flannagan's bill will be to permit us to continue the organization and office presently known as the walnut-program committee (formerly the walnut-control board). Not only will that office be able to collect and prepare vital statistics concerning our industry, but they will be enabled to establish and enforce important grades and standards. Then when the time comes, as it surely will, when we once more have a surplus problem in the growing of walnuts, it will be a simple matter to let us try to solve a great part of our own problem by reestablishing the walnut-control board or some similar agency. We heartily endorse Congressman Flannagan's bill and ask that you please present our views to the House Agricultural Committee if you have the opportunity to do so. Very truly yours, W. S. TESCHE, Washington, D. C.: [Telegram] OREGON NUT GROWERS, INC., DUNDEE, OREG., March 30, 1946. We understand you anticipate testifying before the House Agricultural Committee, repassage of H. R. 5496. Being a cooperative marketing agency, representing some 2,500 nut growers and having had a most successful experience with the walnut-marketing agreement and order since its inception, we heartily favor passage of this bill and would appreciate your incorporating our views in your testimony. NORTH PACIFIC NUT GROWERS CO-OP. |