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Mr. FROMER. We are not complaining about the farmers making money, Congressman. But you have got to let other people make money, too. There are some American importers who are being destroyed by this legislation. Don't put the other fellow out of business by having Congress put through special legislation.
Mr. Hull. What about the Kraft Cheese organization?
Mr. Hull. Yes, and you are in favor of the Kraft Cheese Co. and, at the same time, you are opposed to special interests.
Mr. FROMER. I did not say I was in favor of the Kraft Cheese Co. Kraft Cheese Co., is a member of the National Cheese Institute-not of my organization and I might also say that the Kraft packaged cheese can be purchased throughout the world—at least that was the case before the war.
Mr. HULL. Do you insist, then, that section 104 be stricken? Are you in favor of abolishing all controls?
Mr. FROMER. Frankly, I would like to say this, that if you should find that controls should be continued on butter, as was contained in the Second War Powers Act, for the past several years, that is no reason for including cheese and other dairy products within such controls.
It was the addition of cheese to this control measure which was the subject of the various protests of our foreign allies, and the object of other severe criticism. So much so that the amendment is commonly referred to as the "Cheese amendment.” Perhaps a more apt word would be "cheesey' amendment.
Mr. Hull. Well perhaps so.
Mr. BROWN. We are very glad to have your testimony, sir. · You may be excused.
Mr. FROMER. May I submit a statement I have been asked to submit by the Roquefort Cheese Association?
Mr. TÅLLE. Mr. Chairman, may I ask a question?
Mr. TALLE. Are you satisfied that you answered the question with reference to the export of cheese from this country to Denmark? Are you satisfied that your answer proved that cheese is exported from this country to Denmark?
Mr. FROMER. Oh, no, Congressman. It proves that it is not exported. But we export other agricultural commodities to Denmark.
Mr. TALLE. Very well, that is quite a different matter.
Mr. FROMER. Yes; but I think we should have all of the facts in the record. That is why I wanted to present them.
Mr. Talle. Are you sure that your 2 percent figure is correct?
Mr. FROMER. I take it from the record as I indicated, submitted by Mr. Kline, of the American Farm Bureau Federation, and read it exactly as it appeared.
Mr. TALLE. Are you sure it is not 32 percent instead?
Mr. FROMER. The record said 2 percent and the figures indicate that that would be correct. Because 47 million pounds exported, of which 800,000 pounds, I believe they said, was by reason of aidthat would make 2 percent and not 32 percent.
Mr. TALLE. That is a figure that needs checking:
Mr. Brown. You may be excused and the Roquefort Association statement may be filed for the record.
(The statement referred to is as follows:)
STATEMENT AS TO PROPOSED REPEAL AND/OR AMENDMENT OF SECTION 104 op
THE DEFENSE PRODUCTION ACT OF 1951 SUBMITTED ON BEHALF OF ROQUEFORT ASSOCIATION, INC.
At the time this legislation was first enacted, it was the thought of the French producers of Roquefort cheese that the law was not intended to, and could not apply to, the importation and sale of Roquefort cheese in the United States. This conviction was based upon the announced purposes of the proponent and supporters of the law as stated by them, and as these purposes were apparently embodied in the law itself. These purposes, as to stated (and as repeated to Senator Johnson by the Acting Secretary of Agriculture in annexed letter dated October 12, 1951 (exhibit 1)) were
no imports of these commodities shall be admitted to the United States which the Secretary of Agriculture determines would impair domestic production or interfere with the orderly domestic storing and marketing of any such commodity, or result in any unnecessary burden or expenditures under any Government price support program.”
Despite these announced purposes (as further indicated in the said letter) the Secretary of Agriculture took the position that"under the terms of this legislation, the Department of Agriculture had no alternative but to place cheese under import control."
In other words, the Agriculture Department took the position that "cheese is cheese" and must be denied importation into the United States unless it came under an arbitrary formula for importation based on the 3-year period between 1948 through 1950. This interpretation, under a supposed "mandate,” implied in section 104, ignored the provisions and purposes stated as the reasons for the act. In so stating, we call attention to the following facts:
1. Roquefort cheese is made exclusively of sheep's milk and is cured in the unique caves at Roquefort, France.
No sheep's milk cheese is produced in the United States; nor are the sheep in this country of the same kind as those in the region near Roquefort, France where such sheep have been raised for centuries for the sole purpose of cheese production. (Exhibit 2: Booklet explaining the history and manufacture of Roquefort cheese; exhibit 3: Article by Prof. Ira D. Garrard et al., professor at Rutgers University, published in Industrial and Engineering Chemistry, vol. 29, p. 1167, October 1937; exhibit 4: Decision of Judge Barnes in the United States District Court of the Northern District of Illinois, Eastern Division No. 13473, Société Anonyme Civile de Producteurs de Fromage de Roquefort, a corporation, et al., v. Hillman's, a corporation, et al., decided by Judge Barnes June 5, 1935; exhibit 5: Encyclopedia Britannica 1941 Supplement, p. 150 by Samuel 0. Rice, editor of Capper's Digest; exhibit 6: Standards for Cheese Federal Register August 24, 1950. In these regulations Roquefort cheese and Blue cheese were separately defined and standardized essentially as follows: Sec. 19570—"Roquefort cheese, sheep's milk, blue mold cheese; blue mold cheese from sheep's milk is the food prepared from sheep's milk and other ingredients." Sec. 19575—" Blue cheese is the food prepared from milk and other ingredients, specified in this section." For the purpose of this section, the word “milk" means "cows' milk.")
II. The noncompetitive nature of Roquefort cheese with any American product is recognized by the American cheese industry.
We submit å photostat of a letter written by the executive secretary of the National Cheese Institute (exhibit 7) in which he points out that the application of that association "should not be interpreted as referring to Roquefort.”
In addition, the latest notice for hearing ordered by the United States Tariff Commission expressly stated that the investigation with respect to blue mold cheese did not include Roquefort cheese (exhibit 8). This assertion was repeated in the Journal of Commerce Reports as to the purpose of the hearing, indicating that the American industry was not affected by the sale of Roquefort cheese here (exhibit 9).
III. The sale of Roquefort cheese has not, and cannot, affect the sale of any American product.
Roquefort cheese is a luxury article. It has always sold at almost double the price of any cheese made of cows' milk, whether produced in the United States
or elsewhere, i. e., the so-called blue cheese. (Exhibit 10: Price list of Kraft for · July 1937; exhibit 11: Quotations of prices from New York Journal of Commerce dated April 18, 1952. It is significant to note that the price list as of May 9, 1952, gives no quotations of prices for Roquefort cheese at all, as the legislation complained of has effectively excluded it from the American market.)
IV. Section 104, instead of assisting the American public and the American producers, has an injurious effect upon both. (Exhibit 12: Article from St. Louis Post-Dispatch of February 15, 1952; exhibit 13: Article from St. Petersburg Times, April 25, 1952.) That the American market will not be adversely affected if section 104 is repealed, as far as cheese is concerned, is shown by the fact that there is a shortage of dairy products in this country,
and that a dairy price rise is imminent. (Exhibit 14: New York Journal of Commerce; exhibit 15: New York Times April 10, 1952.)
We believe that the foregoing considerations, so far as Roquefort cheese is concerned, indicate that there is no reason why legislation, such as section 104, should be applied to the importation thereof, and that the section now in effect, as construed by the Department of Agriculture, is both unnecessary and unfair, and unjust to American consumers and to the producers of Roquefort cheese in France.
ROQUEFORT AssociATION, Inc.,
By John J. McANDREW, Secretary. Exhibits mentioned in this statement are on file in the committee office. Mr. BROWN. The clerk will call the next witness.
The CLERK, Mr. Kitchen of the United Fresh Fruit and Vegetable Association.
STATEMENT OF C. W. KITCHEN, UNITED FRESH FRUIT AND VEGE
Mr. KITCHEN. Mr. Chairman, my name is C. W. Kitchen and I appear here as the executive vice president of the United Fresh Fruit and Vegetable Association with headquarters in Washington, D. C. The membership of this association (about 3,000 in number), represents the marketing functions necessary to prepare, distribute, and merchandise fresh fruits and vegetables from producer to the retail store, or its equivalent. We ask for the committee's attention today only with respect to fresh fruits and vegetables.
We are aware of the baffling complexities of the problem you are considering as to whether, to what extent, and for what period of time the Congress should grant broad authority to the executive branch to fix maximum prices. The granting of such regulatory power results in government virtually by decree, and is incompatible with our system of private enterprise and free play of the competitive forces of supply and demand inherent in that system. We believe--and we assume this committee believes that such authority should be granted only during periods of grave national emergency and within definite time limits.
The committee's information is more comprehensive than ours but we know of no evidence which even remotely indicates that a grave national emergency exists at this time so far as the production, distribution, and consumption of fresh fruits and vegetables are concerned. There is no scarcity of such food.
Even during the period of greatest strain upon our food supply during World War II no attempt was made to ration fresh fruits and vegetables. During World War II huge quantities of processed fruits and vegetables were withdrawn from the civilian food supply to meet our military requirements overseas. Fresh fruits and vegetables could
not be shipped such long distances and were used at home. Such military requirements do not now exist either at home or abroad.
The National Food Situation, issued by the United States Department of Agriculture for the quarter January-March of this year states that:
Supplies of fruit appear adequate to meet anticipated domestic and export requirements until the new crops are marketed after midyear. The retail price of fruits, fresh and processed combined, probably will average about the same during the next few months as a year earlier.
For vegetables, the same document states that:
Prices for fresh vegetables are expected to decline considerably as supplies become seasonally more abundant this spring.
The history of these commodities shows excessive supplies, with attendant surplus marketing problems, more often than conditions of short supply. To illustrate, during the last 4 years in a group of 17 fruits only lemons and prunes averaged above parity in 1 year, plums and strawberries 2 years, and the remaining 13, including such important fruits as apples, pears, peaches, citrus, and grapes averaged substantially below parity for each of the last 4 years.
The parity relationship picture for a group of 22 important vegetables shows that during the last 4 years carrots, spinach and sweetpotatoes averaged above parity 3 years, cabbage, cantaloupes and corn 1 year, and lettuce, kale, tomatoes, and watermelons 2 years. In only seven of these instances did the average exceed 10 percent of parity. The remaining 12 vegetables in the list, including such important vegetables as asparagus, celery, snap beans, cauliflower, onions, and potatoes averaged below parity in each of the last 4 years.
Some of these commodities may have exceeded parity for short periods during any or all of the 4 years. The average price for the season, however, is important to producers. Under price control they may sell for less, and most often do, but they may not sell for more than the maximum price established. Price controls imposed during seasonal price fluctuations do not fairly recognize the uncontrollable price and supply fluctuations inherent in the production and marketing of such highly perishable commodities.
We, therefore, recommend that fresh fruits and vegetables be excluded from price control in the bill now under consideration.
Should the committee reject that recommendation-we fervently hope it will not—we recommend three amendments to the existing law as partial remedies.
The first amendment is:
No ceiling price shall be established for any fresh fruit or vegetable at any level of distribution unless or until the Director of Price Stabilization finds that, based upon official and commercial information available to him, prices to producers will average parity for the crop year in major producing areas.
Such an amendment would give recognition in the statute of uncontrollable seasonal fluctuations in supply and price which are common to these highly perishable commodities.
The second amendment is:
Before maximum prices are established or lowered for any fresh vegetable which is the product of annual or seasonal planting, the Director of Price Stabilization shall give, not less than 15 days prior to the normal planting season in each major producing area affected, notice of the maximum prices he proposes to establish therefor; and in the case of perennial crops, the Director of Price Stabilization
shall give, not less than 30 days prior to the normal marketing season in each major producing area affected, notice of the maximum prices he proposes to establish for such crops; provided, that "normal planting season" and "normal marketing season” shall be as defined by the Secretary of Agriculture. The requirement of notice may be satisfied by publication in the Federal Register, but the Director shall utilize appropriate means to insure general publicity to such prices in the areas affected. The requirements of this subsection shall not apply to any annual crop in 1952 in which the normal planting season in any major producing area occurs prior to July 31, 1952.
The purpose of this amendment is obvious. It would give producers and shippers of annual crops notice, in advance of planting, of the maximum prices they could expect to receive. It would give notice to producers and shippers of fruits, in advance of the marketing season, of the maximum prices they could expect. It would prevent price roll-backs during the marketing season such as were experienced in the potato order this year. The requirement of notice in advance of planting annual crops was included in the Emergency Price Control Act of 1942, as amended June 30, 1944.
The third amendment is: In establishing maximum prices for fresh fruits and vegetables, appropriate allowances shall be made for (i) price variations arising from differences in grade, quality, condition, size, variety, and similar factors affecting prices; and (2) normal price variations within seasons. Such allowances shall be made in order to permit producers to average not less than the minimum price specified herein.
The proposed requirement for such allowances is to permit producers to average not less than the minimum price specified in the law. Prices of these perishable commodities are subject to wide variations. Not all of a crop, even under conditions of tight supply, can be sold at parity or the legal minimum established in the law. The allowances provided for in this proposal are usually referred to as a cushion in computing ceilings and recognize the wide variations in marketing highly perishable commodities. They are designed to arrive at maximum prices which, when supply conditions permit, will enable producers more nearly to achieve parity prices, or the legal minimums provided in the law. Unless such provision is made, the adverse influence of price controls upon production would be further enhanced.
We urgently request that the committee carefully weigh the following points in connection with our recommendation that authority to control prices of fresh fruits and vegetables be allowed to expire on June 30 of this year:
1. That there are nearly 100 commodities comprising the list of fresh fruits and vegetables;
2. That these commodities are produced in all parts of the country under varying conditions of soil productivity, weather, insect, and plant disease hazards, as well as specialized cultural and harvesting practices, all resulting in a wide range of production and marketing costs;
3. That these commodities are highly perishable, require many kinds of containers, a variety of grading and packaging facilities, protection against heat and cold while being transported over long distances, and distributed through wholesale and retail stores;
4. That these commodities cannot be stored and carried over from one season to another-many of them cannot be stored at all, but must be harvested and marketed when ready or go to waste with complete loss to the producer;