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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 (1) 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;

5. That because of such conditions, peculiar to these perishable commodities, there are uncontrollable fluctuations, both in supply and price, which make the problem of controlling maximum prices by Government order far more difficult, disruptive of established patterns of distribution, and inequitable than with more staple commodities;

and

6. That because of the speed with which these commodities must be handled, and the nature of the services which competition and experience have proved necessary, it is virtually impossible, as a practical administrative matter, for anyone to write a price-control order that will not disturb the pattern of distribution and will be equitable throughout the industry. (The order on potatoes was issued on January 5. It was revised extensively, amended eight times, and is still far from equitable in all respects, even if everyone understood and obeyed it. MPR Mp. 426 issued by the Office of Price Administration during the last war, and which applied to most fresh fruits and vegetables, had 192 amendments.)

Most of the vegetable crops are planted and ready for harvest in a period of 90 to 120 days, with some requiring even less time. They must be marketed when ready; competition is keen and active; prices are controlled by supply and demand, and they must be sold for what they will bring when offered for sale. Price crises are of short duration. The wholesale distributive industry consists largely of small businesses with more than 25,000 firms presently licensed by the Secretary of Agriculture to handle these commodities in interstate commerce. That figure alone will give the committee a clear indication of the problem of enforcement.

No one of these commodities represents a substantial part of our total food consumption. Potatoes the largest item-represent about 6 percent. Consumers, therefore, have a wide range of selection in this group as well as from competing foods.

Should some fruit or vegetable experience a rapid increase in price for a short period because of a short crop in some producing area, its influence upon the cost of living would be negligible and short-lived. If cabbage or tomatoes, for example, should become high in price in the middle of the winter, the situation would correct itself in a matter of 60 or 90 days. Such situations are inherent in the supply of such perishables, and are not of such national concern as to require throwing into gear the vast and complicated machinery of price control by the Federal Government.

The vagaries of production and marketing hazards are illustrated by recent market fluctuations on Western head lettuce. Last December, Arizona head lettuce, because of cold weather in California, averaged about $11.03 wholesale for crates of 4 dozen heads in New York City, as shown by United States Department of Agriculture reports. According to the New York City Department of Markets, that meant an average of 33 cents a head at retail in New York City. It also meant, according to the United States Department of Agriculture, about $7.15 a crate loaded on cars in Arizona. Those were high prices.

But by early February, or within 60 days, California lettuce again became available in heavy supply, and the price dropped to an average of $2.17 a crate in Arizona, $4.29 in New York City, and lettuce was selling there at retail for 16 cents a head, or about half of the December

price. Prices recovered somewhat during March, but on April 15 were again reported as averaging only 91 percent of parity.

Due to weather conditions, the popular varieties of baking potatoes produced in the Western States were short in the better grades, resulting in higher prices than during more normal years. But the 1951 potato crop of 325.7 million bushels was considered adequate. In this situation, the Office of Price Stabilization issued a price-control order on potatoes early in January which has produced untold confusion and loss to the industry.

It should be remembered that last year the Government bought about 100 million bushels of potatoes to support the price at 60 percent of parity; and even then prices received for the 1950 crop averaged only 50 percent of parity, lower than in any year since 1928 when the average was 48 percent of parity.

During most of the period since 1947 potatoes were among the cheapest foods consumers could buy. Despite the unusual conditions in some producing areas this year, it is doubtful that prices to producers will average parity ($1.73 a bushel) when all figures are compiled for the crop. The preliminary season average to farmers was estimated by the United States Department of Agriculture at $1.53 a bushel. Much of the 1951 crop sold for low prices, as low as one-third of parity in Maine, the largest potato producing State.

Hope springs eternal in the breasts of producers and distributors of these perishable crops. If producers have a bad year, they hope to recoup the next year; if a distributor takes a loss on a car today, he hopes to recoup tomorrow. Under price control, when prices temporarily reach the ceiling, these incentives are removed; those who obey the law take the losses without the opportunity to take a profit when that chance comes.

In this kind of business, the opportunities for black markets during temporary periods of short supply are too numerous to tabulate. The opportunities for tie-in sales and other forms of evasion are obvious to anyone. The result is that the chiseler grows fat at the expense of the reputable grower and distributor. Established firms are put out of business in the bypassing scramble for margins along the channel of distribution.

Quality-improvement programs for grading and standardization are impaired. The investigative and prosecutive forces of the Government cannot possibly handle such situations. Such disruption and confusion, both as to production and distribution, is not justified in an important food industry, except possibly in times of extreme national emergency which do not exist today.

Illustrative of the results of price control is the following statement published by the Simplot Produce Co., Burley, Idaho, under date of March 8, 1952:

To brokers, receivers, and jobbers of Idaho potatoes everywhere in the United States: Gentlemen: On the date of notice of the intended ceiling on Iadho potatoes, January 4, having anticipated a ceiling, we did not own over 10 cars that were unsold. Consequently the date of the ceiling, January 19, it was necessary for us to start buying at the legal ceiling to originate any supplies.

To show you what luck we have had in buying anything at or under the legal ceiling, from January 19 through March 1, our shipments have been 216 carloads, and with about 14 cars to ship this week, that will give us a total of 230 cars and we are through for the season. Where did these 230 cars go? To our brokers and jobbers in some 40 markets in the United States, with no tie-ins, no extra

quarters on the invoices and no joint account deals of any kind. We tried to allocate these 230 cars in direct proportion to our normal volume to each receiver. During this period of January 19 to the end of the season, under normal operating conditions, with no OPS control, we will ship about 800 cars. Let's say this year on account of somewhat short crop, we would have shipped 600 cars. This leaves us short 370 cars. Why?

Simply because our ability to buy potatoes at legal ceiling at any of our six warehouses has been negligible ever since the date of the crder, and has steadily diminished until today it is impossible for us to buy either lump, pack-out, or field run at a price which will stay within the legal limits of the OPS order.

This is the reason that not only ourselves but many other good, reputable shippers (who have tried to comply with the order) find themselves with no supplies, and that is the reason that many reputable receivers and jobbers, who have depended on these dealers for their supplies, find themselves with no Idaho potatoes.

The potatoes were here, as witnessed by shipments of more than 5,000 cars during February, and they will ship about 5,000 to 6,000 cars in March and April. Where they go nobody knows.

We never thought it could happen to us, but we have been put out of business with a consequent lay-off of 85 men in our 6 warehouses.

Being good Americans, we prefer to stay honest and go out of business for the balance of this season in preference to being unable to live with our families, our neighbors and our conscience.

Thanks for having been patient with us. July 10 will see us back with our usual volume of blue ribbons from Idaho and Washington State.

The same trade paper dated March 1 carried a news item as follows: The firm of J. M. McCauley & Son, specializing for many years in repacking and distributing Idahc potatoes, this week announced suspension of operations in Idaho potatoes due to inability to obtain supplies except at black market prices, in violation of OPS ceilings.

The newspaper stated that

the announcement was made by Frank McCauley who says it means laying off the repacking force of 45 people at the big Brooklyn (New York) plant.

I shall not take the time of the committee further to enumerate the inequities and problems of price control on fresh fruits and vegetables. Despite all the arguments that may be advanced on general grounds, and that no part of the economy should go free, the realistic conclusion is that price control on these perishable commoidities is impractical and unnecessary under present conditions. The game is not worth the candle.

Now if the committee feels that our recommendation that fresh fruits and vegetables be exempted from the Defense Production Actand we most certainly hope it will not reach that conclusion-then I have offered three amendments for your consideration.

To review them, briefly, they are this:

First, that the Congress require that the Director of Price Stabilization shall not issue a price order on any fresh fruits or vegetables, unless he has made a finding based upon the best information he can obtain, that prices to producer for that commodity will average parity for that crop.

Growers have to make that determination when they make their plantings, as to whether they are likely to achieve a price equal to parity or not.

Second, then, that the Director of Price Stabilization shall not establish or lower any price ceilings for any fresh fruit or vegetable without giving 15 days notice in advance of planting time and in case of perennial crops, 30 days notice in advance of marketing season.

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