Mr. STUBBLEFIELD. Thank you, Mr. Matsunaga. We are glad to have your testimony this morning.

Mr. O'NEAL. Mr. Matsunaga, on page 2, I thought you were making a very good case to show it is very easy to distinguish the difference between these eggs. You say there that they are anything but fresh. Although the price is 9 to 10 cents higher for island eggs, they compose 96 percent of the eggs sold in Hawaii. On the last page of your statement, it looks like the housewife would be unable to tell the difference.

Mr. MATSUNAGA. The housewife is able to tell the difference, Mr. O'Neal, under existing Hawaiian law because every egg imported from the mainland or from a foreign country is stamped, and Hawaiiproduced eggs are not.

Mr. O'NEAL. She cannot tell the difference by looking at them, but she would tell the difference if she were trading at a store that tried to put something over on her?

Mr. MATSUNAGA. Under present Hawaiian law the consumer can tell the difference by the label put on imported eggs, at the time of purchase. Prior to the adoption of our present State law, dishonest distributors used to import eggs from the mainland, particularly the west coast, and carton them in packages marked "island eggs." There was no way for the housewife at the marketplace to determine whether or not these were in fact island eggs. She would find out after she took them home and then had them for breakfast, and then it would be too late to

Mr. O'NEAL. She would quit trading at that store, wouldn't she? Mr. MATSUNAGA. Well, that could be, yes. Then she would be limited as to the number of stores she could trade with because if this practice is allowed, heavens, every market would be selling mainland eggs or New Zeland or Australian eggs for island eggs at 10 cents per dozen greater profit. This is the predatory practice we have completely stopped by our law. Bear in mind, Mr. Chairman and members of the subcommittee, that we are not in any way asking for lower standards of quality or standards different from those prescribed in the bill. We are merely asking that Hawaii be allowed to continue its labeling requirement which will not in any way deter interstate commerce, and which Hawaii has had in effect for 35 years. Those who intend to ship eggs to Hawaii know about this law and have known about this law for 35 years. No complaint has been lodged against this particular law and things are working out fine.

So, we are asking that we be permitted to continue this law which has proven good for all concerned-for the producer and, more importantly, the consumer.

Mr. O'NEAL. Thank you.

Mr. STUBBLEFIELD. Mr. Montgomery?

Mr. MONTGOMERY. Thank you, Mr. Chairman.

I would like to commend our good friend for the very fine and forceful testimony that he has presented to us today. I am a little concerned. about how far this amendment would go and what effect it might have on other States and what amendments they might want to offer.

Sparky, as I understand it, your amendment only applies to the State of Hawaii. Is that right?

Mr. MATSUNAGA. To Alaska also. Noncontiguous areas of the United States.

Mr. MONTGOMERY. TWO States?

Mr. MATSUNAGA. Two States and possibly Puerto Rico, Guam, Virgin Islands. The noncontiguous areas of the United States.

Mr. MONTGOMERY. I am sure that you might not have the answer to this question, but are you familiar with any other State laws that might have such a law as this on their books now pertaining to homegrown eggs?

Mr. MATSUNAGA. No; I believe that Hawaii is the only State which has such a law. Dr. Otagaki, who will testify immediately after me. is much more familiar with that. I think he will confirm the fact that Hawaii is the only State which has this particular law. As you know, the egg is shipped in, as I stated, by freight, refrigerated, and it takes anywhere from 5 days to 7 days for the eggs to go from the west coast to Hawaii. That makes the eggs at least a week old. If you add the handling on both ends of the ocean, well, heavens, the eggs, by the time they get to the market, could be anywhere from 10 days to 2 weeks old. For this reason, it was for the protection of the consumer that Hawaii adopted this law back in 1931, as a matter of fact, and amended it in 1935.

Mr. MONTGOMERY. Do you think this amendment would encourage Alaska to start egg growing and producing their eggs also?

Mr. MATSUNAGA. Because of the economic situation in Alaska, being suited much more for industry and business other than raising of eggproducing hens. And because of the high cost of living and high employment rate which now prevails in Alaska, I doubt very much that they would go into the egg-producing business up there, the climate too being what it is.

Mr. MONTGOMERY. That would be a factor.

Thank you.

Mr. STUBBLEFIELD. If there are no questions, thank you very much, Congressman.

Mr. MATSUNAGA. Thank you very much, Mr. Chairman.

Mr. Chairman, if I may be permitted to, I would like at this time to introduce the next witness, Dr. Kenneth Otagaki.

Mr. STUBBLEFIELD. Just one moment.

At this point in the record we have a request from the gentlewoman from Hawaii, Mrs. Patsy Mink, and from Senator Hiram Fong, to insert their statements in the record.

Without objection, it will be done.

(The statements follow :)

STATEMENT OF HON. PATSY T. MINK, A REPRESENTATIVE IN CONGRESS
FROM THE STATE OF HAWAII

Chairman Stubblefield and other distinguished members of the Subcommittee. I appreciate this opportunity to give my views on S. 2116, the Egg Products Inspection Act.

This legislation has the commendable purpose of protecting the health and welfare of consumers by assuring that their eggs are wholesome and properly labeled and packaged.

As passed by the Senate, this bill would prohibit the labeling of eggs which have moved in interstate commerce to show the place of origin. Under Federal law, shipment between islands within the State constitutes interstate commerce. Since 1935 Hawaii has had a consumer protection law requiring the stamping of eggs sold in Hawaii with the place of origin. The intent of the law is to inform the public. Eggs from the mainland United States are marked US and eggs from foreign countries are marked with the name of the country of origin. Eggs locally produced are unmarked except for the label on the carton.

Because of this law, our consumers are informed when the eggs they are buying have been produced elsewhere than in Hawaii.

Locally produced eggs are higher priced than those imported; however, local eggs have nearly 96% of the market. Egg imports declined from 2.5 million dozen in 1959 to 646,000 dozens in 1968, while the State's total egg consumption increased from 12.5 million dozen to 17.5 million dozen in the same period.

Prior to the adoption of our law, there were repeated instances of willful mislabeling of imported eggs to deceive the public into believing they were buying local eggs because shippers were aware of the preference for local eggs. Our stamping law has almost completely stopped such practices and has afforded the consumer greater protection.

We have built an egg producing and processing industry of $9 million involving about 420 producers. The industry believes that the adoption of S. 2116 as approved by the Senate would cause a decline of 40 to 50 percent in island egg production and a substantial decline in accompanying business operations such as trucking, feed, dealerships, and employment that are dependent on the existing Hawaii egg industry.

While the egg industry currently produces about enough eggs to meet Hawaii's consumption needs, the predictable decline in the industry under this bill would leave Hawaii without the capacity to meet its own eggs needs in time of shortage. This would leave us in the same unacceptable situation as preceded our adoption of the current labeling law. Mainland producers would import large quantities during times of surplus and dump them in our isolated "pocket market." During periods of egg shortages, there would be limited egg imports and wild fluctuations due to the inability of local producers to supply the demand.

Hawaii is a unique situation because it is cut off from other markets by thousands of miles of open water. It is an isolated market into which commodities can be brought or "dumped' without the competitive stabilization of other nearby

sources.

The stamping process is the only feasible means of reliably providing this assurance. It would be extremely difficult to enforce geographic origin disclosure by other means. With local eggs already higher priced, it would be an unbearable economic burden to require local producers to stamp their eggs. Instead, the stamping of imported eggs which presently constitutes only 5 percent of the market is practical and has not added any significant cost factor since imported eggs still are sold at a lower cost than local eggs.

The State of Hawaii, therefore, requests an amendment to exclude noncontiguous States from Section 23(b)(2). This amendment is supported by the Governor of Hawaii, the State Legislature, the City Council of Honolulu, the Hawaii County Council, the Maui County Council, the Hawaii Farm Bureau and the Chamber of Commerce of Hawaii. I urge the Subcommittee to approve such an amendment so that the rights of consumers in Hawaii will not be taken away by this bill.

U.S. SENATE, Washington, D.C., September 11, 1970.

Hon. FRANK A. STUBBLEFIELD,
Chairman, Subcommittee on Dairy and Poultry, House Committee on Agriculture,
Washington, D.C.

DEAR MR. CHAIRMAN: I appreciate this opportunity to submit a statement requesting that Section 23(b) (2) of H.R. 16092 (S. 2116), designated as "Egg Products Inspection Act," either be amended to exempt Hawaii, a non-contiguous State, or be deleted from this legislation. I support the general intent and purpose of the bill, but I do object to this particular section.

On December 2, 1969, while the identical bill, S. 2116, was pending in the Senate Committee on Agriculture and Forestry, I asked that the particular section prohibiting that a State "require labeling to show the State or other geographical area of production or origin" be deleted or be amended to exempt Hawaii from this provision. It was the conclusion of the Senate Agriculture Committee, however, that inasmuch as S. 2116 would still permit States to identify locally produced eggs as such, this would differentiate local eggs from out-of-State eggs for the benefit of Hawaii consumers.

The proposed prohibition of State labeling of eggs as to place of origin will result in a serious threat to the survival of Hawaii's egg industry. It will nullify Hawall's existing statute requiring origin stamping of all eggs imported into

Hawaii from both foreign and mainland areas. This statute is necessary to prevent surplus mainland and foreign eggs from being dumped into Hawaii, as was the case in the past.

Hawaii's consumers have shown a consistent preference for island eggs. Prior to the enactment of the State law, unscrupulous dealers sold imported eggs as "island eggs," defrauding the consumers. Since the enactment of this law, egg imports declined from 2.5 million dozens in 1959 to 646,000 dozens in 1968. As a result, during the same period the total sales of local eggs in the State increased from 12.5 million dozens to 17.5 million dozens.

The State now is almost self-sufficient in its egg needs. Hawaii's egg production does not enter interstate commerce.

I respectfully ask that full consideration be given by your Subcommittee to alleviating Hawaii's egg labeling problem or to finding an equitable solution to the non-contiguous State's unique egg problem.

As I am unable to appear at your hearing on Monday, September 14, I would deeply appreciate having this letter included in the printed hearing record. With kind regards and aloha,

Sincerely yours,

Mr. STUBBLEFIELD. You may proceed.

HIRAM L. FONG.

Mr. MATSUNAGA. Mr. Chairman and members of the subcommittee, it is indeed a pleasure for me to introduce at this time Dr. Kenneth Otagaki, the chairman of the Department of Agriculture of the State of Hawaii. It is especially a privilege for me because Dr. Otagaki is a real war hero, especially in my eyes. It was he and another stretcherbearer who bore me down the precipitous cliffs of the Italian mountains when I was wounded, before he was, and had it not been for Dr. Otagaki perhaps I would not be a Member of Congress, because I would have probably bled to death up on the mountainside of Italy.

A former Member of the House and now Governor of the State of Hawaii, the Honorable John A. Burns believes the amendment which I have proposed is so important to Hawaii that he has sent Dr. Otagaki on this 5,000 mile trip to plead Hawaii's case before you.

It is with extreme pleasure that I present to you a former GI in the field of battle in Italy and now Dr. Otagaki, chairman of the Department of Agriculture, the State of Hawaii.

Dr. Otagaki.

Mr. STUBBLEFIELD. Doctor, we are delighted to have you with us. We certainly appreciate the part you played in World War II.

STATEMENT OF DR. KENNETH OTAGAKI, CHAIRMAN, BOARD OF AGRICULTURE, STATE OF HAWAII

Dr. OTAGAKI. Thank you very much, Mr. Chairman.

Mr. Chairman and members of the Dairy and Poultry Subcommittee:

I am Kenneth K. Otagaki, chairman of the board of agriculture, State of Hawaii. The State of Hawaii thanks the Dairy and Poultry Subcommittee for the opportunity to comment on H.R. 16092 (S. 2116).

I had an opportunity to review Congressman Spark Matsunaga's testimony and the testimony to be presented by the Hawaii egg industry. Facts and figures of our industry and impact of the enactment of II.R. 16092 have been adequately covered. Therefore, my testimony will reiterate the position of the State and county governments in behalf of the Hawaiian egg industry.

The State of Hawaii supports the general purposes of the Egg Products Inspection Act, H.R. 16092. However, we are most concerned about section 23 (b) (2) which, in effect, would nullify the Hawaii Origin Stamping Law (secs. 147-75, Hawaii Rev. Stat., enacted 1935), which Congressman Matsunaga has already covered. The Hawaii State law was enacted to protect the consuming public from the "dumping" or surplus eggs of questionable quality originating from the mainland and foreign countries. The law was also intended to protect the consuming public against an economic disadvantage of high prices during periods of low egg supply at point of shipment. I think this point is very important.

From a disruptive beginning, the Hawaiian egg industry made slow recovery of meeting market needs for quality fresh eggs. In the 1930's, the then Territory of Hawaii produced less than 40 percent of the domestic egg requirement. But today, our poultry industry is a viable industry producing almost all of our local market supply of eggs. The egg industry contributes substantially to the total economy of the State of Hawaii, with a farm return of $7.7 million in 1969.

I might point out, Mr. Chairman, this amount is a very small amount in figures. However, it is 20 percent of the total agricultural return in the nonsugar, nonpineapple economic return.

Your attention is also called to the consumer preference for fresh island eggs over imported eggs as one of the important factors in the high percentage of island eggs consumed in the State, despite the the fact that imported eggs of comparable quality and size are consistently priced below island eggs. Proper origin identification helps the housewives in their choice and preference of island-produced eggs.

Attention is also called to the effort of the local industry over a period of years to produce eggs preferred by local consumers. Although cost of production has risen rapidly-high feed cost, land, material, equipment, labor, freight costs, and so forth, along with shipping strikes-local egg producers have strived for quality production with the resultant notable consumer acceptance of our eggs. Our present egg law, which is administered by the Department of Agriculture, State of Hawaii, requires both island and imported eggs to be properly identified as to place of origin. It would be extremely difficult to enforce the geographical-origin labeling without the stamping requirement. Elimination of the egg-stamping provisions would give unscrupulous egg handlers an opportunity to resort to fraudulent "bait and shift" practices, unless the present stamping of imported eggs is replaced by a better method of positive identification. Origin stamping serves as an effective control against deceptive merchandising of eggs.

The industry is continually working toward maximum efficiency. However, with the repeal of the stamping requirements, it will never be able to compete with the anticipated and unwarranted dumping of eggs into Hawaii. Because of her insular nature, Hawaii has been a convenient and accessible "dumping" ground for mainland and foreign eggs, along with other commodities. Being an offshore State, Hawaii is a "pocket market," and the local egg market would be highly vulnerable to dumping. Invalidation of the origin stamping would result in a serious threat to survival of the local egg industry, and should H.R. 16092 be enacted, there would be an overnight surge in