proper practice would be enhanced by improper disclosure to consumers. Unmarked eggs could otherwise flood the market and be confused with the local product.

Because of the distance and geographic isolation of the State, Hawaii has in the past been a favorite area for "dumping." Egg production has some seasonal characteristics. Costs of production in Hawaii are comparatively higher. Hawaii producers cannot therefore economically export eggs to other markets. On the other hand, dealers in surplus markets in the past have sent products into the State without the fear of competitive repercussion. Hawaii has been an ideal place for sale of imported eggs below cost as the foreign producer need not consider interference with his normal pricing structure in his area. The Hawaii Egg Industry cannot economically send eggs to other markets and therefore cannot have any impact in foreign areas. For instance, in the past there has been a large amount of Australian eggs shipped into the State.

Without some reasonable state regulation, during such periods of surplus in foreign markets, eggs could be imported into the State at a very low price. Although this may appear to provide a short term savings to the consumer, any benefits would be fictitious and short term. The Hawaii egg producer could not survive in such a fluctuating and unstable market. After the consequential reduction of the Hawaii egg producers and during times of seasonal shortage out of State, there would not be an adequate supply of this vital commodity in Hawaii. Moreover, there would then be no local industry to supply effective competition to foreign egg producers and the consuming public would either have to pay a high price or do without eggs. Accordingly, the State of Hawaii is unique in the egg industry because of the problems enumerated.

A related problem caused by the geographic isolation of the State is the vulnerability of Hawaii to shipping strikes and other economic disruptions which do create a lack of resources from the mainland United States during certain periods. Because eggs are a necessary food and therefore essential to the public welfare, the industry must be kept in a healthy and stable condition in order to maintain at least a capability in food production. Hawaii must maintain its food production in a sufficient manner.

Passage of H.R. 16092 (S. 2116) "The Egg Products Inspection Act" in its present form would result in a serious threat to the survival of the Hawaii Egg Industry. Section 23(b) (2) of H.R. 16092 (S. 2116) would invalidate Hawaii's Origin Stamping Law and allow imported eggs to flow into Hawaii in a confusing uncontrolled fashion during periods of surplus in this seasonal industry. Foreign and mainland egg producers may still import eggs to Hawaii although as a practical matter, they will not lose an existing market as they only supply approximately 4% of the State consumption at this time as a result of the consumer preference for local product.

Hawaii is a unique market for the reasons stated and therefore the invalidation of the Hawaii Origin Stamping Law should not be a part of the Federal legislation. Hawaii should be exempt from Section 23 (b) (2). The Hawaii Origin Stamping Law is necessary to provide assurance of a constant source of this vital food to the residents of Hawaii and not subject the Hawaii egg industry to anticompetitive practices such as "dumping." The consumers of Hawaii are entitled to correct and proper labeling so that they may exercise their own preferences. Based upon the foregoing, the Matsunaga amendment is supported by the Hawaii egg industry and we ask for your consideration and support. On behalf of the Hawaii Egg Industrial we should like to thank you for your consideration of Hawaii's position.

Mr. MATSUNAGA. May I also ask that the statement of Mr. Wallace Nitta, president of the Hawaii Farm Bureau, be inserted immediately following the statement of Mr. Kakazu.

Mr. STUBBLEFIELD. Without objection.

(Mr. Nitta's statement follows:)

STATEMENT OF WALLACE NITTA, PRESIDENT, HAWAII FARM BUREAU FEDERATION The Hawaii Farm Bureau Federation is deeply concerned with the probable effect of the Egg Products Inspection Act, H.R. 16092 (S. 2116) in its present form, on the economic stability and survival of the Hawaii egg industry. The members of the Hawaii Farm Bureau Federation are strongly opposed to Section 23(b) (2) and ask that you give favorable consideration to exempting the

State of Hawaii from this particular section dealing with origin identification. as provided in the Matsunaga Amendment. We do, however, want to state clearly that the Farm Bureau is in accord with and supports the intents and purposes of the H.R. 16092 (S. 2116) and considers it beneficial to not only the consumers but also the egg industry and the nation in general. Our objections are limited and confined strictly to the provisions contained in Section 23(b) (2). The Hawaii egg stamping law was enacted in 1931 to properly identify imported eggs and to protect consumers who bought these eggs. The intent of the law is to assure the consuming public that when it buys what it thinks are Hawaii eggs it is getting fresh locally produced eggs and not imported ones. There were repeated incidences of willfully mislabeling imported eggs and foisting them on the public as local-fresh eggs. To prevent such improper practices and to protect the consuming public, legislation requiring positive identification of each egg became necessary. The enactment of the stamping law has effectively stopped such mislabeling practices.

More than 293 egg producers in the State and their employees are totally or largely dependent upon the State's $7-million egg producing industry for their livelihood. The passage of H.R. 16092 in its present form would not only seriously affect the egg industry but would have a disastrous economic effect on the other supporting industries. The egg producers together with, among others, the various trucking firms, feed companies, dealers and employees will be affected. The Farm Bureau feels that H.R. 16092 in its present form will cause a substantial decline or death of Island egg production and an accompanying substantial decline in the related business operations.

As Hawaii eggs sell at a price higher than imported eggs, yet outsell imported eggs by a large margin, it is evident that the Hawaii consumer prefers fresh Hawaii eggs. With the proper origin identification, the consumers know what they are buying. If consumers ever suspect that imported eggs are being sold as Hawaii eggs, they will lose confidence in the product purchased and this will result in irreparable damage to the egg industry in Hawaii.

Attention is also called to the effort of the local industry over a period of years to produce eggs preferred by the local consumers. The economic welfare of the egg industry in Hawaii has grown to what it is today over a lengthy period of time. The total egg market in the State increased from 12.5 million dozens to 17.5 million dozens from the period of 1959 through 1969. Although the rising cost of production has worked to their disadvantage, improvement in efficiency and quality and the resultant lower prices of local eggs have obtained consumer preference. To lose what has constructively been built with great effort and competition during these years would have a negative impact on the Hawaii egg industry and the economy of Hawaii.

The industry is working towards maximum efficiency, despite Hawaii's high production cost. However, with the repeal of the origin stamping requirements, it will never be able to resolve the problem of unwarranted dumping of eggs into Hawaii. Labeling of imported eggs as to place of origin is still necessary in order to prevent consumer confusion and the dumping of surplus eggs into Hawaii which will follow. The State of Hawaii due to its geographic isolation, represents a "pocket market" situation. Hence, the local egg producers are in an extremely vulnerable position to outside surplus supply sources. The invalidation of the origin stamping requirement would result in a serious threat to the survival of the Hawaii egg industry. Positive identification of eggs is the most effective solution to the problem of controlling misrepresentation.

The Hawaii Farm Bureau Federation respectfully urges and requests that this honorable Subcommittee recognize the danger which Section 23(b) (2) of H.R. 16092 poses to the State of Hawaii, its agricultural community, and its economic condition, and that this honorable Subcommittee favorably act upon the Matsunaga Amendment.

Thank you for your attention and consideration of our position in this matter. Mr. STUBBLEFIELD. The next witness is Harold E. Ford, executive secretary, Southeastern Poultry and Egg Association. He is accompanied by V. W. Henningsen, Jr., president, Henningsen Foods, Inc., White Plains, N.Y.; and Herman O. Jones, Jr., executive vice presi dent, Oak Crest Enterprises, Jacksonville, Fla.

Mr. Ford, we are delighted to have you and your associates here this morning.

STATEMENT OF HAROLD

E. FORD, EXECUTIVE SECRETARY, SOUTHEASTERN POULTRY AND EGG ASSOCIATION (ALSO REPRESENTING THE INSTITUTE OF AMERICAN POULTRY INDUSTRY AND OTHER POULTRY ASSOCIATIONS), DECATUR, GA.; ACCOMPANIED BY V. W. HENNINGSEN, JR., PRESIDENT, HENNINGSEN FOODS, INC., WHITE PLAINS, N.Y. (DIRECTOR OF THE INSTITUTE OF AMERICAN POULTRY INDUSTRIES AND MEMBER OF EGG PRODUCTS COMMITTEE); AND HERMAN O. JONES, JR., EXECUTIVE VICE PRESIDENT, OAK CREST ENTERPRISES, JACKSONVILLE, FLA. (CHAIRMAN OF THE EGG COMMITTEE, SOUTHEASTERN POULTRY AND EGG ASSOCIATION)

Mr. FORD. My name is Harold E. Ford. I am executive secretary of the Southeastern Poultry and Egg Association, Decatur, Ga. With me, on my left, is V. W. Henningsen, Henningsen Foods, Inc., White Plains, N.Y. Mr. Henningsen is president of his company, which processes poultry and egg products. He is a director of the Institute of American Poultry Industries, and a member of its Egg Products Committee. Also with me is Herman O. Jones, Jr., executive vice president of Oak Crest Enterprises, Jacksonville, Fla. He is engaged in the hatching of chickens and the production and marketing of eggs. He is chairman of the egg committee of the Southeastern Poultry and Egg Association.

We are appearing today on behalf of the following national, regional, and State egg and poultry associations: American Poultry & Hatchery Federation; Delmarva Poultry Industry, Inc.; Florida Poultry Federation; Georgia Egg Association; Indiana State Poultry Association; Institute of American Poultry Industries; Kentucky Poultry Federation; Minnesota Poultry, Butter & Egg Association; Mississippi Poultry Improvement Association; National Egg Council; North Carolina Egg Packers and Processors; North Carolina Poultry Federation; Northeastern Poultry Producers Council; Southeastern Poultry & Egg Association; Virginia State Poultry Asso

ciation.

You can see that there has been a great deal of interest in discussing and reviewing the proposed legislation.

In 1969, nearly 69 billion eggs were sold-the average American ate about 320 eggs during the year. To egg producers this represented nearly $2.3 billion income. Eggs are produced in all 50 States.

The poultry and egg industry has been a leader in improving our products for the consumer. Our industry has a long record in support of adequate inspection in order to give every assurance to the consumer of the wholesomeness and high quality of poultry products.

For many years, a number of egg processors have subjected themselves to a voluntary program of egg products inspection by the Department of Agriculture. But as egg products have become a more important part of our food industry and the use of them increased, we are aware that a voluntary program is no longer adequate and recognize the desirability of a mandatory Government inspection program to give consumers the assurance which they desire in the purchase of eggs, egg products or foods made from them. A man

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datory Federal uniform inspection program would provide this assurance that all eggs and egg products they buy are wholesome and produced under sanitary conditions.

For some time our Egg Committees have considered the matter of egg inspection legislation. These committees carefully reviewed the various bills and believe that H.R. 16092, similar to the bill passed by the Senate, is a sound and workable measure.

Clean, sound shell eggs are not a public health problem and eggs are marketed for retail sale under the various State egg laws, which generally provide for proper grading and sizing and accurate labeling. States do an adequate job of surveillance at the retail levels.

H.R. 16092 is aimed at eliminating traffic in the category of shell eggs designated as "restricted" eggs; that is, eggs such as leakers, cracked, dirties, and so forth, which might involve a health hazard. It also provides for the continuous inspection of the processing of egg products to assure wholesomeness. It also authorizes the establishment of uniform national standards.

It is our position that H.R. 16092 which deals with wholesomeness is the measure which the committee should adopt as the basis for legislation. It would provide the necessary consumer protection at a cost which would be commensurate to the benefits. We do not favor the extension of the bill to shell eggs beyond the provisions of H.R. 16092. H.R. 16092 provides for effective inspection without imposing any unnecessary regulation or unreasonable cost to the taxpayers which would be detrimental to both producers and consumers. The bill recognizes that clean, sound shell eggs do not present a health hazard.

It provides for the control of the marketing and use of the type of eggs referred to as restricted, and makes certain that no such eggs reach consumers directly or indirectly through institutions, restaurants, bakeries, or other food manufacturing outlets without having been inspected for wholesomeness.

The bill sets up four major areas of coverage: (1) shell eggs; (2) egg products; (3) products of eggs not used for human foods; (4) imported eggs or egg products.

For shell eggs the bill would prohibit the selling of any restricted eggs which are defined as dirty, check, leaker, incubator reject, loss or inedible, except in accordance with regulations issued by the Secretary under the authority of the bill. In addition, it prohibits the purchase, processing or use of such restricted eggs except as authorized or permitted under regulations of the Secretary.

For egg products the bill provides for the establishment of sanitary standards for premises, facilities, and equipment, and for sanitation practices as may be specified by the Secretary. The bill defines adulteration and provides for the seizure and condemnation of any adulterated product. It prohibits institutions, restaurants, manufacturers of other food products, and egg products processors from processing eggs without continuous inspection unless they process only quality consumer grade eggs in conformity with conditions and procedures prescribed by the Secretary.

Any egg products processed at an official plant, and found to be not adulterated, are required to be pasteurized or otherwise treated, as prescribed by the Secretary, before being marketed.

For products of egg not intended for human foods the bill requires that they be denatured or otherwise identified as prescribed by regulation to prevent their use for human food and the purchase of any such product not so identified is prohibited.

For imported eggs and egg products, the bill provides that such products meet the same regulations applicable to domestic product.

OTHER PROVISIONS

The bill also authorizes the Secretary, under such procedures as he may prescribe, to exempt sale of eggs by producers or shell egg packers on their own premises directly to the consumer for consumption by his household and nonpaying guests. Similarly, the Secretary may permit the sale of egg products by a producer if produced from his own flock and sold direct to a consumer.

The Secretary has complete authority to revoke or modify any exemption whenever he deems such action appropriate to effectuate the purposes of the bill.

The bill provides ample provisions for enforcement of the act through criminal penalties, administrative detentions, and condemnation and seizure.

The bill authorizes and directs the Secretary to make such other inspections of business premises, facilities, inventory operations and records of egg handlers as he deems appropriate to assure that only eggs fit for human consumption are used and to otherwise assure compliance by egg handlers with the requirements of section 8 of the bill, and prohibits the marketing of adulterated or misbranded product.

The bill will provide for uniformity through the establishment of official standards of quality, condition, quantity or grade and the prohibition of any requirements, including labeling or packaging, inconsistent therewith.

I would like to add, Mr. Chairman, that today we have heard reference made to the State law of Hawaii. The Senate committee reviewed this same problem area and, for the record, I would like to read what the Senate committee interpretation and decision were:

The source of eggs is of no value insofar as determining quality is concerned. If a State is concerned about the quality of eggs from another State, this can be determined adequately by egg law officials conducting a check grade on the eggs. If a State wishes to promote its own eggs or inform consumers as to the source of supply of their eggs, it can adopt, either on mandatory or voluntary basis, a regulation providing that eggs produced and sold within that State may be labeled as such. This section does not prohibit this.

That was their interpretation.

Mr. Chairman, we find it hard to understand why Hawaii would be a special case just because it is located as an offshore State. If the bill, H.R. 16092, passes, it will restrict the sale of the quality of eggs that they are concerned with over a dumping situation. You dump eggs when you refer to a quality of egg that is undesirable or low-grade quality. If the bill passes, the industry would be restricted from selling that egg in the first place. That, plus 3.000 miles of ocean freight rate, pretty well gives them a protection of their market.

The bill authorizes the Secretary to cooperate with appropriate State and other governmental agencies in carrying out its provisions. The major difference between H.R. 16092 and H.R. 14687 is the addi