AMENDMENTS TO THE AGRICULTURAL MARKETING AGREEMENT ACT OF 1937 MONDAY, AUGUST 3, 1970 HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON DOMESTIC MARKETING AND CONSUMER RELATIONS OF THE COMMITTEE ON AGRICULTURE, Washington, D.C. The subcommittee met, pursuant to notice, at 10 a.m. in room 1302 Longworth House Office Building, Hon. Thomas S. Foley (chairman of the subcommittee) presiding. Present: Representatives Foley, Sisk, Jones of Tennessee, and Goodling. Also present: Mrs. Christine S. Gallagher, chief clerk; and Lacey C. Sharp, general counsel. Mr. Foley. The Subcommittee on Domestic Marketing and Consumer Relations will come to order. The subcommittee meets this morning for the consideration of two bills, H.R. 18272, by Mr. Sisk of California, and H.R. 18560, by Mr. Talcott of California. The purpose of H.R. 18560 by Mr. Talcott is to amend section 8c (6) (I) of the Agricultural Marketing Agreement Act to permit projects for paid advertising under marketing orders applicable to lettuce. This morning we will first consider H.R. 18272 by Mr. Sisk, of California, to add California-grown peaches as a commodity eligible for any form of promotion, including paid advertising, under a marketing order. (H.R. 18272, introduced by Mr. Sisk, and the Department's report, follow :) (H.R. 18272, 91st Cong., 2d sess.] A BILL To add California-grown peaches as a commodity eligible for any form of promotion, including paid advertising, under a marketing order Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That the proviso at the end of section 8c (6) (I) of the Agricultural Adjustment Act (as reenacted by the Agricultural Marketing Agreement Act of 1937, and as subsequently amended (7 U.S.C. 608c(6)(I)), is hereby amended by inserting "California-grown peaches" immediately after applicable to cherries." DEPARTMENT OF AGRICULTURE, OFFICE OF THE SECRETARY, Washington, D.C., August 3, 1970. Hon. W. R. POAGE, Chairman, Committee on Agriculture, House of Representatives. DEAR MR. CHAIRMAN: This is in response to a request from your committee for a report on H.R. 18272, a bill to amend section 8c (6) (I) of the Agricultural 48-940-70- -7 (83) Marketing Agreement Act of 1937, as amended, to add California-grown peaches as a commodity eligible for any form of promotion, including paid advertising, under a marketing order. The Department favors enactment of H.R. 18272. This bill would permit marketing orders for California-grown peaches to include provision for promotional activities, including paid advertising, and to collect assessments from handlers to pay the costs thereof. The act currently contains authority to permit such activities, including paid advertising for several commodities. This authority has been made available in some of the fruit marketing orders. Advertising projects have been carried out under it for such fruit commodities as Texas oranges and grapefruit, and California olives and nectarines. The trend is toward expanded commodity advertising and promotion in agriculture We anticipate increased effort by the fruit and vegetable industries to obtain the means of financing the advertising and promotion of these commodities in the marketplace. The Agricultural Marketing Agreement Act could provide the facility for this purpose. We believe any fruit or vegetable commodity group which actively supports the development of a promotion program by this means should be given an opportunity to do so. It is estimated that the cost to the Department of each new marketing order that is issued averages about $25,000. The cost of promulgation proceedings involving the amendment to an existing order varies with the size and complexity of the program. The promulgation costs contemplated by this proposal are estimated to be about $7,500 for an amendment proceeding. The Office of Management and Budget advises there is no objection to the presentation of this report from the standpoint of the Administration's program. Sincerely, J. PHIL CAMPBELL, Mr. FOLEY. The first witness this morning testifying on H.R. 18272 by Mr. Sisk will be Mr. Floyd Hedlund, director of the Fruit and Vegetable Division of the Consumer and Marketing Service, U.S. Department of Agriculture. STATEMENT OF FLOYD F. HEDLUND, DIRECTOR, FRUIT AND VEGETABLE DIVISION, CONSUMER AND MARKETING SERVICE, UNITED STATES DEPARTMENT OF AGRICULTURE Mr. HEDLUND. Thank you, Mr. Chairman. My name is Floyd F. Hedlund, director of the Fruit and Vegetable Division, Consumer and Marketing Service, U.S. Department of Agriculture. H.R. 18272 would amend section 608c (6) (I) of the Agricultural Marketing Agreement Act of 1937 to permit a marketing order on California-grown peaches to include any form of marketing promotion, including paid advertising. The Department favors H.R. 18272 and recommends enactment. The Agricultural Marketing Agreement Act of 1937 currently authorizes paid advertising under marketing orders for several commodities. This authority has been incorporated into some existing marketing orders. Advertising projects have been carried out for å number of commodities. The trend is toward more and more commodity advertising and promotion in the fruit and vegetable industry. Producers and others are searching for a means of financing advertising and promotion programs so as to maintain or advance their position in the marketplace. The Agricultural Marketing Agreement Act could provide the facility for this purpose. We believe that any fruit or vegetable commodity group which actively supports the development of such a program should be given the opportunity to do so. There currently is a Federal marketing order in effect for the Elberta varieties of peaches grown in California. This order provides for regulation of grade, size, quality, maturity, or pack of any such varieties. Also, it provides for regulating the containers that may be used in the packaging or handling of Elberta peaches, and for the establishment of research and development projects designed to assist, improve, or promote the marketing, distribution, and consumption of peaches. This latter provision does not authorize the expenditure of funds for paid advertising nor does the statute so permit. This bill would enable the California peach industry to undertake an advertising program for California-grown peaches under a Federal marketing order program. Of course, any such proposal must be considered at a public hearing and approved by two-thirds of the producers involved before it could become effective. In addition to the Federal marketing order on California Elberta peaches, separate Federal marketing orders cover the handling of fresh peaches grown in Colorado, Georgia, Washington, and Utah. However, promotional activity for peaches grown in these States, with the exception of Utah, is presently carried out under State authority. Promotional activities for California fresh peaches are currently undertaken pursuant to a California State marketing order. It is estimated that the cost to the Department of each new marketing order that is issued averages about $25,000 a year. The cost of promulgation proceedings involving the amendment to an existing order is estimated to be about $7,500 for an amendment proceeding. Thank you, Mr. Chairman. Mr. FOLEY. Thank you very much, Mr. Hedlund. Mr. Sisk? Mr. SISK. Mr. Chairman, I have no questions. I want to express appreciation to my friend, Mr. Hedlund. I appreciate his being down here at regular intervals in support of these bills. That is all, Mr. Chairman. Mr. FOLEY. Mr. Jones? Mr. JONES of Tennessee. Mr. Chairman, I am a little bit late but I would like to also express my appreciation to Mr. Hedlund. Mr. FOLEY. Thank you. Mr. Hedlund, would you repeat the distinction that you explained between the California marketing orders and the orders for Utah, Colorado, Washington, and so related States? Mr. HEDLUND. In California you have a Federal marketing order that covers only the Elberta varieties of peaches. It does not include promotion and, of course, can't include advertising. Now, in addition to that, California has a State marketing order under which they currently carry on promotion and advertising activities. Mr. FOLEY. Is that State marketing order for other types of peaches, the cling type as well as Elberta? Mr. HEDLUND. I believe it covers all fresh peaches. The cling variety is almost completely processed. In the State of Washington we have a Federal marketing order covering the handling of fresh peaches. It does not, of course, include advertising. Under the Washington State Fruit Commission they carry on promotion programs on peaches under that State authority. The same is true in the State of Georgia. In Colorado they have a State marketing order that covers promotion activities on peaches alongside a Federal marketing order that regulates the handling of fresh peaches in interstate commerce. Those two orders in Colorado work hand in hand, and the same committee operates both programs. In the State of Utah the Federal marketing order is currently inoperative and there is no State program on peaches. Mr. FOLEY. In the States of Colorado, Washington, and Utah, and possibly others, theoretically it would be possible to amend the marketing order authority to permit paid advertising and promotion under existing marketing order authority; is that correct? Mr. HEDLUND. Yes, that is true if this legislation became effective, this legislation you are considering today. Mr. FOLEY. Well, this legislation is limited, as I understood it, to California marketing orders. Mr. HEDLUND. I am sorry; I meant, if it were expanded to include other States, that is true. Mr. FOLEY. Similar legislation? Mr. HEDLUND. That is right. Mr. FOLEY. Thank you very much. If there are no other questions, Mr. Hedlund, we will excuse you on this bill but hold you in readiness for the next bill. Mr. HEDLUND. Thank you. Mr. FOLEY. The next legislation to come before the subcommittee will be H.R. 18560 by Mr. Talcott of California, to permit projects for paid advertising under marketing orders applicable to lettuce. (H.R. 18560, introduced by Mr. Talcott and the Department's report follow:) [H. R. 18560 91st Cong., second sess.] A BILL To amend section 8c (6) (I) of the Agricultural Marketing Agreement Act of 1937 to permit projects for paid advertising under marketing orders applicable to lettuce Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section 8c (6) (I) of the Agricultural Adjustment Act of 1933, as amended, and as reenacted and amended by the Agricultural Marketing Agreement Act of 1937, as amended, is amended by striking out "or avocados" in the proviso, and inserting in lieu thereof "avocados, tomatoes, or lettuce". HON. W. R. POAGE, DEPARTMENT OF AGRICULTURE. OFFICE OF THE SECRETARY, Chairman, Committee on Agriculture, House of Representatives. DEAR MR. CHAIRMAN: This is in response to the July 23 request of your Committee for a report on H.R. 18560, a bill to amend Section 8c(6) (I) of the Agricultural Marketing Agreement Act of 1937. This proposal would authorize marketing promotion including paid advertising under marketing orders applicable to lettuce. Many groups within the fruit and vegetable industry believe that marketing promotion including advertising will increase the demand for their commodity, and that promotional activities are necessary to maintain or improve their position in the marketplace. The Agricultural Marketing Agreement Act currently authorizes marketing promotion with advertising for a number of commodities. The Department supports the extension of the promotion and advertising authority to lettuce and therefore recommends passage of H.R. 18560. There currently is a Federal marketing order in effect for lettuce grown in the Lower Rio Grande Valley in South Texas. If this bill is enacted, the industry in that area would be able to take advantage of an advertising program for lettuce. It is estimated that the cost to the Department of a marketing order amendment proceeding averages about $7,500. The cost of each new marketing order that is issued averages about $25,000. In the preamble, this bill purports to apply to lettuce only. However, we note in examination of the text of the bill that tomatoes are also included. The Department has no objection to the inclusion of tomatoes and stated our position in a letter to your Committee on July 24, 1970 on the bill H.R. 15842. The Office of Management and Budget advises that there is no objection to the presentation of this report from the standpoint of the administration's program. Sincerely, J. PHIL CAMPBELL, Mr. FOLEY. The Chair is now very happy to recognize the distinguished author of the legislation, the gentleman from California, Mr. Talcott. STATEMENT OF HON. BURT L. TALCOTT, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF CALIFORNIA Mr. TALCOTT. Thank you very much, Mr. Chairman. I came prepared today to urge the adoption of my bill but, unfortunately, I have not been able to bring anybody from the lettuce industry in my district here to testify this morning. I think they would like to have an opportunity but the fact of the matter is that we have just gone through a very serious lettuce strike which has really kept everybody in the business occupied in other ways. At this time of the year my district produces about 70 percent of the Nation's head lettuce but we were involved in a strike that has now been settled, at least temporarily settled. However, unfortunately, I haven't had the opportunity to bring somebody from the industry here to testify which I would have liked to have done and which I anticipated doing. I appreciate having the bill scheduled for today. I appreciate the testimony from the Department and from the Vegetable Growers Association of America. I would like to have their testimony included in the record at this time, if I may, and take their evidence and then at another time have the opportunity to bring someone in from the area. As a matter of fact, the people in the industry from my district would probably like to have somebody from Colorado and Arizona and New Mexico also appear, or at least submit written statements. Mr. FOLEY. I yield to the gentleman from California. Mr. SISK. I would like to ask my colleague this question: Is the Department in support of this bill? Mr. TALCOTT. Yes. Mr. SISK. The gentleman may have heard if he came in on time that I have a bill on peaches Mr. TALCOTT. Yes, sir. Mr. SISK (continuing). Which does the same thing, and I believe we have possibly another bill on tomatoes which does the same thing. The point I wanted to make was I would assume my colleague is interested in moving the bill along. Mr. TALCOTT. I am. Mr. SISK. And, as he knows there are many other commodities where this same authority is granted. Due to the fact that we are right now in the midst of the peach harvest in California my peach people are simply not able to be here. However, I am submitting a statement on their behalf in the hopes that that will conclude the hearing and we can go ahead and move the legislation. All I am saying to my good friend and colleague from California is that, unless these people particularly desire to be heard, I just thought it might expedite the proceedings to move the legislation along. |