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Mr. TODD. I can speak for the vegetable industry, that is the condition it is in today, and the fear it has thrown into the producer. Senator BANKHEAD. What would be the situation as far as the consumer is concerned if you had a bad-weather section, such as to make a short vegetable production?

Mr. TODD. That is true, but how long do those periods last?
Senator BANKHEAD. I don't know.

Mr. TODD. They are very short.

Senator BANKHEAD. They may last for a season, a growing season. Mr. TODD. The set-up of the vegetables in the growing seasons starts from the South, it starts in Georgia, Florida, and the Carolinas, up the eastern coast, you have a 4- or 6-week period, but other than that you will not have. Frankly, I think the idea of no ceilings, farmers, if we had no ceilings, would have the opportunity to go out and compete with industry for their labor supply, which is very definitely a control factor, to the extent they will produce, where you have good production; supply and demand regulate the price and in the end the consumer would have cheaper foods than is possible under the present set-up.

Senator BANKHEAD. Do you think that applies to all agricultural production?

Mr. TODD. No; it applies to perishable products.

Senator BANKHEAD. It seems to me as though there would be more necessity for a controlled price, a price-control program for perishable products than otherwise for you may have run-away prices.

Mr. TODD. Yes, you may have run-away prices.

Senator BANKHEAD. We have had that already.

Mr. TODD. The only question is, the question of freezes, floods, and droughts, like last spring.

Senator BANKHEAD. Watermelons got up to $2.50 apiece, down South.

Mr. TODD. I think that can be explained.

Senator BANKHEAD. And one lady paid 50 cents for a cucumber that formerly sold for a nickel.

Mr. TODD. You recall last year you had two types of crops, one was an essential group of crops that you allowed all the necessary supplies for the war, and a nonessential. Some growers continued their nonessentials. You had a short planting, and you were short at the time of the harvest and suffered a price decline.

Senator BANKHEAD. You will have that all the time.

Mr. TODD. You will have some of that fluctuation, but the consumer does not have to buy watermelons at $2.50, when they can buy spinach and beets, when they can buy some other vegetable.

Senator BANKHEAD. If you had to make the consumer shift from one product to another, you pit one type of farmer as against another, you force them to shift because of an increase in price, one commodity as against another, with an equivalent increase in another commodity, a shift in your economy, and I do not think it is the intention to give the economy to any one section of the country.

Senator TAFT. Fresh fruits and vegetables have a varying price; they begin at a high price and fall off.

Mr. TODD. Yes, I have had them fluctuate 200 percent in one day. Senator TAFT. It seems to me impossible to fix a price anywhere near the figure fixed by supply and demand.

Mr. TODD. I have had spinach fluctuate 200 percent in a single day. I can prove that by my books.

Senator BANKHEAD. I have had more complaints about the high price of food in vegetables than any other part of the price control. Mr. TODD. It is impracticable, Senator.

Senator MAYBANK. I would like to say this, I think it is rather hard on perishable vegetables, perishable foods. I have heard some reference here to the last war, but it seems to me that it all depends on the weather, and in my home section, I have learned we are going to lose 70 percent of the potato crop in the State of Georgia and in the Carolinas because of excessive rainfall down in that part of the country. Mr. TODD. You lost plenty last year.

Senator MAYBANK. Here we got caught in the nonicing of cars, but this year, the cloudbursts and the rainfall at home and all I know is what they tell me, my own family-have resulted in a loss of 70 percent of the crop. But I do think, as Senator Bankhead has said, that in fruits and vegetables, it is a serious situation.

Mr. TODD. May I express one more thing, Mr. Chairman, that was not brought out in my first statement?

The CHAIRMAN. Certainly.

Mr. TODD. The fact that on these perishable vegetables, under the condition just brought out, lots of times we have to plant two or three crops before we get a crop, because of conditions the Senator has brought out, bad weather, the crop is lost, seeding, or in the very early seedling stage you replant considerably. You have to have a high ceiling, somewhere along the line, to make up for what you have lost. Senator MAYBANK. On the other hand, the Office of Price Administration cannot do that.

Mr. TODD. They cannot, but they are placing a ceiling on us. We cannot approach that ceiling, so you have to level off.

Senator BANKHEAD. I think flexibility in adjusting the ceiling would be a much better change than to abandon entirely the ceiling program, the price program.

Mr. TODD. The ceiling at the present time is not satisfactory.
The CHAIRMAN. You want it more flexible?

Mr. TODD. We want it more flexible, but that has got to be able to flex in 24 hours.

Senator BANKHEAD. I do not see any necessity for changing the law; you may want to change the Administrator.

Mr. TODD. The flexibility has to be so that it will move in 24 hours. Senator TAFT. It is such a difficult job and so unenforceable when it is done that we would probably be better off not to try to do it.

Senator MAYBANK. It is so changeable, from section to section, because of climatic conditions, these early crops are entirely dependent on the weather. Those things are quite different from the stable crops that can be planted in all sections.

The CHAIRMAN. I am not a farmer at all, but I am interested in what you gentlemen have to say. I was going to ask you a question about that; I read somewhere that the truck crops between 1939 and 1943 have increased about 200 percent.

Mr. TODD. They have increased, yet your consumption and demand for them has increased faster than your actual production. Senator BANKHEAD. That is by reason of people having more money to buy?

Mr. TODD. People having more money to buy and they are eating better than they ever ate before.

Senator MAYBANK. Transportation is better on perishable products at shorter distances?

Mr. TODD. Yes; we have had our headaches in the transportation business, too.

any money?

The CHAIRMAN. You are not losing any m

Mr. TODD. Yes; a number of farmers in our section lost money and I can name you several farmers within a radius of 10 miles of me

who have gone out of business.

Senator TAFT. What did Senator Townsend do?

Mr. TODD. Senator Tydings?

Senator TAFT. He is over on the Eastern Shore.

The CHAIRMAN. Senator Tydings has a farm?

Mr. TODD. Yes; he is in Harford County. We will let him speak for himself.

Senator MAYBANK. He is supporting the farm; not the farm supporting him.

The CHAIRMAN. Are there any other questions?

Thank you very much.

(The following statement was submitted for the record:)

UNITED FRESH FRUIT AND VEGETABLE ASSOCIATION,

Washington, D. C., March 31, 1944.

INTRODUCTION

The following statement is submitted to the Congress of the United States on behalf of the growers and distributors of fresh and unprocessed agricultural commodities, particularly fruits and vegetables, in connection with legislation now under consideration which will either

(1) Extend the Emergency Price Control Act of 1942 in its present form; (2) Amend the act in such ways as the Congress may deem appropriate; or (3) Eliminate from the public law all control over prices and service charges. In presenting our members' wishes, circumstances dictate that our statement proceed from two separate premises, neither of which is entirely consistent with the other. In so doing, we request the Congress to accept any seeming inconsistency without prejudice.

YOUR PETITIONER

Your petitioner is the United Fresh Fruit and Vegetable Association, a nonprofit corporation chartered under the laws of the State of Illinois for the purpose of encouraging the most efficient methods of production and distribution of the perishable agricultural commodities for which its members are responsible.

The United Fresh Fruit and Vegetable Association has approximately 1,600 members whose establishments are situated in the 48 States, the District of Columbia, the Dominion of Canada, and the Republic of Mexico. Its members originate and market approximately three-fourths of the commercial fresh fruits and vegetables produced in the United States.

Since your petitioner neither produces nor markets in its own right any of the perishable agricultural commodities herein considered, it has no direct financial interest in the outcome of price regulation; but is concerned solely with legislation which will deal most equitably with this essential branch of the national food economy.

The foods with which we are concerned amount yearly to approximately 1,300,000 carloads, more than 19,000,000 tons. They are grown commercially in all parts of the United States. They include a large number of species, varieties, grades, sizes, qualities, and types of packaging for shipment to their ultimate centers of consumption.

OUR PREMISES

In view of the fact that fresh fruit and vegetable commodities fall into an almost countless number of specialties, over which the weather and other unpredictables have ultimate control, and for which human ingenuity has found no universal method of preparation, packaging, and marketing, our first premise is that

Maximum price regulations cannot be devised or administered in such ways as to avoid the imposition of inequities and dislocations which have already become apparent under the present Emergency Price Control Act, and will continue to be prevalent under any modification of the act.

Based on this premise, for which there is voluminous evidence in fact, our most logical conclusion would have to be that any reenactment of present legislation or any legislation enacted to modify or extend the Emergency Price Control Act of 1942 would best serve the public interest by eliminating fresh fruits and vegetables entirely from the act's scope.

Since there is lack of unanimous opinion, even among members of the fresh fruit and vegetable industry, as to the advocacy of eliminating its commodities entirely from price control, and since popular demand seems to dictate a measure of such control, our second premise is that

Future legislation affecting the prices and distributive service charges of fresh fruits and vegetables be so designed as to prevent, so far as may be consistent with the public welfare, those inequities, dislocations, and "squeezes" which have in the past tended to discourage maximum production and to hamper orderly distribution.

Recognizing a lack of reasonable assurance that the Congress will remove fresh fruits and vegetables entirely from the scope of price control, we shall address our petition to our second premise, although we stand ready to present factual evidence supporting our first premise. We ask leave to proceed on this basis without prejudice to our members' position in any future consideration of this cause.

ESSENTIALS OF EFFECTIVE PRICE CONTROL OVER FRESH FRUITS AND VEGETABLES

We hold that the Congress acted wisely in writing into the Emergency Price Control Act of 1942 a provision (sec. 2 (h)) which stipulates the following:

"The powers granted in this section shall not be used or made to operate to compel changes in the business practices, cost practices, or methods, or means or aids to distribution, established in any industry, except to prevent circumvention or evasion of any regulation, order, price schedule, or requirement under the act;"

We submit that there have been many instances, in which neither circumvention nor evasion of the act was intended or possible, wherein historic and essential methods and practices have been dislocated through application of the act to distributive activities which are too complicated to permit of an over-all system of price regulation. Therefore, we ask that the above section be amended by adding substantially the following:

"The Administrator shall make reasonable efforts to observe historical relationships between commodity prices, grades, and differentials in the several funetions of production and distribution, and to conform with the advice of industry advisory committees established under this Act."

A prime requisite for compliance under the foregoing proviso would be, first, the definition of functions which contribute to orderly and efficient production and distribution; and, second, the establishment of adequate maximum prices and distributive margins to insure the maintenance of traffic through each successive step from the farm level to the consumer level. We shall deal with these steps in turn.

CEILINGS AT THE FARM LEVEL

We hold that the Office of Price Administration has undertaken an impossible task in trying to erect price ceilings over fresh fruits and vegetables without beginning at the base the farm level. Whatever political expediency has dictated a free economy in the marketing of these commodities at their source, it has been one of the most serious bars to effective price control in each successive marketing operation.

In setting country shipping-point ceilings, the price agency has relied upon the producer to permit the assembler, packer, and shipper to deduct his costs, plus a reasonable profit, from such ceiling prices. Since no maximum price regulation provides specifically for these costs, however, the producer has naturally assumed that the shipping-point price is intended for his sole benefit, and has usually insisted upon receiving it in full.

Obviously, the services of assembling, washing, grading, packing, loading, shipping, and selling are essential to economical marketing; and, since present maximum price regulations do not provide specifically for compensation of the grower's sales agent out of the f. o. b. ceiling, he is forced to seek his compensation from margins set up to cover the successive steps of distribution. This has the obvious result of compelling radical departure from historical business practices.

Therefore, we respectfully suggest that the Congress include in any future pricecontrol legislation a proviso substantially as follows:

"Provided, That no maximum price shall be established for the sale of a perishable agricultural commodity at the country shipping point which does not provide a separate and specific dollars-and-cents margin to defray the fair and proper costs of assembling, preparation for shipment, and primary sale of such commodity or class of commodities."

We suggest further that future price regulation legislation make mandatory the establishment of farm-level ceilings high enough to encourage maximum production, taking into consideration increased labor, seed, fertilizer, and container costs as well as the reduced efficiency of agricultural labor due to the competition for such labor brought about by industrial and military demands for manpower.

ADEQUATE DISTRIBUTIVE MARGINS

We submit that an efficient system of distribution beyond the shipping-point level is essential to public welfare, and that the great variety of kinds, grades, packs, and qualities of fresh fruits and vegetables has resulted in the establishment of several marketing specializations over a period of a great many yearsall needed for the servicing of specific segments of the consuming public under varying conditions of population and marketing facilities.

Because of climatic and other uncontrollable influences, it has been impossible for the fresh fruit and vegetable industry to establish a single distributive system. Some markets require a variety of functional services because of their geographic or population idiosyncrasies, while other markets require different functional services. Yet the over-all scheme of distribution depends upon all existing funetions to a greater or lesser degree in one marketing area or another. Such functions include:

(a) Growers' or shippers' sales agents, brokers, and auctions.

(b) Carlot receivers and carlot distributors.

(c) Primary distributors who buy in carlots.

(d) Secondary distributors, or less-than-carload buyers.

(e) Purveyors to hotels, restaurants, and institutions.

(f) Service jobbers who supply the retail trade.

(g) Retailers.

We maintain that, to be equitable and enforcible, all maximum price regulations should be required to recognize and define each historical function of fresh fruit and vegetable distribution, irrespective of any personal predelections, entertained by the Office of Price Administration as to their relative essentiality; and that specific dollars-and-cents margins to be provided for each such function when and if it is actually performed.

We maintain further, that provision should be made to prevent the infringement of one function upon the margins provided for other functions, such, for example, as that described in the foregoing section wherein shippers are left no recourse in seeking compensation for their services save to exact a part of the margins provided specifically in maximum price regulations to defray the costs of terminal distribution.

It is not our thought that each firm or individual performing one or more of the distributive services be classified as entitled to a single part of an over-all distributive mark-up. On the contrary, if a single operator performs all recognized functions, he should be entitled to the maximum intermediate margin. If he performs only one function, however, he should be entitled to receive compensation only for the service he actually performs.

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