all due deference, we doubt whether the growers, or the farm organizations, or the officials in the Department of Agriculture are wise enough to do it. The only practical control will come, as it always has, from the combined judgment of all canners-in touch as they are with growing conditions, markets, and their ability to can the crops. And since we have the major stake in the operation-not forgetting that indirectly our growers also have a vital stake-we object to having a control scheme imposed where we think it unwise, impracticable, unworkable, or even harmful.

Next, I might mention marketing. This must be done over the full year. It is a sensitive and difficult operation. Canners have devoted their lives to developing particular markets and to securing the acceptance of their brands and packs in various areas. When they have invested their own money, or the money they borrow, in a warehouse full of canned fruits or vegetables, they have the major risk of marketing. To suggest that how much they may sell and where they may sell it should be a matter of Government controls, in the formulation of which they have no voice or vote, is regarded by them as completely arbitrary. To suggest as this bill proposes, that these controls may nevertheless be imposed-that they may be administered by a control committee appointed by the Secretary which means by one of his subordinates that the canners may be subject to assessments, in which they have no voice, to pay for the cost of the operation-seems to them not only highly unreasonable but fundamentally undemocratic.

Finally, where a proposal has been considered and rejected seven times in 13 years, one might expect that the proponents of these measures would present a set of compelling facts. Thus far we have heard none.

Moreover, one might well ask, now that emergency ideas have been dropped, that Congress consider these problems carefully and deal with each one specifically. When Congress dealt with sugar in the Sugar Act of 1934, it wrote many pages for the control of quotas of that one commodity alone. Even if a case could be made out for this type of wide delegation of power over the life and death of the business in one single commodity, it is doubtful whether wide authority over every commodity should be granted except perhaps in time of war.

The prices paid to growers of canning crops, in terms of ratio to parity, have been relatively more favorable in the last decade than the price the farmer received for most other crops. This is shown by a chart I have given you.

May I speak briefly as a New York State canner. While there has been no opportunity to poll each of our canners on this question, I am confident, knowing our canners as I do, after 25 years of association with them, that they are opposed to this drastic legislation. I might have had some doubt about our one big cooperative canner, GLF, until I received the following wire yesterday:

As members of National Canners Association operating canneries in Pennsylvania and New York, this farm cooperative opposes H. R. 452, amending marketing agreement act to bring all nonbasic farm commodities under production control. This farm cooperative opposes legislation limiting food production.

The CHAIRMAN. Thank you very much. We will recess until tomorrow morning at 10.

(Whereupon, at 12:05 p. m.. the hearing was recessed to 10 a. m. of the following day, Thursday, Feb. 27, 1947.)

Actual prices of specified farm products as percent of parity, 1935-39 average, 1943, 1944, and 19451

Source: Compiled from U. S. Department of Agriculture, Agricultural Statistics 1946, pages 754 to 758.

MARKETING AGREEMENTS AND ORDERS

THURSDAY, FEBRUARY 27, 1947

HOUSE OF REPRESENTATIVES,
COMMITTEE ON AGRICULTURE,
Washington, D. C.

The committee met at 10 a. m., Hon. Clifford R. Hope, Chairman, presiding.

The CHAIRMAN. The committee will come to order. As announced at the conclusion of the hearing yesterday, there will be many witnesses today. We are going to try to hear as many as we possibly can. We have allotted the first hour of the hearings to the canners to continue their testimony. After that we want to hear the representatives of the National Association of Frozen Food Packers, and then the representatives of the National Grain Trade Council. We hope to give everybody an opportunity to present their views.

The chair realizes the amount of time this will take is very largely outside of the control of the witnesses, because it depends a great deal upon the extent of the interrogations by the members of the committee. We are going to make every effort to give all those present a chance to be heard.

I am going to call first on L. E. Neel, a representative of the Turlock Cooperative Growers, Modesto, Calif. Will you come forward, Mr. Neel?

STATEMENT OF L. E. NEEL, GENERAL MANAGER OF TURLOCK COOPERATIVE GROWERS, MODESTO, CALIF.

Mr. NEEL. Mr. Chairman, and gentlemen: My name is L. E. Neel, General Manager of Turlock Cooperative Growers, Modesto, Calif. I represent a State which has grown large in the canning business. This statement is illustrated by the fact that during the past 10 years our packs in California have grown from 30,000,000 cases to a total of 80,000,000 cases packed during 1946, or an increase of 170 percent. The increase has been due to many things fundamental in the development of a manufacturing business. Capital has been willing to invest in both the growing and the canning of fruits and vegetables because there was no restraint on the freedom to venture with the full knowledge that by having ventured every facility of business would be used to expand the markets for the product.

Many millions of dollars have been spent by the canning industry in promoting the sale of California canned fruits and vegetables. This promotion has been constantly carried on by the canners and has only occasionally been supplemented by an advertising program conducted jointly as between canners and growers. Advertising has very rarely

been used in trying to move distress stocks, but instead has been the result of the processors in the industry trying to build a business.

Any increase in the demand for products produced within the State of California results either in growers receiving a higher price for their product, or of increased acreage, thereby making available to the farmers already growing canning crops the use of additional acre; age, or permitting his neighbor to participate in the canning fruit and vegetable industry.

The bill, H. R. 452, being considered by this Committee, would permit establishing marketing orders which in turn would vest in the grower the power to say how much a canner could pack of a given variety, could establish his grades, regulate the markets to which he could ship, even though areas packing the same product were not regulated.

What incentive would there be to a canner to push his brand, and develop his markets, thereby expanding the consumption of the product, if he was regulated as to how much he could pack, and where he could sell without having a voice in the matter?

Canning is a joint venture between the grower and the canner with the canner having over two dollars invested to a grower's one dollar in the finished product when ready for market. The canner pays the grower for his product, pays the laborer working in the cannery, and assumes all the other expense of preparing for market before he sells his pack. The canner takes the risk of getting his money back by selling over a year's time. If the market is maintained he receives his cost back with an expected profit. If, on the other hand, the market is not maintained during the year, he will be forced to sell at a loss, hoping to recover some other year. Then again he may have a rising market in which event he may make a good return.

Over the years the canning industry has demonstrated that it is very sensitive to consumer purchasing power and has had the ability to adjust itself to the existing level of demand. Growers of canning crops have fared relatively well compared with other agricultural crops, because of this flexibility, and the competitive situation that exists within the industry bringing out the best in merchandising ability from within the industry.

Canning is not an old, full-grown industry which has reached a static age. Instead, the industry is growing with consumption per person in the United States being on an ascending scale. This growth is the result of increasing consumer demand, resulting from everincreasing quality of the product, new products being developed, and canners going out and trying to increase their business by trying to increase their business by trying to get people to eat more canned foods.

How will the canning industry continue to grow if the incentive for the man investing over two-thirds of the money and energy is completely regulated by the man who has one-third only of the investment in the finished product? What canner is going to take the risk of investing his money when the rules of the game are regulated by those having only half as much money invested, and with no risk after the pack is once made?

As a canning cooperative, we find it necessary to oppose the enactment of legislation proposed in H. R. 452 as being unsound, impractical, fallacious, and the extreme in complete regimentation.