Foreign imports in recent years have increased as tariffs have been lowered. I include herewith a statement by the Northwest Bulb Growers Association which sets forth specific information with respect to the amount of imports, tariffs, and values. I trust that the Ways and Means Committee will give due consideration to the plight of our bulb growers, and will heed their plea for help. STATEMENT OF NORTHWEST BULB GROWERS ASSOCIATION, SUMNER, WASH. FLOWER BULB IMPORTS This association represents by membership and by acreage growing 90 percent of all the growers of narcissus, iris, and tulips produced in the States of Washington and Oregon. Oregon and Washington produce about 90 percent of all of these three types of bulbs grown in the United States which are used for greenhouse forcing. Large amounts of these bulbs are also produced for seed store and home garden use although these are of less importance in the growing program. The growers in these two States are faced with ruin and bankruptcy because of low market prices for their bulbs brought about by the importation of great amounts of these, particularly narcissus and iris, from Holland. These unnecessary excess imports dumped upon the bulb markets at low prices have encouraged the overproduction of flowers and in consequence flower prices have been depressed far below production costs in many areas of the country. Low bulb flower prices have tended to drag down the whole flower price structure whereby totally unrelated items have unduly suffered. Bulb growers in Washington and Oregon have been forced to accept prices for their product below their own cost of production and in many cases have been unable to move their crops at any price on account of imports. In 1952 domestic growers destroyed their unsold surplus amounting to about 25 percent of all their iris and 20 percent of their top quality narcissus. Again in April of 1953 iris growers plowed up and destroyed 25 percent of their planted acreage because a thorough survey of the market convinced them that their production could not be all sold at any price and they could not afford to finish off the crop and then throw 25 percent away. Imports from Netherlands-U. S. Tariff Commission on March 1953 Iris bulbs are classed along with roots, corms, etc., and the Commission has only segregated Iris for 1950-52. COMPARATIVE PRICES, WHOLESALE TO THE JOBBER TRADE 1 Below are listed the commonly prevailing prices for domestic-produced bulbs and the Holland Government posted prices for imports. These prices are f. o. b. Pacific coast points for domestic and f. o. b. warehouses in Holland as the case may be. These prices are for the two principal items used by greenhouses, other varieties are in proportion. 1 Holland prices are issued at a gross figure but carry a discount of 20 percent to wholesalers, thus the Holland price as issued for King Alfred 1953 reads $50, less 20 percent. or $40 net. Freight and duty charges to port of entry, east coast, United States of America, average $20 per 1,000 for narcissus and $3 per 1,000 on iris. Freight charges from the Pacific coast to east coast, United States of America, average $15 per 1,000 for narcissus and $2.50 per 1,000 for iris. The same figures apply on domestic shipments from Pacific coast to Midwest. The available market is divided at 70 percent for the east coast, 25 percent to the Midwest, all other areas 5 percent. It should be noted that the quoted prices on imports are the posted Holland Government prices; in many cases the actual sale price as paid by the domestic greenhouse or large buyer was considerably lower, in the case of iris in 1952 the posted price was cut by importers as much as 50 percent. Domestic growers in consequence in order to meet competition would often lower their own prices from the suggested list which was already at a rockbottom level because of high production costs. During the war period when there were no imports (1940-45), the prices of narcissus advanced only about 65 percent over 1940 while all other agricultural crops advanced 100 to 150 percent indicating that there was no great shortage of bulbs. Production costs have roughly doubled since 1945, yet the prices of domestic grown narcissus and iris have been forced down 25 percent. In 1949 Holland money was devalued by 20 percent, yet Holland bulb prices declined only 10 percent. This actually worked out to give the Holland grower an advance of 10 percent on his price, while forcing a 10-percent cut on the domestic grower. THE DOMESTIC GROWER'S PRODUCTION COSTS Labor represents about 80 percent of the producer's costs and this item has advanced about 150 percent since 1940. Land rents, machinery repair and replacement, taxes, and other items have all advanced materially. It must be apparent that an item that sold at a presumably fair price of $42 in 1940 cannot be produced and sold today for $58 nor can a producer of any agricultural crop continue to grow and harvest a crop of which 25 percent has to be destroyed because the market is flooded with imports offered at a price below his cost of production. NORTH WEST BULB GROWERS ASSOCIATION, SUMNER, WASH. BULB GROWERS FORCED TO DESTROY 25 PERCENT OF THEIR IRIS PLANTINGS Committees from the various bulb-growing areas of Washington and Oregon met in Seattle today and completed their reports on the acreage reduction program promulgated by the association earlier in the month. The sigued compliance contracts filed with the committee represented in excess of 90 percent of the Wedgewood iris acreage under production and the actual plowing under of 25 percent of that acreage will start April 1. This drastic move was dictated by the debacle which occurred in 1952 when the growers found it impossible to sell a large portion of their crop on account of the immense quantities of Holland imports dumped upon the market at prices below the domestic cost of production. In consequence of these market conditions many growers drastically reduced their plantings and some were forced out of business and bankrupted; however, a survey of acreage still in production and the sure prospect of an ever-increasing flood of imports forced the growers to decide upon the acreage reduction program. It is estimated that about 10 million top-quality marketable bulbs will be destroyed. This move should have some stabilizing effect upon the market for domestic bulbs and relieve some of the pressure of distress stocks at harvest time and the growers will at least save part of the costs of growing and harvesting that portion of their crops which it appears would be in surplus, after harvesting and have to be destroyed anyway. It is a severe indictment of national trade policies which could permit such a situation to come to pass and growers, already battered by the impact of cheap foreign imports ever since the end of the war, are not greatly encouraged to continue to battle this almost impossible production and marketing problem forced upon them. They cannot compete with cheap foreign labor without some protection and that protection is not now in prospect. Re H. R. 4294. CHEESE IMPORTERS ASSOCIATION OF AMERICA, INC., Congressman DANIEL A. REED, Chairman, House Ways and Means Committee, Washington, D. C. DEAR CONGRESSMAN: We note that a suggestion has been made by one or more of the witnesses appearing before your committee to provide for an extension of section 104 of the Defense Production Act as an amendment to the Simpson bill. Our organization is opposed to any such action and we submit herewith our statement to the Senate Banking and Currency Committee when it considered this issue 2 months ago, which we request be made part of the record of the above hearing together with this letter. The facts, arguments, and statistics set forth in our enclosed statement are pertinent here with regard to any attempt to include the said section of the Defense Production Act in the Reciprocal Trade Agreements Act. Section 104 of the Defense Production Act places certain powers in the Secretary of Agriculture which the Secretary himself has stated "goes beyond what is needed to afford protection to price support and other Department programs." The Secretary of Agriculture so testified before the Andresen committee on April 14, 1953. He further testified, in opposition to section 104: “Only 1 of the 3 criteria for restricting imports mentioned in the section relates to price support programs. The other two criteria relating to impairing or reducing domestic production or interfering with orderly domestic storing and marketing can be invoked at price levels above those contemplated by a price support or marketing order program. Such authority was doubtless desirable during the war emergency, but as a continuing authority it is not needed. "Section 104 was enacted as a temporary measure and carries a definite expiration date. The problem of protecting price support and other programs against excessive imports is not a temporary one. Therefore, legislation to meet this problem should be on a permanent rather than a temporary basis. "A proceeding before the Tariff Commission is better suited to the development in an orderly manner of all relevant and material facts than is administrative action by an executive department. The Tariff Commission has had long experience in the conduct of investigations, it has a staff of experts trained in such matters and it is in position to afford full opportunity for hearing to all interested parties. "The Secretary of Agriculture is charged with the formulation and administration of price support and other programs. It seems only fair and just that his decision with respect to interference with one of his programs should be subject to the review of an independent investigating body such as the Tariff Commission. An investigating body like the Tariff Commission gives all sides an equal opportunity to present their views." We submit that the price-support program is adequately protected under section 22 of the Agricultural Adjustment Act and that the said section of the act, under the new administration, be given an opportunity to operate. The Tariff Commission has just concluded its investigation under the said section of the act with regard to dairy imports and its report will be in the hands of the President by June 1. Thus it has been shown that section 22 can operate effectively and with speed, and for this reason, and all the reasons set forth in the enclosed statement, the extension of section 104 is unnecessary and unwarranted. Copies of our statement are being forwarded to the clerk of your committee for distribution to members of your committee as well as for incorporation in the record. Respectfully yours, MARTIN A. FROMER, Counsel. STATEMENT OF MARTIN A. FROMER, COUNSEL, CHEESE IMPORTERS ASSOCIATION OF AMERICA, INC. The Cheese Importers Association of America, Inc., is a nationwide organization of cheese importers comprising in its membership importers of a major portion of the cheese imported into the United States. Its offices are located at 51 Chambers Street, New York City. This association is opposed to the continuation of the provisions of section 104 of the Defense Production Act, restricting the importation of cheese. The first import restrictions imposed against cheese under the Defense Production Act became effective in July 1951, after having been added to the Defense Production Act without any opportunity on the part of cheese importers to be heard. In September 1951, hearings were held by this committee on S. 2104, which bill proposed the immediate repeal of section 104 of the Defense Production Act. The statement of this association, and its testimony, appear in the record of that hearing, commencing at page 2978, and the said statement, testimony, and the exhibits there presented are pertinent here and we request that they be incorporated into this record. As a reseult of the said hearing with regard to S. 2104, this committee published a report, identified as Report No. 790, 82d Congress, 1st session, to accompany S. 2104. The said report comprehensively sets forth eight compelling reasons for the termination of the controls embodied in section 104 of the Defense Production Act. The said report and the facts found therein are pertinent here and we request that it be made a part of the record. A summary of the reasons set forth in the said report of this committee for discontinuance of these controls, after a full and complete hearing, are as follows: (1) Alternative statutes to accomplish the necessary protection of domestic industry are in full force and effect; particularly section 101 of the Defense Production Act of 1950, section 22 of the Agricultural Adjustment Act, as amended, and section 7 of the Trade Agreements Extension Act of 1951. (2) Representative farm groups oppose section 104 as harmful to agriculture. (3) The President, the Department of Agriculture, the Department of State, and the Economic Cooperation Administration oppose section 104 as harmful to the interests of the United States. (4) No hearings were held on section 104 nor did it receive committee consideration before it became part of the Defense Production Act. (5) United States agricultural exports exceed United States agricultural imports, especially in the field of dairy products. Our agricultural exports are likely to suffer from action under section 104. (6) Depriving other countries of a source for dollars through trade will result in a reduction of their imports from the United States, or in the alternative will increase the need for grants and loans by the United States to such countries. (7) Section 104 is inconsistent with United States world leadership in attempting to reduce trade barriers. (8) Ten nations have already protested enactment of section 104, some claiming it violates the law and spirit of the General Agreement on Tariffs and Trade. These findings are just as true and pertinent now as they were at the time of the report. The repeal bill did not reach the floor of the Senate until the end of January 1952, at which time the Senate voted to recommit the bill to the committee for further study. This committee filed a subsequent report, namely Report No. 1225, but the same was not acted upon. Instead, hearings were held in March 1952 with regard to the renewal of the Defense Production Act. At the said hearings, the Cheese Importers Association of America, Inc. again submitted testimony, facts and arguments upon the matter in issue, which testimony and exhibits commence on page 806 of the record of the hearing on S. 2594 to amend and extend the Defense Production Act of 1950. This committee, in rendering its Report No. 1599, 82d Congress, 2d session, to accompany S. 2594, found with regard to import controls as follows: "After careful consideration of the testimony, your committee reached the conclusion that the provision in its present form is unnecessarily restrictive and inflexible, and may result in injury to the American export trade and to American producers dependent on exports, disporportionate to the benefits resulting from the provision." The committee then went on in its report to revise section 104 so as to follow the provisions of Public Law 590, which provided for exercising import controls where such controls are found (a) essential to the acquisition or distribution of products in world short supply, or (b) essential to the orderly liquidation of temporary surpluses of stock owned or controlled by the Government. The Senate acted favorably upon this revision, but the House passed a bill substantially similar to the previous controls, and in joint committee, the Senate conferees yielded to the House on this provision and renewed controls which differed from the previously existing section 104 by permitting the Secretary of Agriculture to allow imports of a commodity in an amount 15 percent over the quotas fixed for the commodity, and by providing for the establishment of controls on the basis of types and varieties of commodities. In July 1952, section 104, as extended, went into effect and expires June 30, 1953. The Secretary of Agriculture has removed restrictions against imports of Swiss cheese, Roquefort cheese, sheep's milk cheese, and incidental minor varieties, but has retained restrictions on imports of Italian types of cheese, blue mold cheese, Edam and Gouda cheese, and Cheddar cheese. Restrictions against import may be reimposed by the Secretary of Agriculture upon all cheese upon a determination under the act, and the possibility of such action is a constant threat to the cheese importing industry. Quotas for the restricted cheeses are issued to importers based upon a complicated formula, all of the factors of which are known only to the Department of Agriculture. We submit herewith facts and statistics pertaining to the volume of imports of foreign types of cheese, domestic cheese production and consumption, and cheese exports. Domestic cheese production and consumption, unlike the situation in the case of butter, have been steadily increasing. In 1952, domestic production was 1,191,000,000 pounds, and estimated per capita consumption was 7.7 pounds, the latter constituting an all-time record, and the former being just short of the all-time record set in 1949. Imports, on the other hand, were again lower than the previous year and amounted to 49,062,000 pounds. This is about 4.1 percent of the total domestic production. The tables of statistics submitted together with this statement indicate that domestic cheese production has increased from 491,963,000 pounds produced in 1931, to 1,191,000,000 pounds produced in 1952. In the same period, per capita consumption has increased from 4.4 pounds to 7.7 pounds. Imports, on the other hand, have decreased from 61,991,000 pounds in 1931 to 49,062,000 pounds in 1952. This, therefore, is not the situation of a new industry entering the American market to damage and destroy the American production. On the contrary, the United States production of foreign types of cheese derives from a market created and established by imports, and copied to some extent by domestic producers. It is worthy of note that domestic production of foreign types of cheese has been steadily increasing and that increased production and consumption of cheese generally reflects itself in increased production of foreign types of cheese. Production of Italian types of cheese in America has grown from 3,493,000 pounds in 1931 to 61,615,000 pounds in 1952. Swiss cheese production has increased in the same period from 28,234,000 pounds to 109,400,000 pounds. Blue cheese, which was not produced in the United States at all in 1931, was developed and introduced from abroad and in 1952 accounted for a production of almost 10 million pounds. Cheese imports of foreign types have been a stimulus to domestic production. The domestic cheese industry is a colossus compared to the trickle of imports from abroad. The situation may be likened to the fly on the elephant's back and the inquiry of whether the fly was injurying the elephant. On the contrary, the giant is being protected against the pygmy. Even in 1950, when cheese imports reached the highest level since prior to World War II, the total of imports did not reach the amount imported before the war. 32604-53-58 |