tional Fruit Export Council considers that the United States should take appropriate action to discourage other governments from subsidizing their exports in competition with U.S. exports to third countries. This should include retaliation by compensatory withdrawal as a final measure if consultation with offending governments, either directly or through the GATT, fails to secure relief within a reasonable time.

The U.S. National Fruit Export Council supports the proposal in section 203 (b) of H.R. 14870 to authorize the President to take appropriate action against other nations which use government subsidies to compete unfairly against U.S. products in third country markets.

EEC TARIFF PREFERENCES/DISCRIMINATIONS

Another major concern is the proliferation of preferential tariff and trade arrangements by which the EEC discriminates against fruit and fruit products and other agricultural products of U.S. origin. The EEC tariff preferences include discriminations against fresh oranges and lemons and canned pineapple from the United States. The EEC tariff discriminations are of questionable GATT legality.

GENERAL AGREEMENT ON TARIFFS AND TRADE

The U.S. National Fruit Export Council considers that the GATT generally provides on a reciprocal basis for fair and reasonable conditions of competition in international trade. Our support for GATT principles, however, is not to be taken as any indication of satisfaction with the concessions obtained by the United States for fruit and fruit products in the last two rounds of GATT negotiations. The Fruit Export Council believes that the United States should vigorously pursue faithful adherence to GATT principles and requirements by the contracting parties.

In practical terms, this means that the United States should challenge the legality of the EEC variable levy system, should oppose the use of export subsidies by other countries to compete unfairly against products of U.S. origin, should continue its opposition to the EEC preferential tariff arrangements which discriminate against the United States, and should continue to press for elimination of unjustifiable trade barriers which limit exports of U.S. fruits and fruit products.

At the outset of this statement is a reference to the execution, or lack of execution of U.S. trade policy. The U.S. National Fruit Export Council feels very strongly that our vital interests in export trade have not been sufficiently protected or advanced by our Government. It is difficult to understand why this should be so at a time when the United States is suffering a deficit in international trade and is in economic difficulties at home, and the fruit industry is anxious to expand its exports.

OFFICE OF THE SPECIAL REPRESENTATIVE FOR TRADE NEGOTIATIONS

Finally, the U.S. National Fruit Export Council believes that the Office of the Special Representative for Trade Negotiations is the

logical center for coordination of all agencies concerned with matters of international trade. We consider that STR has not received the support necessary to function vigorously and efficiently, and that it should receive budgetary and administrative support.

The CHAIRMAN. Thank you, Mr. Lobred.

Any questions of Mr. Lobred?

If not, we thank you, sir.

Mr. LOBRED. Thank you.

The CHAIRMAN. Our next witness is the vice president of the Ohio Greenhouse Cooperative Association.

Will you please come forward?

Mr. Betts.

Mr. BETTS. Mr. Chairman, Mr. Ruetenik, by coincidence, is the second witness from Vermilion, Ohio. This is in my congressional district, and I am happy to welcome him to the committee.

The CHAIRMAN. Thank you, Mr. Betts.

This is Vermilion Day.

If you will identify yourself for the record, we will be glad to recognize you.

STATEMENT OF ROGER RUETENIK, VICE PRESIDENT, OHIO GREENHOUSE COOPERATIVE ASSOCIATION

Mr. RUETENIK. I am Roger Ruetenik, president of the Ohio Greenhouse Cooperative Association.

On behalf of the greenhouse growers of the United States, I would like to present our statement for the record because of the time involved, and we will omit any vocal presentation.

The CHAIRMAN. We always save the best until the last.

(The statement referred to follows:)

STATEMENT OF ROGER RUETENIK, PRESIDENT, OHIO GREENHOUSE COOPERATIVE

ASSOCIATION

Mr. Chairman, we welcome the privilege to present the views of the greenhouse vegetable growers of the United States relative to H.R. 16920 now before the committee.

My name is Roger Ruetenik, President of the Ohio Greenhouse Cooperative Association. I am also speaking on behalf of the National Association of Greenhouse Vegetable Growers, the Grand Rapids (Michigan) Greenhouse Industry, the Cleveland Greenhouse Vegetable Growers' Cooperative Association, the Hamilton County (Cincinnati) Greenhouse Association, and the Toledo Greenhouse Association. I operate my own greenhouse near Vermilion, Ohio, where I am producing tomatoes, cucumbers and leaf lettuce.

VIEWPOINT ON AGRICULTURE

For national security, health and welfare of our citizens, we must have a strong and prosperous agricultural industry. A consistent food supply is essential, and a qualified, well trained labor force available at all times.

The emphasis placed upon United States produced food during World War II supports this statement. The phenomenal growth of the entire United States economy has been possible due to the efficiency of American agriculture. The American housewife spends only 17 percent of her family income for food. For the best interests of our citizens, we believe a strong U.S. agriculture must be maintained.

We believe that a strong United States trading policy will benefit the producers of agricultural products if restrictions on imports are designed to en

courage and give some protection to U.S. agricultural producers. A trade policy must encourage and protect the producers of such commodities as tomatoes and other vegetables. We cannot become dependent on foreign countries for our food supplies. If tomatoes grown in Mexico and other foreign countries are allowed to be shipped into the United States and sold at prices based on the wages paid to their workers, U.S. tomato growers in Florida, California, Texas, as well as local state growers and the highly specialized greenhouse tomato growers, will be forced out of business. This will be a loss to the nation, a loss to the people that own and operate the greenhouses and a loss to the many workers who depend on the vegetable greenhouse for a living.

U.S. GREENHOUSE TOMATO INDUSTRY ILLUSTRATES EFFECT OF UNRESTRICTED IMPORTS

The experiences of the U.S. greenhouse tomato industry illustrates the problem which can occur when imports are permitted to enter this country with little consideration given to local market conditions.

Greenhouse vegetable production is one of the most specialized forms of commercial agriculture in the United States today. At the present time, there are about 1,500 acres of land in the U.S. covered with greenhouses for the production of tomatoes, Bibb and leaf lettuce, cucumbers, watercress and radishes. These 1,500 acres of greenhouse provide 240 million pounds, which generate $60 million annually to our economy. About 500 acres are concentrated in Ohio. The tomato is the leading crop produced in vegetable greenhouses in the United States. Horticulturally speaking, the greenhouse tomato is grown to perfection and has the finest quality of any tomato grown in the world.

In 1970, to produce these fine tomatoes, it will cost a grower about $150,000 per acre to erect a greenhouse. This will give you some idea of the amount of money which the U.S. greenhouse vegetable growers have invested in their business ($165 million). Over the years, the greenhouse tomato grower has had to face the competition from Florida, Texas, California, and other areas where tomatoes are raised out-of-doors. By using the latest scientific know-how and good managerial ability, many greenhouse growers have been able to meet this competition.

Sometimes the competition was rough and the greenhouse grower sold tomatoes at prices lower than the cost of production; but, for the most part, our industry was able to exist with this competition. The same Federal laws and regulations affect the growers in other states (Florida, California, and Texas) as they do the greenhouse grower.

Manufacturers of hard goods have some control over the market and the marketing period for their products, but the greenhouse vegetable grower, as well as the outdoor farmer, has very little control over this phase of the business. Greenhouse tomatoes are perishable and they must be sold soon after harvest. An over-supply of a perishable crop at harvest can result in low wholesale prices. Since the crop is sold during a relatively short period, low prices can be disastrous to the individual grower. Due to the present trade policy, the tomato imports, primarily from Mexico, are heaviest during our marketing period. The effect of our present trade policy will be discussed later.

We have surveyed some of our representative greenhouse grower members regarding production costs during 1969. The average gross cost for producing greenhouse tomatoes was $2.22 per eight pound basket, or about 27 cents per pound. The average wholesale price was $2.40 per eight pound basket, or about 30 cents per pound, leaving only 24 cents per basket, 3 cents per pound, or $3,000 per acre to cover management and profit. Obviously on a return of this nature, we cannot stay in business, we cannot meet the demand of society and we cannot attract young people to enter the field of agriculture as an occupation.

One further point should be mentioned, Wholesale Prices have remained fairly constant during the past 10 years as shown below:

These wholesale prices should be compared with the official O.P.A. established price of $2.52 per 8 pound basket (about 31 cents per pound) during World War II. (During the time the ceiling price was in effect, records indicate that the overall average wholesale price was near the $2.52 ceiling price.)

Our production costs, like most industries, have increased repidly since 1959, but the wholesale prices which we receive have not increased in proportion. Actually in terms of the buying ability of the dollar, the prices have decreased.

A survey of representative growers in our industry indicates labor costs have more than doubled during the past ten years. Other increases over this period are taxes, repairs, containers, fuel and other supplies. In spite of increased yield per acre, through production technology and the use of labor saving equipment, we are unable to increase our gross income per to offset these increased production and marketing costs. The increased quantity of tomato imports has been one of the factors affecting these wholesale prices.

TOMATO IMPORT SITUATION

The imports of Mexican tomatoes in 1970 have increased 58 percent over 1967, 65 percent of 1968 and 27 percent over 1969. The following tables summarize the imports from Mexico by carlot shipments:

The import of tomatoes from Mexico and other foreign countries during the past ten years has been our greatest competition. The tomatoes grown in Mexico are allowed to be shipped into the United States at very moderate tariffs even though Mexico has no established minimum wage for its employees. Why should our farmers be punished and penalized by highly competitive production from areas having such very low schedules of wages? Our greenhouse growers have cooperated in every respect in connection with all labor regulations, not only on the basis of wages, but on safety measures, social security and other 1. Tomato Report, Florida Crop and Live Stock Report Service, 1222 Woodward, St., Orlando, Fla. U.S.D.A. Stastical Reporting Service, State of Florida, Department of Agriculture, University of Florida Agricultural Reporting Service benefits. Therefore, the cost of production per unit is very high compared with that of the imported product, particularly from Mexico.

To illustrate the wide discrepancy in labor costs, a recent U.S. Department of Agriculture publication reported that the wage for unskilled labor (in Mexico) including social benefits, is approximately $1.72 for an eight hour day, or 211⁄2 cents per hour. At the present time, most of our members are paying hourly rates equivalent to and in many instances more than the Mexican daily rate.

According to this same U.S. Department of Agriculture report, about 75 to 80 percent of these tomatoes are imported in the United States during February, March, April and May. These months coincide closely with the months when greenhouse tomatoes are in production. If we would include the Mexican shipments for December and June (other important greenhouse tomato production months) over 80 percent of the Mexican tomatoes would be coming on our markets when greenhouse tomatoes are also being marketed.

SUMMARY

The rapid increase of fresh tomato imports has severely affected the greenhouse tomato industry. If this trend continues, and recent reports indicate it will continue, the future of this important vegetable industry is in jeopardy unless some changes are made in the U.S. trade policy during critical market periods. Certain specialized areas of the U.S. agriculture need help.

Greenhouse tomato growers in the U.S. are unable to meet the subsidized competition from tomatoes produced in Mexico and then shipped to the United States for sale in the retail stores in our metropolitan areas.

To illustrate the effect of these imports in wholesale prices, the experiences during the 1968 spring tomato season can be cited, as an example. Disease and related production problems during early spring (1968) reduced the Mexican tomato production. The imports of tomatoes from Mexico for February through May were about 50 percent less than imports for comparable periods in previous years. The wholesale prices received by greenhouse growers during 1968 were the best prices received during the past ten years. In 1969, when the size requirements were limited because of the Marketing Order in Florida, shipments from Mexico were curtailed and the wholesale prices received were just slightly lower than 1968. In 1970 there have been more tomatoes shipped into the United States from Mexico and greenhouse wholesale prices have been lower, but this has in no way affected the cost to the consumer.

GREENHOUSE VEGETABLE GROWERS CONTRIBUTIONS TO U.S. ECONOMY

The greenhouse vegetable growers uses labor throughout the year. In addition to the millions of dollars he pays for supplies, the taxes which he pays are much higher than many other phases of agriculture since most of the businesses are located near metropolitan areas. A recent suvey of our members indicated their local taxes will average near $2,750 per acre. As mentioned earlier, we have more than 500 acres of greenhouses in Ohio alone. This money spent by U.S. greenhouse growers is reinvested in our local communities, in our states, and in our country. Also the greenhouse employees pay taxes, support their community, spend their money and are gainfully employed twelve months out of the year. The majority of greenhouse workers own their homes, drive automobiles and send their children to school and college. His counterpart in Mexico works for less, doesn't have a home or car, and works with his children in the field on a seasonal basis. We, in our small way, are contributing to full employment.

Our support industries, such as maintenance, packaging, supplies, fuel, inhome or car, and works with his children in the field on a seasonal basis. We, in contributing to make the U.S. economy strong.

RECOMMENDATIONS

We believe a successful greenhouse vegetable industry is in the best interests of the consumer. To have a strong industry, some protection must be given to the U.S. greenhouse industry from the unlimited imports of tomatoes from foreign countries.

The greenhouse growers of America support all international trade that is done on a fair and equitable basis and such trade should be encouraged, but when imports are greatly increased from countries having a very low rate of wages, the situation must be reviewed and the Chairman of the Ways and Means Committee is to be commended for the introduction of H.R. 16920, although it is limited to textiles and footware. We strongly recommend amendments to the bill to include agricultural products for food and the embodiment of the principles of fair marketing as outlined in S. 146, which was introduced by Senator Spessard L. Holland. We strongly recommend that the principles of this bill be included in future legislation with respect to international trade in agricultural products. 1. Since about 80 percent of the tomatoes from Mexico are being imported during the local greenhouse market season, we believe an adjustment should be made on the duties during this shipping season.

2. To provide for sound future growth of the entire greenhouse vegetable industry, we believe a quota system should be established to regulate the imports of tomatoes, based on the supply available and the need.