Now, there is nothing said about seed at all. It comes in at a certain duty. He takes that wheat and he goes down to Chicago or Fargo, N. Dak., and sells it to an elevator as unfit for human consumption. The elevator man puts it in his bins. The farmers around Fargo find out it is Canadian wheat down there unfit for human consumption, and they want to plant some wheat so they go out and say: "I want some of that wheat that you have in your elevator."

The elevator man does not say, "What are you going to do with it?" He cannot say to the farmer, "Don't you dare plant this."

They agree upon the price. He takes it out on his farm and plants it.

Now he has deprived the certified seed wheat, the wheat dealer who wants that particular type of wheat, from raising it, and making a profit on it. Now that is what is going on.

Mr. HIGMAN. We have not had any case on those specific facts brought to our attention, but it seems that if a man uses any wheat for seeding purposes he is not using it for human consumption purposes; so that, if he foresaw that situation, he would have no difficulty in declaring, when that wheat arrived at the border-if he was going to use it for seeding purposes that he was

Mr. SMITH. Forget, please, about what he is going to use it for. The trucker does not know. He is getting 12 cents a bushel for hauling it down to Fargo, N. Dak., and he does not care anything about the wheat. He bought it up there from some Canadian elevator, and he is just in the business of transporting it. It is wheat unfit for human consumption.

He takes it down to Fargo. The Fargo elevator man puts it in his elevator and sells it to a farmer. You cannot say to that farmer, "You cannot plant that wheat."

Mr. ALBERT (presiding). Mr. Higman, we thank you.

You have no legislative recommendations, I take it, with respect to this?

Mr. HIGMAN. No. We worked very extensively a couple of years ago in connection with some legislation on this wheat problem, helped out technically, and nothing has developed yet. But we have not any suggestions on this poisoned seed wheat question.

Mr. ALBERT. Would you mind standing by in case we need to ask you some further questions? I believe we have finished with your principal testimony.

Mr. JOHNSON. I want to ask him one question.

The wheat that is being used for seed is probably the best grade of wheat they have; isn't it? The seed grain is where they pick the very best they have?

Mr. HIGMAN. I would think so. I do not really know.

Mr. JOHNSON. Isn't that generally understood?

Would not it seem then that grain that is going to be used for seed purposes should not be in a lower--I suppose it carries a lower tariff by being put in "Unfit for human consumption".

Mr. HIGMAN. Yes.

Mr. JOHNSON. And by treating it for rust and things like that ahead of time, they make it not fit for human consumption, and they are getting around the tariff laws that way?

Mr. HIGMAN. At least, if they have put this wheat in a condition where it cannot be consumed by humans, whether by the application of poisonous substances to it or the introduction of meat products, or however they do it, it is, in fact, unfit for human consumption and obtains the "Wheat, unfit for human consumption" classification.

Mr. JOHNSON. You could treat seed wheat and do part of the things that the farmer would have to do, treat it for rust and different diseases, and still make it unfit for human consumption; and yet make it worth more for seed, because the farmer would have all that done when he bought it for seed?

Mr. ALBERT. Well, the problem here grows out of the fact we have two different acts and they are not on all fours with each other.

You have the National Seed Act, which has one criterion with respect to seed wheat coming into this country; and you have the Tariff Act, which has entirely different criteria-it does not recognize seed wheat as a separate type of wheat?

Mr. HIGMAN. That is right.

Mr. ALBERT. We thank you very much for your testimony.

We would now be pleased if the representatives of the Department of Agriculture would come forward and give us the benefit of their further opinion on this matter.

Would you please state your names and official titles within the Department?

Mr. BURMEISTER. Gustave Burmeister, Assistant Administrator, Agricultural Trade Policy and Analysis, Foreign Agricultural Service.

This is Wilbur Youngman, seed marketing specialist, in our Grain Division.

Mr. ALBERT. Did you come with any prepared statement this morning?

Mr. BURMEISTER. Yes.

Mr. ALBERT. We will be very happy to hear your statement.
Before you proceed-

Mr. Higman, I forgot to ask you, do you have with you a copy of the regulations which you issue to your port of entry men, which we might have for the record?

Mr. HIGMAN. I can give Mr. Heimburger reference to it.

It is section 10.106. I will send you a copy.

Mr. HEIMBURGER. It is section 10.106 in the Code?

Mr. HIGMAN. It is in the Code of Federal Regulations as well as in the Customs Regulations.

Mr. HEIMBURGER. If you could send a separate copy of that for the record, it would be helpful.

Mr. HIGMAN. I will supply that.

Mr. ALBERT. Without objection, it may be inserted in the record. (The regulations referred to are as follows:)

CUSTOMS REGULATIONS

WHEAT

Sec. 10.106 Wheat, unfit for human consumption; other wheat.-(a) There shall be filed in connection with each entry covering wheat entered under paragraph 729, Tariff Act of 1930, as modified, as "wheat, unfit for human consumption," a declaration of the importer setting out whether any part of the importation is to be used with or without blending with other wheat in the

manufacture of products for human consumption. If it is declared that no part of the shipment is to be so used, a further declaration shall be made stating the use to which the wheat is to be put. When it is shown by the declaration that the wheat is to be used in the manufacture of products for human consumption, it shall be classified as "wheat" under the provisions of paragraph 729, as modified. However, when the declaration states that the wheat is to be used otherwise than in the manufacture of products for human consumption, the procedure outlined in Treasury Decision 47577 shall be followed, and in the absence of other controlling factors, the wheat shall be classified as "wheat, unfit for human consumption" under the provisions of paragraph 729, as modified, if it contains 30 per centum or more of damaged kernels. (Sec. 1 (par. 729), 46 Stat. 634; 19 U. S. C. 1001 (par. 729).)

STATEMENT OF GUSTAVE BURMEISTER, ASSISTANT ADMINISTRATOR, AGRICULTURAL TRADE POLICY AND ANALYSIS, FOREIGN AGRICULTURAL SERVICE, UNITED STATES DEPARTMENT OF AGRICULTURE; ACCOMPANIED BY WILBUR YOUNGMAN, SEED MARKETING SPECIALIST, GRAIN DIVISION, UNITED STATES DEPARTMENT OF AGRICULTURE

Mr. BURMEISTER. Mr. Chairman, we did not attempt to incorporate in this statement what we have in the letter addressed to Chairman Cooley. This is supplementary and, therefore, quite short, and I trust it will be kept in mind this is simply supplementary information to what we had in our letter.

Mr. ALBERT. That is what we want.

Mr. BURMEISTER. Practically all imports of seed wheat from Canada are spring wheat varieties, and nearly all of such imports move into the North Plains States where spring wheat is grown. There is no shortage of good зpring wheat seed in the United States.

Wheat seed imports totaled 2,256,388 bushels in 1955-56 and 2,047,648 bushels in 1956-57.

During the 8 months' period, July 1957-February 1958, the imports amounted to 2,102,638 bushels, nearly twice as much as the 1,151,427 bushels imported during the same period in 1956-57. This would indicate that imports in the current year are likely to total over 3 million. bushels, the largest on record.

As is apparent from the table attached, imports of seed wheat as wheat unfit for human consumption did not become substantial until 1954-55. Such heavy importations were the result of Canada's allowing exports of Selkirk seed wheat and the general realization of importers that the "unfit for human consumption" category for imports meant about 11 cents saving in duty per bushel.

The Federal Seed Act of August 9, 1939, as amended, provides that all seed imported for planting purposes must be tested for germination and purity and not contain more than the stated maximums for noxious and total weed-seed content. All lots of field seeds of 100 or more pounds and sampled at the point of entry by the Collector of Customs are forwarded to the nearest Federal Seed Laboratory for analysis. Upon notice of release by the Federal Seed Laboratory and payment of duty, the seed is released to the importers. Seeds failing to meet the standards are prohibited entry.

As a consequence of the Federal Seed Act, reliable statistics on imports of seed are available as shown in column 5 of the table attached.

22856-58-pt. 1—14

Import statistics for the current year are, of course, not as yet complete, but, for the 8 months' period, July 1957 through February 1958, imports of seed unfit for human consumption, most of which are undoubtedly treated seed, amounted to 2.1 million bushels, almost double the 1.1 million bushels received during the same 8-month period of 1956-57. At this rate, imports in this classification are likely to exceed 3 million bushels.

With approximately 14 million acres being taken out of production during the last year under the soil-bank program, domestic requirements for seed wheat would be reduced by about 14 million bushels. Consequently, these increased imports are increasingly competitive with domestic seed.

This is especially true since imports at the reduced duty rate under the "wheat unfit for human consumption" classification gives the imported varieties an advantage of approximately 11 cents per bushel over the untreated seed wheat.

The present proposal to classify all seed wheat, whether treated or not, as seed wheat, will not result in the decreased importation of seed wheat from Canada, except insofar as the additional duty may tend to have a restrictive effect and assuming the Secretary issues the necessary permits.

The proposal will result in a much clearer definition of wheat imports because it will restrict imports of wheat "unfit for human consumption" to animal-feed wheat, which wheat was the original reason for this separate category at a reduced duty. It also clarifies the meaning of the President's proclamation.

For these reasons, the Department of Agriculture has no objections to the enactment of this legislation.

(The table referred to is as follows:)

United States: Imports of wheat for domestic use, fiscal years 1948–57

1 Reported by Bureau of Census. U. S. Department of Commerce; excess over imports under quota plus amounts of wheat permits represent presentations for imports not allowed entry.

As reported by the Bureau of the Customs.

All seed is subject to inspection by AMS, USDA under the Federal Seed Act.

Permits issued by the Department of Agriculture for certified seed wheat in amount of 100 bushels or

more and not chrgeable against the quota: any excesses over imports under the Federal Seed Act are due to unused permits or importations of less than full amounts of permits.

Estimate derived by subtracting col. 6 from col. 5.

• Preliminary.

Mr. ALBERT. We thank you, Mr. Burmeister.

Mr. BURMEISTER. I wanted to bring out one more idea, since we had to prepare the statement in quite a bit of a hurry and did not get a chance to do much research on it, to bring this closer to the seed wheat import situation. I have here the Department's recent release on crop acreages planted to all spring wheat in the United States, most of which is in the North Central States, and it shows from 1951, with an acreage planted of 22,379,000 acres, that planting in 1957 had dropped to 12,384,000 acres, or approximately 10 million acres, and that would mean a reduction in the requirement of spring seed for spring wheat of about 10 million bushels in this country during that period.

Mr. ALBERT. In that connection, you stated over on page 2: With approximately 14 million acres being taken out of production during the last year under the soil-bank program, domestic requirements for seed wheat would be reduced by about 14 million bushels. That refers to all wheat?

Mr. BURMEISTER. That is all wheat.

Mr. ALBERT. And, of course, the impact would be much bigger on spring wheat?

Mr. BURMEISTER. That is correct.

Mr. ALBERT. And with reference to spring wheat, what did you say the figure was?

Mr. BURMEISTER. Since 1951 there has been a drop in the planted acreage of 10 million. So that would mean a drop in the requirements since 1951 for spring wheat seed of about 10 million bushels.

Mr. ALBERT. 10 million bushels. And what is the total requirement for spring wheat seed?

Mr. BURMEISTER. On the basis of about a bushel to the acre, it would be about 1212 million to 13 million bushels.

Mr. ALBERT. And of that, something like 3 million bushels are estimated to be brought in this year, leaving 9 million bushels available to American producers?

Mr. BURMEISTER. Yes.

Mr. ALBERT. Now you state in your very first paragraph that there is no shortage of good spring wheat seed in the United States.

Mr. BURMEISTER. That is the opinion of the people in the Department of Agriculture.

Mr. ALBERT. In other words, the 12 or 13 million bushels that are needed are amply available in this country?

Mr. BURMEISTER. Yes.

Mr. ALBERT. There is considerable extra cost to the farmer in the production of high-type seed wheat over the production of millable wheat; is that true?

Mr. BURMEISTER. That is my understanding; yes, sir.

Mr. ALBERT. It costs more to produce it?

Mr. BURMEISTER. Yes, sir.

Mr. ALBERT. It must bring more on the market to justify growing this type of wheat; is that true?

Mr. BURMEISTER. Yes, sir. In that regard, we tabulated some recent prices, February prices of spring wheat, for seed running $2.50, $2.60 a bushel. We also

Mr. ALBERT. How does that compare with the present price of wheat?