Mr. HAGEN. Our next witness is Mr. S. R. Smith, who is the Director of the Fruit and Vegetable Division of the Agricultural Marketing Service, United States Department of Agriculture. I might say parenthetically that any of the Members of Congress who have an interest in this and want to come up here and ask questions, may do so.

STATEMENT OF S. R. SMITH, DIRECTOR, FRUIT AND VEGETABLE DIVISION, AGRICULTURAL MARKETING SERVICE, USDA; ACCOMPANIED BY JOSEPH GENSKE, CHIEF, SPECIALTY CROP BRANCH, FRUIT AND VEGETABLE DIVISION, AGRICULTURAL MARKETING SERVICE, USDA

Mr. SMITH. I would like to have Mr. Joseph Genske, one of my branch chiefs sit with me. I might need him to assist in answering questions.

As I indicated, my name is S. R. Smith, Director of the Fruit and Vegetable Division, Agricultural Marketing Service, USDA.

I am here this morning principally to be of what assistance I can to you and members of the committee.

I do not have a prepared statement.

As you have indicated earlier, reports have been submitted by the Department on at least two of these bills. The Department has expressed itself on the other commodity the same as it has in the reports submitted; namely, that it has no objection to the inclusion of these commodities under section 8e of the act, and stating that in the view of the Department the principle of equivalent quality regulations on the domestic and imported fruits and vegetables appears to us to be sound.

One comment in the report on H. R. 7760, to which reference has been made, that I would like to repeat is:

It is suggested that the bill be clarified to show the language "any citrus fruit," is intended to mean that the import regulations apply only to the specific citrus fruits which are domestically regulated rather than to all citrus fruits when any citrus fruit is regulated.

The reason for that suggestion, I would like to illustrate. If regulations are in effect on the domestically produced commodity, say, Florida oranges or grapefruit, which is the case at the present time, would it be the intent of the Congress that at the same time import regulations be imposed on lemons? We think that would be the case with the language as now written. As we see it, this would be ambiguous and impracticable, with the language clarification suggested, the ambiguity, of course, would be disposed of and the intent clear.

In the case of adding dried figs and the other fig items it is sug gested that sliced figs, that is the term "sliced figs," be changed to read "sliced dried figs."

Also, in our report we have indicated that in our judgment all imports of the commodities that were regulated would need to be subjected to inspection by the Department upon entry into this country; I would like to state further that in considering these proposals and formulating the views in the Department on them, we undertook to discuss the subject as it relates to dried figs and the various forms described, with Mr. Harvey who has just appeared before you. The

working relationships between the Department and the Food and Drug Administration, as indicated by him, are very close and amicable. The question does arise, however, as to whether any unnecessary duplication in inspection on imports might arise. It might appear that if domestic regulations were of a type which required products to meet specifications not in excess of what the food and drug minimums are, that the question of possible duplication might arise. However, as we visualize the type of regulations that could, and justifiably might be imposed under such an authority, that the specifications which the imported product would need to meet, might well be above the food and drug minimums. For that reason we have concluded that across-the-board inspection by the Department would need to be applied to the imported commodity.

Those are the only direct comments I have, Mr. Chairman. If there are any questions that I can be helpful in answering, I would be happy to do so.

Mr. HAGEN. Do you have any question?

Mr. TEAGUE. Just one. In your view, is there any reason to include one type of citrus fruit and exclude another?

Mr. SMITH. Congressman Teague, no particular reason other than that which comes from being familiar with the origin of section 8e in its present form and how it developed over time. The two citrus commodities which are subject to some measure of competition from imports are presently included, grapefruit and lime. To a much lesser extent oranges and lemons are subject to import competition.

I think that is why originally they-oranges, lemons and so forthwere not included. But as of this date we in the Department see no particular reason for excluding oranges and lemons, for example, from under the act.

Mr. TEAGUE. Thank you.

Mr. HAGEN. Mr. Saund, do you have any questions?

Mr. SAUND. Would the Department have any objection to including dates?

Mr. SMITH. The Department has had an inquiry from Senator Kuchel concerning dates and its products, and it has responded to the Senator that it has reported favorably on these other commodities, interposing no objection and its view would be the same with respect to dates.

Mr. SAUND. Would it be all right if you would furnish a copy of that report for this record here, too?

Mr. SMITH. I hesitate, because I am not clear in my mind what the protocol is, because it was addressed to Senator Kuchel; but it is available.

Mr. SAUND. That is all right. I will make a formal request that you do that.

Mr. HAGEN. I would like to ask you a question. This language that you propose with respect to citrus fruits, as I understand it, would remove lemons?

Mr. SMITH. No.

Mr. HAGEN. Do they have a marketing order on lemons?

Mr. SMITH. There is a Federal marketing order on lemons, but the Federal order does not regulate lemons by grade, size, quality, or maturity.

Mr. HAGEN. With your proposed language, under that, lemons would receive the same protection, that is what you are saying?

Mr. SMITH. In the report Congressman Hagen, we did not suggest specific language of clarification. The simplest that comes to mind would be to add to the two citrus items grapefruit and limes, oranges

and lemons. Then it would be clear.

Mr. HAGEN. I see. In Mr. Morse's report he says:

It is believed that enactment of the proposed legislation would result in additional annual cost of about $2,000. This amount would be absorbed within existing appropriations.

That is not a very large additional cost. As I understand it, your actual field inspections are paid for by the importer; is that correct? Mr. SMITH. That is correct. We visualize that the financing of the inspection would be aself-supporting enterprise.

There are certain other auministrative responsibilities that we would have to discharge, such as the development of appropriate regulations, their publication under the rulemaking procedure, which gives all interested parties an opportunity to express themselves on a specific proposed regulation, the issuance of the final regulation, and then the matter of surveillance as to performance under the regulation.

Mr. HAGEN. It should also be noted that Mr. Morse's report states that the Bureau of the Budget has no objection to this legislation, is that correct?

Mr. SMITH. That is my understanding.

Mr. HAGEN. To proceed further, the only close analogy that I can find with respect to products proposed to be included under section 8e, and those that are already included, is that in the area of citrus fruits. You already carry out this function with respect to limes and grapefruit?

Mr. SMITH. That is correct.

Mr. HAGEN. It is proposed that lemons and oranges be included. Mr. SMITH. Yes.

Mr. HAGEN. What value have you had produced with respect to protecting the public in the purchase of limes and grapefruit considering the fact that for some time you have been in the same field with the Food and Drug Administration, so to speak, with respect to those two commodities?

Mr. SMITH. Permit me to discuss the items one by one. Our imports of fresh grapefruit into this country come almost entirely, I think entirely, from the Isle of Pines.

Mr. HAGEN. Which is where?

Mr. SMITH. It is an island off southwest Cuba-it is a part of the Cuban Republic. The quantity that comes in each year is not large. As I recall, somewhere between 50,000 and 60,000 boxes.

The endeavor of the Isle of Pines Producers and Handlers has been to get their product into our domestic channels in advance of the maturity and marketing of grapefruit from Florida, primarily. Florida has imposed on itself, that is, the Florida grapefruit industry, regulations issued by the Secretary, involving requirements as to the maturity as well as grade. Those same maturity and grade requirements have had to be met by imports from the Isle of Pines.

From our observations and representations of the industry, improvement has been made in the overall quality of the Isle of Pines fruit in that it is more acceptable from the consumer standpoint than

when they pressed their shipments into this country a little too early, when grapefruit was on the immature side.

In the case of limes we have imports, from Cuba, but more particularly, from Mexico. The effect that import regulations have had is to improve the basic quality of the imported product, largely through the juice content which the imported product has had to meet. This juice content requirement was also imposed on the domestic producers in shipping their product into interstate commerce. Mr. HAGEN. Actually, the philosophy of the marketing orders, the ones that have quality standards, is that the domestic producers had a stake in a better product. And if you permit foreign goods to come in of a lesser quality, you are virtually destroying the integrity of the marketing order, isn't that correct?

Mr. SMITH. The problem arises in the competition which a lower quality product imposes on the domestically produced commodity.

In that connection, I would like to make the observation that the initial concept, as we understand it in the Department, on the part of those who first sought this type of legislation, which were producer groups in Florida, was that they referred to this type of legislation as the application of the golden rule. In other words, what is fair and reasonable for the product of domestic producers should be fair and reasonable so far as the imported products are concerned. It was not conceived as a device to preclude the entry of products into this country but rather that import products should meet the minimum quality specifications which our producers were required to meet in supplying the domestic consumers.

Mr. HAGEN. With respect to citrus, of course, imported citrus goes into the hands of the retail purchasers, that is correct, isn't it, in many instances?

Mr. SMITH. The fruit that is now being regulated under section 8e, yes, it goes through the regular channels of trade to the consumers. Mr. HAGEN. That would be, also, true of shelled walnuts, would it not-they would be sold to housewives at grocery stores as shelled walnuts?

Mr. SMITH. Well, in the case of shelled walnuts, Mr. Congressman, you also have industrial users that enter the picture, in addition to the sale to the ultimate consumer, the housewife.

Mr. HAGEN. But there are, also, sales accomplished of these imported shelled walnuts to the housewife?

Mr. SMITH. That is my understanding.

Mr. HAGEN. Is that true also in the case of these figs, sliced dried figs and dried figs?

Mr. SMITH. There are some in whole dried fig form.

Mr. HAGEN. They have both a commercial market and a home market, is that correct?

Mr. SMITH. The great bulk is in the form of fig paste which is used for manufacturing purposes.

Mr. HAGEN. There would be no retail sales of that?

Mr. SMITH. So far as I know fig paste is not a retail item.

Mr. HAGEN. Would the same be true of the date products-would

there be both a commercial and a home market for those?

Mr. SMITH. Yes. Dates in whole or pitted form are imported for sale through distribution channels to the ultimate consumers. They are, also, imported for industrial use and manufacturing use.