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of amending section 8e, to achieve that which they could not get directly, namely the restriction of date imports.
I would like to add a few comments based on the most recent report of the Tariff Commission on dates.
In the Tariff Commission's report to the President in investigation No. 18 under section 22, relating to dried figs and fig paste, submitted in September 1957, the majority of the Commission held that for an agricultural program to qualify for the protection of section 22 the price-enhancing ingredients thereof must have the effect of attracting or inducing increasing imports. The Commission found that there was nothing in the operation of the date program which induces or attracts increased imports.
The Department of Agriculture program for domestic dates is in essence a diversion program operating through a combination of a marketing-agreement-and-order program undertaken pursuant to the Agricultural Marketing Agreement Act of 1937, as amended, and a program under section 32 of Public Law 320, 74th Congress, as amended.
As recently as September 1957 the Assistant Secretary of Agriculture in a letter to the chairman of the Subcommittee on Foreign Trade Policy Committee on Ways and Means, House of Representatives, explained in the following manner how a marketing-agreement-and-order programs and section 32 diversion programs were afforded protection by section 22:
Under a marketing-agreement-and-order program a plan is developed which generally limits the volume to be marketed domestically in order to obtain a certain price objective. Imports tend to be attracted by the higher price. If they turn out to be larger than planned, (1) it becomes more difficult, if not impossible, to achieve the price objective. To compensate for these larger imports, more of the domestic production must be withheld as surplus or else growers obtain lower prices. In any case they will receive smaller total returns.
Similarly, unrestricted imports can undo the effects of section 32 surplus-removal operations. If imports increase by the amount of the surplus that the section 32 operation removes, the effects of the section 32 operations thus are nullified.
Section 22 of the Agricultural Adjustment Act is a recognition of the fact that, in such ways as outlined above, imports may render or tend to render ineffective or materially interfere with price-support or other programs of the United States Department of Agriculture.
The date program of the Department of Agriculture removes no domestic dates from the United States market. Actually the program is designed to alter the pattern of trade for domestic dates. In essence the program aims to reduce the quantity of domestic dates that may be marketed in whole form, pitted or unpitted, and to increase correspondingly the quantity of domestic dates to be marketed as date products for food manufacturers. A representative of the Secretary of Agriculture stated at the hearing before the Tariff Commission in September 1957:
The long-range objectives of (the sec. 32) program, in coordination with the marketing order, is to convert the domestic industry from its pre-1954 reliance on retail outlets for the sale of practically its entire production to a situation wherein it must market at least a third of the crop as date products for food manufacture.
An examination of the programs and the details of their operation disclose no features which serve to attract or induce imports. It is admitted that in the principal outlet for the most popular new product
(dehydrated granules) imported dates at the present time are not being used and are not even suitable.
The only hope for success of the program is to displace imported dates with domestic dates, and the only prospect of achieving this result is to reduce imports below their normal level. We do not believe it was intended by the Congress that import restrictions should be imposed under section 22 when the only effective method for achieving increased returns to domestic growers of agricultural products is to restrict imports under section 22 below their normal level. The only market for imported dates is the same historical market of the past, and for the same uses.
Gentlemen of this committee, dates are close to my heart, as I am sure they are to the growers and packers of California. I would certainly like to see the American consumers become better acquainted with both varieties and use more of them. I am convinced that the market for California, as well as imported, dates could be greatly expanded to eliminate marketing problems, and any surplus of good marketable dates. In fact, I spent several hours last week outlining my ideas to the sales manager of one of the largest cooperative date handlers in California, and he thought very highly of the plan.
I would like your permission to explain this to you briefly. I think it has a definite bearing on the legislation you are considering, Mr. Chairman. May I proceed quickly?
Reference is made to a survey conducted by the Department of Agriculture entitled "Homemakers Appraise Citrus Products, Avocados, Dates and Raisins," released in September 1957. The survey was based on 2,572 personal interviews made in March and April of 1957 with homemakers throughout the United States. This was a sampling from selected areas to be representative of all households in the Nation.
Among the 60 percent who indicated they had used dates within the past year, the majority, in fact, 91 percent, indicated infrequent use. Almost half indicated they considered dates as seasonal, mainly a holiday and winter item, and only 2 out of 3 said they thought dates were available all year round at the stores where they shopped. In other words, dates are looked upon by many housewives as oranges were at one time considered a Christmas-stocking item.
Lack of familiarity with dates and dislike of dates generally or of their taste were the major reasons given for not having used dates in the past year; 64 percent of the housewives who use dates spoke of the fine taste or flavor; 23 percent gave health reasons. The survey indicated that 37 percent of the nonusers submitted their reason as lack of familiarity.
The results of this survey in addition to the known very small per capita consumption of such a delicious, quick-energy, inexpensive fruit is indicative of a real lack of consumer education.
It is my understanding that the Department of Agriculture diversion payment program cost the Government for the year 1956-57 approximately $400,000. It would seem, if this money were spent to educate our expanding population, and particularly the new generations, in the varied uses and health, as well as quick-energy qualities of dates, the demand for dates would far exceed normal historical imports and domestic production for years to come. Certainly legislative or any other form of restrictions against imported dates from
friendly Arab nations is not the only answer to the problem. Let me ask what has been done by the domestic date industry to create greater consumer acceptance for dates.
Certainly this committee must be familiar with the numerous cooperative agricultural product promotions that have been successfully administered to increase consumer demand for their respective products. Each morning on the radio I listen to the various reasons why I should eat more prunes and drink more citrus juices. Possibly present law does not permit the use of Government funds to increase consumer demand through radio and other recognized forms of consumer advertising, but I feel confident that, if the $400,000 referred to above had been spent in the last year in a consumer-education program, there would not only be no surplus of good salable domestic dates, but the demand would have increased to permit selling them at higher prices and resulted in very adequate grower returns.
I am definitely convinced that any date problem of today is due to underconsumption rather than oversupply, and I would like to recommend to this committee that representatives of the domestic date industry and representatives of the imported date industry meet with the Department of Agriculture to plan and implement a consumer educational program to increase the per capita consumption of dates without reference to the country of origin.
Certainly it should not be difficult to increase the present one-half pound per capita use to three-quarters of a pound. That would not only make quantity restrictions unnecessary, but create an undreamedof demand, providing of course that quality restrictions are enforced. With higher prices for the good quality dates, culls and unacceptable grades could be destroyed, resulting in a higher net return for the
Instead of trying to tax and legislate the acceptable imported date out of the United States market, where it has enjoyed consumer acceptance, and in fact preference, for the past 50 years, let us work together in a united industry effort to increase consumption. Certainly it is worth consideration and a trial.
Each has its place in the market, which I am sure you will agree has been neglected from the consumer educational standpoint.
Members of this committee should also keep in mind the basic differences in character of domestic versus imported dates, particularly with reference to their respective keeping qualities. Briefly, the imported date by reason of lower moisture content and higher invert sugar content, has better shelf life or keeping qualities than the domestic variety.
This naturally creates a marketing problem for the domestic date. Being more perishable they must be handled more carefully in retail distribution to prevent losses. It is my understanding that domestic dates are considered semiperishable, in fact, one of the larger outlets definitely states:
We are selling a semiperishable commodity. We can only be responsible for the condition of our product as long as we control the conditions under which the fruit is held and handled. Therefore, we cannot give credit or make adjustment for fruit returned by the customer. It is the customer's responsibility to inspect the fruit at the time of receipt. If he does not advise us of a defect at that time we will assume that the condition was satisfactory and no credit will be issued after a period of 10 days from sale.
Compare this type of protection to the wholesaler and retail distributor with the protection he has given on imported dates where most distributors guarantee the keeping quality of their package dates for 2 or 3 years under any conditions.
This naturally has an effect on buying preference. The domestic date because of its more perishable character is sold in the produce sections with other fresh fruits, whereas the imported dates are usually sold in the grocery section. Since produce items are generally more seasonal in character, the sale of domestic dates falls in this same category, and receive promotional effort only when the new crop reaches the market.
The survey points out that the consumer has shown a definite preference for the pitted variety of date as compared with the unpitted. While the domestic date industry has made progress in this direction in recent years, only about 20 percent of the crop is sold in pitted form, whereas practically 100 percent of the imported varieties are pitted. There is also a difference in the moisture content between the imported and domestic date which most likely accounts for the bakery and confectionery trade preferring the imported variety which has a moisture content of approximately 13 to 15 percent compared with the domestic date which will vary from 20 to 30 percent. The bakery trade quite naturally prefer the lower moisture since the weight loss in the finished product would be less significant.
I conclude with this statement. The date industry suffers from underconsumption and not overproduction or importation of dates. I consider it an industry problem which I firmly believe can be solved through cooperative industry effort. Certainly it should be given a chance.
Thank you for your attention.
Mr. HAGEN. Thank you, Mr. Koch.
Mr. Anfuso, do you have any questions?
Mr. ANFUSO. I would like to congratulate you for making a very learned and fine statement.
Mr. KоCH. Thank you.
Mr. ANFUSO. How long do you say that we have imported dates, about 50 years?
Mr. KоCH. Yes, sir.
Mr. ANFUSO. Where do we get these dates from?
Mr. KOCH. Primarily from Iraq. And some come from Iran, that is the bulk variety sold to the baking trade.
Mr. ANFUSO. You say that consumption of imported dates has not appreciably increased in the last few years; is that correct? Mr. KocH. That is correct; that is correct.
Mr. ANFUSO. There is really no competition with the domestic? Mr. KOCH. If anything, Mr. Brown will testify later, he can bear out these statistics better than I can, because he has been closer to them but if anything, the imports of dates are not as great as they used to be. That is, on a tonnage basis.
Mr. ANFUSO. You do not regard the domestic as being a substitute for the imported dates?
Mr. KOCH. Not completely. I think of the domestic dates as being a very delicious fresh fruit. There is nothing finer. It is not used in the same way.
And prior to World War II, when the production was only in the neighborhood of 6 or 61⁄2 million pounds, there was no problem, I
mean it could be marked as fresh, at a very fancy price and should still command that premium price. There is nothing finer than a good California date. I am perfectly willing to admit that.
Mr. ANFUSO. What do you think is behind the movement to place restrictions on imported dates?
Mr. Kocн. Well, I frankly think it is a very short-sighted, unfair policy, naturally.
Mr. ANFUSO. On whose part?
Mr. KоCH. Well, on the part of the California interests. I do not blame them. But it is still not fair to the consumer, as I feel they should have their choice and that there should, also, be reasonable competition.
When no imports were allowed to come in during the period 194145, I recall, and I was not in the date business then, but I recall going to a grocery store and paying 89 cents for 8 ounces of unpitted dates. Today that package costs about 23 to 25 cents.
Mr. ANFUSO. What do you think would be the result if we were to place more restrictions on imported dates?
Mr. Kоcн. I do not think it is in the interests of the general public, definitely.
Mr. ANFUSO. Would you elaborate on that a little bit?
Mr. KOCH. Well, this is a case of where imported dates were here first, and when the domestic dates began to develop and their development was quite marked during those war periods of 1941 to 1945, because if you look at the statistics in that Tariff Commission investigation, you will find how there was a very rapid increase in the tonnage of dates. That is due not only to increased plantings but increased methods, better methods of increasing the pound per tree, for which the Department of Agriculture is constantly working, naturally.
So you develop a very large crop, and it varies from year to year. I believe it was in 1957 that it went up as high as 50 million pounds, And then weather conditions may affect it and it will go back down again. But the problem is one of marketing, and I think one of education.
Mr. ANFUSO. I will come to that in a moment. Do you think that placing these restrictions on imported dates might affect our international relations with other nations?
Mr. KOCH. Without question; there are a large number of dates, and they are a very important crop in Iraq, which has been known to be a friendly Arab nation.
Mr. ANFUSO. You mentioned something along the line in marketing of the lack of advertising, all of which has produced less consumption of dates, which every housewife, I think has found palatable? Mr. KоCH. Right.
Mr. ANFUSO. And said it can be used in many varieties. What do you propose? Do you propose that the Government do something about that?
Mr. KоCH. No: I realize the Government cannot. I do not think there are any funds that can be made available.
I do think that the Department of Agriculture through their extension and through their county programs could help with an educational program.
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