STATEMENT OF BERT BACCHETTI, CALIFORNIA TOMATO GROWERS ASSOCIATION,

TRACY, CALIF.

Mr. Chairman and Distinguished Members of the Committee:

My name is Bert Bacchetti. I am a diversified grower in Tracy, California, where I farm 2,000 acres of tomatoes, sugar beets, alfalfa, and some grain. My operation is an incorporated family farm; however, there are only two people in the corporation-my wife Gloria and me. I am here today as a representative of California Tomato Growers Association whose 700 members produce processing tomatoes, the largest of the California canning commodities.

This hearing, as I understand it, is called for the purpose of determining the condition of agriculture in the United States and of seeking possible solutions to some of the problems that agriculture is facing.

Although the nature of California agriculture is somewhat different from that of the remainder of the nation, California farmers share the same problem of realizing an adequate return for their crops. Some 200 crops are grown commercially in California, with twenty crop and livestock commodities accounting for about 82 percent of the State's gross farm income. Cattle, calves, dairy products and eggs dominate the livestock industry, with cotton, hay, grapes, lettuce and canning tomatoes as some of the important crops. However, most crops individually account for less than two percent of the State's total gross farm income. We lead the nation by a wide margin in the production of fruits, nuts and vegetables, accounting for more than 40 percent of the nation's cash farm receipts for fruits and nuts, and one-third of the receipts for vegetables. The vast number of our crops are not affected by subsidy or supports and do not rely upon parity. But California's growers are concerned with one matter that concerns every farmer in the United States and that is escalating costs for everything that must go into crop production, and decreasing net returns. Most California growers do not believe in strikes as a method of achieving equitable returns, but every California grower understands the frustrations that have led some segments of the farm community to strike and to "tractor" on Washington, since farm income is of nationwide concern. These farmers have focused media attention on our plight and have struck a blow for all of us in our attempts to enhance our agricultural returns.

Since most of our California crops are grown under contract between the producer and the handler, growers of particular commodities have banded together in bargaining associations in order to achieve some strength in the marketplace. They have long since discovered that the individual grower has no equity in dealing with a buyer unless he is a part of a strong association which can bargain for the majority of a crop with the buyers of that crop. California Tomato Growers Association is such an organization and annually bargains for price and contract terms with the 28 California processors who pack 85 percent of the nation's supply of canned tomatoes and tomato products.

It was necessary for our State's tomato growers to fight long and hard to achieve our present status as a bargaining association. Processors were reluctant to see their unilateral price setting ability for their largest canning crop destroyed by a grower association. They used every tactic to discourage growers from signing our bargaining agreement, even to the point of raising the price for which we were bargaining during one year to convince growers that they had no need for a bargaining association. It took three years of intensive organizational work for the association to achieve recognition from the handlers as the bargaining agent for the vast majority of tomato growers.

From our experiences, we have come to the belief that there is great need to strengthen the federal legislation which protects the right of farmers to organize in bargaining associations and to require handlers and associations to bargain in good faith.

Such legislation, the National Agricultural Bargaining Act of 1978, is now being drafted in its final form for introduction in the present Congressional session. It establishes standards of fair practices by handlers and producer associations, provides standards for the accreditation of cooperative associations of producers, defines the mutual obligation of handlers and associations to bargain with respect to the production, sale and marketing of agricultural products, and provides for the enforcement of such obligations.

It appears the bill will have the full support of the majority of national farm organizations. We trust that we will also have the support of the members of this Committee whom we know are deeply concerned with the farm problem.

We expect strong opposition from handlers, just as we had strong opposition to S. 109, the original agricultural bargaining legislation.

We have no illusion that the 1978 Act will be a panacea for the many ills that beset American agriculture. It is merely an additional step toward improving the climate necessary for farmers to improve their own economic condition.

Thank you for your concern and attention.

STATEMENT OF WAYNE HAWKINS, EXECUTIVE VICE PRESIDENT, FLORIDA TOMATO EXCHANGE, ORLANDO, FLA.

My name is Wayne Hawkins. I am Executive Vice President of the Florida Tomato Exchange, a non-profit cooperative agricultural association whose members represent about 80 percent of the volume of fresh tomatoes shipped from Florida. I am also Manager of the Florida Tomato Committee which is the administrative committee for Marketing Order No. 966 which regulates the handling of fresh tomatoes shipped from the "production area" as defined in the Order.

I would like to thank this Committee for giving me the opportunity to come before you today and testify in behalf of the Florida Tomato Industry, whose F.O.B. sales total more than 150 million dollars annually and represent more than one third of the total value of all fresh vegetables produced in Florida each year. The Florida Tomato Industry provides jobs for more than 7,000 workers many of whom are not qualified for other employment due to their educational background.

The Florida Tomato Industry at one time provided nearly all of the tomatoes consumed in the United States during the winter months. A large part of the market was lost to imports from Cuba; and since trade relations with that country terminated, Mexican imports have plagued and now seriously jeopardize the future of Florida's largest vegetable industry.

The Florida Tomato Industry has made giant strides in trying to regulate itself with a Federal Marketing Order and a Non-Profit Agricultural Cooperative Association. Most of these efforts, however, have been seriously undermined due to preferential treatment of imports from Mexico by the United States Government. Every time the Florida Tomato Industry attempts to regulate itself, a group of Washington bureaucrats, representing several different branches of government, must first determine how this will affect imports from Mexico. In numerous instances, requests for regulations by Florida tomato growers to control themselves have been denied because of the effect it would have on Mexican imports. Efforts to correct legislatively some of the preferential treatment granted to Mexican imports have met stiff opposition all the way from the White House to the U.S.D.A. to the Congress of the United States.

The most recent example of this attitude is the Florida Tomato Industry's efforts to amend Section 8(e) of the Agricultural Marketing Agreement Act of 1937, as amended, by including regulations which would apply to the contents of imported tomato containers in the same manner that they presently apply to domestic tomatoes under a Federal Marketing Order. This legislation would not halt imports-it would simply force imported tomatoes to compete fairly with Florida tomatoes.

Although this amendment has been passed twice by the U.S. Senate and passed the House of Representatives as an amendment to the 1977 Farm Bill, it is sitting in the Subcommittee on Domestic Marketing, Consumer Relations and Nutrition of the House Agricultural Committee with apparently no plans to vote on it at this time. Why did this occur? Because several very influential Congressmen had enough muscle to stop this legislation in its tracks. For some reason, and God only knows what, they are more interested in protecting the interests of growers in a foreign country than representing a viable United States industry that pays taxes to support the United States government.

For the past several weeks, Mexico has been flooding the United States market with tons of tomatoes. They undercut the Florida price on all packs since there are no regulations to enforce what they put in a package. The ultimate consumer pays dearly for this preferential treatment to Mexican imports. Is it too much to ask for equal treatment in your own market? It must be since we drew opposition from the U.S.D.A., the U.S. Department of State and even the Office of the Special Representative for Trade Negotiations although President Carter

said in his State of the Union address that he was for free trade as long as it was fair trade.

The greatest threat facing the Florida Tomato Industry today is unrestrained imports from Mexico. Statistics available from the Foreign Agricultural Service will verify that imports have been climbing at an alarming rate. Total imports of fresh tomatoes during the 1976-77 season set an all-time high and more than 98 percent of them came from Mexico. Reported plantings of Mexican tomatoes for the 1977-78 season are up 20 percent over last year. They are being grown for export to the United States and will cross our borders by paying only a small tariff established many years ago. Their costs of production are much cheaper than Florida's since they pay laborers only a fraction of the minimum wage required by Florida producers.

The President of the United States under the Agricultural Act of 1956 has the power to seek to obtain agreements with other countries limiting the export from such countries and the importation into the United States of agricultural commodities, but this law has not been exercised with respect to fresh fruits and vegetables. Imports of fresh tomatoes into the United States from Mexico have increased to such extent they disrupt the market for tomatoes produced in the United States. This increase in imports has been caused in large part by lower costs of production, especially in the wages paid to agricultural employees. Because of this unfair disparity in costs of production which exists in Mexico, it is practically certain that imports of tomatoes will continue to increase and further destroy the market for tomatoes produced in the United States.

Since the President is hesitant to use his authority, the Congress of the United States should pass legislation limiting access to the United States market for foreign produced tomatoes on an equitable and orderly market-sharing basis, consistent with the maintenance of a strong and expanding United States production of fresh tomatoes and designed to avoid the disruption of United States markets and the unemployment of United States agricultural workers.

Mexico protects its producers. It is virtually impossible to ship a tomato or for that matter any other commodity into Mexico when they are in production. Why then should they have unlimited access to our markets? The time has come for the United States to protect its producers.

There are numerous avenues for relief under the present trade laws; however, some of them do not apply to perishable goods or the investigative mechanism moves so slowly that the patient is dead before the doctor ever arrives. The United States continues to lose every time we sit down to negotiate trade agreements. We can no longer sit down at a table and see how much we can give away and get nothing in return.

I basically agree in the principal of free trade, but I also believe that it must be fair trade. The only way to have complete free trade is to have complete free movement of the inputs to trade. In other words, don't impose federal restrictions on our land, equipment, seed, fertilizer, pesticides, water usage, labor usage, packing facilities, cartons, transportation, social security, taxes, etc., and allow our competition to operate totally free of these requirements unless some compensating import restrictions are placed on them. Unless this is done there is no way you can compete equally.

There is no private entity, business, or individual that can operate in the long run the way the U.S. Government operates. You cannot continually spend more than you make and stay in business. The government cannot even run itself, so why do they continually try to control private enterprise. By doing so they continue to strangle the free enterprise system. The areas where we need government assistance today are the ones that no one is interested in. The time has come for the United States to look after its own people. An orderly system of sharing the market with the use of quotas or import restraints must be conceived for the business man to succeed and therefore maintain the standard of living now enjoyed by the American people.

Imports from foreign countries should meet the same stringent requirements placed on domestic commodities. They should be labelled all the way to the consumers so they know what they are buying and where it was produced. Regulations should be put on imports preventing them from being consigned all over the United States to compete with domestic products that have a much higher cost of production. There are laws preventing dumping but they have never been properly used to protect the perishable agricultural industry.

The United States became the great power it is today by walking tall and carrying a big stick. It's time to reincorporate these policies. Buy what we need from