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PROBLEMS FACING THE SPECIALTY CROP

INDUSTRY

HEARING

BEFORE THE

SUBCOMMITTEE ON ENERGY POLICY, NATURAL

RESOURCES AND REGULATORY AFFAIRS

OF THE

COMMITTEE ON

GOVERNMENT REFORM

HOUSE OF REPRESENTATIVES

ONE HUNDRED EIGHTH CONGRESS

FIRST SESSION

DECEMBER 12, 2003

Serial No. 108–151

Printed for the use of the Committee on Government Reform

(

Available via the World Wide Web: http://www.gpo.gov/congress/house

http://www.house.gov/reform

(II)

COMMITTEE ON GOVERNMENT REFORM

TOM DAVIS, Virginia, Chairman

DAN BURTON, Indiana

CHRISTOPHER SHAYS, Connecticut

ILEANA ROS-LEHTINEN, Florida

JOHN M. MCHUGH, New York

JOHN L. MICA, Florida

MARK E. SOUDER, Indiana

STEVEN C. LATOURETTE, Ohio

DOUG OSE, California

RON LEWIS, Kentucky

JO ANN DAVIS, Virginia

TODD RUSSELL PLATTS, Pennsylvania

CHRIS CANNON, Utah

ADAM H. PUTNAM, Florida

EDWARD L. SCHROCK, Virginia

JOHN J. DUNCAN, JR., Tennessee

JOHN SULLIVAN, Oklahoma

NATHAN DEAL, Georgia

CANDICE S. MILLER, Michigan

TIM MURPHY, Pennsylvania

MICHAEL R. TURNER, Ohio

JOHN R. CARTER, Texas

WILLIAM J. JANKLOW, South Dakota

MARSHA BLACKBURN, Tennessee

HENRY A. WAXMAN, California

TOM LANTOS, California

MAJOR R. OWENS, New York

EDOLPHUS TOWNS, New York

PAUL E. KANJORSKI, Pennsylvania

CAROLYN B. MALONEY, New York

ELIJAH E. CUMMINGS, Maryland

DENNIS J. KUCINICH, Ohio

DANNY K. DAVIS, Illinois

JOHN F. TIERNEY, Massachusetts

WM. LACY CLAY, Missouri

DIANE E. WATSON, California

STEPHEN F. LYNCH, Massachusetts

CHRIS VAN HOLLEN, Maryland

LINDA T. SANCHEZ, California

C.A. ‘‘DUTCH’’ RUPPERSBERGER, Maryland

ELEANOR HOLMES NORTON, District of

Columbia

JIM COOPER, Tennessee

———

BERNARD SANDERS, Vermont

(Independent)

PETER SIRH, Staff Director

MELISSA WOJCIAK, Deputy Staff Director

ROB BORDEN, Parliamentarian

TERESA AUSTIN, Chief Clerk

PHILIP M. SCHILIRO, Minority Staff Director

SUBCOMMITTEE ON ENERGY POLICY, NATURAL RESOURCES AND REGULATORY

AFFAIRS

DOUG OSE, California, Chairman

WILLIAM J. JANKLOW, South Dakota

CHRISTOPHER SHAYS, Connecticut

JOHN M. MCHUGH, New York

CHRIS CANNON, Utah

JOHN SULLIVAN, Oklahoma

NATHAN DEAL, Georgia

CANDICE S. MILLER, Michigan

JOHN F. TIERNEY, Massachusetts

TOM LANTOS, California

PAUL E. KANJORSKI, Pennsylvania

DENNIS J. KUCINICH, Ohio

CHRIS VAN HOLLEN, Maryland

JIM COOPER, Tennessee

EX OFFICIO

TOM DAVIS, Virginia HENRY A. WAXMAN, California

DAN SKOPEC, Staff Director

MELANIE TORY, Professional Staff Member

ANTHONY GROSSI, Clerk

(III)

C O N T E N T S

Page

Hearing held on December 12, 2003 ...................................................................... 1

Statement of:

Kawamura, A.G., Secretary of the California Department of Food and

Agriculture ..................................................................................................... 32

Zanger, Joseph, member, board of directors, California Farm Bureau

Federation; Jim Bogart, president, Grower-Shipper Vegetable Association of Central California; John D’Arrigo, chairman, Western Growers;

and Robert Nielsen, vice president, Tanimura & Antle and United

Fresh Fruit and Vegetable Association ....................................................... 51

Letters, statements, etc., submitted for the record by:

Bogart, Jim, president, Grower-Shipper Vegetable Association of Central

California, prepared statement of ................................................................ 67

D’Arrigo, John, chairman, Western Growers, prepared statement of .......... 79

Farr, Hon. Sam, a Representative in Congress from the State of California, information concerning Monterey County ........................................... 8

Kawamura, A.G., Secretary of the California Department of Food and

Agriculture, prepared statement of ............................................................. 36

Nielsen, Robert, vice president, Tanimura & Antle and United Fresh

Fruit and Vegetable Association, prepared statement of .......................... 95

Ose, Hon. Doug, a Representative in Congress from the State of California, prepared statement of ........................................................................... 4

Zanger, Joseph, member, board of directors, California Farm Bureau

Federation, prepared statement of .............................................................. 53

(1)

PROBLEMS FACING THE SPECIALTY CROP

INDUSTRY

FRIDAY, DECEMBER 12, 2003

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON ENERGY POLICY, NATURAL

RESOURCES AND REGULATORY AFFAIRS, COMMITTEE ON GOVERNMENT REFORM, Salinas, CA.

The subcommittee met, pursuant to notice, at 10 a.m., in the

Alisal Room of The National Steinbeck Center, 1 Main Street, Salinas, CA, Hon. Doug Ose (chairman of the subcommittee) presiding.

Present: Representative Ose.

Also present: Representative Farr.

Staff present: Melanie Tory, professional staff member; Yier Shi,

press secretary; and Anthony Grossi, clerk.

Mr. OSE. Good morning.

Welcome to today’s hearing by the Subcommittee on Energy Policy, Natural Resources and Regulatory Affairs on the subject of

problems facing the specialty crop industry.

I want to ask unanimous consent to welcome to our panel today

my good friend and colleague from this part of the country, Sam

Farr. Without objection he will be an able and welcome participant

in today’s hearing.

I ask unanimous consent to waive the subcommittee’s quorum requirement. Without objection, so ordered.

We’re here today to examine problems facing the U.S. specialty

crop industry, not only here in California, but across the country.

Historically, U.S. agricultural policy has focused almost exclusively on program crops, such as wheat, corn, cotton, and rice. The

result is that growers of program crops received about $20 billion

annually in Federal price supports and other Federal assistance

programs.

Conversely, specialty crops, which include fruits, nuts, vegetables, forage crops, flowers, and wine grapes, do not receive price

supports and receive only a small fraction of the Federal assistance

programs for agricultural purposes. This is in spite of the fact that

specialty crops contribute more annual revenue to the agricultural

sector: $58.7 billion compared to the $47.9 billion for program

crops. Additionally, specialty crops are often subjected to unfair

international trade practices that limit market access, and effectively hinder genuine free trade.

U.S. specialty crop growers take pride in being considered the

true ‘‘free traders’’ in today’s global markets. Yet, many are concerned with the failure of the Federal Government to adequately

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ensure a level playing field for them in the face of increasing

globalization. One example of this is that Japanese tariffs on U.S.

fresh vegetables are an astounding 64 percent. In contrast, the

United States only has a 5.9 percent tariff on fresh vegetables imported from Japan and countries of the European Union.

Foreign support is staggering for specialty crop growers in nations of the European Union. Currently, there are annual EU price

supports of over $2 billion for tomato growers, $1.9 billion for apple

growers, and $500 million for cucumber growers.

In addition to facing unfair trading practices abroad, U.S. specialty crop producers also must contend with sometimes inadequate

regulatory and trading policies at home. For example, sanitary and

phytosanitary [SPS] regulatory standards for U.S. imports, issued

by the Department of Agriculture’s Animal and Plant Health Inspection Service [APHIS], do not provide appropriate protection for

U.S. growers or the U.S. food supply. Additionally, imports of specialty crops into the United States have increased sharply over the

last 7 years, while market access globally has continued to diminish as mature, foreign economies flood U.S. markets with cheaper,

subsidized products. Unfortunately, U.S. trade negotiators are considering an agreement with Australia that, if approved by Congress, might flood the U.S. market with foreign specialty crops,

such as wine and table grapes, canned fruit, peaches, apricots,

pears, and fruit mixes, and may cause agricultural pest and disease

outbreaks in the United States because of inadequate sanitary and

phytosanitary standards. Such impacts, obviously, would be devastating to the U.S. specialty crop industry.

In my district, and interestingly enough in nearly every other agricultural district in the country, specialty crop operations are

struggling to remain competitive in light of these new challenges.

Think about that. There are 50 States and 3 territories, virtually

every State and territory including Alaska, surprisingly, to one degree or another produces specialty crops. What we’re trying to do

is address the challenges that those people face. To do that on October 30, 2003, I introduced, with my colleague from the Central

Valley, Cal Dooley, H.R. 3242, the Specialty Crop Competitiveness

Act. My bill is designed to address all areas of the industry, including both fresh and processed fruits, nuts, vegetables, floral, and

wine grapes. Additionally, it includes needed Federal financial assistance and additional Federal focus on U.S. specialty crops.

Today, we will examine the domestic and international trade

policies and practices that reduce the U.S. specialty crop industry’s

ability to be competitive in today’s expanding global market. We

will shed light on the industry’s problems and demonstrate that

legislative and regulatory changes are needed in order to moderate

adverse impacts.

Throughout this administration, the President has aggressively

pursued increased international trade agreements. The agricultural

sector has traditionally been a strong proponent of free trade and

has provided the necessary support in Congress to ensure passage

of this free trade agenda. And, while historically the specialty crop

industry has supported the efforts on international trade to reduce

trade barriers and increase market access, there’s a direct connection, I think, between continued support of that agenda and the

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ability to open of these foreign markets and provide a greater focus

for Federal assistance.

Today’s witness panels are august. I am pleased to welcome the

following individuals who will testify as time proceeds.

First, the new Secretary of the California Department of Food

and Agriculture, Mr. A.G. Kawamura will be on our first panel.

Our second panel will be composed of Mr. Joseph Zanger, a member of the board of directors of the California Farm Bureau Federation; Jim Bogart, president of the Grower-Shipper Vegetable Association of Central California; Mr. John D’Arrigo, chairman of Western Growers; and, Mr. Robert Nielsen, vice president of Tanimura

& Antle.

I do want to welcome everybody here. And, as I said at the outset, we are pleased particularly to have the company of Congressman Sam Farr from this district. I’d be happy to recognize him for

the purpose of an opening statement.

[The prepared statement of Hon. Doug Ose follows:]

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Mr. FARR. Thank you very much, Chairman Ose. I’m really delighted that you’ve come to this district and to have this hearing,

the first ever of its type, and certainly I think the first hearing in

the Steinbeck Center.

And, I want to thank my constituents for coming to this hearing,

too. Because I think what we get out of this is a good learning session, a good educational opportunity.

I’ve passed out to several people, staff particularly and to you,

Mr. Chairman, a copy of Monterey County’s crop report for 2002.

And it’s interesting how many times I reach for this in Washington

to try to explain to people what specialty crops are all about.

When I was on the Ag Committee, the authorizing committee

and members would go around the room and talk about their districts and why they’re on the Ag Committee, most of the members

were there because of one crop in their State. And, I’d say in Monterey County we have 85 crops. And, they wouldn’t believe me. I

mean, 85 is more than any other State in the United States produces, and we have it just in this county, with the exception of the

State of California.

So, the crop report points out that this is almost a $3 billion in- dustry here. We have 41 crops that are over $1 million in sales.

And, some things that you wouldn’t think of when you think about

specialty crops. Everybody knows the Salinas Valley for its sort of

the lettuce bowl of the world, but they don’t think of raspberries

in this county being a $38 million crop, or that cilantro is a $4 million crop, or bok choy is a $3.2 million crop, or that squash is a

$1 million crop in this county. These are just examples of what we

mean by specialty crops.

And, where do these crops go? Well, they go to 19 different countries plus the EU, which is 22 countries in the EU.

It’s an international business here. It’s about all the issues that

we deal with in Congress on imports/exports regulation. But what

is unique about it is this is the most productive agricultural region

of the world, in all due respect to the San Joaquin Valley, because

we have more variety here, more difference than the Valley. And,

this area does not receive the kinds of supports that some of the

crops in the Valley receive, nor the water support that the Valley

receives.

In essence, the Salines Valley represents the best of free market

enterprise and agriculture, I think, in the world.

As you stated in your opening comments, we have been kind of

short changed on the big scale of things, especially crops and as

pointed out to somebody before, it used to be called minor crops.

Everybody thought well it’s minor, it doesn’t make much money. It

isn’t big. Well, it is big. It’s huge. It’s very, very important because

frankly these are the things that everybody eats. And, if you look

on all the health charts of what you should be eating, whether in

schools or hospitals or institutions of what the Government tells

you are of nutritional value, this is the place that’s producing that

nutritional value.

So, these crops are absolutely essential to the well being of the

human race and well being of America. And, I think that your

hearing is giving it the focus and certainly the bill that I’ve cosponsored with you and Mr. Dooley, the attention that the industry

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needs. I really want to thank you from the bottom of my heart for

taking time out of your recess here to come Salinas and to come

to particularly, we’re very, very proud of this building right here.

I think this is trying to teach people with the ag museum next door

and certainly probably one of the best known authors in the world,

John Steinbeck who grew up here in Salinas, to be able to present

the combination of land and people in this place and what we’re

all about. So thank you, Mr. Chairman.

Mr. OSE. You bet. Would you like to introduce in the record?

Mr. FARR. Yes, I would like to enter into the record.

Mr. OSE. So ordered.

Mr. FARR. Thank you.

[The information referred to follows:]

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Mr. OSE. Now, just for everybody’s educational background here,

the way this committee works is this is a subcommittee of the Government Reform Committee. In the Government Reform Committee

we swear everybody in; that is just standard practice. There are no

exceptions. If you testify in front of Government Reform, we swear

you in.

Government Reform takes a record of this. We share it with all

of the other committees in Congress.

We have two panels today. During our first panel, as I said, Secretary Kawamura will be testifying. The second panel will be the

remainder of the witnesses.

We have received everybody’s testimony, and I have gone

through it. My staff’s gone through it. I’m sure Congressman Farr

has looked at it, and his people have looked at it.

We provide 5 minutes for our witnesses to summarize their testimony. I’ve got a clock here. There’s a green, a yellow and a red

light on there. The green, obviously, means keep going. The yellow

means you’ve got a minute and the red says the door underneath

your chair is about to open.

If you could summarize your testimony so we can get to questions, I would appreciate it. I know Congressman Farr is time constrained. I know many of our witnesses are time constrained. We

will try to move through this expeditiously. We do have some questions that we have thought about in Washington preparatory to

this hearing, so we are going to go through those.

The questioning after the testimony will go back and forth between Congressman Farr and me. To the extent that we have questions, we are going to keep asking them. If there is stuff you want

to offer extemporaneously, I would hope you do so. If you have

questions about how this works, that would be great; if you want

to ask those as you come up here do not be bashful.

We are making a record here and the record will remain open for

10 days.

After we get through the testimony there is likely to be questions

that come to mind that we would like to submit to our witnesses,

so we will be giving those to you in writing in a subsequent period

of time, and we would appreciate a timely response.

And, with that, we are going to proceed. So, Mr. Secretary, if you

would please rise and raise your right hand.

[Witness sworn.]

Mr. OSE. Let the record show the witness answered in the affirmative.

I am particularly pleased today to welcome the Secretary of the

California Department of Food and Agriculture, Mr. A.G.

Kawamura. Welcome, Mr. Secretary.

STATEMENT OF A.G. KAWAMURA, SECRETARY OF THE

CALIFORNIA DEPARTMENT OF FOOD AND AGRICULTURE

Mr. KAWAMURA. Thank you, Chairman. Welcome, Congressman

Farr. And,thank you very much for allowing me to have this opportunity to speak to you today.

The famous writer/poet Carl Sanburg made a wonderful statement years ago which I think is apropos for today, and that is

when a nation forgets its hard beginning, it is beginning to decay.

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And, clearly here in California we have been struggling with that

forgetfulness at the Department of Agriculture. We are really concerned that the infrastructure which the Department of Agriculture

represents and the industry itself of agriculture which is here in

California is being taken for granted and has been forgotten. And,

it is clear that this nation, which has such an abundance of food,

so many resources, is suffering from a small case of amnesia in remembering how important the domestic food supply really is and

what that contributes to a nation’s economy, well being and security.

In saying that, it is also very interesting that this Subcommittee

on Energy Policy, Natural Resources and Regulatory Affairs is asking us to talk about the specialty crop industry because as we all

know food, just like water, just like petroleum, food and fiber is

stored energy. If you would, stored sunlight. It is something that

the State of California is able to produce on an enormous basis

with the blessing of all the resources we have here. And, it is very

critical to recognize that we are standing at a moment of decision

where we are about to export that capacity and ability to produce

this enormous food supply, this enormous energy supply, to other

countries.

Seeing that, I would like to say that at this point in time in an

enormously complicated world, this is 2003, it’s not 1963, it’s not

1973. In 2003, the global competition, the exchange of technology

is enormous. Formerly countries that we would not imagine being

competitors with us are overnight turning into competitors and our

ability to compete in this complex world is compromised without

some kind of recognition that we need help. The State of California

is making that turn and is ready to start to invest again, we hope,

in this infrastructure which allows agriculture to be here. And, we

are certainly hoping that the Federal Government then is able to

recognize the timeliness of investment into that same infrastructure and the same support that would come to the specialty crops

industries.

I think one of the things that many people forget is that all of

us, and I am a third generation farmer from an urban area in

southern California, who are engaged in the activity of agriculture

and even though I have a new hat today I still am in the agriculture business as a farmer, all of us do so, it is a voluntary investment of our personal wealth to be involved in business and particularly agriculture. And, when that voluntary investment becomes so risky, so full of liability, so full of regulation that we cannot see the return on our investment and it becomes very clear

that maybe that does not work for us, we will pick up those tractors and leave to another State. We will pick up those tractors and

leave to another country. And, again, the timeliness of this hearing

then is a chance for all of us to voice our extreme concern that we

have gotten to that point commodity by commodity where different

players within industry are beginning to and are ready to pick up

and leave unless we do some enormous changes of support.

The global economy is not going to change overnight as far as

making things better. We recognize that we have to be able to add

value to our crops. We recognize that we have to be able to reinvent ourselves. This kind of support for specialty crops then beVerDate 11-MAY-2000 12:03 Jul 12, 2004 Jkt 000000 PO 00000 Frm 00037 Fmt 6633 Sfmt 6633 D:\DOCS\94067.TXT HGOVREF1 PsN: HGOVREF1
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comes one of the critical components to allow our industry to retool

itself, to reinvent itself, to spread the word, and I will talk about

that later in my remarks, about the different, wonderful opportunities that the global environment gives us.

Certainly, we can talk about the global threats. I think we all

recognize those. But in looking at the different opportunities, we

know that we are replaceable suppliers of a food supply. We would

like to be not replaceable suppliers, but the contributors and the

partners in a food supply that is not only dynamic but is contributing to an enormous boom for the State of California.

We talked about a California renaissance, and that renaissance

cannot take place without a renaissance in agriculture in the State

of California as well. That being said, the Specialty Crop Competitiveness Act 3242 is one of those things that can help us get to that

point where we go from a $30 billion industry with 350 commodities in this State to $40, $50 billion. How does that happen? The

simple math of looking at consumption as an optimistic point in the

future. Many of us have heard about this five a day program, eating five healthy servings of specialty crops. Currently the numbers

show that the U.S. population eats three servings a day. If we go

from three to five servings, that is a 60 percent increase in consumption.

Evidently, the Canadians are at seven servings a day. If we go

from three to seven servings, that’s 130 percent increase in consumption. And, evidently the French eat 10 servings a day. If we

go from 3 to 10 servings, that is a 330 percent increase in consumption. That would be a sucking sound that would be very hard for

us farmers to fill, but it would be a nice challenge for us to do it,

would it not? And, it would certainly raise all boats within the agriculture industry.

Currently, the benefits of the previous specialty crops block

grants that came to the State of California have been judiciously

and wisely invested in different aspects of the California economy.

I will just talk briefly of a few of them. The clearest example, of

course, is part of this wonderful museum that we are having this

hearing in. This is a chance where this museum is able to educate

the public about the importance of agriculture. And, we were a

small part of that, and we thank the wonderful supporters of this

museum for making this legacy here in the Salinas Valley.

The California International Market Promotion for Agriculture

Program [CIMPA], provides 34 agricultural business and grants to

help the international marketplace.

The Western Institute for Food Safety and Security in a very

complex world that has many, many dangers including SARS, West

Nile Virus and all the other plagues and problems that can come

into the State, that is an institute with the task of looking into the

highest level of identification and detection of diseases in plant invasions.

The Nutrition grants, which we are all hopeful that this State

and the rest of the country will be involved with, is a critical aspect. Our nation currently has an epidemic in obesity and childhood diabetes. That is driven by a poor diet. We recognize that fast

healthy food is easily possible. Fast healthy food means using a lot

of specialty crops, and we are looking forward to that.

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We will ignore the drink that you are drinking.

The LEAF program which is Linking Education, Activity and

Food is a wonderful example of those block grants at work.

The California Minor Crops Council received a grant to develop

successful tools for effective and environmentally friendly pest and

disease exclusion practices and controls, a sustainable movement in

the direction that this State and this country surely is moving toward. Those are the kinds of assistance that we need.

The momentum created by these 2001 block grants then is an excellent start, but it is only a beginning. We are so very encouraged

to think that around this country the specialty crops production

States, which basically are all the States in one way or another,

can look again at a different way of seeing agriculture in the year

2003.

Again, the forgetfulness of not recognizing that agriculture is a

pillar of support, as the Homeland Security Task Force has recognized that the agricultural system, food and fiber system, is a critical infrastructure of this country. Certainly this is a movement in

the right direction. And, the funding for these programs would be

a wise investment.

With that, I would like to close and again say thank you to

Chairman Ose, and for the entire delegation that recognizes these

important aspects of agriculture today in 2003.

[The prepared statement of Mr. Kawamura follows:]

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Mr. OSE. Thank you, Mr. Secretary.

It is orange juice. It is orange juice. I just want you to know that.

It is orange juice.

All right. This is how we are going to proceed here. Again, Congressman Farr and I will alternate back and forth asking questions. To the extent that you have the answers or you can come up

with the answers and you can share them with us, that’s great. If

you need to consult with your staff and get back to us, that’s fine,

too. We’re keeping track of the questions we ask either both in the

record and otherwise. And, those questions that need further input

certainly we’d be happy to take them in writing.

So with that, Mr. Secretary, on page 2 of your testimony you

state that the block grant program and the Economic Assistance

Act of 2001 has been successful here in California. I think your testimony talks about the wine grape deal. In fact, you even list them;

there’s six or seven you list in your testimony.

I specifically want to ask in addition to the Buy California Initiative that you talked about in your testimony, what additional plans

do you think need to be considered at the State level for increasing

or implementing the increase in marketing and the promotion and

consumption of specialty crops? Are there additional things that

you have on the boards that you can share with us?

Mr. KAWAMURA. Our plan is, again, to build on the successes of

what we see happening with the current programs. We have a new,

as you know, a very exciting Governor that is dedicated to the

health of children. And, it is interesting that a healthy child has

to be a well nourished child. We are very hopeful at this point that

the Governor, and we have had some discussions with the Governor and staff, that message is a natural message to Buy California, to be involved with California and health and eat those five

a day or seven a day, nine a day servings and get away from those

soft drinks and things that are so tough on the health of our kids.

Mr. OSE. Sure it is. All right. Thank you for that.

Title IV of H.R. 3242 talks about specialty crop research and the

like. Would it be possible or do you have plans under this grant

program where some of the funds would go to research or would

you reply on the authorization within this particular title only?

Mr. KAWAMURA. Certainly, as you know, many times we find ourselves in the middle of a crises similar to the recent Pierce’s Disease. And, you would always want to leave yourself some option to

be able to redirect your funding to the emergency of the day. In

saying that, there’s a large section in the act to look and focus on

the very real problems of pest exclusion and that the fact that,

again, California is the portal to the rest of the United States going

back to my opening statement about the forgetfulness of how important agriculture is or how important are those hard beginnings.

We have learned a lot of lessons about pest exclusion over 10,000

years of human history or more, especially in California we clearly

have well documented studies showing that pest exclusion prevention is your best dollar spent. And, as these new technologies and

new sciences come about that we are able to do so even more

sustainably than in the past, even more effective than in the past,

these are the kind of focuses for technology that we will need. In

addition to that, using that same technology and study to make

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sure that any trade barriers that may exist are in other countries

that we are able to put those dollars to focus to open those markets

that currently are closed because of scientific technological trade

barriers. That is another focus that we hope to keep open and focus

on as they arise.

Mr. OSE. I want to dwell on this pest and disease exclusion issue

for a moment. As I understand it, we have spent in California

nearly $200 million in two particular instances dealing with

pests—$22 million in one instance and $177 million in the other instance—is that right? Some of that money has come from the State,

some has come from the Federal Government. From where I sit,

the exclusion of pests or disease from entering our country is a

Federal responsibility. Do you share that view?

Mr. KAWAMURA. I absolutely do share that view, because it is

just the history of this United States, actually before the formation

of the United States. We understand that the bugs and the diseases and the pests don’t understand borders. They can come in

from any port. Before the formation of the United States, I think

the best example is the incursion of the explorers with certain diseases, small pox, venereal diseases that wiped out entire populations of human beings. Every living group, every living population shares that vulnerability, whether it is our plant populations

or our livestock populations, even our pets. So we talk about that

all the time.

There are things that want to eat us, our plant supply or our

pets, too. And, that is a battle that has been going on for millions

of years and it knows no borders. And so, yes, the Federal Government has that No. 1 priority, each State has its own responsibility

as well.

Mr. OSE. Sam.

Mr. FARR. Thank you, Mr. Chairman.

Thank you, Mr. Secretary, for your testimony. I would just like

to followup on a couple of questions that the chairman asked on the

Buy California Initiative.

Let me put it into a little bit different context. We are here to

talk about this Federal legislation. But, what I also see is it is very

difficult to move this nation. It is so big. I mean, move the U.S. Department of Agriculture from a broad national standpoint of really

committing to the kinds of things you are talking about. And, it

seems to me there is other pressures that can be brought up under

experiences; and that is California itself as being the populous

State, the biggest agriculture State and the most diversified agriculture State.

In the grant program for the Buy California Initiative, I am wondering whether the Department is thinking about using the results

of those grants, the success of those grants to essentially tackle the

issue of how we really get specialty crops into institutional buying

programs. If you look at us on the Ag Appropriations Committee

and every year when we are looking at the commodity programs

and those commodities that we buy end up back in the school lunch

program or buy back in other kinds of public feeding programs, and

those commodity programs are not producing the things that are

nutritional five a day programs suggests we should eat. So essentially the Federal Government is not buying what they are telling

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people they ought to eat, and we are going to try to do something

about that.

But one of the problems you have is that, frankly, they have been

buying these things because they are easy to buy in commodities.

You can put them in big barrels or you can put them in big boxes.

They do not think about specialty crops being packaged the way we

are packaging them now. It is just a seque on technology. You do

not remember that the lettuce in the bag was not invented at MIT

or silicon valley. It was invented in the Salinas Valley. And, the

carrots and celery that you can get in a package that are party

snacks or used and served on airplanes, that technology was developed here by the men and women sitting in this room.

So, you do have a technology investment along with this, just for

the sake of packaging fresh produce. But I would love to see if you

can as the new Secretary bring together how we can have institutional changes in California. If we can change our own schools and

our prisons. I mean think of the institutions that feed a lot of people; our hospitals. And, I think the U.S. military is very interested

in being right there with you, because they want healthy food. That

we could from California really shape that agenda by not only talking about the need to do it, but demonstrating that we can deliver

fresh produce, fresh crops, specialty crops to the buyers in a timely

way and in a way in which they can distribute them.

So it is just more of an observation than needing comment. And,

I just hope you will be able to pull that together. You have already

pointed out in your testimony that it has changed the school behavior in being able to build facilities to have salad bars in schools and

milk vending machines, and so on. And that is, I think, the demonstration that the rest of the Nation needs to see. Because I believe as goes California, so goes the country.

The other point I want to mention on your California Agriculture

Emergency Response Team just FYI, the only school in the United

States that is teaching first responders by giving them master’s degrees in a whole new field called Homeland Security, is right here

in Monterey at the Naval Post Graduate School. I have asked the

faculty over there to get ahold of our Ag Commissioners and members of the agriculture community here to essentially address the

thing that you need, which is to support the Emergency Response

pertaining to food safety, pest, disease prevention as they teach

these first responders who are career people, who are coming over

here to get a master’s degree. And, they do it by coming here for

2 weeks. They get an initial course and they go back to their jobs

and do distance learning, and come finally to get their degree. I

think it’s going to seque into a doctoral degree.

The inventive educational curriculum that is being done in Monterey will carry over to universities throughout the country because

there is demand for that. I hope you can plug into that.

I mean, the Navy will probably come and talk to you. But, I will

make sure that they ask questions and maybe you can tell people

to also give them a call.

Last, the invasive pests that the chairman was talking about.

When George Brown was alive, who is a good friend of yours from

southern California, he worked with UC Riverside and Secretary

Gomes to try to create a center for prevention, rather than just reVerDate 11-MAY-2000 12:03 Jul 12, 2004 Jkt 000000 PO 00000 Frm 00049 Fmt 6633 Sfmt 6633 D:\DOCS\94067.TXT HGOVREF1 PsN: HGOVREF1
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spond to disaster. Essentially you and science know—we have ideas

of what is coming, what is headed this way, what may get into the

California food chain. We ought to be working on the ounce of prevention. We ought to be able to know that whenever we have a

Pierce’s Disease that what is the kind of response that is appropriate.

What happened is that the Federal Government, they were going

to do a local tax election there, and I think that failed, to help this

center for disease control and prevention. We need to get that back

on the agenda, and I think the Federal Government needs to support that very heavily. We are pitching that with the USDA but

your support could be very helpful in that.

Mr. KAWAMURA. Be very happy to do that.

Mr. FARR. Thank you very much.

Mr. OSE. Thank you, Congressman Farr.

Secretary Kawamura, for the record, I just want to make sure I

get this here, as I read your testimony you support H.R. 3242, the

Specialty Crops Competitiveness Act?

Mr. KAWAMURA. I support it absolutely.

Mr. OSE. All right. That sounds like a simple statement, but you

cannot imagine how much weight that carries. I am just telling

you. That is a powerful message to the rest of the country.

I want to just examine it for a minute. How do you feel this bill

will benefit the specialty crop industry here in California? What do

you see coming out of this?

Mr. KAWAMURA. Going back to my earlier statement about just

those dynamics of consumption increase again. If we really do find

ourselves with five, six, seven servings within a short period of

time due to a health message, due to a nutrition message of eating

this healthy, it could be fast food but it is going to be healthy fast

food. It could be in the school systems. It could be food coming

down to all the different institutional providers.

In 2003, and this is the right setting to be talking about value

added food supplies. Value added is basically technologies of the

day putting food into a new form that makes it easier to ship, possibly less perishable, more adaptable to a consumer that’s on the

move, more easily sent abroad. And, again, those old conceptions

of what a commodity purchase program can be need to be reevaluated. In 2003 we see that there is a tremendous potential for an

increase beyond anything we have imagined driven by a nutrition

paradigm that can move this State and this country forward, not

only in the business side of it but in the health side as well. So

the dual win/win of that kind of scenario is something that this

kind of a specialty crop grant program and this kind of a specialty

crop act can provide and give the impetus as we move forward to

reassess the entire Farm bill in 2007.

Mr. OSE. Your point is that you tie the different pieces of this

together from the research and the marketing and the trade aspects, and then all of a sudden using the USDA’s food pyramid, you

think the demand for specialty crops will increase rather significantly?

Mr. KAWAMURA. Almost overnight.

Mr. OSE. Right. Now, I want to go back for a moment if I may

to the pest exclusion issue. We were talking about the Mexican

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fruit fly or the New Castle Disease. Again, 22 million on the Mexican fruit fly, 177 million on the New Castle Disease. In terms of

the cost of dealing with that, how much of those costs is the State

bearing today?

Mr. KAWAMURA. Going back to Congressman Farr’s statement,

and both of you had mentioned an ounce of prevention and we

talked about the dollars of a penny wise, pound foolish, an ounce

of prevention is worth a pound of flesh. The first dollar prevention

that we can continue to spend in all areas of pest exclusion is our

best investment.

These dollars that were spent on Pierce’s Disease, the dollars

that were spent on exotic New Castle disease, those numbers are

actually amazingly low for the just outstanding response that the

State working hand-in-hand with the USDA was able to provide in

getting up to speed and fighting those infestations.

The partnership clearly is something that we understand. The

question is how much of a role does the Federal Government play

in this? It is an absolute hand-hold. Our economy currently, of

course, is impacted. We hope to be back on the right track here in

California. We are always concerned then if dollars are short in

areas of prevention, and this time we would always hope that the

Federal Government would be able to help us during a time of financial difficulty. We plan to be able to convince our own State of

the importance of pest exclusion and make sure that our funding

is always strong so that we are not a drain on the Federal Government by any chance. It is something that we are working toward,

so we need assistance.

I might remind everyone, it is the experts that are asking and

encouraging us to seek that assistance. There’s some tremendous

knowledge here in the State, and we should be all very wise to listen to that.

Mr. OSE. $22 million and $177 million is pretty quickly $200 million. One thing that has been shared with me is the State pays a

share of that even though, frankly, much of the responsibility

might originate at our borders. Am I accurately informed on that?

Mr. KAWAMURA. Yes, you are. Yes, the State does have a cost

share within those programs.

Mr. OSE. What is the cost share arrangement?

Mr. KAWAMURA. It depends, I believe and I might have my facts

wrong, but it should be one for every dollar. I believe with the

Pierce’s Disease it’s $8.

Mr. OSE. We can expand on that, but there is a cost share relationship?

Mr. KAWAMURA. I can followup? Yes, there is.

Mr. OSE. OK, so we will followup with you with a written question about that to get that on the record.

Is that cost share relationship equitable?

Mr. KAWAMURA. It is in regards to the total amount of, how

would you say, resource that is preserved or saved for the rest of

the country. Again, California produces over 50 percent of all the

fruits and vegetables, for example, in the country. And so, this is

the food supply for the country that is being protected, not just for

California. Our specialty crops, where they are an enormous

amount of the percentage of the food supply of the United States

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in the form of food, specialty crops are what California produces for

the rest of the country. So the whole country benefits from the

preservation of this industry. And, it is not right to look at each

State. It is a parallel production within all the States. It is our food

supply and we must always protect it. Because if we get a tremendous flood or some horrendous disaster in California, you had better hope that Florida does not have that disaster. It is, again, a big

picture that we forget many times of what the food system of the

United States is all about.

Mr. FARR. I had one more series of questions.

Mr. OSE. It is your turn.

Mr. FARR. Just a seque on that also, Mr. Chairman, that was a

very good question. And, I think, when we get to that and you will

see that California specialty crops put in more of their own private

funding matched with a commitment with the State than probably

any other crop in the country. I mean, we are carrying more of our

burden, and, I think, that was the chairman’s question. The Federal Government should have more of a responsibility.

Mr. KAWAMURA. Congressman Farr, if I may just add, and that

was an excellent point, part of the reason that the industry stepped

up to the plate is we deal with perishable living things. The bureaucratic process is too slow sometimes for the response that we

need. And so, to followup on that, we could always do better, we

could get those response emergency funds out faster. When the experts are asking for it, I think we should deliver it. That is how

fast it should work.

With hoof and mouth disease, for example, every hour that you

delay the process to seal it up, it costs millions upon millions of

dollars. That is one of those estimates that are out there.

So in followup, the reason the industry responded with some of

their own money is they see the danger to their crops in a short

timeframe. They cannot necessarily wait for the right processes to

go through. We would love to modify that process and make it a

quicker process.

Mr. OSE. Someone on the second panel talks about the cooperative or collective efforts within marketing orders or different segments of the industry in terms of dollars committed to that. So we

will expand on that when we get to that.

Mr. FARR. I have no further questions.

Mr. OSE. OK. I do want to examine a couple of things, Mr. Secretary. With respect to California itself, what do you feel are the

most important trade priorities for our agricultural sector?

Mr. KAWAMURA. We have always asked for a harmonized set of

rules that allows all of us to trade so that our trading partners

have the similar kinds of rules and regulations into their food production that we have to deal with. We have always asked our

tradeofficials to look for countries that have populations that can

actually buy our crops.

Many times we are making trade agreements with countries that

have nothing to offer us, but their specialty crops and no market

for our specialty crops. That is a concern.

Many times within our trade policies we are finding that our

products are kept out of those countries because of, again, technical

trade barriers that can be solved if we were to focus a little more

49

of our resources on resolving those barriers in those countries to

open the markets for us instead of focusing our dollars on allowing

other countries to come into our country with their food products.

So, those are the kind of focuses that we need to followup on.

We have not yet looked into the food assistance dynamics and

the politics of how we feed a hungry world that sometimes is in crises, going back to the fact that we have products now in 2003 that

used to be very perishable that are now in forms that are highly

non-perishable and easily delivered. We should certainly look at

that new function of specialty crops being a part of that nutrition

program that we give to a hungry world that is certainly in many

cases in significantly dire straits in terms of their nutrition.

Mr. OSE. You made a very cogent point relative to targeting

these trade agreements on countries that can afford to buy our

product. I mean, that is such common sense it is unusual, I mean

I have to tell you. I have been in Washington for 5 years and I do

not think I ever heard it put so succinctly. So, I do think that is

a very good point that gets lost in a lot of our discussions.

Are there countries in particular that we do not have trade

agreements with today that you are aware of that we ought to look

at? If you were able to say or wave your hand and say all right,

we are going here, there, and there; where would you go?

Mr. KAWAMURA. Well, again, those countries that could buy our

products easily. European Union as a trading block, we do not have

a current open bilateral treaty with them. There is all kinds of, as

you mentioned earlier, tremendous subsidies to their specialty crop

sector that basically prohibit us from being competitive in their

markets. As well as tariffs into Japan would be another one. Some

products are getting in, some products are not.

So, those countries with the biggest populations of middle class

and just with the kind of economy that it can afford our products,

it is an easy demographic that you can see, we should be focusing

on those for our products.

We understand many of these trade treaties are driven by national security interests. I think we always want to try and remind

our administrations and our country that food security is a security

issue for national security.

Mr. OSE. Right. Thank you.

We have no further questions at this time. We do have things

that came up here that will be pleased to forward to you and your

staff.

Mr. KAWAMURA. One last, for the record. Again, and I apologize.

I am about day 15 here into the job site. I do not have all the facts.

Mr. OSE. You are doing fine.

Mr. KAWAMURA. But on the fruit fly infestation recently, the Federal Government put up $11 million and California put up $11 million. The New Castle disease it was a Federal recognizing the danger to the entire State—to the entire country on an explosion of

New Castle disease into the poultry industries. It is $170 million

from the Federal side, $7 million from the State side.

Mr. OSE. OK.

Mr. FARR. Just the State?

50

Mr. KAWAMURA. Just the State. And this is just on these aside

from what private industry might have put in on their own,

but——

Mr. FARR. It was $170 million just for California or the whole

country?

Mr. KAWAMURA. $170 million on the Federal side.

Mr. OSE. For the outbreak that occurred in California?

Mr. KAWAMURA. Yes.

Mr. OSE. Right.

Mr. KAWAMURA. On the glassy-winged sharpshooter, it was $6 million for the State, $24 million Federal.

Mr. OSE. OK.

Mr. KAWAMURA. And then, not to mention the private contribution, which was a sizable amount as well.

Mr. OSE. From industry?

Mr. KAWAMURA. From industry.

Mr. OSE. OK. All right. Well, Mr. Secretary, thank you.

Mr. KAWAMURA. Thank you again for your support.

Mr. OSE. Is this your first testimony before a congressional committee?

Mr. KAWAMURA. No, and it will not be my last, but——

Mr. OSE. I tried to get there first.

Mr. KAWAMURA. The first in this capacity, yes.

Mr. OSE. All right. Well, we are pleased you were able to join us.

We look forward to working with you, and we thank you for your

support.

Mr. KAWAMURA. Thank you for your support. I appreciate it.

Mr. OSE. Thank you.

We will take a 5-minute break here.

If the second panel of witnesses could gather as the Secretary

leaves, that would be great.

[Recess].

Mr. OSE. All right. I want to welcome the second panel of witnesses to our hearing today.

We are joined today by Mr. Joe Zanger, who is a member of the

board of directors of the California Farm Bureau Federation. We

are joined by Mr. Jim Bogart, who is the president of Grower-Shipper Vegetable Association of Central California. We also have with

us today the chairman of Western Growers Association, Mr. John

D’Arrigo. And, we are also joined by the vice president and general

counsel of Tanimura and Antle, Mr. Robert Nielsen.

Gentlemen, you saw how we handled the first panel. We are

going to shortly hear your oral testimonies. You have each submitted written testimony, which we have received and reviewed.

Each of you will be given 5 minutes to summarize your testimony, which ought to be interesting because I read everybody’s testimony and I do not believe I could summarize some of it in 5 minutes, but we will see.

Then we will go to questions. So, we will have five, five, five, five

and then questions between Congressman Farr and I. The questions will follow the completion of your testimony.

Do you have any questions?

OK. If you would all rise so we can swear you in.

[Witnesses sworn.]

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Mr. OSE. Let the record show that all the witnesses answered in

affirmative.

Our first witness on the second panel is a board member of the

California State Farm Bureau Federation, Mr. Joe Zanger.

Mr. Zanger, you are recognized for 5 minutes.

STATEMENTS OF JOSEPH ZANGER, MEMBER, BOARD OF DIRECTORS, CALIFORNIA FARM BUREAU FEDERATION; JIM

BOGART, PRESIDENT, GROWER-SHIPPER VEGETABLE ASSOCIATION OF CENTRAL CALIFORNIA; JOHN D’ARRIGO, CHAIRMAN, WESTERN GROWERS; AND ROBERT NIELSEN, VICE

PRESIDENT, TANIMURA & ANTLE AND UNITED FRESH FRUIT

AND VEGETABLE ASSOCIATION

Mr. ZANGER. Thank you. I am Joe Zanger, a grower, processor,

packer and retailer of fruits and vegetables in Hollister. I am a

member of the California Farm Bureau Board of Directors and I

serve on the USDA USTR Trade Advisory Committee for Fruits

and Vegetables. Also, I have been on the Farm Service Agency

State Committee for the last 8 or 9 years. Congressman Farr saw

to it that I received that appointment back then and with the

change of administrations, thanks to Chairman Ose, I am still on

the State committee.

On behalf of our Farm Bureau members, I thank you for the opportunity to present testimony on problems facing the specialty

crop industry. And, thank you, Mr. Ose, for forwarding the testimony from this hearing to the House Ag Committee. Thanks, too,

for the Ag Committee staff who are present here today.

While working to provide a reliable food supply through responsible stewardship of our country’s natural resources, growers are

attempting to balance numerous issues such as global competition,

retail consolidation, trade barriers, rising input costs and low commodity prices. Specialty crop growers are determined to find solutions outside the traditional U.S. farm support programs. Solutions

can be identified through meaningful review of the reform of domestic policies that impair the viability and global competitiveness

of our specialty crop producers. The Specialty Crop Competitiveness Act of 2003 offers necessary short and long term support for

growers of fruits and vegetables and nuts throughout America. The

bill addresses a wide array of issues from threats imposed by imported pests and diseases to preparing a strategy to increase U.S.

exports.

I would like to express our appreciation to the bill’s author, Congressman Ose, and the cosponsors of the bill including Representative Farr.

But today, I would like to briefly comment on international

trade. The WTO Doha Round presents a unique opportunity for the

horticultural industry to reform inequitable trade policies that

place our producers at a competitive disadvantage. Past trade

agreements have provided more benefits to foreign producers than

U.S. producers, primarily because of continued high tariffs in many

countries and substantial foreign subsidies. Our competitors enjoy

the ease of exporting their product into the United States under

low and zero tariffs.

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To ensure that issues of interest to the specialty crop sector are

addressed, a number of U.S. specialty crop organizations, including

the California Farm Bureau, have collaborated to form the HORT

Alliance. The HORT Alliance stands for Horticultural Organizations for Responsible Trade.

The HORT Alliance is seeking an overall WTO agreement that

produces tangible benefits for the fruit, nut and vegetable sector.

Our objective is to correct disparities that disadvantage U.S. growers through the framework negotiations, and if necessary to sectorspecific negotiations.

The Alliance is seeking: Aggressive and significant reform in

market access; new rules that limit trade distorting amber box subsidies to horticultural and specialty crops; and immediate elimination of export subsidies.

To summarize, there are significant trade export subsidy and domestic support issues that must be addressed if U.S. specialty crop

produces are to see meaningful reform in the Doha Round. California Farm Bureau looks forward to continuing its work with the

U.S. negotiators and with our Members of Congress in an effort to

address the trade inequities impacting the U.S. specialty crop industry.

I think I will stop there. I do have additional thoughts and perspectives on how the Federal Government can be helpful to specialty crops, and I will try to tie them in and bring them out during

the questioning and answering period.

[The prepared statement of Mr. Zanger follows:]

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Mr. OSE. If there is something we miss in the Q&A period, just

make sure that you get our attention. You do not have to raise

your hand.

Mr. ZANGER. Thank you.

Mr. OSE. All right. Thank you, Mr. Zanger.

Our next witness is the president of the Grower-Shipper Association here in Salinas, Mr. Jim Bogart.

Mr. Bogart, welcome. You are recognized for 5 minutes.

Mr. BOGART. Thank you.

Mr. Chairman, thank you for this opportunity to testify on behalf

of the Grower-Shipper Association of Central California to discuss

Federal agricultural policy with regard to specialty crops. We want

to provide a warm welcome to you and the other distinguished

Members of Congress and congressional staff on your visit to Monterey County.

There is no better place than right here in Salinas to discuss specialty crop issues. We are very proud of our growers and shippers

that they have been able to provide the most affordable, abundant

and safe supply of fruits, vegetables and other specialty crops available anywhere in the world for the American public. Monterey

County, with over $2.8 billion in agricultural output in 2002, produces many specialty crops which are an important component of

a healthy diet.

It is commendable of Members of Congress to come here to Salinas because today our ability to continue producing the most affordable safe and abundant supply of nutritious specialty crops is

in jeopardy. We face many challenges in order to remain competitive in global markets. For that reason, the Grower-Shipper Association strongly supports the Specialty Corp Competitiveness Act of

2003, H.R. 3242, as it will address many of the problems facing our

industry. We want to particularly commend you, Mr. Chairman,

and Representatives Dooley, Farr, Cardoza, and others who have

cosponsored this bill, for your leadership on this legislation.

Today I want to focus some of the challenges our growers and

shippers face in the area of international trade.

Specialty crop growers in California have long known that expanding exports is critical to maintaining a competitive edge in

global markets. However, in recent years, the balance of trade for

U.S. fruit and vegetable exports versus imports has not been positive, as we have seen our exports remain stagnant while imports

have steadily increased. I have attached some statistics and charts

to my remarks to bear this out.

Our growers and shippers have been disappointed with their inability to gain access to international markets in recent years. The

Uruguay Round trade agreement of 1995 was supposed to lay the

ground work for market access for our specialty crop exports. The

two primary components of this agreement that benefit specialty

crops are the dispute settlement and sanitary and phytosanitary

[SPS], mechanisms. While there have been a few bright spots within our industry in efforts to expand exports under the Uruguay

Round, for the most part our growers continue to find access to foreign markets blocked by trade barriers.

There are several key reasons that U.S. specialty crops growers

have been frustrated in their efforts to increase exports. First, we

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continue to face dozens of SPS trade barriers in many foreign markets, many of which are based on very questionable scientific data.

For example, Japan, which is a very large potential market for specialty crop exports, has been notorious for using questionable SPS

barriers to block entry of our products.

Another major issue that our growers continue to face competition from heavily subsidized growers in foreign countries. The European Union is the largest problem in this regard, providing $11

billion in subsidies per year to its fruit and vegetable industries.

As you can imagine, it is extremely difficult for our growers, who

do not participate in the USDA subsidy programs, to compete

against foreign growers who receive generous financial assistance

from their government.

Another area of concern is that many of the bilateral free trade

agreements that have been enacted in recent years are with countries that do not have substantial markets per capita or per capita

income needed to purchase high value specialty crop products. If

Federal trade policy wants to provide for increased specialty crop

exports, we need to negotiate trade agreements with countries that

have larger markets for our products, such as the Asian Pacific

Rim nations.

Currently, developments in international trade threaten to pose

even more challengers or specialty crop growers. Most notably, the

trade sanctions with the European Union are threatening to levy

in trade disputes will directly impact many specialty crops grown

here in Monterey County. Our trading partners recognize that specialty crops are very important, and we will always be vulnerable

to retaliation measures. These disputes must be resolved promptly

in an amicable manner in order to avoid a trade war which could

devastate our existing exports.

We do have a few success stories to tell about Federal efforts to

address the international trade problems our growers face today.

For example, Congress approved funding for the Agricultural Research Service to conduct research for controlled atmosphere shipping that has great promise for enabling us to overcome SPS trade

barriers in some export markets. I would like to thank Congressman Farr for his work on the Appropriations Committee to bring

this project to fruition.

However, as the challenges that our growers face continue to increase, so too must the efforts of the Federal Government to enact

policies that meet the needs of specialty crop growers. Our Federal

agriculture policy must do more to address this problem of a lack

of foreign market access for our exports.

Fortunately, H.R. 3242 will enhance existing programs and establish new initiatives that will provide growers with the tools and

technologies needed to expand exports and remain competitive.

This bill includes increased funding for the Technical Assistance for

Specialty Crops program, it will direct APHIS to focus more of its

resources on processing export petitions, and it will enhance the

Suppler Credit Guarantee Program. With these provisions and others, this legislation will assist our growers in boosting exports, and

ultimately will enable our industry to remain competitive in global

markets.

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Mr. Chairman, again, I want to thank you for this opportunity

and commend you for your efforts to improve Federal policies for

specialty crops.

[The prepared statement of Mr. Bogart follows:]

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Mr. OSE. Thank you, Mr. Bogart.

Our next witness joining us from Western Growers, Mr. John

D’Arrigo.

Mr. D’Arrigo, you are recognized for 5 minutes.

Mr. D’ARRIGO. Thank you, Mr. Chairman.

On behalf of Western Growers, thank you for the opportunity to

testify at this hearing today.

As you said, I am currently chairman of Western Growers with

a membership of nearly 3,000 which represents specialty crop

growers in California and Arizona that produce approximately onehalf of our Nation’s produce.

I am president of D’Arrigo Brothers Co. of California, a third

generation family owned grower of vegetables and fruits. And, I’m

proud to say we are celebrating our 80th birthday this year.

I wanted to compliment you for coming to Salinas Valley, home

of the salad bowl of the world, as we like to think of it, to discuss

the many important challenges facing the specialty crop growers.

I especially want to commend you, Congressman Ose, as well as

your colleagues Congressman Dooley, Congressman Farr and Congressman Cardoza for your outstanding leadership in introducing

the Specialty Crop Competitiveness Act of 2003, which Western

Growers strongly supports.

Western Growers believes that a competitive specialty crops industry is essential for the production of an affordable supply of nutritious fruits and vegetables that are vital to the health of all

Americans. In addition, with the serious concerns on food safety

and bioterrorism today, a secure domestic food supply is a national

security imperative, in our opinion. If specialty crop growers are to

remain competitive in today’s global markets and continue to provide affordable and safe produce to the American public, Federal

agriculture policy must be substantially improved. Growers of specialty crops face a crises of competitiveness that must be addressed

by Congress.

It is extremely difficult for growers to compete against foreign

produces who are heavily subsidized and minimally regulated. As

regulation increases to control the impact of agricultural practices

on air, water and soil quality, production costs for growers are increasing rapidly. Growers compete in a supply and demand environment. We are price takers, not pricemakers. And, therefore, we

are unable to merely increase prices to cover increased input costs.

Simply put, we cannot pass increases on.

While specialty crop growers make a substantial and important

contribution to our Nation’s economy, as well as our health, we

have different needs compared with the Federal program crops. As

such, Western Growers and the Florida Fruit and Vegetable Association has co-chaired an effort of specialty crop organizations

throughout the United States to develop comprehensive legislation

that will meet the needs of growers in all States producing specialty crops; whether you are a grower in Texas, Washington,

Michigan, Georgia, New York. The challenge of competitiveness is

a universal concern to all growers. These proposals are embodied

in the Specialty Crop Competitiveness Act of 2003. I applaud you

for including these important provisions in your bill.

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I would now like to briefly highlight a few of the major issues

that are important to Western Growers.

First, marketing order promotion programs have come under

legal and Constitutional challenges in recent years, and thus, the

benefits they provide to growers and consumers are in jeopardy.

We need to research and identify new concepts and tools that can

assist growers in remaining competitive in this area.

Western Growers recommends that the Federal law be changed

to prevent marketing order committees to implement food safety

programs. This would allow growers to implement good agricultural practices designed to keep fruits and vegetables free from

adulteration or microbial contamination. This would help meet the

public’s demand for greater levels of food safety.

Another issue that needs to be addressed is the adverse impacts

on growers and shippers of the inspection scandal at Hunts Point

Terminal Market in New York. Under the procedures of the Perishable Agricultural Commodities Act [PACA], even though a grower/

shipper may have received a damage award through the packer administration process, the wholesaler in a procedure can appeal the

packer ruling and receive a new hearing in U.S. Federal District

Court. In many cases, the dollar amount of the award to the grower/shipper may be only $10,000 or less and therefore would make

it not feasible to invest legal fees to pursue action in Federal court.

In some cases, the wholesaler involved in illegal activity simply

went out of business and the grower/shipper had no opportunity to

collect any money on the packer damage award. Clearly, the current system is not working for our growers and shippers in order

to make them whole from this scandal. Western Growers recommends the development of an arbitration proceeding that could

be established and utilized to effect a more cost efficient and timely

resolution of this problem.

I also want to stress the importance of improving foreign market

access that we can increase specialty crop exports. Based on data

from the U.S. Department of Commerce over the last 7 years, U.S.

imports in fruits and vegetables have increased by almost 60 percent while U.S. exports have increased only 7.3 percent.

There are a number of reasons for this, such as the $11 billion

in subsidies which the European Union provides to its agricultural

industry annually. Additionally, the recently completed Free Trade

Agreements, the FTAs with countries such like Chile and those

currently in the process of being negotiated with such as Latin

America, Morocco and the South African Customs Union offer

United States and vegetable growers only limited export opportunities. Many of these countries are not economically developed

enough to be able to afford high value products, and therefore the

market for our exports is negligible.

Western Growers believes that the international trade provisions

in your legislation, Mr. Chairman, will address this problem of limited foreign market access providing growers with the tools such as

the market access and technical assistance programs needed to increase exports. In addition, Western Growers would like to see free

trade agreements in the Asian Pacific Rim countries that currently

have high tariff rates and significant phytosanitary barriers so that

these implements to our exports can be removed.

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In closing, I urge you to review these issues discussed in my

written statements which are addressed in Specialty Crop Competitiveness Act. Western Growers again wants to thank you, Mr.

Chairman and the cosponsors of the bill for your strong leadership.

Cannot say that enough. We urge Congress to enact this legislation

and look forward to working with you toward this goal.

Thank you.

[The prepared statement of Mr. D’Arrigo follows:]

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Mr. OSE. Thank you, Mr. D’Arrigo.

Our final witness on the second panel is Mr. Robert Nielsen, the

vice president and general counsel for Tanimura & Antle. Welcome.

Mr. NIELSEN. Thank you, Mr. Chairman.

Mr. OSE. You’re recognized for 5 minutes.

Mr. NIELSEN. Thank you.

Mr. Chairman, Congressman Farr, ladies and gentlemen, I want

to thank you for this invitation. I want to thank you, too, for your

being here. I want to thank you also for your work on the specialty

crops issues that this country and its industries are facing.

I am appearing today on behalf of Tanimura & Antle here in the

Salinas Valley, and also on behalf of United Fresh Fruit and Vegetable Association, which is headquartered in Washington, DC.

At the outset I would like to say that we support the Specialty

Crop Competitiveness Act and we applaud you for your efforts. The

first time, as far as we can determine, that such a comprehensive

effort has been made to address the issues that specialty crop producers in the United States face. This is commendable. We are

pleased that Congress is on record as both you members pointed

out, that the volume of specialty crops produced in this country

now exceeds the volume in dollar terms of the crops that receive

Federal assistance. We are no longer, as Congressman Farr pointed

out, minor crops. We are the biggest player in the game.

That being said, I would like to talk to you in behalf of and in

the context of Tanimura & Antle, which I represent, as being one

of the players in this industry, along with the D’Arrigo Brothers

and many of our other neighbors here in the Salinas Valley. We are

the people who produce these specialty crops. And, I think it is

helpful for the Congress, for the committee, for the staff to understand what we who bear this burden, if you will, or cease these opportunities face everyday.

Tanimura & Antle, headquartered in Salinas, is one of the largest privately owned produce companies in the United States. We

ship a full line of fresh vegetables and value added products, i.e.

specialty crops, grown on 56,000 acres in California and Arizona.

We have cooling facilities in Salinas and Huron, CA, as well as

Yuma, AZ. In addition, we have two value-added salad-processing

plants here in Salinas, one in Yuma and one each in Jackson, GA,

Plymouth, IN, and Boisbrind, Quebec. We sell our products

throughout the United States and Canada, and also in Europe and

Asia.

We are players and we deal with the issues that have been

raised by the three previous speakers on this panel.

Founded in 1982, Tanimura & Antle, is owned 50/50 by two families, and it prides itself on being a leader in responsible farming

that respects the land and produces specialty crops of the highest

quality. We are consumer-oriented, as all the major companies and

all the farmers in our industry are, and at the same time we value

the contributions of our other constituents; that is our employees,

our growers and the communities in which we operate.

Tanimura & Antle is a leader in the application of technology to

farming, being extensively committed to drip irrigation, as well as

the use of satellite technology, advanced plant-breeding techniques,

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and labor-saving machinery and equipment, much of which we develop within our own country.

As part of our technology and the efforts we do, we produce

these, which the chairman was gracious enough this morning to indicate he might be interested in consuming. Loaded with vitamins

and minerals, these are aimed at helping kids in this country eat

healthy products on a snack basis. Carrots or celery that kids can

get, and they’re nutritious and they are good for you. This is an example of the technology that our industry, as Congressman Farr

pointed out, has been pursuing with breathable films, with manufacturing techniques that permit this crop to have a self life and

to be exported, and to be shipped around the country.

As I mentioned, I am also appearing on behalf of United Fresh

Fruit and Vegetable Association, which has been around since the

early part of the 20th century and is a strong voice representing

the views of producers, wholesalers, distributors, brokers and processors in Washington.

Tanimura & Antle also as part of the activities that it engages

in, is an owner of a company by the name of Natural Selection

Foods, which is the major organic producer in the United States.

We are a grower for Natural Selection, and we market and ship

products under their label, which is Earthbound Farms.

The produce industry is unique. Our products are highly perishable. In fact, a son of Salinas, John Steinbeck described in ‘‘East

of Eden’’ one of the first lettuce shipments from Salinas to the East

Coast. Although the book is fiction, his narrative is based on facts

that actually occurred. The enterprising packer/shipper who sent

the rail car eastward, lost everything when it was parked over the

weekend on a siding in Chicago and all the ice inside melted.

This early story is an example of the constant risk taking that

we in the produce industry continue to engage in. We put millions

of dollars worth of working capital into the ground with every crop

that we plant never knowing for sure whether Mother Nature, retail channels, the marketplace or any other number of issues will

or will not stand in the way and cause us to lose or gain from the

investment that we have made.

Our markets are highly volatile, as you have heard today, yet we

have never relied on traditional farm programs to sustain our industry. Instead, we look to Adam Smith’s ‘‘invisible hand’’ to promote efficiency and reward the entrepreneurial risk-taking that so

marks our industry. And, it is in this context that we greatly welcome the Specialty Crop Competitiveness Act and the efforts that

you, Mr. Chairman, and your committee and the Congress are undertaking.

I would be pleased to answer more questions further on.

[The prepared statement of Mr. Nielsen follows:]

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Mr. OSE. Well, thank you.

I thank all the witnesses for their cogent and, frankly, comprehensive summaries of their testimonies.

We are going to go again, as we did during the first panel, just

back and forth with questions.

Do you want to go first this time?

Mr. FARR. Well, thank you, Mr. Chairman.

Let me point out an observation you all made about the need for

a good stable labor supply. A bill has been introduced in Congress

by Mr. Cannon and Mr. Berman from California on the Ag Labor

worker program and get some benefits to those who are here now

to provide some temporary status while they are pursuing permanent status. That bill has gotten broad based support in both the

House and the Senate, both Republicans and Democrats. The one

person that I have heard that is opposed to it is Senator Feinstein,

and I think we need to use the industry to talk to her office about

why this bill really is beneficial to California. I think what the reaction is that in the first instance there will be an increasing in

population in California from the guest worker program. All the

fears about that are sort of good. But it is, I think, the only hope

that we can address this issue and I just urge you all to bring that

attention to our Senator here.

I wanted to ask Joe Zanger, the regulation area. Monterey County I saw in the paper just adopted the right to farm ordinance creating, which I always thought was a smart idea, that we talked

about in the Endangered Species Act of why you have to preserve

a critical mass of habitat in order for a species to survive. If you

think about agriculture being an endangered species, then we

ought to create a protective habitat for agriculture to survive. You

are going to do that through Federal roles and State roles. But the

real land use issues are local.

Are these ordinances having an effect? I am sure that the reason

that the County Board of Supervisors adopted it is because of the

interest in agriculture in Monterey County? Is the Farm Bureau

pursuing in each of the ag counties in California?

Mr. ZANGER. Yes. You know, land use and land zoning is very

important. You know, we support keeping agriculture on the prime

ground. But it is just not enough to draw the lines. At the same

time while we are farming, we need to have a means of being profitable. And, you know, if you are not profitable, then you know all

the rest hardly matters. So in conjunction with the land use and

the zoning, you know there is a number of other things that can

be done both locally and State wide and federally that help with

the profitability standpoint for the industry.

Mr. FARR. You know, the difficulty though with just doing it that

way, is there is no guarantees. We have created in the Williamson

Act in California essentially a commitment by the landowner to

keep their land in agriculture for whatever the contract period is,

and that seems to have worked well. It’s a quid pro quo for that

you get a reduction in your property taxes.

It seems to me that we need to make more of those quid pro

quos. I mean, I am supporting you, but I think that the right to

farm, I would like to see that in each county in California. Because

I think that protects at least from the notice requirements to land

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buyers and to neighbors. You are moving into an area where there

is going to be noise, there is going to be dust, there is going to be

spraying, there is going to be activity that are necessary for productive agriculture.

You brought up the regulations, and that is why I am really wondering how far the State Farm Bureau was carrying those kinds

of issues. We will try to address these issues at the Federal level.

Mr. ZANGER. Well, as I say, we are supportive of the right to

farm. I think predominately most counties do have ordinances.

Now, how well they stand up to litigation, that is another question.

I think farmers and ranchers are more than willing to do all they

can to protect the environment and to be part of the environment.

But it sure helps if you are making a dollar so you can afford to

do that. A lot of problems are solved when you have money in your

checkbook.

Mr. FARR. Well, I think that whole idea of protection of farmland

has to be consistent with protection of economic return on the investment. It has to be sustainable.

Thank you.

Mr. D’ARRIGO. I would like to weigh in on your question, if I

may.

Mr. FARR. Certainly.

Mr. D’ARRIGO. I think it is an excellent question. I farm right up

to a lot of urban areas. They have encroached on my property. I

have people at night who go out into my farms from the surrounding urban environment and neighborhoods that have moved into

the area after we have been farming there for decades. They turn

off our pumps. They sabotage our equipment. They do not like the

noise. They do not like the dust. They call the Ag Commissioner

and complain. They want us to shutdown our farming operations.

And, you try to explain to them, well we were farming here first.

You moved into a nice area because you thought it would be nice

and pretty to move around a farm and look how nice it is out there,

and then you realize what it is like to live around a farm.

So I really support these ordinances of a right to farm and right

to exist and Western Growers is working on behalf of trying to find

a balance there, but clearly farmers do have a right to produce. We

have to keep reminding people as the cities grow that we need to

be able to do this.

Mr. FARR. Well, I appreciate that. I mean, this county, Mr.

Chairman, has made incredible strides. We were the first county

to require posting. It was not a State law. The ag community was

supportive of that.

The regulations are setbacks are debated county-by-county and

chemical-by-chemical. But, I think this county, and perhaps Mr.

Nielsen could comment. The one thing that was in his testimony

he did not talk about is what you do for the labor community that

you hire, the farm labor community. I think outside of California

and perhaps outside of the specialty crops.

Specialty crops probably employ more people than any other part

of agriculture. More shipping. I mean, there is more touching and

handling of small stuff than the big stuff, which is all combines

and can be shipped and put in big grain elevators.

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I once had a staff member from Montana who was a wheat farmer; when we drove in the Salinas Valley, she said what are those

people doing out there in the fields. I said, well how do you harvest

your wheat. And, she said, we just hire equipment and my kids

drive it.

The point is that there is so much unknown about this industry

that is so important to the big economic picture of America. I

mean, you could comment on Tanimura & Antle does for your

workers.

Mr. NIELSEN. Well, Congressman Farr, the backbone of any specialty crop farming operation is the people. The infrastructure that

you bring to the process is essential.

Our two families are committed to the workers that we employ,

well over 3,000. We pay among the highest wages in the industry.

We have a health care plan, vision care, dental care, prescription

drug plan for all of our employees and their dependents. We have

a 401(k) plan for every field worker. We have a company profit

sharing plan and the profits that we give to our employees go into

the 401(k) plan for them. We have a scholarship fund for some of

our employees’ children.

We also, this past year, opened a preschool daycare facility in

concert with Monterey County on our premises here in Salinas. We

provide full daycare for children of our farm workers and the staffing comes from the county with assistance from the State. The kids

receive nutritious meals, they receive preschool education, which is

bilingual and is moving them in the direction of learning English.

And, it’s proven to be very, very effective. In fact, we had a ceremony celebrating that earlier this past week.

Our take on all of this is that if you invest in human capital,

which is the most important capital component in any business operation, the returns more than justify the investment you make. It

is on the basis of that investment that we have, I think, good relationships with our employees as do many, many other participants

in the specialty crop industry. It is for that reason that we—and

we mentioned it in our testimony—support the various attempts

that are being made to facilitate lawful immigration into the

United States for field workers and other people. It is a very important part of the industry. We have a great deal of faith in our employees. We respect them, and I believe, they respect us and our

company and our country. I do not think there are a more committed nationally supporting people that I have ever seen in a work

force than in our industry. These folks work very hard, some of

them holding down two jobs, driving long distances, living in poor

quality housing that is a long away from where they work and yet

they still keep coming and they still work hard and they pursue

the American dream. Their kids generally do not work for us. They

go to college and law school. But that is the way it works. We are

very pleased to be part of that.

So in a long response to your question, I would say that the people you work with are the most important part of your operation

and they are to be cared for and respected.

Mr. OSE. Thank you. Each of you testified about the issue of open

markets and the impact of such on yourselves and your colleagues.

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And, we have had discussion about what countries the USTR

should focus on relative to new trade agreements and the like.

I want to turn that question around a little bit. With respect to

the specific trade agreements, I mean we can talk about sanitary,

phytosanitary things, we can talk about tariff levels or we can talk

about subsidies or what have you. At the risk of having each tell

me well they’re all co-equal, which one is most important? Which

one does the USTR really need to focus on first? And, it might be

1A, 1B and 1C, but when next the members of the Ag Committee

meet with Ambassador Zoellick, what do you want us to tell him?

Mr. Zanger.

Mr. ZANGER. Well, sure, I will start.

That is probably the toughest question you could ask today. Because from country to country and product to product, you know

that answer is going to change. It depends on your industry.

Mr. OSE. We are talking about specialty crops today.

Mr. ZANGER. Specialty crops.

Mr. OSE. Yes.

Mr. ZANGER. Probably the largest concern is the domestic subsidies in Europe. Because we are competing against them in other

markets, in third party markets. They are able to produce at a loss,

but then they are backfielded by the government. And then, their

product is ending up in third party markets while we are trying

to quote prices and get there.

Mr. OSE. So Spanish clementines, Greek pares.

Mr. ZANGER. Peaches, olives. It goes on and on.

Mr. OSE. OK. Just right down the list?

Mr. ZANGER. Yes.

Mr. OSE. The subsidies to growers of those kind of crops?

Mr. ZANGER. Right.

Mr. OSE. All right. Mr. Bogart.

Mr. BOGART. Yes, I would agree with Joe, although I think SPS

is right up there with subsidies. It is 1A/1B as far as I am concerned. I mean, there is a reason why I mentioned it in my remarks, and I mentioned subsidized crops as well. I mean those are

barriers, those are imbalances that we are trying to overcome.

We are not here before you testifying for handouts and subsidies.

Mr. OSE. Right.

Mr. BOGART. I mean, this is an investment as you both up there

know. It is an investment that I feel that the return could be tenfold, a hundredfold. We are just asking to compete on a level playing field. We are innovators. We are very creative here. As Congressman Farr mentioned with the bag salads; that were invented

here. We are just asking for the opportunity to compete on an

equal basis. We would never ask for subsidies, anyway.

Mr. OSE. Right.

Mr. BOGART. We have always been opposed. My association has

been opposed. I know Western Growers. I mean the producers of

specialty crops we do not want subsidies. We want access. We want

the ability to get into the game. And, I think, that these

phytosanitary barriers have been used to deny us access to important market opportunities, as well what Joe mentioned, the subsidized countries. So they are right, they are both right there as

far as I am concerned.

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Mr. OSE. All right. Mr. D’Arrigo, amongst your 3,000 members

what is the input?

Mr. D’ARRIGO. I think those two issues are your answer. Enabling us to be more competitive in the world market with free market access, eliminating these unofficial trade barriers, which when

I say that, I used to go to Japan. Anytime the local markets had

a surplus of broccoli, well then I got inspected, rejected and kicked

out of the country because of whatever reason they wanted to come

up. This level playing field does not exist. So, that and the subsidies are the issue.

Mr. OSE. I mean, you suggest that the day-to-day knowledge of

the government agency in some of these other countries is such as

to be able to say on that specific day or that specific week there

is a surplus or a deficit in this product. Yet, we do not have that

here. There is no way that USDA tracks it that closely here.

Mr. D’ARRIGO. Well, absolutely. I quit Japan because I used to

send dozens if not 20 to 30 loads a week there. When they had a

surplus in their local markets, in their domestic production, the inspections phytosanitary things came out of the woodwork, and I

clearly had rejected loads that were unsubstantiated. I flew over

there to personally inspect my own loads.

They have a system there that works to protect their local farmers, and these kind of unofficial things killed my business over

there.

Mr. OSE. OK. Mr. Nielsen.

Mr. NIELSEN. Mr. Chairman, the whole post World War II free

trade structure is built on an embodiment of the law of comparative advantage, which reflects the fact that some nations, as you

know, produce better than others. For that law to work there has

to be not only free trade but fair trade.

We are active in markets in Asia and in Europe. We support the

WTO, but we support fair trade. The concerns we have are the protectionist distortions that arise from agricultural interests within

the country that we are exporting to.

We do not mind the fact that Chinese broccoli in certain times

of the year sells way under ours in Japan. The Chinese have lower

labor costs, it is a shorter distance to ship. What we do mind is

when phytosanitary barriers are imposed on our products coming

into Japan. And, those barriers are imposed on an ad hoc basis

without consistency, and they are imposed because they are found

in products coming from California the very same kind of bugs, if

you will, that exist in Japan.

I should say that progress is being made in this regard with the

Japanese Government and with governments in other parts of the

world, but it is long and slow and hard. These distortions which

unlevel the playing field, which corrupt if you will the law of comparative advantage are what have to be addressed. We strongly

support the act’s proposal to have the USTR have at least one person—I do not think one is enough—but at least one person in there

whose focus is going to be on specialty crops who can get into the

process with Ambassador Zoellick and just make sure this gets

raised so that we do not get lost in the need to sell super computers or Boeing aircraft or whatever else is more important to the

United States in a large big picture.

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Mr. OSE. OK.

Mr. FARR. Your problem in Japan is unique because it is a perishable crop. So just the delay?

Mr. D’ARRIGO. Exactly. You are dead.

Mr. FARR. Kills your product? I was just thinking, we have never

put perishability into the jargon that we use in trade.

Mr. D’ARRIGO. It’s critical.

Mr. FARR. Because it is probably the only thing that we export

that is a living thing that dies within a certain time. I mean it decays. Let me just suggest something. Because the bill that the

chairman’s authored, along with Congressman Dooley, has six titles in it. There is some heavy lifting in this bill.

Essentially what it is going to do is what you stated, is that the

specialty crops need to be treated as a major crop in America. Need

to be treated as probably the major crop because it employs more

people and all the things that we have talked about. It is healthy,

and this kind of stuff that we ought to be supporting.

But, this is about getting more money in a zero-sum game; we

ought to have more money for grants, more money for loans, it is

a bill about marketing. It is about food safety, phytosanitary

issues. It is about international trade. It is even about changing position in the U.S. Trade Representative’s Office so a specialty crop

representative could be there. It is for market access, technical assistance, supply of credit guarantees. It is about specialty research,

more money; robbing from Peter to pay Paul. It is about the

invasive test stuff and disease that we have talked about here; food

safety issues. And, it is about a sustainability practice which I have

applaud you and applaud the chairman for getting into the bill because that is really, I think, what all of this from land use to being

economically viable talked about; is how do you do this over a time

particularly in the State of California which is the most populous

State in the United States, and growing that way.

What the chairman cannot say but I can sit here among friends

and say, and this is just political advice, we have got a lot of people

that will look at this bill as a threat. Why? Because it is going to

cost more money. You are going to have to put some personnel in

there and, frankly, there is some competition for that.

In this trade issue is the stool of the economics of agriculture in

the United States. As I said in the opening, we have traditionally

been treated as a minor crop or, you know, we do not exist. There

is one time when we do exist. Only one time. That is the politics

of trade. It is not because of the crops you grow, it is because California is the biggest ag State. So anybody in the trade business,

whether it is the financial markets of New York or the computer

industry in Silicone Valley, they always want the lobbyists for

trade to be agriculture because every Member of Congress has

some agriculture in their district. I guess, except the city of New

York and here the city of L.A. But Willie Brown was always fine

in just saying well they grow crops there they are just not put in

the ag report.

But, the point is that you are the front lines for the lobby for

trade for everything that is in trade. And, I think, that California

agriculture needs to sort of hold its cards a little tighter, and particular if this bill is going to be successful.

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You ought to start letting the world know that if they going to

come here, this is the only time they come to you and say will you

help us. We say ‘‘Yes, we will, but here are our conditions.’’ Because everything you have outlined is needed to be done, but it will

not be done unless we change the politic in Washington to do it.

So, hold back and negotiate a good deal for yourselves.

Now that I have that off my chest, but it comes about because

Mr. Bogart in his testimony put out the Agriculture Coalition on

Trade, and there is a way you have a way you can hold those cards

tight.

I did have one question for John D’Arrigo, which was the arbitration in the PACA, suggesting that we have an arbitration. Could

you explain that a little more? Would it be binding arbitration you

are suggesting? I mean, again, we have gone through that fight

when I was on the Ag Committee, and we were able to beef up the

cutback in that or stop the cutback in that area. It is an area that

I found when we discussed it in Washington, nobody knew about.

They did not know PACA existed.

Mr. D’ARRIGO. They did not know it existed? That tells you something.

Well, what I’m suggesting is we have to find a way that the

Hunts Point scandal brought out the problems that you could get

your ruling against that receiver and still they could bring it into

U.S. Federal Court, it is economically inviable to go that route. So

we have to find some other method and arbitration is one method

that would preserve your assets and you could get your money back

and not basically spend everything and more to prove that you

were right and go broke doing it.

Arbitration may or may not be the method, but we need some

method to do that. I am suggesting arbitration.

Mr. OSE. May I?

Mr. FARR. Sure. Please.

Mr. OSE. If the party on the other side of the arbitration or whatever process it is, goes out of business then it doesn’t make any difference. It seems to me that the party who brought the action is

just kind of cutout whether the antagonist collapses in an arbitration hearing or collapses in a judicial hearing. It seems to me like,

if you will, the plaintiff is still kind of left out in the cold?

Mr. D’ARRIGO. Well, that is a tactic that is used. However, in the

PACA laws what happens is the rights of the shipper are protected

in a first position. So if the assets are ceased properly, including

the receivables, we have first shot at it.

Mr. OSE. OK. So you have a priority claim?

Mr. D’ARRIGO. Yes.

Mr. OSE. All right.

Mr. FARR. The problem we have is, again, the perishability.

Mr. OSE. Right.

Mr. FARR. If you have a PACA situation with corn or wheat, you

could resell it.

Mr. D’ARRIGO. You hit the nail on the head.

Mr. FARR. You cannot resell something that it’s perished.

Mr. D’ARRIGO. Right. Within a couple of weeks, we are dead.

Mr. NIELSEN. Mr. Chairman, if I might add, we had an experience in which we were dealing with a wholesaler in New Jersey

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who basically disappeared on us. We knew where he was. We knew

where the moneys were. We went into Federal court to exercise our

rights under PACA to confirm the statutory lien that we were entitled to, and the Federal court there refused to grant it. We lost a

lot of money and, indeed, we appealed the decision and went up to

the circuit court and made some law in the United States which

says that Federal district courts can grant injunctions under

PACA. It is not clear under the statute, but about 4 or 5 years ago

we had to do that.

It is an act that does help this industry incredibly well. There

are folks on the other end of the chain who do not like it because

we trumped them. But I think the key in the proposed act and the

bill language with regard to Hunts Point is that what you are seeking to do is to vindicate our faith in the people we look to help us

in this industry.

I think the problem with Hunts Point is that it is a scandal, it

is a debacle and for a while there were some folks in the Federal

Government saying, ‘‘Well, yes.’’ This act would seek to go beyond

that and to reenforce the efforts of good and like minded people in

the government who did try to help us.

I think the thing is that Hunts Point really just is a black mark

and we need to have our faith restored. I think that is what you

are trying to do with this part of the legislation.

Mr. OSE. If I might, I would be interested in your collective feedback regarding the efforts in Japan and Australia in effect to impose sanitary and phytosanitary standards on America exports

there. Are those standards scientifically based? I mean, does anybody have any input on that? Mr. Zanger.

Mr. ZANGER. Well, that has been a critical issue. The SPS issues

on all these FTAs that are going on right now. We have made a

stand, especially with Australia, because lots of times it is not

science, to answer your question. We heard that about Japan. It is

not the science or is it a dispute in scientists among scientists, they

will dispute it. And so, you get into that.

So, there are committees now while they are negotiating these

FTAs that are dealing with the ongoing issues, and they have set

up mechanisms in anticipation of future issues that come up. But

that has been one of our greatest concern is that the SPS issues

are going to slip through again and you can fix the other things,

but if they put down artificial barrier because they cry foul, then

it is all for not.

Mr. BOGART. If I could chime in there, Mr. Chairman?

Mr. OSE. Mr. Bogart.

Mr. BOGART. Yes, I agree with Mr. Zanger again completely. The

problem is, in our view, a lot of these phytosanitary barriers are

not grounded in sound science. That is what we are pushing for

through this legislation and any other way that we can, is have

these things based and grounded in science. That is the main problem, as I see it.

Mr. OSE. Mr. D’Arrigo, Mr. Nielsen, anything?

Mr. D’ARRIGO. I concur.

Mr. OSE. OK.

Mr. NIELSEN. I would add that I think that science often depends

on someone’s perspective. It is difficult. I mean, we have run into

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in Japan the issue of people saying well science supports the conclusions that are reached by the regulators there. It is a very difficult proposition.

I should recuse myself with regard to Australia, because that is

where I am from. But my ancestors were specialty crop farmers,

some of them in New South Wales. I do not believe that the folks

that I know and my family down there are protectionists. Australians do not receive agricultural subsidies. The Canns Group has

been supporting efforts to eliminate subsidies worldwide.

I would believe that in the longer run the CSIRO, which is the

Commonwealth Scientific Organization down there would be able

to work with Americans. We speak slightly different languages.

But I think that they could reach accord and develop scientific

agreement on what the issues are.

Mr. OSE. One of my objectives in Section 4.2 of this bill is to try

and set up a mechanism by where we can get money authorized to

create, if you will, a template for sanitary and phytosanitary standards so that you can take it from here to there, and it is always

generally the same template. You might tweak it here and there.

But is that something we need to basically convey either directly

within the legislation or within a report on the legislation?

Mr. ZANGER. Well, that SPS committee system within the FTA

agreements, they set it up as a template in Chile. Now they are

applying it to negotiations in Australia and Morocco, and lots of

countries. So in that sense, you know, the USTR trade negotiators

are using that template method.

It is a matter of whether the teeth are there, though, Congressman.

Mr. OSE. Until you enforce it, it does not mean anything?

Mr. ZANGER. Yes.

Mr. OSE. Are the standards in the existing agreements being enforced?

Mr. ZANGER. I do not know.

Mr. OSE. Well, that says something in itself.

Mr. ZANGER. No. I think producers would say no, but when you

look to the GATT agreement and Uruguay Round and the standards and the rules there. You know, with Australia I do not know

if it took 10 or 12 years to straighten out the table grape thing;

that is a long period of time for enforcement, to have enforcement

work.

Mr. OSE. Yes. But if I might, just come back to the question: Do

you all agree that it is important to have specific SPS standards

in the trade agreements?

Mr. ZANGER. Yes.

Mr. BOGART. Yes. Absolutely.

Mr. OSE. All right.

Mr. NIELSEN. Yes, Mr. Chairman, I think it is analogous to generally accepted accounting principles. Generally accepted—well the

GASP would be the acronym, so you would not want that. But

something like that, that we and the country with whom we have

the bilateral or the multilateral agreement agrees these are the

principles. And then, there should be no argument and if there disruption or distortion that occurs, then you can go to the WTO. That

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is where we would need this special crops person in the STR’s office to help us make the case.

Mr. OSE. Sam.

Mr. FARR. Let me shift for a moment on two issues that came

up before Congress right now; one is the country of origin. As you

know, we were able to in the appropriations bill delay for 2 years

the implementation. As I have been discussing with Bob Nielsen

and others, and the chairman can reflect on this, too, let me just

tell you the attitude.

I think that post-September 11 there is a big push in America

to buy American, be America; everything is American. We put riders on everything saying you got to buy—military has to buy American, State Department has to buy American. I mean, it gets difficult to implement, but it points out that there is a political sentiment there that we are going to do that. That runs sort of contrary

because we have over time, particularly the automobile industry,

has a requirement every single part in your car has to be labeled.

Things like spark plugs that you do not even look at. Your ties and

your coats, and everything in clothing in America is labeled. So, the

American consumer has been getting accustomed to looking at labels. And, I think, that is what feeds this politic in Washington.

Obviously, just saying ‘‘Buy American’’ and then writing regulations and put the oneous on you as the growers and the shippers

doesn’t work. And, that is why we have delayed it.

The question here is do you think the industry can find a way

to create a voluntary program or something that might meet that

political demand that I sense, and maybe it will fade in time? But

I do not see it immediately happening. Because there was a lot of

people very critical of the fact that we delayed the implementation

of the ‘‘Buy America.’’ We delayed it because it would not work and

it was not fair to put all the oneous on you.

Mr. D’ARRIGO. Well, Western Growers, we believe in the concept

that the consumer does have the right to know where their produce

is coming from. That is the big picture. Now, the rules of engagement and implementation serve to complicate the matter tremendously because the pressure that the retailer has put on incorrectly

to the shipper saying well that is your problem and trying to label

these things at the farm level, such as a picture behind you, trying

to label a head of romain and something presents quite a problem

of cost and really it is not feasible, to tell you the truth.

Now, one possible solution that people are talking about is

produce grown in this country in the supermarkets, does it have to

be labeled? Can it be presumed to be American, U.S. grown and

foreign product brought in will be labeled with a placard up on top

so at least you know that if it is not labeled, it is——

Mr. FARR. It is imported?

Mr. D’ARRIGO. If it is not labeled to be United States, if it is imported then the retailer would have to put up that this did come

from Mexico or wherever. Trying to cut the costs out of the equation a little bit. Kind of like who is going to pay for it kind of thing

and nobody wants to pay for it.

You could see the problem at the labor side, speaking of the labor

issue, trying to get all these farm workers to label all these heads

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of lettuce. The cost would be so prohibitive, you might as well just

not go in the field.

Mr. FARR. So, leave it to a country a generic or could you just

say that it is imported produce. The problem is that the groceries

then say well we cannot do that because we do not know. We just

buy this stuff and we do not know what comes from—actually the

box, as you know, because we are very proud of saying, the box

tells you where it comes from. Just take the label off the box.

Mr. D’ARRIGO. Well, that is one of our arguments is that a lot

of stuff today is packaged and that is easily printable and you can

put on USA or some other place. But when it is a bulk item, I

mean who is responsible for that? Well, I really think it is in the

retailer’s corner to put that up there and just have a simple

placard up on top of the whole display saying this came from Chile

or wherever. And, that is provided to the retailer.

Mr. FARR. People might be surprised to find out that bananas are

not grown in the United States.

Mr. D’ARRIGO. You are exactly right. You would be surprised—

they do not know where a lot of things are coming from.

Now, speaking of that issue, a lot of people have called, they are

interested in knowing more where their produce is coming from in

the light of the recent problems with the Mexican green onions.

Mr. FARR. Yes.

Mr. D’ARRIGO. People want to know and have a choice that if I

do not want to get produce from a certain country because their

record may be suspect, I think they have that right to know that.

Mr. NIELSEN. Congressman Farr, the fact of the matter is the

Farm bill mandates country of origin labeling now in 2 years. The

‘‘Buy America’’ concept I think from our perspective is a bit of a

red herring. I mean, we do not buy only American oil or American

electricity, or American high tech parts because they come from

China. This is a global economy and a global world. We bring in

products from other countries.

My company has a manufacturing plant in Quebec. We ship California lettuce in bulk up to Quebec, combine it with local carrots

and then we bring them here. But, we do do bilingually label because we sell those up there too.

We bring those products then down and sell them in the northeast. Well, under the earlier proposed regs there was no space on

a bag to put all the information required.

I think the issue that we have here is that consumers do have

a right to know where their products come from if they want to

know under Customs laws as they now stand. As you said, the

boxes have to be labeled. The country of origin is known. It is the

bulk product that does not have that right now. What has happened is that the Congress, we presume the Senate will vote on

January 20th to agree with the House, the Congress is providing

our industry with 2 years within which to work something out. The

retailers who are the reason why we are price takers now, as Mr.

D’Arrigo said, are the folks who have said to the farmer you tell

us where this is coming from. And, it has backed up the chain to

us.

What we believe as a company, and I think some others in the

industry believe, is that there has to be 2 years now worth of hard

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work under this umbrella that we have been given by the Congress

presumably when the Senate votes, and we think it is important

somehow maybe in this act to authorize and direct USDA conduct

research that would give us on an unbiased and factual basis what

do consumers want.

Our own research in our company indicates that with regard to

some crops, they do not care where it comes from. They just want

it seasonally and they want it fresh, and it has to taste good. It

could come from Mongolia. It does not, but it could. That is where

I think where we need to go.

The law as it now stands is very limited. The green onion problem would not have been reached by the country of origin labeling

law as it now stands because it does not apply to food service. It

does not poultry. We think a voluntary consumer driven approach

is the way to go, but we need to find out what consumers want,

and we think that is where the USDA, if perhaps guided by this

act and funded, could give us some help.

Mr. ZANGER. Can I chime in here?

Mr. OSE. Sure. Go ahead.

Mr. ZANGER. I am going to take a little bit different perspective.

And, you know, myself and California Farm Bureau has the utmost

respect for companies like Tanimura & Antle. No question about

what they do.

We just concluded our annual meeting in Long Beach on

Wednesday. And, Wednesday morning we voted and reaffirmed our

policy for country of origin labeling to be implemented as soon as

possible. Congressman Farr, you have been supportive of that for

a long time now, and thank you for that.

The way we see it is the import lobby and the domestic retailers,

there is about five chains that control perhaps 65 percent, 67 percent of the domestic market here. They do not want to do the country of origin labeling. They want to be able to buy product from

wherever they can get it to satisfy their customers and make their

highest margin.

U.S. producers figure if every product is labeled or the display

is labeled, domestic consumers will have the opportunity to make

a choice. We think they will choose more often, not always, but

more often to buy U.S. product over imported product. That will

help us with our oversupply situation that keeps our prices down.

It is over supply that keeps the prices down.

You know the cost to label this stuff, every apple has a sticker

on it. Every orange has a sticker on it. Broccoli bunches have rubber bands on it. Carrots and celery stalks have these little wire

strip things on it. Cauliflower, you see it wrapped. Lettuce you see

wrapped.

We are already doing it. I think that is a red herring that the

import lobbyists and the domestic retailers are throwing at us saying it is going to cost too much, the growers are going to have to

pay for it and they cannot afford it, they are already not making

it. We would like to see implementation immediately. We are reviewing the rules that are going to be discussed in January before

Congress. We are ready to go with this now.

Mr. FARR. Two things that I would just like some comments on.

Perchlorate a big problem. It gets sort of back to this whole—I

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mean, as in origin labeling is, is who is liable and what should the

growers and—where is their role in this.

Let us speak for perchlorate, and then I will have my last question.

Mr. D’ARRIGO. What specifically do you want to know about perchlorate?

Mr. FARR. Well, yes. It is raising a lot of eyebrows as to how we

treat it, how we eliminate it.

Mr. OSE. The question is how it manifests itself in specially crops

and its impact on your ability to produce and sell your product. Is

perchlorate truly a threat that has been described in some of the

more hyperbolic things or is it something else? How do we get to

a conclusion on this?

Mr. D’ARRIGO. Well, on perchlorate, clearly it is a water quality

issue. OK? All of us who produce product down the Imperial Valley

and also over in Yuma, we are using the Colorado River basin

water. That water has been contaminated by rocket fuel producing

plants primarily, who have dumped perchlorate or leached or who

now closed and the residual is leaching into the water system. That

needs to be addressed ASAP. We feel it is a Federal problem. A Department of Defense problem.

Sound science is needed. That clearly is the answer: What are

the risks? What are tolerances needed on perchlorate? None of that

has really been developed yet. How it manifests itself? Some say

it concentrates in certain types of produce more than others. This

is a national problem because the food supply, as we said earlier,

50 percent of it comes from these shippers that produce not only

here or there. Here we do not really have the perchlorate problem

in the Salinas Valley. However, it is right up the street here in

Morgan Hill, I understand.

I think Congress should get into this with a very heavy hand and

not let the responsibility be waived away or exempted. I think that

Department of Defense with these contractors who produce this

should be responsible for cleaning up this problem. And then, direct sound science to determine what are the safe tolerances for

perchlorate, because it is not going to go away for a while.

Mr. BOGART. Yes, if I could be heard on this just briefly. I agree

a lot with what John just said. That term keeps coming up over

and over again, and it is ‘‘sound science.’’ I mean, yes, it is there.

Yes, it is been detected in a percentage of samples of lettuce that

were taken. But what is the risk? Is there a risk at all? We do not

know. We need studies. We need science. And, you know, the industry and ag associations have stepped up to the plate to fund

and pursue and assist in this research. Because if it is bad, we

want to know. But that is the thing, it is like perception governs.

And, perception impacts markets. Perception impacts our ability to

be a viable industry. If the general public thinks that their lettuce

is laced with rocket fuel, they are not going to purchase it. They

are not going to eat it. They hear that. It is a crescendo. And, you

say, ‘‘But wait, but wait. We are trying to conduct these studies.

There are no studies that even validate what some people are telling you about this lettuce.’’

It is again sound science. It is making rational, informed judgments. That is what we want. perchlorate is a darn good example

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of it. You can see examples of this everywhere. And so, I think the

perchlorate question is a good one with respect to this ‘‘sound

science.’’

Mr. OSE. I have done some research on this. I probably do not

know as much as some of the other people in this room. We are

a little bit afar afield on this, it is tangential but not central to the

issue we are dealing with today.

As I understand it there are few if any studies as to what the

threshold of human toxicity is relative to perchlorate. There are a

few if any studies establishing which crops, if you will, might be

suspectable to the lodging of perchlorate in their end product. And,

in fact, there are studies if I am correct in this—I am reaching far

afield here. But I think the chemical equivalent of perchlorate in

the medical industry is used to treat hypothyroid.

Mr. D’ARRIGO. That is correct.

Mr. OSE. Hypothyroid.

Mr. D’ARRIGO. You are correct in that case.

Mr. OSE. I am more than a little confused as to, if you will, some

of the more boisterous claims about the dangers that perchlorate

may pose, especially when the levels found in the lettuce are less

than the levels used to treat hypothyroid.

Mr. D’ARRIGO. You are sounding like a rational person. The rest

of the country is not so rational about this issue. But you are right

on every case there.

Mr. OSE. Yes. The fact of the matter is, we are lacking some significant amounts of information here.

Mr. D’ARRIGO. That is correct.

Mr. OSE. All right.

Do you remember your other question?

Mr. FARR. No. My cold and my age, I have forgotten my last

question.

So, I just want to thank you very much for having this hearing

here. It is probably the first that we have ever had that sort of

highlight specialty crops. But it is interesting that a person who is

not a member of Ag Committee is doing it. And I really do respect

and thank you for——

Mr. OSE. I am a member of the Ag Committee.

Mr. FARR. Well, I mean the committee——

Mr. OSE. Oh, Government Reform?

Mr. FARR. Government Reform and you are chairman of the subcommittee. In this room we are preaching to the choir, but we are

trying to get specialty crops on the national recognition list. To me

it is the motherhood of agriculture. It is the apple pie. And, we in

America do not know that. We have all this big advertising about

the big corn belt. We are even going to have use corn now. I mean,

what Congress determined this year in their energy bill is that

corn is for driving cars and specialty crops are for eating.

Mr. OSE. How is that?

Mr. FARR. Thank you, Mr. Chairman.

Mr. OSE. Here is the connection for those struggling with why is

Government Reform doing this. This subcommittee also has jurisdiction over national economic regulatory issues, meaning how does

Government policy effect the ability of this or that regional economy to contribute to the national economy as a whole. And, while

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I straddle the two committees as well as Financial Services, I can

tell you that this issue especially, crops and the success therein, is

not only important on the ag side, it is also important regionally

here in Salinas, and, from an economic standpoint it is important

here in this State. We are the fifth or sixth largest economy in the

world. We have 35 million people here. So it is not curious that we

are having this hearing. I just wanted to clarify that.

I do want to come back to——

Mr. FARR. But thank you.

Mr. OSE. I want to come back to one other thing if I may. Mr.

Bogart, one of the things effecting the ability particularly of specialty crops to put their product into foreign markets is the ability

to say to those foreign markets, for instance, this product is clean.

We do not have pests. We do not have disease. That gets me to the

use of methyl bromide and our request for some increased number

of critical use exemptions under the Montreal protocols. How has

the recent decision to decline to increase those number of critical

use exemptions from methyl bromide affected the specialty crop industry?

For that matter, I mean I would open that to anybody on this

panel for any input.

Mr. D’ARRIGO. Well, I think it is going to render us uncompetitive. Until we find a viable alternative to methyl bromide, we will

have serious problems competing. Our costs are going to skyrocket.

The people we are competing against are still using methyl bromide. Again, the playing field becomes increasingly unlevel and I

see disaster looming.

Mr. OSE. OK. So you would advocate that the position of the Federal Government, until we have an appropriate and——

Mr. D’ARRIGO. Effective?

Mr. OSE [continuing]. Effective and efficient substitute for the

properties that methyl bromide brings, we ought to be adamant

about demanding critical use exemptions?

Mr. D’ARRIGO. Absolutely.

Mr. OSE. OK. Mr. Nielsen, do you agree with that?

Mr. NIELSEN. Yes, Mr. Chairman. Either that or we ban its being

used in the Third World. I mean, this is an example of the unlevel

playing field where free trade, the law of comparative advantage is

distorted because environmental laws are not being applied uniformly around the world.

Mr. OSE. OK.

Mr. BOGART. As Mr. D’Arrigo said in response to one of my earlier comments, I concur.

Mr. OSE. Mr. Zanger.

Mr. ZANGER. I agree with them.

Mr. OSE. OK. I just wanted to get that on the record here.

One of the things in our hearing in Washington, which Mr.

McInerney attended, that we spent a lot of time talking about was

the interaction between the Department of Homeland Security and

APHIS at the border, this one face at the border kind of thing.

And, I know the industry has been meeting with DHS to try and

address some of the concerns that have been highlighted. Have you

been making progress? Are any of you involved in that or cognizant

of what is going on?

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Mr. NIELSEN. No, I am not personally involved in that. I’m not.

Mr. BOGART. I am not.

Mr. OSE. Mr. Zanger.

Mr. D’ARRIGO. I’m not.

Mr. ZANGER. We feel that progress is being made. I do not know

the specifics of it, but we were very concerned when Homeland Security was being formed as an agency and APHIS was going in that

direction. But we have been receiving assurances on how that—

how this new makeup is and that we are getting the proper attention.

Mr. OSE. Well, I am very concerned about how it gets implemented. Because I am also aware that originally they were talking

about 2 days of training for their one face at the border people to

deal with this, and then they had some bogus argument about dogs

being multi-tasked, and what have you. We are not going to go

there today. But, I just want make sure that we keep our focus on

how important APHIS’ role is in bringing food in and out of this

country as it effects our Department of Homeland Security.

Congressman Farr, we are at the point where we are ready for

closing statements. I am talked out. You indicated you might have

one.

Mr. FARR. Well, I want to wish you happy holidays and remind

you that people will eat more specialty crops during these holidays

than any other kind of crop in America. And, I would like to suggest that we all go out and enjoy a very health lunch in the valley

of the sun.

Thank you very much.

Mr. OSE. Thank you, Congressman Farr for hosting us today. It

is always great to come down here. This really is just one of the

wonders of the world to come to your district and see this kind of

production in agriculture.

Today we focused on the domestic international issues facing the

specialty crop industry. Obviously, the decline that we have seen

in U.S. exports coupled with the rise in imports to this country has

effected us rather dramatically. We have talked about how foreign

trade barriers, subsidies, tariffs, and sanitary, phytosanitary standards all affect our people and how these factors may twist what

might otherwise be a natural outcome in the industry.

Congressman Farr and I have heard your concerns, not only here

but also in Washington. We are aware of the vulnerability of the

industry and the challenges you face. The purpose of H.R. 3242 is

to try and bring Federal policy to bear to address those. I want to

reiterate that I am most appreciative of your support of that legislation. We now have 52 cosponsors from 21 different States. You

can see the breadth of interest in this. We will continue to work

toward getting that magic triple digit number of a 100. This is

going to be a heavy lift. I just want to be clear, there is not a single

one of these cosponsors who thinks it is program crops or specialty

crops. This is not a competition. It is not A or B. It is A and B.

All right. I want to be very careful that we make that clear to people; it is A and B. Because the people who grow A, they or their

neighbors also grow B. So, it is not mutually exclusive.

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Anyway, it is always a delight to come down to this part of the

State. I mean, you ordered up Chamber of Commerce weather for

me. I am most grateful.

Mr. FARR. It did not rain today.

Mr. OSE. That must be because you are on the Appropriations

Committee. Because you are powerful.

So, anyway, I want to thank our witnesses for joining us today.

We are going to leave the record open for 10 days. We may have

questions that occur to us as we travel back to D.C. here in the

next couple of days. And, we will forward them. We would appreciate a timely response.

Anything you want to add? You are set? OK.

With that, we thank you all for joining us. This hearing is adjourned.

[Whereupon, at 12:19 p.m. the field hearing was adjourned].

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