Mr. WEDDIG. The city is a major landing port and processor of U.S.-caught fish and northern shrimp, and is also extremely significant as a landing port of frozen, foreign-produced fish blocks and fillets. More than 300 million pounds are landed annually, and stored in Gloucester.

About 30 percent of this, or 90 million pounds, are converted to fish sticks, portions, dinners, and other prepared foods in the major processing plants in the city.

The balance of this imported product is transshipped to other areas of the country for processing. Employment related to the industry is approximately 4,000.

Once again, the map, number 3, illustrates the concentration of facilities. Certainly, with 31 operations handling such tremendous volume of product, we would expect a sizable force of inspectors. However, we do not believe 31 would be required, but that six or eight would reflect an almost constant presence in the various operations.

Thus far we have illustrated three typical seafood processing communities. There are many others just like this throughout the country.

We would like now to show a somewhat different enforcement problem-a more extended area with many very small plants.

The illustration is of the section of the Eastern Shore of Maryland from the Chesapeake Bay Bridge to the Maryland line, a distance of about 70 miles. We located 45 plants in this area with employment averaging about 40 persons. There are two very large processors in the area, but most plants would be classified as small and seasonal.

(The map follows:)

In Grasonville we found nine plants. The largest of these employs 110 people. The average is around 40 to 50 people.

Their peak season runs for 10 months, generally split between clams and oysters. The plants usually consist of one room with long-15 foot by 25 foot tables, and people on both sides shucking. It will also have another room where the shucked food is washed and canned, or put into packages for sale on a fresh basis.

Of the nine plants, six are all on one road, spread out for about one-half mile; the other three are within 3 minutes' driving time of the first six.

Next, on one peninsula of the Shore area from Easton to Tilghman, there are six plants all within 4 or 5 miles of each other on the same road. Four of the six employ under 50 people, while two have under 140 during their peak season. These plants are, in description, almost carbon copies of those in Grasonville.

The next leg of the Shore, Cambridge to Fishing Creek, has six plants. With the exception of two plants in Cambridge, all these plants had under 30 people employed during their peak season. Again, the operations were very similar to those described earlier. The area between Salisbury and Crisfield comprised the last and southernmost leg of the shore. Here there were 24 plants, 19 of which are in Crisfield, Md. The setup here is somewhat different because there is quite a bit of crabbing done where there is none in the north.

In Crisfield, of the 19 plants, 17 have under 50 people employed. The plants are, as in Grasonville, clustered in groups of five or six. In plants of this nature the workweek is most erratic, going from 20 to more than 50 hours.

Total catch in Maryland is about 72 million pounds.

Since we know there is other production on the Atlantic coast and on the western side of the bay, we feel the total production is about 40 million pounds a year.

All of these, I might add, ship from State so these are all the responsibility of the Federal Government for inspection.

I think you can see how several inspectors based strategically in the various communities could effectively cover the area. We cannot see how value to the Nation would be provided by a requirement that the town of Grasonville, population 1,183, with nine small plants, working seasonally, be staffed with nine Federal inspectors. Similarly, we cannot find any justification for placing 19 inspectors in the town of Crisfield, as S. 1528 would mandate.

We would hope that these illustrations of actual conditions in the industry would show that comprehensive inspection to assure compliance can be accomplished through a flexible system of surveillance, and that the total cost would be beneficial to the taxpayer.

In practice, the attention applied by an inspector to any given plant, as in the Agriculture system, should be related to the size of the plant, the complexity, variety and nature of the operation, and to the continuing quality of the operation.

Obvoiusly, the plant under inspection would not be aware when the inspector would visit-thus nearly eliminating any possibility of inferior practices.

One final point on this issue is the concern, by some, of which I am personally aware, that poor quality fish may be processed in a situation which does not embrace a full-time inspector on board.

Dr. Snyder advises me that precise programing the processing of poor quality fish is nearly impossible. Plants generally receive fish as it comes. Of course, any poor lot of fish could be stored to process at a particular time, but the inspector would be aware of the lot and act accordingly.

The task of instituting an equitable inspection system in the United States would be different. Expense in these days of tight Federal budget and mounting national needs in many critical areas will depend in part on the type of inspection finally determined by the Congress.

The matter is, of course, complicated by the well-known fact that the U.S. fish and seafood market is served by more than 100 nations, which supply 60 percent of the total requirements.

The proposed legislation, both S. 1528 and S. 700, require that overseas nations desirous of shipping to the United States, legislate and establish inspection systems equal to that determined for the United States. This is a copy of the requirements in the meat and poultry inspection legislation.

We cannot stress too strongly that the legislation being enacted is worldwide in impact. What is designed here must be just as workable in Guyana, Venezuela, Pakistan and scores of other nations, as it is in Massachusetts or Georgia.

Contrary to statements in the record of the last inspection bill hearing, there is no country in the world that operates a continuous inspection system as defined in S. 1528.

The Canadian and several Scandinavian fish inspection systems are highly developed, but do not meet the criteria of an inspector in each plant on a full-time basis.

The Icelandic system has an inspector in the plant on a full-time basis, but this man also serves in other duties as an employee of the processing plant.

The importance of avoiding the establishment of an artificial trade barrier in the guise of consumer protection is paramount. Should unrealistic, unworkable requirements for inspection systems, rather than inspection results be imposed, we can expect that the fishing nations of the world will choose to sell their products elsewhere. The result would be detrimental rather than beneficial to the consumer, who would then expect to pay inordinately higher prices for the product.

Earlier in this statement I cited several statistics which showed that over a 4-year period the volume of fish and seafood used increased by 27 percent, but that its value increased 45 percent. Inflation, of course, had a hand in this, but the major reason for the more rapid increase in price is the overall, worldwide shortage of fish and seafood. The law of supply and demand exercises its influence in the fish commodities very strongly.

For example, a worldwide shortage of cod fish blocks developed during the second half of 1970 continues at present. Inventory at the end of the year was only 30 million pounds, 29 percent lower than a year previously. The shortage drove block prices from 25 or 26 cents per pound to 40 or 41 cents in a period of 6 months.

Another example: Shrimp production around the world is down and the Japanese are net importers of shrimp at the present time. As a result, the U.S. market has been unable to obtain enough shrimp to satisfy its needs. Imports during the first quarter are down 20 percent. This reduces the total supply by approximately 10 percent. The result is that the price of shrimp, in the standard 15-20 count size, has jumped from $1.45 to $1.95 per pound since January 1.

The point should be clear. Reducing availability of fish and seafood to the market through excessive legislation that cannot be met in overseas countries will serve only to create a trade barrier with negative results to the consumer.

Some might believe that the overseas nations will be happy to do anything we say to maintain access to the U.S. market. The world situation in fish and seafood is such that the U.S. market, while still very desirable to most producing countries, is by no means the only market. Western Europe, Asia and even Africa are active in the world market, outbidding the U.S. buyer for many commodities.

We believe that a system which is based in the concept of continuous surveillance, identical to that which we believe best for the domestic industry, buttressed by intensive port-of-entry inspections, will protect the consumer and be workable in most of the overseas nations shipping to the U.S.

We have a few additional comments on specific provisions of S. 1528. We believe the provision that an inspector must be given access to a plant "at any time," should be modified to say "any reasonable time" or "any time during which the plant is in operation."

We also cannot see any need for a provision for summary suspension of a certificate. The Secretary has the ability to detain product during which time normal enforcement procedures of seizure and injunction can be exercised.

Likewise, there should be no way a certificate can be suspended on grounds of disagreement with a condemnation of product or appeal of a condemnation.

Again, the public can be adequately protected through normal routes of seizure and injunction so that a plant operator can feel confident in taking a condemnation appeal through the judicial review stage without jeopardizing his plant certificate.

We were somewhat disturbed about the lack of a companion bill which would provide financial assistance to smaller firms which might otherwise find it impossible to remain in business under a new set of regulations.

For the record, we are attaching an appendix which itemizes the type of improvements which will have to be made by many smaller, older plants in the industry if they are to conform to new regulations.

To recite that a company may have to retile a floor or wall, or install new icemaking equipment, may seem rather trivial, but this type of detail and expense is precisely what an inspection bill will mean to hundreds of small businessmen if they wish to continue in this industry.

We are trying to show that the provision of this bill have very real effects on the industry and the consumer, and are not matters that can be considered in a theoretical sense only.