growers, than if the crop is dumped on the market without regulation and without regard to what the market can take at a given time. Stabilizing supplies and prices and avoiding waste, by balancing shipments to demand has been the fundamental principle of marketing programs carried on by the Agricultural Adjustment Administration, as it was the fundamental principle of the programs carried on cooperatively by farmers. Marketing agreements and orders under the Agricultural Adjustment Act as amended, are largely the outgrowth of the experience gained in the operation of the cooperative, industrycontrolled programs of the past, with additional provision for preventing noncooperating minorities of producers and shippers from destroying the stability gained through the cooperative efforts of the majority.

Marketing programs for various agricultural commodities, designed to stabilize marketing conditions for these commodities and to improve the returns to their producers, have been carried on through 1936 by the Agricultural Adjustment Administration. These programs have enabled a larger number of producers to share in the benefits of adjusting shipments to market requirements, than would have shared had there been no programs. Generally improved economic conditions in the country as a whole, with a corresponding increase in consumer purchasing power, were additional factors in increasing returns to producers of fruits, vegetables, milk, nuts, and other special crops.

Responsibility for initiation of marketing programs rests largely upon the industry concerned. The Agricultural Adjustment Act as amended August 24, 1935, contains specific provisions relating to growers' approval and handlers' signature of marketing programs.

The amendments to the Agricultural Adjustment Act, approved August 26, 1935, provided, among other things, for substituting marketing orders for licenses, and specified the terms and conditions which may be included in the order. Under the act, the marketing agreement and order comprise component parts of a single programa marketing agreement program which is designed to control or regulate certain phases of the interstate commerce in a commodity for a particular region or market area.

The marketing agreement is a voluntary contract between handlers of a particular commodity and the Secretary of Agriculture. The order is in the nature of a regulation issued by the Secretary of Agriculture for the purpose of making the provisions of the agreement applicable to all handlers regardless of whether they signed the agreement. In effect, the order is issued primarily for the purpose of preventing minority groups of handlers from rendering the marketing agreement program ineffective.

Under the act, as amended in August 1935, the authority for issuing orders is limited to milk, fruits (except apples), vegetables, pecans, walnuts, soybeans, and naval stores. The amended act also provides that orders are not to be issued for fruits or vegetables for canning, except olives and asparagus.

I. MARKETING PROGRAMS FOR FRUITS AND VEGETABLES

For commodities other than dairy products, orders may be issued to supplement marketing agreements which have been signed by handlers of not less than 50 percent of the volume of the commodity

produced or marketed, or to make effective a program included in the marketing agreement on which a public hearing has been held, but which does not receive the signature of the necessary percentage of handlers concerned. in this latter situation, where 50 percent of the handlers do not sign the agreement, Presidential approval of issuance of the order is necessary, as well as the support of two-thirds of the producers. Before any order can be issued by the Secretary of Agriculture, the Secretary must determine that its issuance is favored by at least two-thirds of the producers concerned, or producers who produced for market at least two-thirds of the volume of the commodity for a representative period of time.

Redrafting of marketing programs in conformity with the provisions of the Agricultural Adjustment Act as amended in August 1935, was continued through 1936. Programs which formerly had been on a marketing agreement and license basis were revised, considered at public hearings held in the respective areas, and put into effect on a marketing agreement and order basis. By the end of 1936 seven marketing agreements and orders for products other than dairy products were in effect. These provided marketing programs for Pacific coast walnuts, California-Arizona citrus, western Washington vegetables, Florida citrus, southeastern watermelons, California fresh deciduous tree fruit, and Colorado peas and cauliflower. In addition, there were a marketing agreement and order for anti-hog-cholera All new marketing programs have been developed on a marketing agreement and order basis.

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PROGRAMS AFFECT 90,000 GROWERS

Marketing-agreement programs for fruits and vegetables and other specialty crops are administered by agencies of the Secretary of Agriculture, usually known as control committees, and composed of representatives of growers and handlers designated by the Secretary from nominations submitted to him by the industry concerned. The costs of operating these programs are prorated among the handlers on the basis of the volume of fruit handled by each.

During 1936, marketing-agreement programs directly affected about 90,000 growers in 10 States. The value of products produced by these growers was around $119,000,000. Several surplus-removal and diversion programs supplemented operations under marketing agreement programs. Purchases of surplus commodities were made in practically every State of the United States in connection with efforts to improve marketing conditions for producers.

Growers and handlers of a product, by cooperating, can adjust the volume of that commodity sent to market in balance with market demands, thus reducing the marked fluctuations in market prices that are brought about by irregular shipments, and preventing shipments in excess of the quantity that will return a fair price to the

grower.

METHODS OF REGULATING SHIPMENTS

The methods of regulating shipments now provided for in the Agricultural Adjustment Act and applied either separately, or in combination, through marketing agreement programs now in effect may be classified as follows: (1) Control of the rate of shipment to

market by limiting the total volume permitted to be shipped during each specified period, such as a week; (2) limitation of the volume of certain grades and sizes shipped; (3) prohibition of all shipments for short periods, sometimes called shipping holiday; and (4) a limitation of the total supply to be marketed during a season. Variations of these general methods have been employed in certain instances.

Adjusting shipments on a period-to-period basis has been one of the principal methods of supply control included in marketing-agreement programs for fruits and vegetables shipped fresh. Under this method a maximum volume of shipment is fixed for each period, usually 1 day or 1 week, and prorated among handlers and growers. The California-Arizona orange and grapefruit industry has regulated shipments in this manner continuously since January 1934.

The main purpose of this method of control is to bring about a more orderly movement of supplies to market throughout the entire marketing season.

Provisions for limiting or prohibiting the shipment of inferior grades and sizes of products are included in a number of programs now in effect for general crops.

This method tends to prevent losses resulting from shipping products of a quality or size which sell for less than the cost of harvesting, marketing, and transportation. For this reason the method is particularly suitable to areas marketing only a part of their total supply during a given period. Other objectives have been to improve prices by improving quality, and to eliminate inferior products and thus benefit from the higher prices and greater total returns from a smaller total volume.

Shipment control by prohibiting all movement for short periods has been employed by the southeastern watermelon industry and in the case of Bartlett pears under the California deciduous-tree-fruit agreement. In the case of Bartlett pears this regulation has been a part of the broader control of the rate of shipment to market since it delays shipments to concentration points from which movement is further regulated on a daily basis. Under the watermelon program the principal object of the "shipping holiday" is to prevent or reduce large accumulations of cars on track at terminal markets, which cause rapidly declining prices.

If this method is to prove most successful, growers and handlers must cooperate to prevent greatly accelerated shipments just before. and just after the holiday. This type of shipment control is simple in operation and adaptable to industries in which it would not be practical to allot quotas of shipments to individual shippers and growers.

Another type of shipment-control measure provided for in the Agricultural Adjustment Act and used principally in marketingagreement programs for dried fruits, nuts, and canning crops, limits the season total supply for a given market outlet. In programs such as that for Pacific coast walnuts, supplementary provisions for diverting into alternative uses the volume not permitted to be sold in the primary outlet are an additional and important feature.

PROGRAMS FOR VEGETABLES AND MELONS

Programs in effect in 1936 for vegetables and melons included marketing agreements and orders for Colorado peas and cauliflower; for western Washington lettuce, peas, and cauliflower; and for Florida,

Georgia, North and South Carolina watermelons. Purchases for diversion to relief channels were made in conjunction with regulations under the western Washington and Colorado programs.

VEGETABLES GROWN IN WESTERN WASHINGTON

The marketing-agreement program regulating the handling of fresh lettuce, peas, and cauliflower grown in western Washington has been in effect for 3 years. The major provisions for adjusting shipments to market requirements as contained in the marketing agreement and order now in effect are: (1) Limitation of total shipments by periods within the marketing season; (2) limitation of shipments by grades or sizes; and (3) uniform grading and inspection.

Because of heavy supplies due in part to unusual weather and a depressed market for peas, the Secretary of Agriculture, upon recommendation of the control board, issued a regulation prohibiting shipment in interstate or foreign commerce of peas grown in western Washington which graded less than 85 percent U. S. No. 1 grade. This regulation became effective July 7, 1936, and was continued with slight modification until July 31.

Supplementing the grade regulations during the heaviest marketing period, the Secretary approved regulations which permitted each shipper to move in interstate or foreign commerce not more than 50 percent of his total available supplies.

In order that growers would not lose all peas which they were forbidden to ship during the 9-day period when shipments were prorated, the surplus was diverted to canneries and to purchases for relief. About 55 cars were diverted from the fresh market into canning and 65 cars were purchased for relief distribution during the proration period. Subsequently, 32 additional cars were purchased for relief distribution.

The program involved the marketing of approximately 1,200 cars. Preliminary data indicate that the 1936 farm value of peas grown in Washington totaled over $1,000,000, or nearly twice as much as in 1935, and about 70 percent above the 1932 total.

VEGETABLES GROWN IN COLORADO

The marketing agreement and order regulating the handling of fresh peas and cauliflower grown in Colorado continued a marketing program similar to that developed in 1934 under an agreement and license. The principal provisions include: (1) Regulation of shipments of peas and cauliflower by grades and by sizes; and (2) regulation of total railroad shipments. Abnormally heavy rainfall at harvesting time reduced the crop of peas and made it unnecessary to issue regulations for the 1936 marketing season.

While the total quantity of cauliflower shipped during 1936 was no greater than that shipped in 1935, it was marketed during a shorter period and under adverse conditions because of extreme heat in the major consuming centers. Under the marketing program the quality of the cauliflower pack was improved and the quantity somewhat restricted by a regulation limiting shipments to U. S. No. 1 grade of a specified pack. Because of the weather conditions under which the crop had to be marketed, the price to growers fell to about 15 cents per crate, despite this regulation. Consequently, on August 25, a further

regulation was issued, limiting total shipments to 15 cars daily for a 3-day period. This was followed by a third regulation which prohibited the loading of cauliflower for an additional 2-day period. By these restrictions of shipment, track holdings were so reduced as to cause the market to strengthen materially, and the price to growers increased from 15 cents per crate to 30 cents per crate.

About 95 cars of cauliflower, prevented by the restrictions from entering the usual market channels, were purchased by the Government for relief distribution.

WATERMELONS GROWN IN SOUTHEASTERN STATES

The marketing program for watermelons grown in Florida, Georgia, North Carolina, and South Carolina was operated during 1936 for the second year.

The Southeastern States ship watermelons from May to September. During that time they dominate markets east of the Mississippi River, especially in the North and South Atlantic States. The principal marketing problem in the watermelon industry is due to rapidly accelerated shipments through June and July, which oversupply terminal markets and reduce prices and sales by growers. The problem includes shipment of inferior quality watermelons which affect prices to growers.

The marketing agreement and order now in effect provide for periodic regulation of shipments by grade or size and regulation of movement by "shipping holidays" of not more than 48 hours. In the 1936 season two shipping holidays were necessary. At the end of June and again after July 18, when heavy shipments piled up in terminal markets, grower prices fell sharply and growers made few sales. Restriction of shipments for 48-hour periods resulted in a decrease of track holdings and a substantial strengthening in the terminal and f. o. b. prices. From July 25 to August 16 shipments of unclassified melons from the Southeastern States were prohibited.

The 1936 season was relatively favorable to the several thousand growers in the four Southeastern States. The average price received by growers was about 92 percent higher than in the previous season. Returns to growers, which had averaged $2,170,000 in the 4 previous years, averaged about $3,600,000 in 1936. Major factors accounting for the improved returns are the moderate supplies shipped and the improvement in consumer income.

PROGRAMS FOR DECIDUOUS TREE FRUITS

Because of the perishable nature of deciduous fruits, growers suffer considerable loss when markets are overloaded. This is especially true when the fruits are produced long distances from the market with high and fixed marketing charges prevailing. Marketing agreements have been found most useful in regulating the grade and size of fruit sent to terminal markets and in preventing gluts which cause direct losses to growers.

Purchases for relief distribution have supplemented some of the marketing regulations or, as in the case of apples, have enabled more profitable marketing of grower storage supplies of the heavy 1935 crop. Also, a plan for encouragement of exports and development of new domestic markets for Pacific coast fall and winter pears was made effective in 1936.