In Texas, growers have decided that the crop years 1930 to 1933 represent a fairer basis for allotment to the individual. These differences between the allotments of the total acreage of each State among individuals do not in any way change the balance worked out among the three States. The individual growers in Louisiana and Arkansas can determine the approximate amount of their 1934 acreage allotment by computing their 5-year average acreage and reducing it by 20 percent. The Texas grower computes his 3-year average acreage and reduces this by 22 percent. CHAPTER 9 SPECIAL CROPS The activities of the Agricultural Adjustment Administration with respect to special crops have necessarily been limited to the consideration of marketing agreements between the Secretary of Agriculture and associations of producers, processors, and other handlers engaged in the marketing of various nonbasic agricultural commodities. The Agricultural Adjustment Act provides no specific authority for dealing directly with the problem of production control in the case of those agricultural products not designated in the act as basic commodities. With a view to increasing the returns of producers of many nonbasic commodities a number of marketing agreements have been entered into and a great many more are under consideration for application during the 1934 season. Marketing agreements relating to the canning of cling peaches in California; the distribution of walnuts from California, Oregon, and Washington; the shipping of fresh deciduous tree fruits, except apples, from California; the shipping of fruits from the Northwestern States; and the shipping of Tokay grapes from California were completed and in operation during the period covered by this report. In addition, 3 citrus fruit marketing agreements were completed and placed in operation, 1 covering shipments from California and Arizona, 1 covering shipments from Texas and 1 covering shipments from Florida. These agreements were placed in operation in December 1933. An agreement has also been prepared for the canned olive industry of California, and is now in operation. An agreement covering the peanut-milling industry was placed in effect in January 1934. At the close of the period covered by this report, hearings had been held and agreements were in process of completion for the marketing of fresh vegetables and melons from California and Arizona, strawberries from Florida, fresh asparagus from California, and dates from California. Consideration had been given to the development of marketing agreements for the principal canning vegetable crops, dry beans, raisins, and potatoes. Under the authority transferred to the Secretary of Agriculture by Executive order of June 26, 1933, the Agricultural Adjustment Administration has also participated in the preparation of codes of fair competition for various groups of processors and handlers of fruits and vegetables, poultry and eggs, peanuts, and other special commodities. A brief statement covering the various activities of the Administration in the development of marketing agreements and codes of fair competition follows: 41746°-34- -13 I. MARKETING AGREEMENTS AND LICENSES CANNED CLING PEACHES IN CALIFORNIA The first marketing agreement and license affecting the crops mentioned above were those for the canning of cling peaches in the State of California. Conditions in this industry had been unsatisfactory for several seasons and prices paid to growers of cling peaches for canning had been at a low level. In 1932 less than one half of the crop of peaches was harvested and the price paid for this proportion of the crop was approximately $6.50 per ton, which represented but little more than the cost of harvesting the peaches. An analysis of the peach-canning situation indicated that with a limitation of the quantity of peaches canned to a volume which could be moved into consumption at a reasonable price, it would be possible for canners to pay growers a much more satisfactory price for peaches than that which prevailed in any recent year. Estimates of the crop indicated that sufficient peaches were available to pack 12,500,000 to 13,000,000 cases. Available information indicated that such a pack would result in a price for the canned product which would in all probability mean a very low price to the grower for his raw fruit. To overcome this situation an agreement was effected and a license issued whereby the pack was limited to 10,000,000 cases and each canner was given an allotment to pack a certain quantity of fruit based upon his previous sales record, potential sales ability, and outstanding contractual commitments. While some canners objected to the restrictions placed upon them with reference to the quantity of peaches which they were allowed to pack, it is now fully evident that the marketing agreement including the limitation and allocation of the pack has operated to the advantage of the peach growers and to the advantage of the peach-canning industry as a whole. Under the prices established in the agreement the margin between canners' operating costs and the minimum prices to the trade was kept at a very low level. It is expected, however, that the limitation of the pack will reduce or eliminate inventory losses on the carryover of canned peaches into the 1934 season. The agreement provided that canners would pay growers $20 per ton for no. 1 peaches used for canning, and that in addition they would contribute to a surplus control fund which was used to purchase the surplus no. 1 peaches above the quantity required to pack 10,000,000 cases. Prices for sale by canners to wholesalers were set at $1.35 to $1.50 per case. Growers whose peaches were not canned received $15 per ton for their peaches, the difference between this price and that paid for peaches canned representing approximately the saving in harvesting cost on the peaches which were not harvested. By means of the agreement, therefore, the peach growers not only received approximately three times as much per ton for the peaches sold for canning as was received in 1932, but they also received a comparable price for the no. 1 peaches which were not canned whereas in 1932 growers received no payment for surplus peaches. Total returns to growers in 1933 amounted to $5,000,000 as compared with $906,000 in 1932. SHIPPING AGREEMENTS FOR FRESH FRUITS AND VEGETABLES For several years the cooperative and private shippers of fresh fruits and vegetables have realized that excessive market supplies during certain portions of the season resulted in prices so low that in many cases they did not cover the costs involved in harvesting and marketing the products. Recognition of these facts has resulted in many attempts to regulate shipments with a view to maintaining prices and improving income to growers. These attempts, however, have usually been thwarted by reason of the fact that some portion of the shippers refused to cooperate and thereby nullified the entire program. The authority contained in the Agricultural Adjustment Act with reference to marketing agreements and the licensing of handlers of agricultural products has made it possible to develop a more effective approach to this problem by requiring all shippers or handlers to cooperate in the interest of the industry as a whole. . The conditions under which perishable commodities must be marketed make it impossible to prepare agreements which will cover the entire scope of necessary operations. These agreements and licenses, therefore, provide for an administrative committee and also for a proration committee which carries out the actual work of determining periodically the supplies available for market and the supplies which can probably be absorbed by the market without diminishing the price. If the available supplies exceed the quantity which can be sold at a certain price, then the proration committee establishes a percentage allocation and makes allotments to each shipper. Each shipper thereafter is bound by the terms of the agreement and license equitably to allot his share among the growers for whom he markets the commodity. CALIFORNIA DECIDUOUS FRUIT The deciduous fruit shippers of California were the first group to present a marketing agreement of this type to the Administration. This agreement and its accompanying license were for the purpose of limiting supplies shipped to market at such times as it appeared that excess supplies would have a detrimental effect on producers' returns. Considerable economic research has been carried out to show the probable effects of such limitation, and it is known that returns may be greatly enhanced by a careful regulation of the movement to market. Fruits covered by this agreement and license include apricots, cherries, plums, prunes, pears, peaches, and other tree fruits, except apples. No adequate opportunity was presented this season for thoroughly testing the effectiveness of the agreement. While the agreement was being developed, a heat wave in California greatly reduced market supplies of fruit. However, the agreement had a stabilizing effect upon the market and reports received from the trade indicate a general satisfaction. Growers are well represented on the proration committee, for at least 3 out of 7 must be growers or representatives of growers' cooperative organizations. CALIFORNIA TOKAY GRAPES A similar agreement was perfected for the marketing of Tokay grapes from California. This agreement and its accompanying license were put into effect during the middle of the marketing |