The Marketing of California Walnuts with Special Reference to Marketing Agreements

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The Marketing of California Walnuts with Special Reference to Marketing Agreements The marketing of California walnuts with special reference to marketing agreements Item Type text; Thesis-Reproduction (electronic) Authors Christopher, Charles E., 1882- Publisher The University of Arizona. Rights Copyright © is held by the author. Digital access to this material is made possible by the University Libraries, University of Arizona. Further transmission, reproduction or presentation (such as public display or performance) of protected items is prohibited except with permission of the author. Download date 05/10/2021 16:36:51 Link to Item http://hdl.handle.net/10150/553345 THE MARKETING OF CALIFORNIA WALNUTS ivITH SPECIAL REFERENCE TO MARKETING AGREEMENTS by Charles E« Christopher A Thesis submitted to the faculty of the Department of Economics in partial fulfillment of the requirements for the degree of Master of Arts in the Graduate College University of Arizona 19 3 7 Major Processor It ^ 4 7 9 / /?_3 7 Z- TABLE OF CONTENTS Page I. TITLE PAGE ...................................... i II. INTRODUCTION .................................. iv III. METHOD OF PROCEDURE ............................. vi IV. CHAPTER I: HISTORICAL DEVELOPMENT AND PRESENT STATUS OF THE WALNUT INDUSTRY................ 1 Era of Introduction and Selection of CO t- HtO Varieties ............................ Present Importance of the Walnut Industry Status of the Walnut Industry Prior to 1933 .. Brands and Varieties ........................ ' Distributing California Walnuts.... ......... 14 'Independent Growers1 Associations ..... ...... 15 "The California Walnut Growers association .... 15 V. CHAPTER II: MARKETING WALNUTS PRIOR TO THE AGRICULTURAL ADJUSTMENT ACT OF 1933 ......... 24 Preparing of Shelled Walnuts for Market ..... 24 Foreign Markets Prior to 1932 ............... 30 European Methods of Curing Walnuts .......... 33 Imports and Methods of Selling in Competition. 34 Use of Standardization, Branding, and Advertising............................... 37 Chaotic Developments of 1932 ................ 48 VI. CHAPTER Ills THE MARKETING AGREEMENT UNDER THE AGRICULTURAL ADJUSTMENT ACT AND ITS EFFECT ON THE WALNUT INDUSTRY............... 53 Provisions and Purposes of the Agricultural Adjustment Act ........... 53 The Marketing Agreement for Packers of Walnuts Grown in California, Oregon, and Washington.......... 53 Provisions of the Agricultural Adjustment Act Affecting Licensees ................... 67 Operations of and Opinions on the Marketing Agreement.... .. ................ 73 / / Z ?o 7 ill Pag® VII. CHAPTER IV: SUMMARY AID CONCLUSIONS ........... 92 Legal Statu® of Marketing Agreement® ........ 92 The Effects, of the Marketing.Agreement on Producer® ............................. 96 The Effects of the Marketing Agreement on the Income of Growers ............... 98 • The Effects of the Marketing Agreement on the Consumer ............. 106 Are the Results Obtained Under the Agreement Antisocial? .................... 108 Outlook and Permanent Solution .............. 113 VIII. APPENDIX .............................,..........119 IX. BIBLIOGRAPHY ................................. 128 IBTRODtJCTIOH The questlcaa which this thesis undertakes to answer Is whether or not the provisions of the Agricultural Adjustment Act, as passed by the Congress of the United States in the spring of 1933, and finally approved Hay 12 of that year, together with amendments providing subsidy payments, were effective in securing desirable results for the walnut industry of California, Oregon, and Washington. There has been considerable difference of opinion among the citizens of the country in general as to the desirability of the provisions of the AAA program both from a social and an agricultural point of view. While it is evident that practically all walnut growers have favored and appreciated the benefits obtained under the surplus control program, a few growers have been opposed thereto. Upon being con­ sulted, however, those who opposed such a program were unable to present any facts or logical arguments to sup­ port their opposition. The Agricultural Adjustment Act made it possible not only for the walnut producers to control the distribution of the output of walnuts in an artificial manner, but it also made it possible for them to receive a price for wal­ nuts not established under unregulated competitive condi­ tions. This thesis, in attempting to investigate and to arrive at a satisfactory conclusion concerning the effec­ tiveness and desirability of the policies established by the Marketing Agreement and the License requirements ob­ tained under the provisions of the Agricultural Adjustment Act, considers the problem from two main points of view: (1) That of the Industry Itself (2) That of society The test of the benefits of the Agreement, in so far as the industry itself is concerned, is found in the effect of the Marketing Agreement on the income and morale of the growers. There are many things to be taken into consideration in determining the effects of the Marketing Agreement on the consumers. For example, are walnuts a necessity or a luxury; can other nuts be substituted for them; what ef­ fect does the Agreement have on both short- and leng-rim price determination of walnuts to the consumers; and are the results obtained under the Agreement antisocial? METHOD OF PROCEDURE The procedure employed In studying the effect of the Agricultural Adjustment Act on marketing California walnuts can be divided into six general types of investl- C gations: 1. The gathering of as complete a bib] possible 2, Extensive reading of government-bulletins and textbooks 5. The preparation of an outline dealing with per­ tinent questions bearing on the problem 4. Actual gathering of the material from the fol­ lowing sources: a. Governmental publications b. Early editions of the Pacific Rural Press, dating back to 1870, The California Culti­ vator, The Diamond Walnut Hews, and other similar publications. e. Annual Reports and other official documents of the California Walnut (lowers Association d. University of California, College of Agri­ culture, bulletins e. Interviews with officials of the Citrus Experiment Station, The California Walnut vii Growers’ Association, growers and packers, and the Manager of the Walnut Control Board 5. The arranging of the material gathered in a logical sequence 6. Analysis of the economic conditions that prevented effective adjustment of the supply of walnuts to market requirements, and the way in which the Marketing Agreement was used to bring about more effective adjustments 7. The arriving at conclusions based on economic analysis and the probable outcome in the light of economic principles involved viil SOURCE OF MATERIALS The literature and materials used In this study con­ sist of certain government publications, including the Agricultural Adjustment Act Itself, The Marketing Agree*'■ ■■■ ment made between the Secretary of Agriculture, H. A. Wallace, and the handlers of walnuts on the Pacific Coast, together with amendments to this Agreement, The Citrus Experiment Station and Graduate School of Tropical Agri­ culture and Horticulture in the Experiment Station, located at Riverside, California, which is a part of the University of California^ made available its entire library and files and, also, the reports of experiments and research per­ taining to the walnut industry In California. There is perhaps no more complete library pertaining to the early history of the walnut industry in the world than that which is contained in the publications of the library and files in this institution# Utoder the directorship of Dr. L . D . Batchelor, The California Agricultural Experiment Station and Graduate School of Tropical Agriculture and Horticulture in the Experiment Station, has conducted ex­ periments and rendered reports on the subject of walnut culture. Through M s cooperation it was possible to secure copies of publications now out of print and a com­ plete file of the Diamond Walnut Hews, which is the offi­ cial publication of the California Walnut Growers Associa­ tion. Many features of intense interest appeared in the early editions of the Pacific Rural Press and the Gallfor- nla Cultivator in the 1870,s when the walnut Industry was in a nebulous state of development. The California Walnut Growers Association made avail­ able its files, annual reports, and publications. In ad­ dition, the Association was most considerate in showing how walnuts were packed, graded, canned, processed, shelled, and prepared for market. Officials of the Associa tion explained the organisation of the Association and its problems. The Walnut Control Board, which is the agency for estimating, controlling, and marketing the surplus of walnuts, made available information pertaining to the methods employed in administering this governmental agency. The Manager of the Walnut Control Board, Mr. W. E. Good- speed, graciously supplied statistical and other data presented before the 1935 Agricultural Adjustment Act hearing, which could not be obtained from any other source. The Los Angeles City Library was utilized for ob­ taining books and other publications pertinent to the subject being studied. CHAPTER I HISTORICAL DEVELOPMENT AND PRESENT STATUS OF THE WALNUT INDUSTRY Era of Introduction and Selection of Varieties It has been approximately seventy years since the English walnut, or as it is more properly called, the Persian walnut, was introduced into California on a com­ mercial scale.1 In fact, its introduction was in the year 1867, less than twenty years
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