CRITICISM OF GOVERNMENTAL POLICY RESTRICTING USE OF FOREIGN CONTRACT WORKERS ON AMERICAN FARMS IN 1965 EXPRESSES THREE POSSIBILITIES -- (1) A SEVERE DISRUPTION OF DOMESTIC FRUIT AND VEGETABLE PRODUCTION, (2) AN INCREASE OF AMERICAN INVESTMENT IN FOREIGN, PARTICULARLY MEXICAN, AGRICULTURAL PRODUCTION, AND (3) A LOSS OF UNITED STATES EXPORT MARKET TO FOREIGN PRODUCERS. TOTAL PRODUCTION, HOWEVER, WAS NOT SIGNIFICANTLY LOWER IN 1965 THAN IN 1964, AND ONLY A FEW GROWERS MOVED THEIR OPERATIONS TO MEXICO OR MADE OTHER ARRANGEMENTS TO PRODUCE IN THAT COUNTRY. THE VALUE OF TOTAL FRUIT AND VEGETABLE EXPORTS INCREASED WHILE THE BALANCE OF TRADE IN FRUIT AND VEGETABLES CONTINUED FAVORABLE. FRUIT AND VEGETABLE EXPORTS IN 1965 WERE VALUED AT $468.4 MILLION OF WHICH FRESH ORANGES, CANNED PEACHES, DRIED BEANS, FRUIT COCKTAIL, DRIED PRUNES, GRAPES, APPLES, AND DRIED RAISINS ACCOUNTED FOR 44 PERCENT OF THE TOTAL. VEGETABLE EXPORTS DECLINED $2.7 MILLION TO $155.3 IN 1965 DUE TO LOWER SALES OF DRIED BEANS AND CANNED ASPARAGUS. SOME MEXICAN IMPORTS INCREASED DURING 1965--(1) TOMATOES, 8 PERCENT, (2) MELONS, 17 PERCENT, AND (3) FROZEN STRAWBERRIES, 30 PERCENT, BUT THESE GAINS REFLECTED INFLUENCES OTHER THAN LACK OF BRACERO LABOR IN THE UNITED STATES. THE END OF THE BRACERO PROGRAM HAS NOT RESULTED IN A LARGE SCALE MOVEMENT OF AMERICAN FARMERS TO MEXICO OR A SIGNIFICANT LOSS OF MARKET TO FOREIGN COMPETITORS. HOWEVER, PATTERNS OF PRODUCTION AND MARKETING MAY CHANGE IN COMING YEARS DUE TO THE TERMINATION OF FOREIGN LABOR AND OTHER FACTORS. THIS DOCUMENT APPEARED IN "FARM LABOR DEVELOPMENTS," JULY 1966. (WB)