We feel that any price protection should be in the nature of a compensatory payment system because (1) only by compensatory payments can you preserve individual initiative and promote orderly marketing; (2) such a system would help solve one of the fundamental weaknesses of the previous program, í. e., the problem of equating storage potatoes to nonstorage potatoes; (3) compensatory payments do not unduly burden the consumer by forcing her to pay twice, once in cash and once in taxes, for her produce; (4) a program using compensatory payments and marketing quotas would more nearly equate the different areas from marketing considerations so that no area would have to "hold the umbrella" to allow a competitor nearer the market to clean up her crop. The feature of joint Government and industry responsibility for price is somewhat new. Three suggested ways by which it might be achieved are (1) an acre assessment on all potatoes, paid into a common fund to be used for compensatory payments, with the Government's share decreasing as the industry matured in the program to a point where the industry conceivably could finance a program within itself; (2) a fund built by prorating Government compensatory payments, 75 percent to the farmer and 25 percent into a general fund that would eventually be large enough to take over the entire load; (3) by using either of the foregoing suggestions in combination with penalty funds collected as a result of exceeding an acreage allotment to establish a fund. In any event, a prosperous industry, paying taxes, would more than reimburse Government for all funds used both administratively and for compensatory payments. We feel that a suitable program can be worked out as we have indicated above because the potato industry, to be eligible, must accept a mature responsibility in every phase of the program but will still retain enough initiative to make the program successful. Government might well confine their participation in proportion as industry accepts responsibility. We feel that the potato industry is entitled to a referendum on a program such as we have outlined. We know this much; Maine is ready to do her part. We have held meetings throughout the producing areas with an aggregate attendance of over 750 producers. There has been practically unanimous agreement with the fundamental ideas we have advanced here. We wish to thank the committee for their consideration. The CHAIRMAN. Mr. Edmunds, how would these quotas be fixedon past production, you say, in each State? Mr. EDMUNDS. Yes, sir, on the basis The CHAIRMAN. Over a period of how long? Mr. EDMUNDS. There are two suggestions I have heard. One is to go back to the good years and attempt to establish a base there. Another one would be The CHAIRMAN. You mean the good years of high production? Mr. EDMUNDS. The good years, the profitable years for the potato industry, on this theory The CHAIRMAN. I find the good years from a profitable price standpoint are probably low-production years. Mr. EDMUNDS. I am going back to the program days immediately after the last war. There was a very good record kept at that time, which would be very useful in trying to establish production controls on that basis. The CHAIRMAN. And each State would be allowed to produce so much potatoes? Mr. EDMUNDS. That is right. The CHAIRMAN. In order to effectuate that, however, all of the States who would be assigned a quota would be eligible to vote? Mr. EDMUNDS. That is right. The CHAIRMAN, It would require two-thirds of those voting under your plan to make the plan effective? Mr. EDMUNDS. That is right, similar to the provision in the old socalled Lucas bill, I believe it is. The CHAIRMAN. The same as we have for cotton and others, about the same principle-it may be a little different? Mr. EDMUNDS. I say there is a divided feeling. Other people feel that acreage allotments for an area should be based on the acreage over the past 4 or 5 years. I think I may say that either system would be acceptable to the State of Maine, although we might possibly prefer the latter method. The CHAIRMAN. I was coming to that. As I understood you, you are proposing a bushelage? Mr. EDMUNDS. In concert with acreage control, using them both together. The CHAIRMAN. What is the purpose of doing that? Why do you not do one or the other? Mr. EDMUNDS. You have my reasoning, Senator. The potato crop is very sensitive to weather conditions. You take in the State of Maine last year, we drew 310 bushels to the acre. This year we are growing 440 bushels to the acre. That is almost a 50 percent increase from one year to the next. The CHAIRMAN. What is the average production? Mr. EDMUNDS. The actual production? The CHAIRMAN. The average-say for the past 5 years? Mr. EDMUNDS. In the neighborhood of 400 bushels to the acre very close to it, sir. We had 2 poor crop years-the 2 poorest crop years for a number of years, but it might be slightly less, but not much less. The CHAIRMAN. You would have in this program those who produce a few potatoes for the early markets, more or less used in the nature of tender vegetables-would you put those in there, too? Mr. EDMUNDS. I think that you should define what a commercial producer is by the size of his unit. Let us say less than 3 acres would be less commercial. Above that it would be very desirable to have all areas included. The CHAIRMAN. That would be irrespective whether you could store the potatoes for the next year or not? Mr. EDMUNDS. That is right. The CHAIRMAN. In some areas you grow potatoes this week and unless you eat them in 2 weeks they are likely to spoil. Mr. EDMUNDS. Each area very definitely affects the marketing of the adjoining area. The CHAIRMAN. I understand that. In the State of Maine and in the State of Idaho, you can dig your potatoes in the fall and you can preserve them until the next fall almost without their spoiling, except maybe to sprout. Mr. EDMUNDS. That is right. The CHAIRMAN. But in other areas that I know of you produce a potato, say, the latter part of May or earlier, and you cannot store that more than maybe 2 months. If you do, it is out. You are going to put that potato in the same category as the potato in Maine and in Idaho? Mr. EDMUNDS. I think that it should be. The CHAIRMAN. All right. I just wanted to get your ideas. How would you work the compensatory payments that you talk about? Mr. EDMUNDS. As I see it, as I understand it, what I mean when I say compensatory payments The CHAIRMAN. That is what I would like for you to describe to us. Mr. EDMUNDS. As to what I mean? The CHAIRMAN. Yes, how would you work it, in other words, you mentioned compensatory payment. That, to me, means some kind of payment coming from somewhere, to get to the farmer the difference between what he gets and what he ought to get. Mr. EDMUNDS. That is right. The CHAIRMAN. Where would that come from? You said that you would assess the farmers so much. Mr. EDMUNDS. I said that the Maine industry is more than willing to enter into a joint The CHAIRMAN. Let us talk about the country as a whole. If we dealt with the State of Maine only, we might solve your problem in 10 minutes, but you have 48 States to deal with, and not all of them can plant lush potatoes as you do and as California does and as Louisiana did--we do not produce so many now-how would you get the money-would it come from the Treasury, or would you want to assess somebody for it, or what? Mr. EDMUNDS. That is one system that I have heard mentioned. It would be a Treasury check that would be the basis of this compensatory payment. The CHAIRMAN. How would you fix the price at which potatoes would sell to give the farmer a fair return? Mr. EDMUNDS. We feel, I think, that the potatoes should achieve at least 90 percent of parity, especially since parity is considerably lower than parity was 5 or 6 years ago. The CHAIRMAN. Suppose that you established a formula whereby you would give this 90 percent of parity and you produce 400 bushels in some places and others they produce maybe 125 bushels. How would you adjust that? Mr. EDMUNDS. Well, parity is figured differently for each area, each State, for potatoes, which takes those factors into consideration. The CHAIRMAN. You would have a different price then? Mr. EDMUNDS. That is right. As I visualize it in Maine, parity, let us say, would be $3.50 a barrel. The CHAIRMAN. To the farmer? Mr. EDMUNDS. On the farm. I am speaking in terms of barrels, which we use in the State of Maine. It might be $5 a barrel in Florida. It is figured for each area, each month, and for each State. The CHAIRMAN. Depending upon the time that those potatoes come on the market? Mr. EDMUNDS. That is right. I think the determination of parity alone would equate one area with another. That is done by a formula that I believe Congress passed. The CHAIRMAN. What weight would you give to the freight rate and the distance in miles? Mr. EDMUNDS. I think that your freight rate, Senator, has to be solved within the industry. Let me put it this way: We have a freight rate against us in Aroostook County very definitely. The CHAIRMAN. That is why I bring up the subject. In other words, from Vermont I imagine you could ship potatoes to New York or Boston cheaper than you could from the State of Maine? Mr. EDMUNDS. Parity figured on the farm would have to be used as the basis of determination. The CHAIRMAN. You mean the area? Mr. EDMUNDS. The area or the State. The CHAIRMAN. The area or the State, all right. Let us go back to the matter of raising these funds and their payment. How would you work that out? You would want that to come from the Treasury? Mr. EDMUNDS. Of course it is hard for me to say. The CHAIRMAN. Tell me how to do it. Mr. EDMUNDS. One way is for Congress to appropriate a certain amount of money to be used for purposes of maintaining a parity price, and the farmers, if they accepted this plan, would also have an equal responsibility to contribute to that amount of money. The CHAIRMAN. So it would be a joint venture? Mr. EDMUNDS. Right. The CHAIRMAN. As I understand your plan, in any State wherein 90 percent brought less than $3.50, as an example in Maine, and in another place $5.50, as in Florida, if those potatoes in Maine and potatoes in Florida sold for, let us say, in Maine instead of $3.50, they sell for $2.50, that would be $1 difference? Mr. EDMUNDS. That is right. The CHAIRMAN. You would want a program whereby you could sell, that is, the farmers could sell at $2.50 with the expectation of the Government providing the $1? Mr. EDMUNDS. If we had to sell at $2.50, that is right. The CHAIRMAN. I am assuming that. Mr. EDMUNDS. That is right. The CHAIRMAN. In Florida the potatoes sold for $3 instead of $5.50, you would want the Government to put up $2 between that and $5.50? Mr. EDMUNDS. That is right. That is the way we understand it. The CHAIRMAN. You have heard of the so-called Brannan plan? Mr. EDMUNDS. Yes. The CHAIRMAN. Is it along that line? Mr. EDMUNDS. I think it is very similar to the Brannan plan. The CHAIRMAN. You know how that plan was lambasted all over the place? Mr. EDMUNDS. Yes, sir. And I also know it has been fairly successful in wool-a somewhat similar plan. The CHAIRMAN. It has not worked yet in wool, I was told this trip. We had quite a bit of hearing on that. The only difference between the wool and the potato proposal that you are making is this, and I want to say that I voted against the wool bill-no ifs and buts about it. That is my position. There is a compensatory payment, but that amount in order to meet that payment comes from taxes that are collected, called tariffs, and that amount will be used to compensate the producer. In other words, since we do not produce all of the wool that we need in this country it was thought by the proponents of this bill that we ought to encourage the production of wool at a certain. level, so that in case of war or an emergency we would at least have that much wool that we could depend upon. That was the purpose of that. You concede that situation does not prevail as to potatoes? Mr. EDMUNDS. That is right. The CHAIRMAN. Can you not also concede that since that is not the case, that this cost may be quite a drain on the Treasury? Mr. EDMUNDS. No, sir, I cannot, for this reason: Our plan is based on strict production controls in terms of bushels that can be marketed and it is a very well-established fact that the State of Maine, for instance, can ordinarily market about 48 or 49 or 50 million bushels. There would be no responsibility on the part of the Government, except for that proportion of the crop that went to market for fresh use. There would be no responsibility for potatoes that were, let us say, not of sufficient quality to go to market and were not included in marketing quotas. The CHAIRMAN. The amount of these compensatory payments that you speak of, would that amount be determined from a national average or on the regional and season basis? Mr. EDMUNDS. I would say it would have to be on a regional average, because of the computation of parity on a regional basis. It has to be. The CHAIRMAN. That is why you would have a different price formula? Mr. EDMUNDS. That is right. The CHAIRMAN. For the various regions. How would you describe a region—what would you call Idaho and the Dakotas, would you put them in one? Mr. EDMUNDS. I would say that a region is an area that produced upwards of 7 or 8 million bushels of potatoes. Let us say, a surplus State, an area that became a surplus State rather than a deficiency State should be treated as an individual. Parity is figured for each of those States. The CHAIRMAN. Where would you put California? Mr. EDMUNDS. I think that California would have to have parity figured for the State of California alone. The CHAIRMAN. Where would you put Oregon? Mr. EDMUNDS. I would say the same thing. The CHAIRMAN. That is, each State would have a different formula? Mr. EDMUNDS. That is right. The CHAIRMAN. Where would you put Florida? Mr. EDMUNDS. I would say the same thing for Florida. The CHAIRMAN. You speak of regions. Can you name some States in which you could put them in the same region? Mr. EDMUNDS. Yes, sir. I think that there might be possibilities in the other five New England States, if they wanted to be included. as a region. They now operate under a feed marketing order as a region, whereas the State of Maine has an individual order. And I might say in New Mexico, Arizona, possibly Texas, that might be a |