means and money necessary to promote the use of potatoes as a basic and healthful food.

The potato program should be under the direction of a national committee of potato producers who will formulate and recommend to the Secretary of Agriculture, such regulations or changes that are needed to carry out the potato program, to meet the needs of the industry and supply the amount of potatoes needed at a fair price to the consumer and a fair income to the producer. The Secretary will, in turn, issue the order making such regulations effective and will assist in enforcing such order or orders.

This procedure follows that provided in our present Federal Market Agreement Act. Marketing agreements should be in effect in each State or area embodying a complete marketing area. A marketing agreement is the tool which can be used to set grade and size standards, to supply a quality product to the consumer. These local marketing agreement areas should be under the direction of the national potato committee. This committee would be empowered to recommend to the Secretary such minimum grade and size regulations as they deem necessary on a national basis. On order of the Secretary, the local marketing agreement area may exceed, but not fall below, such minimum national grade and size regulations.

Marketing agreements are an effective means of helping the producer in marketing a commodity. They should be used by all marketing areas, however, they do not provide the requirements for an overall national potato program. First, they do not provide regulations on the beginning end of production. This must be done through marketing allotments perhaps transferred to acreage. This initial regulation is essential to keep the supply in proper relation to demand. Marketing agreements may then be used to regulate quality to be marketed and to withhold any surplus produced by favorable growing conditions.

Marketing agreements without initial regulation on production are ineffective in getting the producer a fair share of the potato dollar in years of large oversupply. This may be due to two or more reasons. First, a large oversupply becomes very difficult to control. Second, the amount of potatoes to be withheld by grade and size orders are not recognized by the Federal Crop Reporting Service and thereby are not recognized by the potato trade. This part could be partially remedied by the issuance of monthly stocks on hand reports, especially for the storage crop of 270 million bushels. These reports issued Novemher through May could easily show the disappearnce each month of all potatoes. Such report will reflect the diversion of potatoes each month through marketing orders and other means and would then be recognized by the potato trade. The program should also provide a markoff on a hundredweight basis. These funds would provide for the industry operation of the program and permit a program for the promotion and use of potatoes. Local funds would be used for the organizing of growers and distributing information.

The program should give the farmer bargaining power in the market place. A provision for the operation of marketing holidays on a local or national basis would be helpful in providing bargaining power. Procedures used in Government purchase of agricultural commodities often have a very depressing effect on the price of perishables. The acceptance of bids submitted by the processor establishes a low price of all grades of a commodity. Agricultural products are the only ones purchased by the Government armed services at less than cost of production. Sight buying or the purchase at parity price would help remedy this situation.

Attached is an outline of a program we propose for regulating the potato industry on a national basis.

LONG-RANGE POTATO PROGRAM

AS SUGGESTED BY SAN LUIS VALLEY POTATO IMPROVEMENT ASSOCIATION

These are only suggestions. We request that you offer others.

1. Establish a regulated potato program incorporating the following:

(a) Under direction of a national committee of potato farmers in cooperation with United States Department of Agriculture.

(b) Regulate by market allotment on basis of normal consumption and regulate flow to market.

(c) Expand use of marketing agreements where desired, or use other grower organization within the State.

2. Government retain necessary amount of potatoes to protect consumer in case of short supply.

3. Establish markoff to carry cost of program such as:

(a) Promotion.

(b) Operation.

4. Permit shipping holiday when price falls below fair exchange value f. o. b. farm gate (to be recommended and supervised by area committee.)

5. Regulate by areas (early, intermediate, late).

The program as outlined above should be planned and directed by a national potato committee composed of farmers elected by a farmer committee in each potato-producing State. Each State committee will make recommendations to the national committee which will then make recommendations to the Secretary of Agriculture. He will issue the order and the Department will then become the enforcing agent. With these regulations the committee can then keep the potato program in pace with future needs.

The adoption of this plan on a national scale will establish stabilized prices to the consumer and supply them with the best possible quality of each season's crop.

A regulated program will increase the ability of farmers to obtain credits to finance farm operations. Lending agencies will be more willing to give credit by being able to determine in advance the farmer's possible income from his potato crop.

The potato farmer should benefit by regulating the supply and demand thereby establishing more stable economy. Present income-tax laws, and production and marketing costs, will no longer permit the potato producer to exist on the income received in 1 year of high prices, 2 years with prices slightly above cost of production and 2 years below cost of production in each 5-year period.

Potatoes show extreme sensitivity in price as related to surplus production. Restrictions on other supported crops may easily become a source of an oversupply of potatoes. The correction of maladjustments of supplies in terminal markets should prevent erratic price changes which are passed back to the producer.

This is a self-help program. We are not asking for a support price.

COOPERATIVE EXTENSION WORK IN AGRICULTURE AND HOME ECONOMICS

EXTENSION SERVICE,

COLORADO STATE COLLEGE OF AGRICULTURE,

AND MECHANIC ARTS,

(U. S. DEPARTMENT OF AGRICULTURE
AND RIO GRANDE COUNTY COOPERATING),
Monte Vista, Colo., September 10, 1955.

DEAR MR. SPUD GROWER: This is a thank you for your cooperation in the potato production cost study made recently in which you were asked to cooperate. The following figures are averages of those submitted by you and your fellow growers.

Acreages responding were 2,236, the average per grower, 68.43 acres.

The average yield in 1954 on above acreage was 257.76 hundredweight bags per acre. This yield produced 177.2 No. 1 bags; 27.8 bags No. 2's; 28.55 bags seed; 13.4 bags culls; and 10.8 were lost by shrink.

These figures turned into percentages are: 1's, 68.75 percent; 2's, 10.78 percent; seed, 11.09 percent; culls, 0.0520 percent; shrink, 0.0419 percent.

Totals of above totals: Production costs of $0.4748 per bag, plus harvesting $0.5010, plus processing $0.5120, gives a grand total of $1.4878 per hundredweight invested. In other words, considering culls worth $0.15 per hundredweight (which is the net price paid by the starch plant), ordinary run of the mill seed $1 per hundredweight and No. 2's, $0.90 (present price on Denver market), No. 1's would have to sell at $1.86 to bring $1.50 to the grower.

Sincerely,

The CHAIRMAN. Next is Mr. Palm.

(No response.)

W. J. WONDERS, County Agricultural Agent.

The CHAIRMAN. All right; next is Mr. Patterson.

Give us your name in full, and your occupation, please.

STATEMENT OF DEAN PATTERSON, CENTER, COLO.

Mr. PATTERSON. Mr. Chairman and gentlemen, my name is Dean Patterson. I farm 160 acres of irrigated land in Saguache County, Colo., raising potatoes, alfalfa, and sheep.

First: Destroying portions of a crop is not the solution of our surpluses. Destroying surpluses does not remove the ability to produce more surpluses, and does produce bad relationships between the farmer and the taxpaying public.

I feel that the moving of surpluses by selling, bartering, and stockpiling of strategic materials have helped to reduce surpluses. The soil-fertility bank needs more consideration, not from the standpoint of incentive payments for soil-fertility bank acres, but in that it will shorten the supply going into trade channels, and these soil-bank acres will in a time of need produce needed agricultural commodities. National marketing agreements would enable the farmers to use the soil-feltility bank plan without jeopardizing national production.

I feel any controls used for perishable products should be on a bushel or pound basis, rather than acreage. We have proven that through improved farm practices we have increased our acre production which has added to our surpluses.

I feel that individual farmers that have suffered losses through drought or other disasters, in places which are designated as disaster areas should have consideration on long-term low-interest loans.

I feel that the Government should not bring in new producing areas as long as we have price depressing surpluses.

One more point that I would like to make is that all crops should be treated equally under any Government program.

I feel a bipartisan approach to the agriculture problem is needed for a long-range program.

The CHAIRMAN. When you say all commodities should be treated similarly, you mean that if we have a support price for the basics, we ought to have it as well for all perishables?

Mr. PATTERSON. That is the way I feel about it.

The CHAIRMAN. Could you tell us how to do that?

Mr. PATTERSON. Well, through the marketing agreements, that is, let each group in the United States vote whether they want it, and then control it, either in areas or in States, or however that would be set up.

The CHAIRMAN. What would you do in cases where you would have a surplus; how would you get rid of those?

Mr. PATTERSON. If you shortened the crop, you will not have surpluses.

The CHAIRMAN. I know, but the question is how to shorten the crop. Mr. PATTERSON. Through the soil-fertility bank. When you take acres out, you will shorten the surpluses.

The CHAIRMAN. You realize that in the last 10 years the law has been good all over the Nation, except for maybe a few little spots here and there.

Mr. PATTERSON. That is right.

But it would still be better to sell a portion of that crop, and I would be willing to take my share out at a fair price, rather than all of it at a loss.

The CHAIRMAN. I understand that. That is what we are trying to achieve, if we can, but the question I was interested in having an answer to is: Would there not still be surpluses to hurt us under your plan?

Mr. PATTERSON. We would only-if you will notice, I mentioned that we have enough not to jeopardize the amount of food that we have for the American public, if I make myself clear there. The CHAIRMAN. Thank you, sir.

Next is Mr. Quinlan.

STATEMENT OF C. H. QUINLAN, ANTONITO, COLO.

Mr. QUINLAN. Mr. Chairman and members of the committee, I appreciate the opportunity of being able to make a statement on the current livestock problems.

I operate a sheep and cattle ranch on the Colorado-New Mexico border, about 150 miles north of Albuquerque. My operation is both a range and irrigated-farm situation. I am very much concerned with present conditions and the prospects for the future.

The CHAIRMAN. Are you satisfied with the program as it is on the statute books?

Mr. QUINLAN. I am.

I think, of course, we have some criticism, but I think that it certainly deserves a chance to work.

The CHAIRMAN. Very few laws become very effective in operation the first time that they are on the statute books. We always find a few bugs in them, and have to get rid of those as we go along.

I am sure that the legislation, although it may look good now, may require that kind of treatment in the future.

Mr. QUINLAN. Yes, sir, that is right.

Studies made of sheep operations in our area show that the cost of producing a pound of lamb is $21.80 per hundred pounds, and wool 60 cents per grease pound. The average selling price for feeder lambs was 164 cents in 1954, and 17 cents per pound in 1955. While wool sold for 50 cents in 1954 and 35 cents this year, the debts of the sheep men in our area have steadily increased from year to year. Many have reached the point where the bankers will have to foreclose unless something is done soon.

I feel that there are many contributing factors to this present condition, and I will state a few:

1. Steadily rising prices of the things a rancher buys and the cost of hired labor are up at least 30 percent since 1948. When a raise is given in our main industries it always causes an increase in the cost of the product they make. As the increase of these industrial labor families rises a larger share is used to buy nonfood items. A man's stomach has a narrow capacity and is generally full, regardless of his income.

2. Studies show that farmers producing crops have been able to reduce labor requirements about 30 percent in the last 10 years, while the livestock farmer has been able to reduce his labor requirements only 6 percent.

3. Rigid price supports for the so-called basic crops some of them do not seem so basic to me-have held an artificial floor under the feed needed by the livestock producer. Another contributing factor is that the acres which are taken out of crop production and used for pasture and animal feed has only aded to our oversupply of meat.

I strongly feel that with all the things a livestock farmer buys being controlled and with part of his own industry's products under control, it is becoming impossible for him to compete without some help. All segments of agriculture and industry should be on a supply and demand basis, or all should be treated equally under any aid program. The soil-bank plan is doomed to failure unless ways are found to prevent livestock from being increased as a result. Also ways must be found to reduce the present overproduction.

In closing, I would like to say that I feel this country cannot continue to prosper with one segment in a depressed condition. And unless we are able to correct this inequity, the whole country will suffer.

The CHAIRMAN. Mr. Quinlan, as you stated awhile ago, we do have a law on the statute books now with respect to sheep-raising. Mr. QUINLAN. Yes, sir.

The CHAIRMAN. It is my sincere belief-I did not vote for this law, I want to be perfectly candid with you that that law may be made to work provided the sheepherders get together and do something to increase the product, improve the quality of the product.

I find that on many of these programs, and that will hold true unless you watch it with sheep, the farmers are prone to grow for Uncle Sam rather than for the markets.

Australia has a big wool market. They have a way of separating the good wool from the bad; they get a good market for it.