combines and tractors, to operate a family unit farm. Conditions in the West where we came from are different from those here. There is no comparison. I tell you that. There they do not have a sale for all they produce. You have. They have got to struggle to sell what they produce. There is such an abundance of it. Many of the farms in those areas responded to their Government in order to expand and it is because of that that you have the situation with respect to a lot of the wheat, a lot of the tobacco, and a lot of the corn, and what have you. I find that the situation in Vermont is far different from what you find almost any place in the country. Yours is done through dairying almost solely and you are very fortunate in having a lot of people you can sell it to in Boston and the big areas here. You are pretty well protected with Government law. Do you get the idea? I thought that I would put that in the record.

Mr. VARNEY. Yes, sir.

The CHAIRMAN. All right, sir. Anything else? If not, thank

The CHAIRMAN. Mr. Ferrin Edmunds. Now, Mr. Edmunds, will you be seated, please? I understand that Mr. Frank Hussey, Mr. McIntire, Mr. Peabody, and several others are joining you in these statements. Is there anybody else?

STATEMENT OF FERRIN EDMUNDS, PRESIDENT, POTATO INDUSTRY COUNCIL OF MAINE, FORT FAIRFIELD, MAINE

Mr. EDMUNDS. Mr. Chairman in the interest of conserving time, they have asked me to read our statement into the record. And those gentlemen, with the exception of Mr. Peabody, will be available for questioning at your request.

The CHAIRMAN. Are there any others than those I have mentioned? Mr. EDMUNDS. No, sir.

The CHAIRMAN. You have six, with yourself?

Mr. EDMUNDS. Five, including myself. Mr. Peabody is not here. The CHAIRMAN. That is what I mean, that you speak for Mr. Peabody, too?

Mr. EDMUNDS. That is right.

The CHAIRMAN. He is not present?

Mr. EDMUNDS. No.

The CHAIRMAN. The statement you have before you there incorporates his views?

Mr. EDMUNDS. That is right, sir.

The CHAIRMAN. All right, you may proceed, sir. Give us your name in full and your occupation.

Mr. EDMUNDS. My name is Ferrin Edmunds. I am a farmer in Fort Fairfield, Maine, and I am president of the Potato Industry Council of Maine.

Mr. Chairman and members of the committee, the Potato Industry Council of Maine wishes to thank you for making it possible for us to appear here today. We hope your sonsideration of what we propose will be reflected in a measure of security, both for us as producers as well as in increased prosperity for the general economy of our country. The Potato Industry Council of Maine is a trade organization financed and supported by the more than 4,000 commercial potato

producers within our State. We appear today as elected delegates of the council and we have taken great pains to positively ascertain what our members want and need in the way of legislation for their protection as potato producers.

We recognize that a divided feeling exists across the Nation as to how far the potato industry should go in submitting itself to any type of program. Over the past several weeks you have undoubtedly heard many varying testimonies as to what would be best for our industry. The type of potato program embodied in our testimony is designed to protect the interests of the efficient family-sized farmer. It has the solid support of 95 percent of the producers in Maine where the average unit of potatoes is about 30 acres per farmer. If the family-sized unit is to continue as the backbone of American agriculture, the problems of the small producer must be given commensurate consideration with those of the larger operator. We know this committee will give him an equal amount of consideration. The CHAIRMAN. Would you describe a small producer for us in the Maine area-do you have that in your statement?

Mr. EDMUNDS. No, I do not have that.

The CHAIRMAN. Would you tell us what is a small producer-how many acres, the investment involved, and what is the problem of production?

Mr. EDMUNDS. A small producer in the State of Maine would probably own a farm that had about 75 to 100 acres of potato ground and, conservatively, under good conditions, it should be worth about $15,000.

In addition to that, and I am speaking here, sir, of an averagesized producer, that is, 30 acres in the State of Maine, that is the average unit of potatoes in the State of Maine.

Senator HOLLAND. Do you mean that much planted each year? The CHAIRMAN. Out of the 75 to 100?

Mr. EDMUNDS. Yes.

The CHAIRMAN. In other words, about a third of his acreage is devoted to that?

Mr. EDMUNDS. I would say 25 to 33 percent.

The CHAIRMAN. Of the acreage of 75 to 100 acres which you consider a small farm unit-is that all cultivated?

Mr. EDMUNDS. That is pretty nearly all cultivated acreage. Our rotation is generally, hay, a few peas, some grain and potatoes.

The CHAIRMAN. What is that done for, for the enrichment of the soil or to get into some other crop that would produce?

Mr. EDMUNDS. We are limited, as I pointed out in this statement. The CHAIRMAN. Go ahead.

Mr. EDMUNDS. By diversification. We cannot do it.

The CHAIRMAN. Do you go into that in your statement?

Mr. EDMUNDS. I do, briefly.

The CHAIRMAN. What is done with the other acres besides potatoes? Mr. EDMUNDS. I touch on it in this way, that diversification does not lend itself to our problem in Maine in the potato-producing areas. The CHAIRMAN. Do you have a method of approach which you want to submit?

Mr. EDMUNDS. I believe it would be satisfactory. If not, I will be glad to answer any questions.

The CHAIRMAN. All right, we will soon find out.

Mr. EDMUNDS. Such inquiry as we have made assures us that our program is supported by many producers in other areas than Maine. Generally speaking, our analysis of the opposition to a type of program such as we propose is by (1) a minority of farmers who in all honesty oppose any type of Government program, agricultural or industrial, whether for reasons of their own proficiency, financial stability, or moral principle; (2) in some instances, by our industry's packaging, shipping, and distributive channels which are protected by an everwidening markup for their services and can often profit greatly by the speculative nature of an uncontrolled potato economy; (3) by some larger producers now profitably growing crops embraced by Government programs who actually risk little else by an unprofitable venture into potatoes than a reduction of their income-tax liability; and (4) by certain areas newly created by Government reclamation projects established in the potato business during the past few years, not only by low-priced land and water, but, in some instances, by Government urging

The CHAIRMAN. Would you mind a question there?

Mr. EDMUNDS. No.

The CHAIRMAN. You read just before this sentence a statement. What was the statement you made there?

Mr. EDMUNDS. "By some larger producers" who are growing basics and who can go at will into potatoes on any acreage they want to.

The CHAIRMAN. How would you stop that--have you got a plan? Mr. EDMUNDS. I have included in here, in my testimony, that, I think, by going back to the old compliance regulations, which were dropped this past year.

The CHAIRMAN. All right. You may proceed.

Mr. EDMUNDS. That are loathe to accept crop history as a basis of production control. Should the Congress enact legislation such as we propose, no program binding upon the potato industry could be instituted unless two-thirds of the growers voting in a nationwide referendum were in favor of the provisions of the program. In effect, we are asking the Congress to offer a program for the potato industry, subject to the industry's approval. This seems to be a fair request. We feel potato producers are fully entitled to such Government protection as is enjoyed by other segments of our economy, including agriculture, if the potato industry is willing to accept certain responsibilities. The previous unfortunate venture by the Government into a price support program for potatoes should not unduly influence consideration of a more sensible type program. We have paid our penance for our participation in the previous support program by being reduced to our present condition of financial instability approaching disaster proportion. Let us recognize that the previous program was an outgrowth of encouraging wartime production, and suffice by saying it was fitted by neither economic nor mechanical considerations to postwar conditions.

Agriculture today generally operates under Government programs designed to insure economic stability to the efficient grower. We have no quarrel with the rights of others to enjoy security; our concern is that we, as potato growers, do not enjoy any protection while being forced to compete on all sides with those who do. Labor is protected by minimum-wage laws; business, among other ways, by being allowed to create virtual monopolies; transportation, communication and

power services by rate-fixing. If this general pattern of increased costs is working a hardship on the segment of agriculture now included under Government programs and it is a recognized fact that agriculture is lagging far behind the prosperity enjoyed by the rest of the economy, the sorry plight of the potato producer is easily understood. The limited assistance furnished to us over the past 2 years by diversion programs at a total cost to the Government of less than $1,500,000 has substantially failed to return us the cost of production. The program currently in effect, while broader in scope, will still see us operate at a tremendous loss as an industry. We appreciate the help, as you well know, but it does not and cannot satisfactorily solve our problems. Our farms have decreased by over 50 percent in value. New machinery designed to combat rising labor costs is beyond our resources and must be forfeited. Government credit agencies are being forced to abandon some of their more hopeless cases and curtail lending to others hardly more fortunate. Commercial credit institutions are becoming increasingly wary of agricultural loans wherever risk is an appreciable consideration, especially since banks in three towns in our area have been forced into liquidation because of "frozen potato assets." The attrition of the past three crop seasons has become readily apparent since the release of 1954 census figures. There has been a reduction, in 4 years' time, from 3,900 farmers to 3,200 in Aroostook County alone.

Our problem in the potato-producing areas of Maine, and especially in Aroostook County, is principally one of lack of diversification. This may be the panacea for other distressed areas but it does not lend itself in any way to the solution of our difficulties. Our area is ideally suited for the production of large, high-quality crops of potatoes but we cannot shift at will into other crops. Our season is too short for some, too cold for others, too wet for a few, too dry for many. We have tried livestock, but with a conspicuous lack of success. Under our climatic conditions, livestock requires 6 months in the barn for every 6 months on grass. Efficient production of the basic crops has never seemed feasible in our area; consequently, we lack the necessary crop histories to undertake their cultivation. Despite our best efforts at diversification, we are, and must continue to be, a predominantly potato economy.

One of the worst blows the potato industry has suffered in recent years was the cancellation of cross-compliance regulations. It seems eminently unfair to us that farmers fortunate enough to have quotas for production of the basic crops at specified levels of parity should be allowed to indiscriminately exploit less fortunate crops. We can ill afford to be a "stooge" for the basic commodities. The increasing production of potatos on the reclamation projects in the West is equally unfair. Where can we turn if the Government continually restricts the potato acreage of the established centers of production on the one hand while encouraging the development of our competitive areas on the other? How can we successfully compete for our share of the consumers' dollar against odds such as we face?

Profitable potato culture is essential to the economy of this country. Potatoes are a staple in the national diet, primarily because they combine low-cost, high-nutritive value with variety and ease of preparation. The production and distribution of a crop of potatoes provides

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employment for thousands of people on an annual basis. Billions of dollars are invested in the tangibles and intangibles that constitute the potato industry from farm to consumer.

A correctly designed potato program is fully as much in the interests of the consumer as the producer. Sensitive as potatoes are to the slightest threat of shortage or surplus, uncontrolled production will alternately create extremely high and low prices in the market. These wide fluctuations serve no other purpose than a speculative profit to the fortunate few who are in a position to capitalize on the situation. The ultimate result is dissatisfaction on the part of the consumer because she must purchase generally inferior merchandise at inflated prices, thus encouraging her to buy substitutes of lower nutritive value. The reaction at the farm level is to increase production to a point of surplus, which is aggravated by the declining consumption occasioned by the shortage.

The potato industry has done an excellent job, where means are available, of putting its own house in order. There is fairly conclusive evidence that our industry is ready to accept, on a nationwide basis, marketing agreement programs whereby potatoes of inferior grades and sizes can be withheld from market. At the present time, nearly 60 percent of the production from the 29 late States is marketed under Federal or State marketing orders, certainly a tremendous improvement over conditions existing 5 years ago.

The industry has indicated a desire to establish a promotional fund, raised on an assessment basis, to increase the annual consumption of fresh and processed potatoes. Growers are ready to raise additional funds to help finance the research so necessary to keep modern industry in a competitive position.

Maine has already taken many of these steps. Last year an overwhelming majority of the growers voted to accept a Federal marketing order to control the quality of their product. Over the past shipping season we voluntarily reduced the supplies available for shipment by 20 percent in the interests of good marketing practices and, despite the poorest quality crop in many seasons, we supplied our markets with superior Maine potatoes. This year, we are operating under the most severe regulations of any area in the country. The combination of quality control and surplus removal in Maine has bolstered the market across the Nation and we have partially averted complete disaster. At our request, the recent session of the Main Legislature increased our self-imposed assessment for advertising purposes from 1 to 2 cents per barrel, giving us far greater funds to pursue an active promotion program. At least one-third of these funds are used for research purposes under the supervision of the University of Maine and the Agricultural Research Administration of the USDA. At the present time all interested agencies are working toward a more orderly marketing program for merchandising the Maine crop. The results of the program are being reflected already in an increased movement of Maine potatoes to market prior to the winter season.

Some authorities on agricultural economics have questioned the adaptability of potatoes to any type of program, since they are a yearto-year crop that cannot be "stored" in the sense of the basic commodities. We feel that potatoes are ideally suited to a program and for a number of reasons: (1) The past 3 years of low prices and sharp competition have established as never before the efficient areas of