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region and possibly Louisiana, Mississippi, Alabama might be a region.
The CHAIRMAN. You can almost count Louisiana out because we are out of it practically.
Mr. EDMUNDS. I say the production in those areas is so limited that it would seem impractical to set up a separate program, but States that produce, let us say, upwards of 7 or 8 or 9 million bushels of potatoes, or in the case of
The CHAIRMAN. You mentioned a while ago exempting 3-acre people? Mr. EDMUNDS. Yes.
The CHAIRMAN. You would not want to put him in the picture at all, you would leave him out?
Mr. EDMUNDS. I think it would be essential that you not reduce it below 3 acres, both from the administrative standpoint—there are something like seven or eight hundred thousand, 3-acre farmers.
The CHAIRMAN. Irrespective of whether he grew potatoes before or after?
Mr. EDMUNDS. I think that he would be able to grow all the potatoes he wanted up to 3 acres.
The CHAIRMAN. No matter whether he grew potatoes or not?
The CHAIRMAN. And you would have no control over his production? Mr. EDMUNDS. That is right.
The CHAIRMAN. But he would get the benefit of this price he would get the compensatory payment, also?
Mr. EDMUNDS. He would not get the compensatory payment, either. He would be outside of it. He would get the benefit in this way, if production controls tended to hold the market at a level of a fair return to the grower, he would sell his potatoes, and get a fair return.
The CHAIRMAN. Would it not be possible, if we had too many 3-acre boys to affect the market a good deal, because that happened in many other basic commodities, you know, by putting no limitation on production as to certain farmers with certain areas. They produced heavily, and that had the effect in many instances—I would not say of glutting the market, but producing just that little surplus between 2 and 5 percent which caused a downward trend in the prices.
Mr. EDMUNDS. Under a program today parity is considered lower than it was 7 or 8 years ago, so far as potatoes are concerned, and there would not be the attraction for that 3-acre grower to get into business.
The CHAIRMAN. But, you are assuming that the parity formula would remain as it is. We have had testimony to change it, it does not work any more. The price is too low. Mr. EDMUNDS. I did not know that there had been.
The CHAIRMAN. The record is replete with that. We have to change that. Some want to go to the old parity and revise that a little bit and do away with the modern parity, where you add a year and drop one. It is only in a few cases where that formula has provided what growers of certain commodities think ought to remain there, but others are against it. It may be that some change will be made in that regard.
Mr. EDMUNDS. I think it is also true, Senator, that the production of potatoes over the past 30 years has shifted from around 3 million acres to around 1,200,000 acres that are grown commercially in this
country. And at the same time from two or three hundred thousand so-called commercial producers to around 30,000.
The small producer, because potatoes have not been attractive enough, cannot afford to own the necessary potato machinery to cultivate 3 acres of potatoes. I do not anticipate this would encourage a lot of 3-acre growers.
The CHAIRMAN. You would be surprised. Do you envision in your plan which, as I understand it, is now both bushelage and acreage so many bushels, so many acres—to produce that bushelMr. EDMUNDS. That is right.
The CHAIRMAN. Suppose you produce a little more than that, what would you do with the surplus ? Mr. EDMUNDS. If I could just go through my plan again.
The CHAIRMAN. I mean, just let us be practical about it. How would it work? I am trying to get how it would work. You see, we have to draft a law in order to make it applicable to all parts of the country to meet your test.
Mr. EDMUNDS. That is right.
The CHAIRMAN. Let us assume now that you have a quota of 350 million bushels. Let us say the production is 400 million bushels. What would you do with the 50 million?
Mr. EDMUNDS. As I pointed out in my program, if farmers generally lived within their acreage allotment, each farmer should probably be eligible for a section 32 program, similar to what we have today at the discretion of the Department of Agriculture and at least then the cost of production, so there is no encouragement for a farmer to try to wreck a program. We feel that a program just would not work in potatoes, because of the varying yield from year to year unless you include both.
The CHAIRMAN. I have other questions, but Senator Holland has some that he wants to ask. He is from Florida where they produce mighty nice potatoes.
Mr. EDMUNDS. I have some very good friends in Florida.
Senator HOLLAND. I have been interested in your testimony, Mr. Edmunds. You remember, of course, that when the support price fiasco in potatoes came to an end, that the Association of Potato Producers in Florida was very strongly instrumental in bringing about that end, that it took a very strong positionMr. EDMUNDS. That is right.
Senator HOLLAND (continuing). Against continuance. I have had no evidence at all that they have changed their position upon that matter. Have you had any such evidence ?
Mr. EDMUNDS. Not that they have changed their position substantially. We have some good friends in Florida. I question whether they would support this program. At the same time, we are going to present this program as we have outlined here today to the National Potato Council in Chicago next week, and representatives will be there from Florida. We hope we will get an endorsement of all of the things on this program. We know that it will not be unanimous, but we hope to get an endorsement.
Senator HOLLAND. Neither my State nor any other has the right to veto a national program of importance, but I do recall that my people very strongly were against the other program under which, as you will remember, they simply planted more hills of potatoes in the row.
Mr. EDMUNDS. That is right.
Senator HOLLAND. And put the rows closer together, put on more fertilizer, and the net result was such that even though they had an acreage allotment figure, that was greatly reduced, the support program was reduced to 60 percent, as I recall, of parity, from 90 percent
Mr. EDMUNDS. At the industry's request.
Senator HOLLAND. Yes; at the industry's request, yet still the industry's production cost the Federal Government something like half a billion dollars—something like $500 million in such quick time that the whole Nation revolted against it.
Mr. EDMUNDS. I believe that is right. That is the reason—the only reason why we ask for both bushel and acreage controls, because you cannot control the production which determines the price of a crop of potatoes in the United States by acreage alone. At the same time, I question whether it would be in the good interest of the country to try to determine by the bushel quotas alone.
What we ask is that you establish or that the Department establish, an acreage allotment for the Nation, let us say, of 1,200,000 acres, which conceivably might grow 450 million bushels of potatoes with ideal conditions, and that they go a step further and they say that whoever complies with his acreage controls broken down on an individual basis will be eligible for his share of the national marketing quota, let us say, of 340 million bushels.
We know that the fallacy of the old program was acreage control. That is, alone with nothing to cover the bushels.
Senator HOLLAND. You know, of course, there are two separate areas of potato production in California. Do you know what the attitude of those areas, or either of them, is toward this program?
Mr. EDMUNDS. I think I can say very safely that the early potato areas in California would be opposed to it.
Senator HOLLAND. That is south California ?
Mr. EDMUNDS. Primarily for the reason that they are now growing a lot of cotton and they were the one segment of the potato industry that was in favor of abandoning cross compliance. They wanted a chance to take their diverted acreage taken out of cotton and to put it into potatoes and other crops with nobody governing them.
The late areas, up in Shafter and the northern part of California I feel quite confident will endorse this program or a somewhat similar program to this, because they feel very much the same way we do. I have talked to them.
Senator HOLLAND. You know that the south California area and the Florida area, the other earlier areas, do not feel that there is a direct competition between their product and yours?
Mr. EDMUNDS. That is right.
Senator HOLLAND. In that they sell for a higher price or are of a different quality, cannot be held, are in a sense a de luxe item and not eaten generally as are the standard white potatoes, the firm ones, such as are produced by the State of Maine and other places.
What justification would you feel there would be for including those early soft potatoes which are not strictly competitive, in a program which the producers would not approve and in which they
would be called upon to contribute to the carrying on of the program in areas that produce the hard potatoes?
Mr. EDMUNDS. I think in the first place this program is fully as much in their interest as it is in ours, that they will get all of the benefits if not slightly more than the benefits that we will get under the program; and in the second place the statements and I have heard them before that they make that their production does not influence our production or price or outlet is completely false and misleading, because this crop of potatoes sold in this country is on the basis of the actual crop report. That sets the tone of the price for the entire season and they contribute to it whether it is 20 million or 30 million bushels, the same as we do, and they are coming into our markets with those potatoes and displacing ours.
Senator HOLLAND. One more question, insofar as the wool situation is concerned, do you really think there is any fair comparison between wool, which is 1 of our 2 great deficit crops, the other being sugar, and the perishable surplus crops of which Irish potatoes is one of the principal examples? Do you think there is any real basis for comparison between the two?
Mr. EDMUNDS. I was not attempting to compare the two crops in any sense. I was attempting to illustrate that compensatory payments were being used in one crop, and as far as we know from what we read it has been fairly successful.
Senator HOLLAND. The objectives are completely different. In the case of wool I am sure the objective is to increase our own independence of others of the world by enlarging our production of a strategically necessary farm commodity beyond the 30 or 40 percent of that commodity used in this country which is about the maximum we have produced.
It seems to me when you have an objective in wool to increase, and when your objective in Irish potatoes is to diminish the surplus, the complete difference of the programs is so clear that the mere fact that the compensatory payment has been used and is working in one case to increase, might even be an argument against using that kind of program when the objetive in potatoes is to decrease or diminish the crop. Do you not think that is sound reasoning?
Mr. EDMUNDS. I think that your reasoning is sound. I still feel that compensatory payments preserve a certain amount of initiative to me as an individual to try to do the very best job that I can possibly do from a cost basis and marketing basis, and because I will be rewarded. The old program did not include that.
Senator HOLLAND. The compensatory payments for wool is designed to increase production.
Mr. EDMUNDS. That is right.
Senator HOLLAND. And yet you would use that same sort of program on a commodity where you are attempting to decrease production. Do you think that would be a logical adaptation of that program?
Mr. EDMUNDS. The way you put it, Senator, I cannot answer your argument effectively, but I still feel that the compensatory payment system-I cannot answer that one argument—I still feel it has a tremendous amount of value in so far as the potato industry is concerned, because you are going to tie the gross national production to what the country can actually market with strict production controls. Theoretically, you should have 100 percent of parity by doing that. I know that you will not, but if you tie it close enough to potatoes, which are so sensitive to figures, you cannot adjust it closely enough, so that I think that you would find compensatory payments would never be a burden on the Government or the industry to maintain them.
Senator HOLLAND. There are two things in your statement I find such that I can completely approve of them. I want to develop them a little, if I may.
You spoke of the steps that your people have taken to meet their own problems.
Mr. EDMUNDS. Yes, sir.
Senator HOLLAND. One of those steps is the adoption of the separate marketing agreement under Federal law applicable to Maine potatoes; is that right?
Mr. EDMUNDS. That is right.
Senator HOLLAND. The other is the levying of an advertising and research tax upon your own production. Mr. EDMUNDS. That is right. Senator HOLLAND. What does that amount to annually?
Mr. EDMUNDS. It raises up until this past year—it used to raise approximately $150,000 to $160,000—we have doubled it; it raised approximately $300,000 to $325,000. I think I could make a statement that the industry itself would go farther in doubling it.
Our problem has been with our legislative to a certain extent, that they do not know whether we would be right in doing it.
Senator HOLLAND. I commend the position of your industry on that. If our experience in the citrus field has been of any advantage to others, we are spending approximately $6 million a year derived from a tax on our production per box. We find it to be very effective. It is spent largely on advertising, but also on research and transportation problems and the like. I commend you for what you have done.
Have you not gone further and have a compulsory grading program?
Mr. EDMUNDS. We have a very strict marketing order that we adopted. We have a grade-labeling law in the State of Maine. We have had it approximately for 20 years, which says that no package of Maine potatoes can be shipped unless the contents of the bag be specified on the outside. Under our marketing order we establish regulations in terms of grade and sizes. This year a 21/4-inch minimum and 4-inch maximum, U. S. No. 1 generally fairly clean, by far the strictest in the country. None can be shipped without submitting those specifications for the table trade. And the others, the seed specifications, for certified seed, are different in terms of size only.
Senator HOLLAND. Do you not also have a compulsory package law?
Mr. EDMUNDS. In what way do you mean? All potatoes that are shipped out of the State of Maine are shipped in packages, no bulk.
Senator HOLLAND. They have to be shipped in packages? Mr. EDMUNDS. Under our marketing order you cannot ship otherwise. We established the packages that you can use, 10's or 25's or 50's or 100-pound bags, but we have prohibited bulk shipments.
Senator HOLLAND. I commend you for all of those things.