Mr. GRANGE. It is a good-appearing potato. But it can be bruised and banged up with mechanical injuries like these that I have here. Mr. WILLIAMS. I mean, a potato that would pass inspection.

Mr. GRANGE. One of the primary difficulties with the Chippewa, sir, as you undoubtedly know, is because of its relatively low specific gravity. And we do not have a requirement in our grade standards for a minimum specific gravity. However, upon the application of the person obtaining the inspection, we will, if they wish, determine the specific gravity for them or percentage of solids.

We are doing that right now in many of the processing plants across the country, for example. But that is a voluntary part of the deal rather than a requirement under the grade standards.

Mr. WILLIAMS. That is all.

Mr. GRANT. Mr. Matthews?

Mr. MATTHEWS. Mr. Chairman, I have just 3 or 4 questions to ask. First, Mr. Grange, about how many grades of potatoes are there? You are talking about type 2. You call them types or grades. Would you hazard a guess as to about how many of them there are in the United States! Did you give them in your testimony a while ago?

I mean, in other words, in flue-cured tobacco we have all kinds of types, from Virginia fire-cured tobacco to all the rest, we have all kinds of types. What about the types of potatoes and grades, about how many of them do we have?

Mr. GRANGE. We have in the basic grades themselves, a U. S. Fancy, a U. S. Extra No. 1, U. S. No. 1, U. S. Commercial, and U. S. No. 2. There are five grades of potatoes. Now, we may have a large number of different varieties that are certified in accordance with those grades. But we do not have any different requirement for one variety than we do for the other.

Mr. MATTHEWS. But, of course, there are a considerable number of grades and varieties of potatoes, which would be natural, in that, as I understand, all of the 48 States produce potatoes, and they naturally would have grades different in varieties and types.

Mr. GRANGE. But we apply the same grades to all varieties and to all States. If you were packing a U. S. No. 1 potato in Alabama, there would be the same requirement as if that potato were being grown and packed in Maine, for example.

We do not begin to have the multiplicity of grades and variations. in our fresh fruits and vegetable standards that there is in tobacco. Mr. MATTHEWS. Now, this question. Do we have a similar act, a similar labeling act for any other agricultural commodity, one, now, that takes in the whole United States?

Mr. GRANGE. Not to my knowledge.

Mr. HEDLUND. We do not have in the fruit and vegetable field, and outside of that I don't believe we are qualified to say.

Mr. MATTHEWS. All right, sir.

I will ask this question: In your opinion, will certain areas, like those areas for example, that have starch and conversion plants, will they have any advantage over other potato growing areas that don't have those plants?

I don't know whether you would like to express an opinion or not. Mr. GRANGE. Not insofar as starch is concerned, because potatoes to be used for starch would be exempted from the provisions of the requirement. The principal thing that was brought out in our state

ment is that if we were to distinguish between potatoes being used for food processing, it would have to be confined to the area of our products, in our opinion. So that if you had a food-processing plant focated within the production area, you would be authorized to use field-run potatoes which net at least 85 percent U. S. No. 2.

If your plant were located outside the production area, you would have to use the regular U. S. No. 2 minimum, because in our opinion it would be entirely impossible to try to keep up with the shipments moving outside the area to be used for different purposes.

Mr. MATTHEWS. Thank you.

I have

Mr. JOHNSON. I believe, if I listened to the question of Mr. Matthews, you claimed that the lowest grade was U. S. No. 2. a letter here from a packer in which he states:

U. S. No. 2 are larger potatoes and do not lend themselves well for canning, as the consumer is interested in a large count of potatoes per can, which can only be arrived at by the use of No. 3 or No. 4 potatoes.

What is he talking about?

Mr. GRANGE. We have all different kinds of terms that are used across the country by some of the potato shippers or receivers. But he is referring, I think, entirely to size. And we have stated in our statement here that we would undoubtedely put into effect the exemption on minimum size for canning which is authorized by the bill, because the smaller sizes are preferred for that purposes.

Mr. JOHNSON. Is the inspection at this time on a voluntary basis? Mr. GRANGE. The inspection of potatoes is voluntary, and is made compulsory only in those areas that have Federal marketing agreements and orders, or have State marketing agreements and orders, or other laws making it mandatory.

Mr. JOHNSON. What States have Federal marketing laws?

Mr. HEDLUND. The States having Federal marketing agreements now are the States of Maine, Idaho, Washington, Oregon, and the two northern counties of California, also Colorado. Those are presently in operation.

There are several others that are in effect but are not in operation. Those are South Dakota, North Carolina, and Virginia, and in New England outside of Maine.

Mr. JOHNSON. You mean they have applied for it?

Mr. HEDLUND. They have marketing orders in effect, but they have by their own wishes determined that they shouldn't operate for the time being.

Mr. JOHNSON. In those other States, then, it is entirely voluntary? Mr. HEDLUND. In the States other than those named inspection is voluntary, unless the State makes it compulsory, or a State marketing order makes it compulsory.

Mr. JOHNSON. Then, does the particular grower apply for inspec tion?

Mr. HEDLUND. That is correct.

Mr. JOHNSON. And then he has to pay for the inspection?

Mr. HEDLUND. Yes, sir.

Mr. JOHNSON. What percent of the Wisconsin potatoes were inspected last year?

Mr. GRANGE. It is our estimate that 25 percent of the commercial shipments of Wisconsin potatoes were inspected.

I would like to say one thing further, if I may, on this matter of the proportion of the potatoes that we inspect.

We had in our statement that we inspected about 75 percent of all potatoes at shipping point. Our inspections in the terminal market. by repackers is virtually negligible. I just wanted to clarify that point.

Mrs. KNUTSON. Mr. Chairman, may I ask a question?

Mr. GRANT. Certainly.

Mrs. KNUTSON. We hear so much about the budget these days. How much additional appropriations are we going to have to have in order to pass these bills?"

Mr. HEDLUND. As I stated earlier, we estimated our cost to be $400,000 a year, in addition to the cost of conducting referenda. But this proposal provides that the funds to administer it be transferred from section 32 program funds, which are presently available.

So, as Mr. McIntire brought out a few moments ago, it would not require additional funds beyond those which have already been made available.

Mr. HAGEN. I want to ask Mr. Hedlund, under this proposal, in a given lot of potatoes, would there be a permitted tolerance of belowgrade potatoes. For example, would you let the 10 percent below U. S. 2 go through?

Mr. HEDLUND. No, there would be no tolerance, either they are up to No. 2's or they are not. There are certain tolerances prescribed within the grade itself, but unless they are No. 2, it wouldn't be eligible under this proposal.

Mr. HAGEN. So the shipper or grower would have to cull that lot and get them out; is that correct?

Mr. HEDLUND. That is correct.

Mr. HAGEN. Now, in your statement you have some figures which dealt somewhat, I think, with the question of what percentage of the culls presently are marketed to the housewife. It was not too clear to me what percentage of below minimum 2 potatoes hit the market. now for home use.

Mr. HEDLUND. Mr. Congressman, I don't think there is any way of knowing.

Mr. HAGEN. Could you guess?

Mr. HEDLUND. I certainly couldn't.

Mr. HAGEN. I mean, is it substantial?

Mr. HEDLUND. Well, from what I have been told by potato producers, and others, in some areas there are some substantial movements in cull potatoes, and, of course, it depends a lot on the price level.

Now, if the price of potatoes gets very high, like it was here a few years ago, I think everything was being marketed then, including the culls, in most areas. But if you get potatoes at the price they are today, I think that there are probably considerable fewer culls that are marketed.

Mr. HAGEN. Well, could you venture an opinion as to whether or not the percentage of culls marketed, whatever it may be, has a substantial effect on the price levels of No. 2 and better potatoes?

Mr. HEDLUND. I think it has an effect, Mr. Congressman. I would not go so far as to say how much, but I think it does have an effect. Mr. HAGEN. In other words, there are several hundred thousand hundredweight of these culls marketed, are there not?

Mr. HEDLUND. There is a considerable quantity. As we say, we estimate there are 14 percent of a crop that fall below the level of U. S. No. 2 at the time of harvest. Well, now, that is a lot of potatoes.

Mr. GRANGE. We are talking about twenty to thirty million hundredweight, Mr. Congressman, at the time of harvest, and then with decomposition and breakdown during storage, you have additional potatoes that perhaps were good at one time that are culls.

There is a terrific variation as to the amount of off-grade potatoes that is sold. We just do not have any quantitative data as to what it may amount to. I was looking at an inspection certificate the other day for one of our major terminal markets where we had done the inspection at time of arrival on the market, as we do, and that particular carload contained 85 percent grade defects, 85 percent of them were culls. Now, that is about the extreme you will get into. It varies with the time of year, it varies with price levels, it varies with the outlets. And as to what it amounts to in aggregate, we have no way of knowing. Most of the potatoes are graded, most of the potatoes are above No. 2 grade. If they weren't, it would be quite a bad situation.

The great majority of them are higher, considerably higher than this kind of potato I have been showing you here. But there still is some trade in such potatoes.

Mr. HAGEN. Well, removing these culls from the market will definitely increase the income to potato producers around the country, will it not?

Mr. HEDLUND. We think it will increase the price to the producer. That has been the thesis of all the marketing orders throughout the country, that you would improve the returns to the producer by improving the quality of the product you put on the market.

Mr. HAGEN. And for that reason you approve of this legislation, provided there are certain changes made in it?

Mr. HEDLUND. Yes; we approve the general objectives. But we, of course, want the potato industry to be in on the thing and very much behind it, if it is going to make it work and work successfully. Mr. GRANT. Mr. McIntire?

Mr. McINTIRE. Some reference has been made there to the percentage of inspection by States, the best estimates that you have available.

I would like to ask unanimous consent that Mr. Grange make a part of the record such tables as he thinks may be pertinent to this hearing that might be of assistance to the committee.

Mr. GRANT. Good.

Mr. GRANGE. We will be glad to furnish those, Mr. Chairman.

Mr. McINTIRE. And such others as you may have that you think will be helpful.

Mr. GRANT. Thank you very much, gentlemen. Your testimony and information has been very helpful.

Mr. KRUEGER. Mr. Chairman, may I insert a statement into the record?

Mr. GRANT. Without objection it will be inserted at this point in the record.

(The statement of Hon. Otto Krueger, a Representative at Large in Congress from the State of North Dakota is as follows:)

STATEMENT OF HON. OTTO KRUEGER, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF NORTH DAKOTA

Mr. Chairman, members of the committee, I appreciate your giving me the time to present my views on the necessity for the enactment of a National Potato Grade Labeling Act.

The National Potato Grade Labeling Act represents an attempt by an important segment of American agriculture to meet its own problems by providing better products in an effort to attract and hold a fair share of the market.

The need for this legislation was summed up very well by Mr. Clifford J. Moquist, chairman of the North Dakota Potato Development Commission, when he stated:

"Our potato industry is meeting a great deal of competition from all forms of agricultural products these days, each competing for the consumer's dollar. If we do not keep abreast of the times, the per capita consumption of potatoes will steadily go down every year. In this bill we are only asking that the poor potatoes be kept from the consumer, thereby making the housewife a happier customer when she comes home and opens the bag."

I might add that recently growers from all parts of the Red River Valley in North Dakota and Minnesota went on record favoring a national grade labeling act. The growers, as a matter of fact, would be happy to have the provisions of the act go on even further.

They would like to see this apply all the way to the retail level, but realizing the difficulties in this way, they are satisfied that the proposed Potato Grade Labeling Act will go a long way and will be extremely beneficial to the entire potato industry.

Lyle W. Currie, executive secretary of the Red River Valley Potato Growers Association, terms this legislation an important step in the right direction, and adds that the association he represents is highly in favor of the act.

The Red River Valley, incidentally, has compulsory inspection now and prohibits the sale of culls, as do most of the major potato producing sections. All areas doing the same would have a beneficial effect on the consumption of potatoes.

Compulsory grade labeling is desirable, too, since it would put a stop to any misrepresentation of grade which may now be taking place. With the grade on the container, everyone would know exactly the grade they are buying.

With the support of the national and regional and State potato producer's associations, and with representations of independent producers' support, it seems just and fair that this committee should give its support to the proposed National Potato Grade Labeling Act.

Mr. JOHNSON. Mr. Chairman, I have a letter and a telegram from Wisconsin that I would like to have incorporated.

Mr. GRANT. Without objection they may be inserted. (The letter and telegram referred to are as follows:)

Hon. LESTER JOHNSON,

House of Representatives,

Washington, D. C.

FRIDAY CANNING CORP., New Richmond, Wis., April 11, 1957.

DEAR SIR: We understand that legislation to authorize mandatory inspection, grading and labeling of white potatoes and to prohibit the marketing of potatoes that do not meet the standards of U. S. No. 2 is being introduced and will be the subject of hearings by the Domestic Marketing Subcommittee of the House Committee on Agriculture on April 15 and 16.

We have read over the text of the proposed legislation H. R. 6409 and object to section 3, section 5, and section 7-C. We feel that there is no need to give the Secretary of Agriculture any discretionary authority over the supply of potatoes for canning, but that potatoes for canning should be completely exempt from the legislation. The canning industry provides potato growers a market for potatoes that are not desirable because of size for the fresh market. U. S. No. 2 or larger potatoes do not lend themselves well for canning as the consumer is interested in a larger count of potatoes per can, which can only be arrived at by the use of No. 3 or No. 4 potatoes. Regardless of the size of potato that is canned, they must be top quality and freshly dug.