We are very happy to have you before the committee, Mr. Broome. Mr. BROOME. Thank you.

Mr. GRANT. Mr. Hagen wants to ask a question.

Mr. HAGEN. I just want to ask one question.

When you as a potato grower put your potatoes in a railroad car, say, destined for New York, when they arrive there do you have a sale price or do you sell them after they arrive in New York?

Mr. BROOME. We have two ways of selling. We sell f. o. b., and on an arrival basis, but the price is agreed upon under either condition.

Mr. HAGEN. You mean at the time you leave your area you have control over the price in that they are not auctioned in New York? Mr. BROOME. No, our potatoes are shipped on a sold basis.

Mr. HAGEN. Fixed price?

Mr. BROOME. Yes, sir.

Mr. HAGEN. So you don't bear the risk, then, of price changes?

Mr. BROOME. Well, there is a very small percentage of our potatoes shipped to commercial merchants, the transaction is closed, and if they are shipped subject to arrival, there is a different price agreed upon.

Mr. HAGEN. I see. That is a little bit different from most fresh fruits and vegetables.

Mr. BROOME. Some difference, yes.

Mr. GRANT. Thank you very much.
Mr. Chenoweth?

Mr. CHENOWETH. Mr. Chairman, I wonder if I could have permission to file a statement for the record?

Mr. GRANT. Yes, sir.

(The statement of Hon. J. Edgar Chenoweth, a Representative in Congress from the Third Congressional District of the State of Colorado, is as follows:)

STATEMENT OF HON. J. EDGAR CHENOWETH, A REPRESENTATIVE IN CONGRESS FROM THE THIRD DISTRICT, COLORADO

Mr. Chairman and members of the committee, as the sponsor of H. R. 5108, a companion bill to H. R. 5137, I am happy to appear before you today in support of this legislation.

I have joined with the other members who have introduced similar bills for the reason I am anxious to help the potato industry. I believe that this legislation will be of assistance to the potato growers of the country.

I represent a district which produces a large amount of potatoes. Many of these growers produce potatoes as their sole crop. These growers have been having a difficult time due to the prolonged drought, and to the low price received for their potatoes. It is my belief that the passage of this legislation will improve the market for the grower and will, at the same time, provide a better potato for the consumer.

The acreage of potatoes in Colorado from 1952 through 1956 ranged from 50,000 to 56,000; 55,000 acres were planted in 1955 by nearly 1,800 growers. Almost 20 percent of the acreage is grown for late summer harvest, most of this acreage is in the Gilcrest District in Northern Colorado. A large part of the fall crop is grown in the San Luis Valley in south central Colorado, which I have the honor to represent. The varieties in this area are predominantely Red McClure and Russet Burbank and each is recognized for its high quality and desirable cooking characteristics. Nearly all of Colorado's potato acreage is irrigated.

From the 1956 crop, total shipments amounted to 17,036 cars of which 4,336 were shipped to market by rail and 12,700 carlot equivalent by truck. The 1955 crop of 9.1 million hundredweight was valued at $15.8 milion. The 1954 crop of 10.6 million hundredweight was valued at $21.5 million.

Growers and shippers in Colorado, many years ago recognized the demands of consumers for a high quality patato and initiated State laws and regulations designed to furnish this quality product. A State and a Federal marketing agreement, designed to further assist in supplying a quality fresh patato to the consumer, was accepted in 1941.

Market surveys have been conducted under the State department of agriculture to determine the desires of the consumer as to the grade, size, and quality of potatoes wanted. These surveys indicate the consumer does not with to buy low grade or small size patatoes.

Legislation pased in Colorado in 1949 now requires labeling as to the grade of potatoes contained in each package, and since 1923 has provided for the inspection and certification of this quality by Federal-State inspectors.

A Federal marketing agreement regulates the shipment of potatoes to U. S. No. 2 or better grades as a minimum requirement. Marketing orders in this area further regulate by grade and size to more nearly meet the trade and consumer requirements.

Retail prices in market centers outside of producing areas are not changed upward to any appreciable extent by these higher reguirements. Experiment station records show that waste in preparing cull potatoes for cooking may be as much as 50 percent above that of potatoes of U. S. No. 2 grade. The small difference in the retail prices of potatoes of U. S. No. 2 grade and those of lower grades does not offset this loss.

Growers and shippers of potatoes in this State have found grade labeling, inspection and certification very satisfactory. The potato acreage here, as over the United States, has been greatly reduced but still there is an over supply of potatoes. Even with this large production there has never been an over supply of good quality potatoes.

Consumers demand only good quality potatoes and producers should not put those low grades on the market except in a year of short supply and then only to the extent such low grades are needed.

I point out the above reasons in support of the National Potato Grade Labeling Act now pending before the Senate and House Committees on Agriculture. This act contains three major provisions :

(1) It establishes a minimum level of quality control, on a national basis, which is a U. S. No. 2 grade for potatoes being marketed in fresh form. Provision is made that in times of emergency such as a short supply, the Secretary may modify this requirement.

(2) Each container or bulk load must be properly marked or tagged to indicate the State or Federal grade of the potatoes contained therein;

(3) It further provides that all potatoes marketed must be inspected and certified by an authorized inspector.

The act further provides that to become operative it must be approved by twothirds of the producers voting in a referendum.

Potatoes moving through trade channels pass from the producer, through the local shipper, broker, wholesaler, jobber and retailer before reaching the consumer. A national law is needed to regulate conformity to U. S. grade standards in each of these branches of trade. This proposed Potato Grade Labeling Act. if enacted, will place each of these groups on a standard base of grade competition.

There are amendments proposed to the Perishable Agricultural Commodities Act now before Congress, which will assist in regulating the grading of perishable commodities in channels of interstate commerce. These amendments are all needed. The National Potato Grade Labeling Act will add to the value of the Perishable Agricultural Commodities Act and assist in making it more effective. Consumption of potatoes on a per capita basis has declined from 160 to 104 pounds in the last few years. One of the major reasons for this decline is the loss of consumer faith in being able to purchase a product of dependable quality. This law, providing for labeling, inspection and certification as to the grade contained in the package, should greatly assist in restoring the consumer's faith in being assured the purchase of a quality product.

I briefly submit the reasons why I favor a National Potato Grade Labeling Act: 1. Colorado rotato growers and shippers have found from long experience that labeling as to grade and inspection and certification thereof are desirable safeguards for the consumer and producer, and recommends this program on a national basis.

(a) Inspection and certification of all potatoes handled in fresh market has been under State law since 1923.

(b) All containers of potatoes are required to be branded as to grade since 1949.

(c) Growers have operated under Federal and State marketing agreements since 1941.

2. There is a need to have all segments of the industry on a standard basis of grading, labeling, and the inspection and certification by a disinterested party. 3. Consumers need the safeguard of a National Grade Labeling Act.

4. This act will support and make more effective the P. A. C. Act.

Mr. Chairman, I want to again thank you for the opportunity to be heard in support of H. R. 5137, and the companion bills which are pending. The large number of witnesses from Colorado who are here in support of this legislation is ample proof of the interest in this legislation in our State.

I urge the committee to favorably report H. R. 5137, as I feel that this legislation is badly needed by the potato industry.

(The statement of Hon. John B. Bennett, a Representative in Congress from the 12th Congressional District of the State of Michigan, is as follows:)

STATEMENT OF HON. JOHN B. BENNETT, A REPRESENTATIVE IN CONGRESS FROM THE 12TH CONGRESSIONAL DISTRICT OF THE STATE OF MICHIGAN

Mr. Chairman, I would like to present the following statement in favor of H. R. 6409 and similar pending legislation. My congressional district covers the western half of the northern peninsula of Michigan.

The chief cash crop grown in these counties is the Irish potato. (This is grown extensively in Iron, Dickinson, Houghton, and Marquette Counties.) In support of this bill to authorize a national grade-labeling law let me say that we have an urgent need for a national program to make grades and labeling of Irish potatoes uniform. The Irish potato is shipped extensively in interstate commerce, as we all know. Freight rates from our area to the markets warrant the shipment of only the highest quality potatoes. The cost of the potato to the consumer has not been high, considering its importance in the diet. past season we have had low farmer incomes from potatoes.

This

One of the major reasons for low prices has been the shipment of too many low-grade potatoes to the markets. These low-grade potatoes set the market tone.

The housewife in most cases is not competent in skills of grading potatoes. She will be sold these inferior grades of quality as long as they can be shipped to market. Our growers contend that the labeling and required certificate of inspection to identify grade will insure that only the best quality will be marketed and used by consumers and that poor quality products will be kept off interstate markets.

Accurate labeling and inspection will guarantee the grower of the potatoes that they will receive the proper grade on arrival to market, provided that deterioration has not occurred while in transit.

The act, likewise, protects the buyer from being defrauded. He will be sure what he buys is as indicated on the inspection certificate.

The reasons that problems exist in regard to shipment of low quality potatoes are because at present the State laws or regulations allow such potatoes to be transported and a lack of uniformity of enforcement of quality or grade labeling between States.

Many of the growers and dealers who are near markets are opposed to such legislation because they would be required to grade and identify each lot of potatoes as to quality before they could be placed in the marketing channels.

Some opposition to the bill may come from States who wish to set up State marketing agreements for vegetables. These people are building their arguments on promoting only their own States' products. The system of marketing agreements set up in States will not be affected by this act, only that those shipped in interstate commerce shall be labeled and graded uniformly.

I hope the committee will approve legislation of this type and that the House will adopt it.

Mr. Chairman, I also ask permission to include with my remarks a copy of a resolution recently adopted by the Houghton County Agricultural Society in my district. This resolution reads as follows:

"Be it resolved that the Houghton County Agricultural Society, an organization of potato growers in Houghton County, Mich., go on record as favoring the passage of the National Potato Grade Labeling Act.

"The association feels that such legislation will aid the potato industry in marketing the quality potatoes that consumers have a right to expect."

Mr. Chairman, I would also like to include with my remarks the attached resolution by the Upper Peninsula Potato Grower's Association in support of H. R. 6409 and similar legislation.

"RESOLUTION

"Whereas bills to authorize the National Potato Grade Labeling Act, which provides quality requirements for, and the inspection, certification, and labeling of Irish potatoes, have recently been introduced in the United States Senate and House of Representatives (specifically, S. 1393, by Senator Smith and others; H. R. 5137, by Representative McIntire; and H. R. 6409, by Representative Bennett); and

"Whereas these bills have been carefully studied by the members of the board of directors of the Upper Peninsula (of Michigan) Potato Grower's Association, an organization of potato growers and handlers in the Northern Peninsula of Michigan; and

"Whereas the contents of these three bills appear to be identical with regard to the inspection, labeling, and grade requirements for the marketing of Irish potatoes; and

"Whereas, the enactment of any one of the bills into law would be of benefit to the potato industtry: Therefore, be it

"Resolved, That, by this resolution, the passage into law of the desirable legislation contained in said bills be recommended by the directors of the Upper Peninsula Potato Grower's Association in annual meeting assembled, at Marquette, Mich., on Monday, April 8, 1957; and be it further

"Resolved, That copies of this resolution be sent to Senators Potter and McNamara and Representatives Bennett and Knox.

"The adoption of this resolution was moved by Gerard VanDamme, of Rock, seconded by A. M. Hiltunen of Lake Linden. Carried unanimously. "JOHN V. SODERMAN,

"President,

"WM. CARGO,

"Secretary,

"Upper Peninsula Potato Grower's Association."

Mr. GRANT. It is past the noon hour. We will adjourn until 10 o'clock tomorrow, and we will try to move a little faster.

(The following statements, letters, and telegrams were submitted to the subcommittee, as follows:)

STATEMENT OF HON. CHARLES O. PORter, of OregON

Mr. Chairman, thank you for the opportunity of appearing before your committee. I know it will not be news to you gentlemen when I say that potatoes are the largest vegetable crop in the United States. I believe it may be safely said that they are used as a food in some form in every American household. My bill, H. R. 5274, would provide for nationwide quality requirements for, and the inspection, certification, and labeling of Irish potatoes.

This legislation, as you gentlemen know, is identical to that introduced earlier in the current session by my colleague, the Hon. Clifford G. McIntire of Maine. It is a proposal which many Congressmen have introduced because they firmly believe, as I do, that growers in all States should strive for uniform standards. This bill provides, in a practical way, the means of serving two entirely worthy objectives at the same time: Potato quality and grade protection for consumers and price and income protection for potato producers who have made an effort to provide higher quality potatoes for consumers.

I believe it is of interest to realize that this vegetable accounts for about 1.2 percent of the total cash receipts from farm marketings of all farm products and for approximately 23 percent of the cash receipts from the marketing of all vegetable crops. Obviously the potato grower plays an important part in this Nation's economy. He helps boost the income of my State, Oregon, and, I understand, nearly every State.

Those more versed in the field of agriculture than I tell me that there are nearly as many varieties as there are States and that heretofore growers have not always been in accord. If this legislation wins congressional approval, it would call for compulsory inspection, prevent marketing of culls and assure that

potatoes are labeled for what they are throughout the country and not only in certain areas.

Under the current Federal marketing agreement and order programs, producers in potato producing areas may vote to have their area covered by orders which specify the grade and quality of potatoes that may be shipped from the area. The order is applicable only to producers in the areas which have voted in favor of such orders.

During the crop year 1956, only 43.7 percent of our total potato production was covered by Federal orders. About 15.6 percent of total production was covered by State orders. Approximately 40 percent of the production was not covered by any kind of quality or grade regulation. While growers in the areas not covered by a marketing order may not necessarily market potatoes of a lower quality, there is nothing to prevent them from doing so. Consumers have no protection against the lower quality potatoes that may be marketed from such areas. Producers in the areas under orders are subjected to the pricedepressing effects of marketings of any low-grade potatoes marketed from the areas not covered by orders.

This bill is not intended to modify, supersede, or repeal any marketing agreement or marketing orders issued pursuant to the Agricultural Marketing Agreement Act of 1937, as amended, or any State laws. It will not prohibit more stringent restrictions on potatoes issued pursuant to any marketing agreement or order. However, any marketing agreement or order, except as provided in the bill, may not permit the handling of potatoes which are below U. S. No. 2, the minimum grade or quality standard provided in the bill.

To become effective at least two-thirds of the producers of the Nation favor a referendum to accept the restrictions provided in this bill. If the referendum is unfavorable in any 1 year, the provisions of the bill will not be in effect. In such an event, however, any area desiring marketing orders may still be covered by them.

I believe this bill would provide a uniform, high quality of potatoes for the market at all times and would give producers protection against price-depressing effects of low-grade potatoes marketed from areas not covered by any type of marketing restrictions. The protection given to producers should tend to encourage the production of higher quality potatoes generally.

The Oregon Potato Commission, a body which represents the thinking of the majority of growers in my State, is strongly in favor of this legislation. The commission's administrator, Ben Davidson, said in a letter to me that this bill will "help to obtain a better quality product for the consumer and will alleviate many distressing situations that are caused by existing statutes in some States, not observed by other States, in interstate transportation and marketing."

Mr. Chairman, I thank you for allowing me the opportunity of appearing before you today to testify on behalf of this important legislation.

STATEMENT OF A. E. MERCKER, EXECUTIVE DIRECTOR, NATIONAL POTATO COUNCIL

I am Albert E. Mercker, executive director of the National Potato Council since November 1, 1956. Prior to that time I was employed for over 36 years in the Fruit and Vegetable Division of the United States Department of Agriculture. In March 1929 I was assigned as a marketing specialist for the white or Irish potatoes and spent all of my time on the potato problem.

The problem is one of violent fluctuations in prices from year to year, due to overproduction, or the production of a supply in line with, or slighty below consumptive demand. For example, growers received about $3.21 per hundredweight for their 1952 crop when they produced a crop of 211 million hundredweight, whereas they received $1.31 per hundredweight for the 1953 crop of about 232 million hundredweight. Per capita consumption has declined steadily from about 201 pounds per capita in 1909 to 128 pounds in 1940, to the low of about 100 pounds in 1951, since which time it has risen slightly and steadied at about 104 pounds per capita per crop year for the last several crops. Total consumption of potatoes has remained rather steady due to the increase in our population.

All potatoes produced, irrespective of where they are produced, or whether they are new or old potatoes, have an effect on the price structure for potatoes. When the crop in the late stages is small or moved into consumption or diverted rapidly, the price prospects for the early potato producers are enhanced. When the crop of early potatoes is big and there is a large carryover of early and summer potatoes into the late marketing season, price prospects for late potatoes are lowered.