Mr. GREENBERG. I am speaking for myself. There are other growers in the same boat as I am.

Mr. MYERS. Thank you, Mr. Chairman.

Mr. SISK. The gentlewoman from Washington?

Mrs. MAY. No questions.

Mr. SISK. Thank you very much, Mr. Greenberg, for your statement. The committee will now be glad to hear from Mr. Rolland Jones, potato grower, shipper and processor, Rupert, Idaho.

Let the Chair state that if any of you desire to summarize your statements, the committee will make your statement in full a part of the record. We are hopeful, I might say, of getting through this hearing today. We are happy to have you read your statement, Mr. Jones, or if you prefer to summarize, it will be made a part of the record.

STATEMENT OF ROLLAND JONES, POTATO GROWER, SHIPPER, AND PROCESSOR, RUPERT, IDAHO

Mr. JONES. Mr. Chairman, committee members, my name is Rolland Jones. I reside in Rupert, Idaho-where I have grown potatoes for over 20 years. I am presently growing 900 acres of potatoes, operate a potato packing warehouse, and have an interest in a potato flake manufacturing plant in Rupert. I am presently a member of the Idaho Potato Commission, a director of the Idaho Grower Shippers Association, and a former member of the Idaho and Eastern Oregon Marketing Order Control Committee. I am strongly in favor of H.R. 11243 because the Marketing Order Act of 1937, as amended, discriminates against growers who produce potatoes for dehydration. There is presently an active movement in Idaho to amend our marketing order so that potato supplies for dehydration can be controlled. Many of my neighbors grow potatoes for freezing and are exempt from marketing order control. Because dehydration is a means of preserving food, just as is freezing, I strongly urge this committee to favorably consider H.R. 11243 so that I can operate on an equal footing with my fellow growers in Idaho.

I should also like to point out that only certain potato growing areas are subject to marketing order regulations. My potato growing and processing operations are designed to support the manufacture of potato flakes. My potato flakes are in direct competition with flakes produced in the Red River Valley, Maine, Michigan, Washington, Colorado, or any other area where sufficient potatoes are produced to support a flake plant. A local marketing order which could restrict my supply of potatoes for flake manufacture could take me in an impossible competitive situation with other potato producing areas, as well as with other types of foods which consumers have available to them.

The potato industry has grown rapidly and prospered since the advent of processing during the fifties. Growers who have operated an efficient growing operation have prospered also. All of this has been accomplished without marketing order controls on dehydration. The potato industry will continue to prosper if given the freedom and the competitive equality which is essential to free enterprise. Mr. SISK. Thank you, Mr. Jones, for your statement. Mr. Jones?

Mr. JONES. No questions.
Mr. SISK. Mr. Myers?

Mr. MYERS. No questions.

Mr. SISK. Thank you, Mr. Jones. The committee appreciates your testimony.

The next witness is Mr. L. E. Tibert, potato grower, Voss, N. Dak. The committee is happy to have you before us, Mr. Tibert. You may proceed.

STATEMENT OF L. E. TIBERT, POTATO GROWER, VOSS, N. DAK.

Mr. TIBERT. Mr. Chairman, members of the committee, my name is Budd Tibert of Voss, N. Dak.

We are certified potato growers, located at Voss, N. Dak. We grow approximately 800 acres of seed potatoes each year. A large percent of our seed sales are to growers who grow for the processing industry. If the marketing order of 1937 with the amendment of 1956 were enacted this could cause many of our customers to go out of business. I would appreciate all the consideration that you gentlemen can give to the proposed amendment to the marketing order of 1937 so that it would exempt all processors.

Mr. SISK. Thank you, Mr. Tibert.

Mr. Jones of Tennessee?

Mr. JONES. No questions.

Mr. SISK. Mrs. May? Mr. Myers?

Mr. MYERS. Just one question, Mr. Chairman. Who certifies you? Mr. TIBERT. We have an organization within the State of North Dakota.

Mr. MYERS. State certification.

Mr. TIBERT. State certification, yes.

Mr. MYERS. And that is according to a type that you produce as well as the quality? How is it controlled?

Mr. TIBERT. Certification is based on disease. In other words, if you have any amount of disease, you would not make a certification grade, certified grade.

Mr. MYERS. Do they check you once a year to see if your disease is held down?

Mr. TIBERT. No. We have three inspections in the field per year plus an inspection of packing at the time of shipment, plus the winter growing growing potatoes throughout the winter. It is very closely regulated.

Mr. MYERS. Thank you.

Mr. SISK. Thank you very much, Mr. Tibert, for your statement. The committee will next hear from Mr. Bruce Nicholes, a potato grower from Madras, Oreg.

STATEMENT OF BRUCE O. NICHOLES, POTATO GROWER, MADRAS, OREG.

Mr. NICHOLES. I am Bruce O. Nicholes. My address is Route 2, Box 1402, Madras, Oreg.

I would like to delete a little bit from my written testimony to answer some of the questions which have occurred here this afternoon if it would be all right with the chairman.

My occupation is farming. I farm 380 acres of irrigated, diversified

farm ground in the north unit irrigation project at Madras, Oreg. I have been raising potatoes every year since 1954. I am also president of the Scotty Potato Distributing Co., Inc., an Oregon corporation dealing in potatoes, packing and shipping as well as growing an average acreage of 200 acres of potatoes on leased grounds. Scotty Potato Distributing Co. also buys potatoes to pack from other growers in the area. Scotty Potato Distributing Co. or myself as an individual have been in the packing and shipping of potatoes since 1956. I have been a member for 2 years on the control committee of the Oregon, California marketing order as a handler. I am a member of the National Farmers Organization, past president of the Jefferson County Chapter of NFO, and past chairman of the National Farmers Organization National Potato Program. I am at the present, coordinator for the NFO in marketing order programs.

I am here today representing not only NFO but a collection was made from those growers in central Oregon, the Growers and Shippers Association, to send me here to testify.

We of the NFO and Central Oregon Potato Growers and Shippers feel that the Federal Marketing Order Act is one of the best laws on the books at this time for farmers to have some control in how their products are marketed. It is a fair law for both producer and consumer. Though the producer has control over the marketing of their products, the Secretary of Agriculture must approve of each and every action the control committee takes. He is there to see that the grower uses the program only to get a fair and equitable price for his product. He is also there to see that they do not abuse the power and restrict the market to the point to causing the consumers to be short of food or cause the price to react to a point to be more than the average of parity in any one crop season. We are here today, Mr. Chairman, to consider legislation that has been introduced to amend the powers of the Marketing Order Act, which growers have voted in by at least. a 6623 majority to control the marketing of potatoes in many sections of this great Nation.

Let's look at the past record of potato prices from years behind us. Let's consider whether these marketing orders have abused the law which has given them their right to control quality and volume of the potato crop they have produced. The winter crop is the crop which is now under marketing orders. The following is an average price growers receive for potatoes during the winter crop which is covered by marketing orders.

I will not read this testimony here except to note that from 1966 through 1967, the average price as calculated is $2.09 for the 1968 crop. (The table referred to follows:)

Mr. NICHOLES. These figures are from the U.S. Department of Agriculture. Now, Mr. Chairman, you can see by this table that those growers of potatoes under marketing order control have not abused the use of the marketing order. Only once in this period of 1960 through 1968 did they even receive the average on the prices of potatoes in the United States and that was only in 1964, when they received 13 cents over the average price. At that time, every usable potato in the growers hands was used and the marketing order only controlled the quality which could be put on the market. Quality is what marketing orders control most of the time. This assures that the consumer receives that grade of potatoes he purchases at the retail level. Why do processors want out from under the control of the act? Not because of lack of quality potatoes to use in their processing, but because they want to use that potato that has been removed from the market because it is of such poor quality it cannot be shipped to the market by fresh shippers or because either the marketing order has taken it off because of quality or the order is trying to control the volume of potatoes which will go to the market.

There is just so much demand for any product on the consumers' market, whether it be in processed potatoes or fresh, with each year more of the crop being processed. If a processor can take the potatoes which are removed by the marketing order and place them on the market anyway, there is nothing taken off. Growers must receive a fair price for that which they produce. Much of the potatoes purchased for processing are culled potatoes purchased at a price of 10 cents per hundredweight or even 10 cents per ton. Can this be fair? Where else can a manufacturer purchase his supplies of raw products to manufacture his product at such a ridiculous price? This is less than 5 percent of the cost of production. The product is bought cheap because it is of low quality on the fresh market. After moving through a processing plant, it is marked U.S. No. 1 potato. There is no room at today's consumption rate to move 100 percent of the potato crop into the market at a fair price to growers. Growers must be able to control that percentage of the crop that can be used, otherwise there will be chaos in at least 4 years out of 5. For 1 percent of excess production kills any hope of a grower receiving a fair and equitable price for his production. The USDA Crop Reporting Service sees to this. Yet, if we have a short crop and people do not have sufficient supply, prices will skyrocket. Under the marketing order we are able to adjust an overproduction so that growers may receive a fair price for that percentage of his crop he sells. The balance must be withheld from the market, or you will still have an oversupply.

We feel that we should now have control of freezers and canners if we are to do a complete job of being able to control our market ourselves. This past season we of the Oregon-California marketing order, because of the USDA report showing approximately 8 million hundredweight over production, removed from human consumption our low quality potatoes from the market. We as growers were able to show a profit on our production which the USDA said would be a disaster for potato producers. They recommend we ask for a diversion program which would cost many Government dollars. We controlled our volume with the marketing order with no Government help needed. This assists producers in bargaining in a fair manner. We

believe all types of processors should be on a fair, equal and competitive base. To buy their raw products at a price level which growers of this product can make a legitimate profit. But we feel it would be wrong to place dehydrating processors in a position which would allow him to steal his raw products from the producer. Therefore, we the potato growers of Oregon and this Nation, ask you to please defeat this legislation and pass legislation which would put canners and freezers under the control of the Federal marketing order. This would then make all of them on a fair, equal and competitive base.

There has been some discussion or statements made as to the prices of the Oregon-California marketing order area being in a low position this year. I have with me the records of the marketing order service which quotes the prices averaging in the Oregon-California marketing order as being $2.14 which is No. 4 in the Nation as to an average. But I must also call the attention of the committee to the fact that this is only 73 percent of parity.

Mr. SISK. What year are you referring to?

Mr. NICHOLES. 1968 crop. The 1968-69 crop.

Mr. SISK. Could I inject, is this the price the grower received? Mr. NICHOLES. This is the price the grower received. I would like to also comment on a price that was quoted here as to what the gentleman purchasing his potatoes could have purchased it in the Sacramento area, or wherever Pik-Nik potatoes are. I would suggest he find a new broker. I am in the shipping business and I would have sold him for much less, but the crop reporting service quotes an average for potatoes out of the Oregon-northern California marketing area starting out in June of 1968, at $2.10, and the highest price was April this year at $2.50 grower prices.

Mr. SISK. Thank you very much.

Mr. NICHOLES. That pretty well completes my testimony with the exception that I would like to add why we of the California marketing order removed the low grades from the market this year. Potatoes were always available. I as a shipper found myself with an oversupply and those other shippers within the area also found themselves with an overburden, oversupply of what we refer to as stripper potatoes.

These are those potatoes which do meet the marketing order standards which would have been this year 2 inch or 4 ounce potatoes. That would be the smallest size. Then you go to your cartons and normally strippers are then 6 ounces and down. In other words, down to the 2 inches and 4 ounce and 6 ounce. Those potatoes are normally put into a 10-pound consumer package. It is a good quality as far as quality is concerned, but most housewives really don't like that small a potato.

We were overburdened with this supply of potatoes. This potato could be used very readily by Pik-Nik and the cost would have been, if they had called me in central Oregon-I will gladly give them my telephone number next year and I can furnish them at a very equitable price.

The same thing was happening in the State of Washington. Many times these potatoes were diverted last year to starch plants to the processor at a price of 10 cents a ton to growers because the market would not accept them. There was no place for them to go. The processors did very well on those potatoes being culled out in Washington.