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Mr. Chairman, I am increasingly concerned about the future health of the family farm in our agricultural economy. It is painful for me to observe the number of farms that are going out of business in my own state, particularly in such important farming areas as Aroostock County. I believe that the family farm is not an obsolete institution but remains a vital necessity in our national life. Our government must take the necessary steps to preserve a strong and healthy agricultural economy, and this means preserving the environment in which the efficient family farm can survive. For the potato farmers of Maine, one small but important step would be passage of H.R. 7287. Thank you for your courtesy in permitting me to testify.

STATE OF MAINE, DEPARTMENT OF AGRICULTURE, Augusta, Maine, November 2, 1970.


President, Maine Potato Council,

Presque Isle, Maine

DEAR MR. CHASSE: This is in response to your letter of October 22, 1970, requesting my position on the elimination of Maine potato futures trading on the New York Mercantile Exchange.

I note from the results of the Council's recent poll that an overwhelming percentage of the growers responding desire such elimination.

I share the belief of these growers that the Maine potato market would be strengthened were the legislation to prohibit futures tradings.





After 21 years or more of actual experience with the operations of the potato futures market, it has become apparent to the great majority of the industry, from growers to retail outlets, that this perishable commodity is not adaptable to futures trading.

Many had hoped that potato futures could become a useful part of the marketing system, as is true of the more storable commodities such as grain and cotton.

Unfortunately and disappointingly, far from promoting orderly marketing, increasing futures activity has been accompanied by increasing demoralization of the industry, erratic price movements unrelated to supply and demand and a steady and drastic deterioration of Maine's position as compared with producing areas not dominated by the futures market.

Until recently, futures trading in potatoes has been limited to Maine. Many of the producing areas in the U.S. do not use futures, so elimination of futures will not have any unfavorable impact on any area. An overwhelming majority of growers and dealers in actual potatoes are strongly opposed to futures trading and have urged its immediate elimination.

Maine's situation as regards both actual price and price stability has deteriorated in relation to competitive areas in futures activity has increased in Maine potatoes. Growers in those areas of the Country where there is no use of futures trading have consistently fared better than those in Maine, and the Maine grower's position has progressively worsened as futures trading has tightened its hold on that market.

The Potato Futures Market is used only to a negligible extent in hedging and much of this is done in a manner damaging to the price structure and to the average grower. Also, futures trading causes confusion, disorder and price gyrations and the futures market is often completely dominated and controlled by speculative interest.

Growers are demoralized and confused by the "antics" of the futures market and this causes failure to make a constructive effort to solve other problems, such as orderly marketing.

For these reasons, I feel that prompt action by this Sub-Committee would substantially improve the ability of the Maine potato farmer to receive a reasonable return on his investment.


My name is Robert Felmlee and I live in Center, Colorado which is located in the San Luis Valley. I am a potato producer and at present raise 220 acres. I am Chairman of the San Luis Valley Potato Committee and have been instructed by my Committee to testify in support of HR 7287 to prohibit futures trading of Maine potatoes.

The question must arise-How could trading in Maine potato futures have any effect on the marketing of Colorado potatoes? Where we must store our crop and market it over a nine month period anything which can effect orderly movement can create troubles in our area. Inasmuch as commodity traders have no interest except the trading of contracts the information on future prices are widely published and influence our producers often in the withholding of supplies for a later shipment and a speculators guess on the market. Often this has resulted in a backlog at the seasons close and the inability of the handlers to process them all or the market unable to absorb the additional supplies.

To base a market on the results of speculators trying to out-guess one another, instead of supply and demand, gives us cause for much concern. Today, being a potato producer requires considerable investment in land and machinery. Machinery alone, for a fair sized operation, easily reaches the $100,000 figure. We take our chances with weather and other factors beyond our control, but we do not want to take chances on a few individuals who might guess wrong and affect our whole livelihood.

We feel, in addition, that trading in Maine futures causes increased plantings regardless of the United States Department of Agriculture suggested Marketing Guides for Fall crop production. As an example I quote from a Commodity Letter received in the San Luis Valley on May 21, 1971, at which time we are in the midst of planting and with plenty of available seed and land have no difficulty planting additional hundreds or even thousands of acres of potatoes. "Maine potato futures advanced to new contract highs for the season under the influence of reports from Maine indicating that plantings might be as much as 10,000 acres less than were harvested last season, with little prospects that other Eastern producing areas will be able to expand acreage to compensate for this reduction". Isn't it human nature for a producer in our area or any area to take advantage of this suggestion of a crop shortage by planting additional acres? With this information it is a safe bet there will again be overproduction in the nation.

We must do everything to insure our future in the potato business. We must do all possible to see that our product is marketed in the best possible way and to take our chances on a market price based on true economic factors. We strongly urge the support of this legislation.


American Farm Bureau Federation, Washington, D.C.
Empire State Potato Club, Inc., LaFayette, N.Y.

Florida Fruit & Vegetable Association, Orlando, Fla.

Idaho Grower-Shippers Association, Inc., Idaho Falls, Idaho
Maine Farm Bureau, Augusta, Maine

Maine Potato Growers, Inc., Presque Isle, Maine

Michigan Onion Growers, Stockbridge, Mich.

Michigan Potato Industry Commission, Lansing, Mich.

National Council of Farmer Cooperatives, Washington, D.C.

National Farmers Organization, Presque Isle, Maine

National Grange, Washington, D.C.

National Onion Association, East Lansing, Mich.

National Potato Council, Denver, Colo.

New Jersey State Potato Association, New Brunswick, N.J.
North Carolina Potato Association, Raleigh, N.C.

Ohio Potato Growers Association, Columbus, Ohio

Oregon Potato Commission, Salem, Oreg.

Pennsylvania Cooperative Potato Growers, Inc., Harrisburg, Pa.

Potato Growers of Idaho, Inc., Blackfoot, Idaho

Red River Valley Potato Growers Association, East Grand Forks, Minn.
San Luis Valley Potato Administrative Committee, Monte Vista, Colo.
Tulelake Growers Association, Tulelake, Calif.

Virginia Potato & Vegetable Growers, Belle Haven, Va.

Wisconsin Potato & Vegetable Growers Association, Antigo, Wis.


January 10, 1972.

House of Representatives,
Washington, D.C.

DEAR MR. HATHAWAY: The Oregon Potato Commission is on record as strongly supporting legislation forbidding futures trading on all potatoes. We, therefore, recommend passage of HR 7287 sponsored by you.

The practice of speculation on futures trading is detrimental to all segments of our industry and should be abolished at the earliest possible date. The orderly flow of potatoes to the market place can best be accomplished by free and open competition.



Antigo, Wis., December 20, 1971.

Maine Potato Council,
Presque Isle, Maine

DEAR CHIP: Enclosed is a copy of some of the resolutions that were proposed to and passed by the membership at our Annual Meeting, on December 10, 1971. You will note that we oppose futures in potatoes and any other vegetable crops.

Our reasons are the same as yours. Futures trading has never done too much for the grower. Lately it has become a rigged deal, at grower expense. Think that about sums it up.

Lastly you will note that our resolution opposes futures trading, period. No qualifications. Think this pretty well explains our position.

Though we aren't in a position to testify, I believe that we would endorse most anything that you come up with. Good luck!


Executive Secretary.


Because the Wisconsin Potato & Vegetable Growers Association holds the interest of all producers in Wisconsin paramount in its desire to secure greater profits for them, also the interests of all consumers in receiving a more desirable product; Be it resolved that our association make every effort to expand the use of the Federal-State Inspection Service amongst all producers of the State of Wisconsin.

Be it resolved that we constantly strive to improve the quality of our products, and that we discourage those practices that are harmful to the indutsry. Resolved that the Wisconsin Potato & Vegetable Growers Association do all in its power to school its members. and to work with distributors, food editors, and consumer groups in emphasizing the nutritional value of potatoes and vegetables; and to encourage better methods for handling, displaying, and utilization of our products.

Be it resolved that the Wisconsin Potato & Vegetable Growers Association

continue their efforts to improve the conditions for those people engaged in agriculture, employers and employees alike, for neither can progress at the expense of the other.

Resolved that the Wisconsin Potato & Vegetable Growers Association utilize all the public relations tools at its disposal whenever possible, in order that consumers of our industry's products may know the actual facts of the situation and that our products, indeed are not price supported.

Be it resolved that the Directors continue to work with all agencies, state committees, industry representatives, and the University, to encourage the establishment of potato and vegetable processing facilities in Wisconsin.

Because agriculture represents such a small segment of the population, and each commodity group by itself represents even a smaller segment; Be it resolved that the Wisconsin Potato & Vegetable Growers Association join forces wherever possible with other Wisconsin agricultural groups in solving problems that are common to all concerned.

Recognizing that many problems common to the potato producers are also common to potato buyers, haulers and distributors: Be it resolved that the Wisconsin Potato & Vegetable Growers Association encourage these people to more active participation in our association activities, working in cooperation with potato producers in solving problems common to all of us.

We wish to thank all agencies in education, research, marketing, and legislation for helping to advance the potato and vegetable industry in Wisconsin. Be it resolved that we make better known to the general public our respect for the land, and that our use of fertilizers, pesticides, and other production tools, is based on facts rather than fantasy and emotion.

Resolved that the Wisconsin Potato & Vegetable Growers Association endorse any legislation that will prohibit futures trading in potatoes and other vegetable crops.


Columbus, O., July 26, 1971.


Executive Vice President,

Maine Potato Council, Presque Isle, Maine.

DEAR CHIP: The Ohio Vegetable and Potato Growers Association supports the position Maine Potato Council, Presque Isle, Maine has taken on futures trading of Irish Potatoes. The following resolution was made at the 56th Annual Meeting of the Ohio Vegetable and Potato Growers Association-Columbus, Ohio February 2, 1971:

"Potatoes by their very nature are an unsuitable commodity for futures trading. Such futures trading has in the past caused severe injury to farmers and we do not believe that any corrective actions taken by the Mercantile Exchange or the Commodity Exchange Authority can make a basically unsound situation healthy.

We strongly support legislation by the Congress to prohibit futures trading in white potatoes."



WILLIAM MCNUTT, Secretary, Ohio Vegetable and Potato Growers Association.

DAVID M. KELLEY, Manager, Ohio Potato Growers Association.


Presque Isle, Maine, December 31, 1970.

Maine Potato Council,

Presque Isle, Maine.

DEAR ERNEST: Inasmuch as our recent member vote pertaining to the New York Mercantile Exchange was decisively in favor of attempting to eliminate the trading of Maine potatoes on the Exchange, the Directors of Maine Potato

Growers, Inc. will abide by this membership mandate and work with you and the Maine Potato Council in an effort to bring about the wishes of the majority. Please feel free to call on us when, in your opinion, we can be of help.


Total ballots-730.

Total returned-299.

WALTER M. REED, JR., President.

Total in favor of elimination-243; 81.2%. Average acreage-113.9.
Total opposed to elimination-56; 18.8%. Average acreage-141.6.

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New Brunswick, N.J., June 22, 1971. CHAIRMAN, DOMESTIC MARKETING AND CONSUMER RELATIONS, Subcommittee of the Agricultural Committee,

U.S. Department of Agriculture, Washington, D.C.

DEAR SIR: The Executive Committee of the N.J. State Potato Association, representing more than 100 potato growers in New Jersey, who produce approximately 85% of the Irish potatoes in New Jersey, voted at a regularly called meeting to strongly endorse the passage of HR 7287. The purpose of this bill, as you know, is to remove Irish potatoes from the list of commodities traded in future markets on commodity changes.

We believe that potato futures trading is conducted in large part by speculators who have little or no knowledge of potato producing and marketing problems.

Speculators purchase carloads of potatoes only with the hope that the price will advance so they can make a profit.

They neither own potatoes nor have any knowledge of where to sell them when the price drops and their holdings are often dumped in the terminal markets and are sold as distressed produce resulting in a drop in the market price of potatoes being handled by brokers for their potato producing clients.

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