State Spud Farmers Collect Diversion Funds But Some Growers Say $1 Million Payment Was Just A Waste Of Taxpayer Money

Washington potato farmers have collected $1 million from the U.S. Department of Agriculture for diverting a portion of their 1996 crop to livestock feed.

Payments made through the department’s Potato Diversion Program were intended to boost prices by using up excess supplies of potatoes before farmers began their summer harvest.

But some farmers said the program disrupted normal marketing channels and wasted taxpayer dollars.

“I sympathize with the growers’ plight of oversupply, but in the long run it didn’t have much affect on our prices,” said Tony Czebotar, an Othello farmer and owner of Pacific Produce packing company. “We don’t need the government to get involved. We’ll take our losses when we overproduce, and when the crop is in short supply, we’ll take our profits.”

Bud Middaugh, executive director of the National Potato Council in Englewood, Colo., said the organization has opposed diversion programs ever since a similar one failed in the late 1970s when farmers began growing more potatoes to collect government payments.

“It’s a government handout,” he said.

The USDA resurrected the national diversion program after farmers in Maine complained in January about an extended period of low prices and high production.

Prices earlier this year fell below the costs of production in the fertile Columbia River Basin. Farmers sold potatoes for the fresh market at $40 per ton, half what they need to earn a profit. Spuds headed for cattle feedlots were practically given away.

“Some people will oppose the diversion, saying it encourages greater production,” said Lance Hammond, a Quincy potato grower. “But prices were so low, I can’t see that the program could make much difference. No one is going to grow potatoes so they can get $5 a ton.”

However, stockpiles of Idaho and Washington potatoes were worse in 1995 than this year, the Agricultural Statistics Service reported. Washington had 825,000 tons in storage on May 1, compared with the 1995 record of 850,000 tons. Idaho had 1.9 million tons, compared with 2 million tons in 1995.

Under the diversion program, the USDA paid 75 cents for every 100 pounds of potatoes shipped to feedlots; $1.50 for each 100 pounds given to charity. All Washington and Idaho participants chose the feedlots.

“It’s a pretty low price we pay,” said Mary Kay Bryan, program specialist with the Farm Service Agency in Spokane, a branch of the USDA.

The agency allocated about $8 million nationwide to buy potatoes, including $1 million to 20 Washington farmers and $3.6 million to 98 Idaho growers.

But Idaho farmers have yet to sell their potatoes and collect the government payments, said Cordell Kendrick, program specialist at the Farm Service Agency in Boise.

“It’s a waiting game to see if they can get a better price” from feedlots and other potato buyers,” he said. “I don’t think it’s supposed to work this way.”

, DataTimes