Potato Trouble Again

In eight years, the Agriculture Department spent more than half a billion dollars trying to keep up the price of potatoes. It burned them, gave them away, let them rot and tried dozens of other schemes of destruction. Finally, a year ago, Congress forced it to give up and let the law of supply & demand take over. When all subsidies were withdrawn, farmers cut their potato acreage, since many of them had not been raising potatoes for consumers, but only to sell to the Government for destruction. As supply decreased, demand increased, and the price of potatoes more than doubled.

Last week, the Government decided to monkey with potatoes again, this time because the price was too high. It had reached more than 105% of parity and OPS Boss Mike Di Salle can control any farm products above parity. He rolled back white potato prices 5% to 26% at farm and wholesale levels and will soon follow with similar rollbacks at retail levels. Potato growers promptly protested. They thought that supply & demand would cure the high prices just as they had the low. Their sensible argument: to cash in on the high prices, potato growers would soon raise so many potatoes that the U.S. would have a glut again--and prices would drop.

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