MR. COREY: My committee members thank you again for the opportunity of being able to address you.

My name is Michael Corey. I'm the Executive Director of Maine Potato Board in Presque Isle, Maine. I have additional copies of my testimony if you would like to have it. We would like to address some concerns we have in trade, especially with the neighboring countries of Canada and also with Mexico.

Being from the northern border state surrounded on three sides by Canada, we realize the importance of a good trading policy. We have also experienced the effects of that trading policy when it doesn't treat each country equally. Canada/U.S. Free Trade Agreement did not equally address agricultural issues, such as subsidies and ministerial exemptions that favored Canadian producers. The Maine potato industry has struggled with severe Canadian import pressure in the northeast table markets ever since. And we have seen these exports rise, especially in the years when North American farmers have had bountiful yields, and it seems like that situation is compounded by the cheap Canadian products that come in. At these times we have seen the import prices further depressed, U.S. prices, and we have seen goods delivered in the Boston market for what the they were receiving in Presque Isle, Maine. At the same time, we have seen Maine acreage decline from about 135,000 acres in 1986 to 64,500 acres in 1998, while Eastern Canada's acreage will increase from 116,000 acres in 1986 to around 174,000 acres in 1998. Maine has rebounded in the latest figures back another 25 acres this year.

Future trade policies need to be complete before they are adopted. Agriculture cannot be sacrificed in favor of a trade agreement that's favorable to other nations. It should be negotiated completely or delayed until the agreement can be made. Maine has been over 12 years recovering from a decline in production and only within the last year have we seen any increase in acres, and this is the result of some drastic changes within the industry to encourage a major processing plant expansion by McCain Foods, Inc. in Easton, Maine.

Care should also be taken in negotiating and overseeing phytosanitary agreements. We must be careful not to allow the agreements to be used as artificial trade barriers by trading partners. We have seen this with Canada by changing requirements for potato spindle tuber, which was done very quickly. Without U.S. being able to make adjustments, we were kept out of that market or required to do additional testing. Also, there is a double testing requirement on ring rot disease, bacterial disease on potatoes, and seed potatoes going to Canada must be tested in the United States and then again tested once again in Canada, so you have double testing requirements. This adds cost to U.S. growers and discourages trade.

Mexico has also effectively refused to allow seed potatoes from going into that country due to sanitary concerns. And as quick as one concern is addressed and they agree to let us in, they come up with a whole new list of concerns. And this has been going on since the beginning of the NAFTA agreement. If we are to have free trade, it must be available to both sides unless for some scientific reasons this should not happen.

Trade remedies in the United States need to be reformed. Laws are inadequate to protect the U.S. farmers. New legislation is needed that will allow farmers to prove regional injury rather than national injury. Imports into one area of our country can severely affect growers in that area while not having a major impact on production areas in other regions.

Also, green box subsidies need to be better defined because currently countries are interpreting them and it's not real clear what the real rules and definitions are. All countries, including ours, have subsidies but they must be clearly defined as to their acceptance under WTO and steps must be taken to remove illegal subsidies.

And finally, world trade is vital to the success in U.S. Agriculture, but without fair trade we are only forcing our farmers out of business. We are seeing way too much of this lately. You must negotiate to protect our farmers rather than handing keys to our tractors to other countries. Our strength as a nation depends on our ability to feed ourselves and I don't want to wake up some day wondering why our farmers are no longer producing enough food for us to eat.

Again, thank you. Glad to answer any questions. Thank you for the opportunity.

MR. SCHUMACHER: We will be taking the potato issue -- we will work very hard with you because in the state of Washington (inaudible) so, again, the same issue in Canada, our friends in Canada, potatoes -- a number of -- (inaudible) and I believe the pressure that we have put on them has softened, at least they are a lot more aware of what they are doing.

Thank you for your testimony.

COMMISSIONER RUDGERS: A couple of New York questions. I want to understand -- I'm really not up on the different colored boxes of describing subsidies, but when you referenced it, that eastern Canada is subsidizing somehow their potato farmers, do you have some specific descriptions of the programs being employed?

MR. COREY: There's been a number of programs that they have had since the mid '80s. In the past few years, I think because of some of the pressure the United States has put on, some of those subsidies have been taken away and -- but they were there for a number of years and gave them an advantage and ability to get their infrastructure in place. So, they -- and those include export transportation, and they include programs that help them to build storage facilities and things like that. I am told by the Canadians that's no longer in existence.

COMMISSIONER RUDGERS: The ability is there.

MR. COREY: That's right.

COMMISSIONER RUDGERS: With regard to the sanitary issues, has the golden, (inaudible) end quote, come up from the management concern -- I know we have due diligence on that. And we have concerns that other countries may use that, depends on your domestic potato -- (inaudible)

MR. COREY: That comes up when you're negotiating with another country. They look at all of the pests all across the country as being a target pest. Golden is one of those target pests and it's pretty well confined to a very small area. Even -- you know, not even throughout New York, just very localized. We are very concerned with that and support additional testing and research on that.

COMMISSIONER RUDGERS: We appreciate the support. Thank you.