The Commodity Futures Trading Commission has imposed "substantial" penalties against the two major participants in the highly publicized default of the May 1976 Maine potato futures contract traded on the New York Mercantile Exchange.

Late yesterday, the CFTC made public consent decrees signed by John R. (Jack) Simplot, the multimillionaire Idaho businessman, and Peter J. Taggares of Othello, Wash.

Simplot and Taggares, who held contracts to deliver specified amounts of Maine potatoes under the May 1976 contract, were charged with attempting to manipulate downward the price of that commodity, violating cease and desist orders barring such manipulation and violating speculative limits on the number of contracts they held, the CFTC said.

Profits of futures contract transactions are made in one of two ways: Holders of short positions, or contracts to deliver commodities, are betting that prices will fall below the level at which they "sold" their short positions, while holders of long positions, or contracts to buy, want prices to rise above the level at which they entered the market.

Because few commodity futures transactions involve actual delivery, participants take their profits or losses by matching their position with one from the other: shorts buy long contracts and long holders sell short. The May 1976 default occurred when those holding short positions refused to match up with those holding long contracts in an attempt to drive prices down. But they also refused to deliver the actual potatoes as required under the exchange rules.

Simplot and his companies, J.R. Simplot Co. and Simplot Industries of Boise, Idaho, were fined $50,000 and their trading privileges were suspended for six years beginning April 21. Taggares, his firm, P.J. Taggares Co. Inc. of Othello, Wash., and Simtag Farms, a joint venture of the two men, were fined $15,000 and barred from trading on U.S. futures exchanges for four years.

In signing the agreements, Simplot and Taggares neither admitted nor denied the charges in the complaint, the commission said.

The CFTC said the decree also resolved charges against H. Dean Summers, an Idaho businessman. Summers was fined $2,000 and his trading privileges were suspended for 2 years.