“The domestic marketplace has seen a healthy increase in demand from consumers and production growth for producers, but this has not been the case for the peanut export market,” says Donald Chase, peanut farmer from Macon County, Ga., and Georgia Peanut Commission (GPC) board member.
Chase testified recently before the House Agricultural Committee’s subcommittee on general farm commodities and risk management at Valdosta State University in Valdosta, Ga.
The 10 members of Congress in attendance were on hand to hear from south Georgia farmers and to take suggestions on the next farm bill, which will come before Congress in 2007.
The Georgia members of Congress in attendance include Jack Kingston, R-Ga.; John Barrow, D-Ga.; Jim Marshall, D-Ga.; David Scott, D-Ga., and Sanford Bishop, D-Ga.
Chase praised Congress for passing a “very respectable” peanut program in 2002, but he says the U.S. Department of Agriculture (USDA) continues to set the loan repayment rate for peanuts too high. Chase called for more transparency from USDA on how they determine the weekly posted prices announced by USDA every Tuesday at 3 p.m.
Despite language to the contrary in the 2002 farm bill, USDA has relied far too much on data unrelated to the price other export nations are marketing peanuts for in the world marketplace, Chase says. U.S. peanut producers have lost a significant portion of their export market despite the changes invoked by the 2002 farm bill. Our present export situation is directly related to the high loan repayment rate set by USDA, he says.
The 2002 farm bill directs the U.S. Secretary of Agriculture to establish a loan repayment rate that the secretary determines will:
• Minimize potential loan forfeitures.
• Minimize the accumulation of stocks of peanuts by the federal government.
• Minimize the cost by the federal government in storing peanuts.
• Allow peanuts produced in the United States to be marketed freely and competitively, both domestically and internationally.
“Georgia farmers believe that USDA is not sufficiently considering the competition in the world marketplace,” Chase says. “This lack of response to competition from other origins has critically wounded our export programs.”
On the other hand, the new peanut program has encouraged peanut product manufacturers to develop new products and spend more money on marketing these products. Domestic demand has increased for peanut products. The new program has also allowed producers to more readily enter peanut production. In Georgia alone, peanut acres have expanded significantly with some of the greatest growth in non-traditional peanut areas.
The Georgia Peanut Commission will be meeting with industry partners in the coming days to develop more specific suggestions for the next farm bill. Currently, Chase says, GPC supports the continuation of the current program, but will seek to update specific provisions.
According to Chase, when the 2002 farm bill was drafted, peanut producers did not envision record high energy prices that impact the major crop inputs including fuel, fertilizer and chemicals. “The 2006 peanut crop will feel the full impact of these increased costs. It is important that the next farm bill not rest on the backs of declining farm equity,” Chase says. “We hope that every effort will be made to ensure that producers who are assuming the risk in agriculture will be the recipients of these programs and incentives.”