When the new farm bill passes — and it will pass — growers should resist the urge to plant peanuts from fence row to row, says Rep. Terry Everett, (R-Ala.).
“I'm afraid there will be some serious repercussions from Congress if we do this,” said Everett at the recent Georgia Peanut Farm Show in Albany. “Let's produce peanuts to make a profit and to maintain quality.”
Current problems in the U.S. peanut industry can be traced back to the passage of the North American Free Trade Agreement (NAFTA), said the congressman. “NAFTA caused a lot of changes in the country, and those changes were not good for peanuts. The amount of peanuts coming into this country continue to increase while tariffs decrease. In 2008, tariffs will disappear and the amount of peanuts coming into the United States will be unlimited. The quota would continue to go down without compensation,” says Everett.
During negotiations over the last farm bill, votes in favor of continuing the current peanut quota program were hard to come by, he says. “We had a difficult time writing the peanut title. There were four or five peanut groups, and we couldn't get our act together. Manufacturers and shellers were determined to end the quota system. Also, the national media has attempted to turn the public against the quota system,” he says.
Growing opposition to the quota system and damaging trade policies led to the currently proposed peanut program, says Everett.
“We wanted to preserve the peanut industry in this country,” he says. “We also want to make money for peanut producers. I've seen too many of my constituents going out of business. Input prices have gone up but we still have our $610-per-ton support price. My colleagues said it was fair to take away the quota without offering compensation. But the quota holder invests in our rural communities.”
Under the proposed peanut program awaiting action by the U.S. Senate, more than $1 billion has been set aside to compensate quota holders, says Everett.
“We had a problem with one of our conference members who wants to take funds out of the peanut program and move them to research and education. We kept $3.5 billion for the program. The Senate still needs to get this farm bill passed.
“Farmers, bankers, land owners, quota holders — no one knows what to do at this point. I understand there's dissatisfaction about base and other issues, but we can't write a peanut title that'll please everyone. We can re-address some of these issues in conference.”
President Bush, says Everett, will sign this farm bill. “More importantly, the President has promised that our budget will stay the same as when we wrote the bill last year. We had a $73.5 billion budget for our 10-year House farm bill, and we were afraid we'd lose some of that money.”
Everett's appearance in Albany came amidst continuing dissension among Georgia peanut producers and commodity groups over the proposed new peanut program. One day prior to the Peanut Farm Show, more than 700 people gathered at the Albany Civic Center to organize to represent the “quota holders of America.”
Under the provisions of the new program, peanut base would be assigned to producers rather than to quota holders. Some of these quota holders have threatened to file a lawsuit if program changes are not made in response to their concerns.
The Senate Agriculture Committee has approved a marketing loan rate for peanuts of $400 per ton and set the target price at $520 per ton. The legislation also provides a quota “buyout” of 10 cents per pound per year for five years.
The “base” concept is new for peanuts, says Armond Morris, chairman of the Georgia Peanut Commission, which has endorsed the marketing loan concept. “The quota is being bought out. The language is very specific about the fact that the quota payment is for the loss of an asset. Quotas expire in 2002, and no one in Washington would even sponsor a bill to try and keep the quota in any form,” says Morris.
A farm bill most likely will be passed this year for this year, he says. “The only caveat is that because of the dissent in the ranks of quota holders, and a still-seeming failure to work within the system that is staring us in the face, there may be further losses, including the possibility of a total loss of the buyout. And, no base will be assigned to quota holders,” he says.