The House's version of a radically different peanut program would be devastating to Virginia peanut farmers, says the vice chairperson of the National Peanut Board. “We've had a lot of farmers go out of business at $610 a ton,” says Dee Darden, vice chairperson of the NPB and a peanut farmer in her own right, with her husband, Thomas in Smithfield, Va. “Lowering the price per ton will only hurt our peanut farmers even more.”
Peanut industry experts in the V-C area are hoping that the final bill will contain language that lessens the effects of the wide-scale changes, Darden says. “We all know that quota is out, but let's get it where we can all stay in business and make a profit.” The Senate has not introduced a bill.
At grower meetings held to discuss the proposed changes this summer, the general mood has been one of “shock.”
“First of all, people are in shock that it will go into effect in 2002,” Darden says. “I understand the implications of trying to get the money secured in the budget, but most people are gloom and doom. Cotton is 35 cents a pound, beans and corn are down.”
“Peanuts have paid a lot of bills in our area,” Darden says. “It's going to be hard to produce peanuts without a price.”
Dell Cotton, manager of the Peanut Growers Cooperative Marketing Association, agrees. “With the cost of production at $539 a ton, there's not enough money for the producer,” Cotton says.
The peanut industry is bracing for the full effects of NAFTA and other trade agreements. Peanuts coming into this country would be virtually tariff-free by the middle of the decade, and well below the current $610-per-ton support price farmers now receive.
“There are a lot of unknowns in changing a system that we've known so well for so long,” Cotton says. “The tendency of the farmer is to look at the bottom line. And the first reaction is ‘that's not enough money to keep me in business.’”
The House bill replaces the quota system with a “market-oriented” approach. The U.S. government would guarantee growers a $350-per-ton market loan payment, while setting the domestic peanut target price at $480 per ton. Growers would also receive a $36-per-ton fixed decoupled payment. The House version would also compensate quota holders with a 10-cent-per-pound buyout over the next five years.
“We can't grow peanuts for $350 a ton,” Darden says, who farms 130 acres of peanuts. Land rent, seed costs and disease pressure and a short growing season make the producer's job a difficult one. “The only thing we have going for us is the Virginia-type peanut and quality.”
Other elements of the House version are also troubling for Virginia growers. “The (quota) base seems to be tied to the farm and the producer doesn't get the benefit of the base,” in the quota buyout, Cotton says.
He also doesn't see the wisdom in doing away with the Peanut Administrative Committee (PAC), the group that helps to insure the reputation of the quality of U.S.-grown peanuts.
“People have got to keep in mind that we are growing a quality crop,” Darden says.