THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Wednesday, August 23, 1995 TAG: 9508230442
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY SUSIE STOUGHTON, STAFF WRITER
DATELINE: SUFFOLK LENGTH: Medium: 94 lines
Sen. John Warner brought Congress to the country Tuesday to listen to pleas from peanut industry officials, who predict economic disaster if the government scraps its support of agricultural programs.
Some in Congress have threatened to eliminate the 50-year-old federal support program, which guarantees a minimum price for farmers for a quota of their crops and ensures a stable food supply for consumers.
Warner, a member of the Senate Agricultural Committee, pledged to fight such attempts.
``We must maintain the government's partnership with our nation's farmers,'' said Warner, conducting a field hearing of the Senate Agricultural Committee in Suffolk City Council chambers.
But he predicted the 1995 Farm Bill, which Congress will consider this fall, will undergo radical revision from past years.
Changes are inevitable, agreed representatives of the peanut industry - growers, shellers and manufacturers.
Each segment, however, disagreed on how those changes should be made.
Growers said cuts in the peanut support price would mean the farmers could not recover their investments and many would go out of business.
The price guaranteed to the farmer would be lower than his production costs, said Marvin Everett, a Southampton County farmer representing the Virginia Farm Bureau.
``We cannot and will not advocate economic suicide,'' Everett said.
Farmers have already supported efforts to tie the amount of quota peanuts to domestic demand and to regulate the program so it doesn't cost money to operate, said Ray Holland, president of the Virginia Peanut Growers Association.
But growers object to proposals to cut the quota support price, which is $678 a ton this year.
Instead, Congress should first close two loopholes that help drive the domestic price down, Holland said.
Under the North American Free Trade Agreement, or NAFTA, peanut products - such as peanut butter - can be imported from Mexico in unlimited amounts, if the peanuts are grown in Mexico. And the General Agreement on Tariff and Trade, or GATT, allows candy bars from Canada in unlimited amounts, Holland said.
Shellers are caught between the growers and those who want to eliminate the program, said Whitney G. Saunders, a Suffolk lawyer and executive secretary for the Virginia-Carolina Peanut Association.
``We want to preserve the peanut program and its protection for farmers,'' he said, ``but we are confronted with the economic reality that quota support price must be reduced.''
U.S. peanuts are overpriced at about $678 a ton for farmer stock peanuts, Saunders said. Peanuts are being imported from Argentina for $350 a ton and from Mexico for $450 a ton, he said.
``If we do not become competitive, we will not survive,'' Saunders said.
Shellers want the support price reduced to $550 a ton this year, with market adjustments afterward, Saunders said. He said manufacturers would pay a premium for U.S. peanuts rather than relocate plants to other countries, such as Mexico.
``But we cannot reasonably believe that prices greater than $550 per ton can be accepted by manufacturers,'' he said.
Manufacturers agreed that the support price must be lowered.
Hal Burns, vice president of Jimbo's Jumbos Inc. peanut processing plant in Edenton, N.C., said his company buys imported peanuts to ``take advantage of the competitive prices.''
If the support price is not lowered to $550, companies like his will be forced to handle more imported peanuts, he said.
Pat O'Malley, director of operations for Planters Lifesavers' in Suffolk, said his company is committed to passing along price reductions to the consumer.
Warner said the program must be more market-oriented to increase U.S. competitiveness in global markets while operating without a net cost to the taxpayer and providing a measure of security for the farmer.
Cuts in the farm program must be coupled with legislation allowing the farmers relief from governmental regulations and tax burdens, Warner said.
Rep. Norman Sisisky agreed with the growers that slashing the support price to $550 would be ``a disaster.''
Doing away with the peanut program would not help balance the budget as some have advocated, Sisisky said. ``By doing away with farm programs, I'm afraid we may be doing away with family farmers.'' ILLUSTRATION: [Color photos]
MICHAEL KESTNER/Staff photos
Peanut farmers John Brock, left, and Tommy Darden attended Tuesday's
field hearing of the Senate Agricultural Committee in Suffolk City
Council Chambers.
U.S. Rep. Norman Sisisky
by CNB