THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Saturday, September 30, 1995 TAG: 9509300271
SECTION: BUSINESS PAGE: D2 EDITION: FINAL
SOURCE: BY SUSIE STOUGHTON, STAFF WRITER
LENGTH: Medium: 72 lines
The Senate Agricultural Committee passed a bill this week to renew a federal support program for peanut farmers - with two significant changes - but industry officials predict a difficult journey through Congress before a final version is adopted.
The fight to preserve the program, which is considered vital to area peanut farmers, is far from over, said Thomas R. ``Dell'' Cotton Jr., manager of Peanut Growers Co-Op Marketing Association in Franklin.
The committee's proposal would lower the government's support price guaranteed to farmers from $678 a ton to $628 a ton and would shorten the length of the program from seven to five years.
``It was the best thing we could have gotten,'' Cotton said Friday after returning from Washington. ``But we have a long way to go.''
Sen. John Warner, who sits on the Agricultural Committee, helped get the bill passed.
Compromises were necessary because opponents - including Chairman Richard Lugar of Indiana - wanted to eliminate the program altogether, said Warner's agricultural assistant Chas Phillips.
The Senate Agricultural Committee's version includes two major changes from the previous seven-year farm bill. They are:
Lowering the government's support price for quota peanuts - the first 100,000 pounds a farmer produces under federal guidelines. The bill would reduce the price from $678 to $628 a ton.
Farmers have objected to any reduction, saying they cannot operate at a loss, but shellers have advocated $550 a ton to make U.S. peanuts more competitive with foreign nuts.
Last year, Congress adopted two agreements - the North American Free Trade Agreement and the General Agreement on Tariffs and Trade - which allowed cheaper nuts into the country. Peanuts are being imported from Argentina for $350 a ton and from Mexico for $450 a ton. The imports - while limited to about 5 percent of the domestic market - will increase to about 10 percent in the next six years, under the agreements.
Farmers, shellers and processors all expected changes. The proposed Senate bill brought relief to some.
``That's not a bad compromise,'' said Clifton A. Slade, Virginia Cooperative Extension agent in Suffolk. ``Farmers can live with that price. After we had heard $550, we are breathing a sigh of relief when we hear $628.''
But Slade agrees the outlook is still uncertain. And no final answers are likely to come until December, while farmers need to plan now for next year's crops.
Reducing the program from seven to five years.
Other commodity programs, however, would continue to be effective for seven years. In 2000, the peanut program would be the only one being considered for renewal.
Warner - along with Sen. Jesse Helms of North Carolina and Sen. Paul Coverdell of Georgia - managed a compromise at five years, instead of two as some opponents wanted, said Phillips, the Warner assistant. And the opponents agreed not to fight the bill.
The bill is expected to go to the Senate floor by mid-October. So far, however, the House Agricultural Committee has been unable to agree on a bill. If the committee continues to be deadlocked, a House version would be decided as part of the budget deliberations.
Eventually, any differences in the Senate and House bills would be worked out in conference.
For 50 years, peanut farmers have relied on the government to guarantee the price they could get for a portion - or quota - of their crop. And to discourage overproduction, additional - or surplus - peanuts have brought a much lower price, if sold to the government. by CNB