The big jump in peanut acreage in Mississippi and Arkansas this year is “a very positive thing” for growers by providing them a new source of income and crop diversification, and for the industry by strengthening its influence in Washington, says Bob Redding.
“We’d like to see even more growth in peanuts in this region,” he said at the Mississippi Farm Bureau Federation’s summer peanut commodity meeting at Grenada, Miss. “Mississippi and Arkansas farmers think like other peanut growers across the South, and they have similar farm structures, which is helpful in working on issues and legislation important to the industry.”
Redding, who lobbies for the industry in Washington, said, “Your members in Congress understand agriculture. In a time when the number of legislators representing farmer interests is shrinking, your delegations continue to be closely involved in agriculture issues and have been very helpful in advancing legislation of benefit to the peanut industry.
“We are concerned about the shrinking number of members of Congress with a focus on agriculture, so we have to be more politically active. What we really need, particularly in Mississippi and Arkansas, as more farmers are growing peanuts, is for them to identify themselves as peanut farmers.
“When you meet with or talk with members of Congress and congressional staff, make sure you impress on them that the peanut sector and peanut policy are important to American agriculture.
“You have some senators and representatives Washington who are very helpful to agriculture, but we need for them to understand that the peanut industry is growing in these states and that we need their support for peanut policy.”
Unfortunately, Redding says, farm programs dominated by Midwest interests often give short shrift to southern growers and southern crops.
“In the spring, I went to a joint trade show of Florida/Alabama peanut growers; they had a record crowd — I’d never seen that many producers in attendance. The message from those growers, in discussing farm policy, was, ‘We recognize our nation is in a fiscal crisis, and we want to do our fair share to help.’
“But my message to them was, ‘That’s not what this is about. Agriculture has made it’s contribution for this farm bill, whether it ends up with $23 billion in cuts or $33 billion. What we’re talking about is the residual — the money that will be left for Title One or commodity programs.
“Midwestern farm groups and some Midwestern members of Congress have a really good idea: They want to take all the residual money and put it into Midwestern, one-size-fits-all farm programs. They want to take money from southern farm programs, plus their money, and put it into programs that work for their commodities— and only incidentally hope those programs will work for us. But they don’t — they don’t work for us.
“We know there are going to be significant cuts in ag programs, and we’re pretty sure direct payments won’t be in the final package. The real question is, what happens after that? How do we get a program that is similar to our traditional countercyclical-type program that still protects us and still has some value?
“This is my seventh farm bill since 1981,” Redding says, “and the focus in the peanut industry has been, ‘Let’s get a program that we believe will work for our growers, and let the score be what it may.’ That’s the approach we’ve taken with the 2012 bill, too.”
Evaluating legislative proposals' effects on peanuts
The University of Georgia’s National Center for Peanut Competitiveness is used, Redding says, to “run the numbers” of any farm legislation affecting peanuts “to see how it would work, based on 22 representative peanut farms from New Mexico all the way around to Virginia — a snapshot of farms in the peanut belt, some small, some medium, some large.
“In the last year, they’ve evaluated 25 different legislative proposals, with up to 40 different analyses for each of the 22 representative peanut farms. All but one of the proposals has been for revenue programs.
“Every time a member of Congress comes up with a new proposal, we check it out and see how it would work for peanuts. Every time a trade association comes out with a new program —whether it’s southern, Midwest, or wherever, whether it’s corn, soybeans, whatever — we have the center analyze it to see how it would work for those 22 farms.”
With the Senate’s proposed Agricultural Risk Coverage (ARC) program, Redding says, 21 of the 22 representative peanut farms would “have a 100 percent reduction in farm payments for any type of program participation. That’s a bad sign. The one farm that would have received some compensation over a projected five-year farm bill, would’ve had a 50 percent reduction.
“So, when people look at charts and talk about corn growers taking a 30 percent hit with the Senate bill and that being their fair share in reducing program costs, just remember that 21 of 22 peanut farms would have a 100 percent reduction.
“I think that was a pretty good signal that ARC won’t work for us.”
Although ARC ended up in the Senate bill, Redding says four southern members voted against it, including three from the peanut belt: Thad Cochran of Mississippi, Saxby Chambliss of Georgia, and John Boozman of Arkansas.
In a committee vote, they were joined by Senator Mark Pryor of Arkansas.
“This four–man team is who we worked with and strategized with,” Redding says, and “that expanded to 30-odd members before it was over. The overwhelming majority voted with us, based on what the new program would do to peanuts and rice.
“Your Mississippi senators, Thad Cochran and Roger Wicker, became part of that large group and voted with us on the floor, as did both Arkansas and Louisiana senators. There were 250 amendments filed with the bill, which was indicative of the problems that existed with the legislation and the lack of regional or geographical equity. That was pared down to 73 amendments.
“Our efforts were focused on making the bill better, not killing it or derailing it. We knew we needed to get to conferencer; we also knew we had ore support in the House Ag Committee leadership than on the Senate Ag Committee.
“Some of the final 73 amendments stuck, and some were not good, among them the amendment by Sen. Chuck Grassley of Iowa that would set a hard cap of $75,000 on marketing loan gains.”
What happens if no bill passes after July 11, when the House Ag Committee does markup?
“If the House doesn’t get a bill on the floor, or doesn’t get a bill off the floor, there are options,” Redding says. “An extension of the current farm bill, for one or two years, is a possibility.
“Once we have the House Ag Committee bill, we hope it will be a bill in line with what peanut organizations in the South have been proposing — a producer choice-type bill, hopefully with an increased target price that keeps our marketing loan, with a separate payment limit, storage and handling peanut incentive, and a revenue-type program.”
Over the years, the “peanut industry has been resilient, adjusting to new politics and farm policies,” Redding says. “We’ve gone from the era of government quotas, to the loss of import restrictions, to open production, to issues with the Chinese over peanut paste being transshipped through Canada. We cured the Chinese problem in the General Agreement on Tariffs and Trade, but we still have issues.”
Among them, he says, is the USDA’s procedure for setting peanut prices.
“The language in the 2002 bill, mirrored in the 2008 farm bill, was that the USDA set their Tuesday posted price to include what peanuts were selling for in the world marketplace.
“Data from the National Agricultural Statistics Service is used for these calculations, and that hasn’t worked well for us. In the early years, particularly in the period of the 2002 farm bill, we didn’t feel a lot of the price information coming out of the USDA was very accurate.
“We tried to change that in the 2008 farm bill, so the USDA would look at the Rotterdam price, which we felt a more accurate reflection of what was going on in the world marketplace. But it didn’t happen.
“We’ve worked really hard to get it straightened out, but haven’t been successful. The peanut shellers, plus some growers with standing, sued the USDA over this, but they lost in federal court, so we’re kind of stuck with the program.”