Monday, April 30, 2007

Congress drops peanut subsidies

Georgia produces 40% of U.S. crop ASSOCIATED PRESSPublished on: 04/29/07
Washington — Southern peanut farmers lost a major funding battle this past week as lawmakers dropped $74 million in subsidies for the crop from a massive war spending bill.
Peanut producers had sought to piggyback on the war bill as their last chance at continuing government supports that expired last year that helped farmers cover storage and handling costs.
But the peanut money — which many Republicans had ridiculed as an example of Democratic largesse — didn't make the cut as House and Senate negotiators agreed on the latest version of the legislation Monday.
"We ended up being the poster child for everybody that was against whatever was attached to that spending bill," said Don Koehler, executive director of the Georgia Peanut Commission. "It sure is sad that it had to be us because this is something that's real important for the economy of the rural South. It's just real disappointing to me because somewhere along the line you'd like to see us investing here at home in our own people."
The bill totals some $124 billion, of which more than $90 billion would pay for operations in Iraq and Afghanistan. The remainder is earmarked for a variety of initiatives, including $13.2 million for avian flu research, $650 million for the State Children's Health Insurance Program and $400 million for low-income heating assistance.
President Bush has vowed to veto the measure over Democratic-backed language requiring that U.S. troops begin leaving Iraq by Oct. 1. But Republicans and Democrats say that with troops in battle, the underlying spending will probably ultimately win approval.
Almost all the peanuts produced in the United States are grown in the South. Georgia is by far the largest producer with more than 40 percent of domestic production, followed by Texas and Alabama, according to the American Peanut Council.
The Georgia Peanut Commission says the crop feeds a
$2 billion industry in the state.
Peanut farmers saw major changes under the last farm bill implemented by Congress in 2002.
The bill eliminated a decades-old quota system that propped up peanut prices by limiting the size of the crop, replacing it with a program that gives more farmers price supports, but at a lower level.
As part of the compromise, the bill also included government assistance to help cover peanut storage and shipping costs. But that subsidy expired in 2006, and the industry had been working for months to extend it for at least another year, until the next farm bill is adopted.
Koehler and other peanut representatives have been visiting Washington this past week to press their case for other supports as Congress began hearings on the next farm bill.
"Our farmers are really struggling," he said. "All of their costs have gone up, and what they're selling their crops for hasn't."

Stewart Parnell

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