Quota system done
The waiting is almost over for area peanut farmers who have been in limbo pending the passage of a new Farm Bill by the United State Congress.
The Senate sent a Farm Bill to President George W. Bush Wednesday which marks a reversal of the 1996 Freedom to Farm law and is expected to swell agriculture spending by about 80 percent over the cost of existing programs.
Bush has promised to sign the bill and area peanut farmers are breathing a sigh of relief because now they know which program they will be operating under this growing season.
Some peanut farmers have yet to put their crops in the ground because of the uncertainty of the provisions of the new Farm Bill.
The new version of the Farm Bill ends a quota system that props up peanut prices. As compensation, farmers and land owners who own quotas will receive 11 cents a pound annually for five years.
Pike County farmer and buyer for Anderson Peanuts, Frank Talbot has always been opposed to NAFTA and GNATT, which, he said, are responsible for the farmers woes in the Southeast.
"We’ve lost our textile mills and our peanuts have been hurt badly," he said. "We are under the wisdom of Congress in a global economy and, since we are in a global economy, the Farm Bill had to change. Peanut farmers can’t compete on the world market unless it did."
Talbot said, with the support prices at $612 a ton under the Freedom to Farm law, shellers could not compete with Argentina, China, India and Mexico prices.
"Under the new program the quota system is gone," he said. "Quota owners will be compensated for five years, but what is good for farmers is that a base will be given to those who do the work and take the risks.
"The base price will be $495 and while that seems like a cut, farmers won’t have to pay 8 to 12 cents a pound to rent quotas. So, that will help even it out."
Talbot said the new Farm Bill establishes a loan rate for peanuts at $350 a ton.
"That means that a farmer who doesn’t have a base can plant as many peanuts as he wants and get $350 a ton for them," he said. "Farmers can contract their peanuts if they decide that’s the way for them to go to get the best price or they can not contract and hope to get the best price that way."
Talbot said either way, the peanut farmer is in a better position under the new Farm Bill.
"If the Freedom to Farm law had stayed in effect, I think many of the peanut farmers would have called it quits," he said.
Talbot said the farmers who have waited to plant, haven’t waited too long.
"There’s still time to get the peanuts in the ground and come out with a good crop," he said. "It’s real dry right now, so what we need is some good, steady rain and the peanut farmers should be okay – for now."