New farm bill has N.C. peanut growers crying foul

Farmers in N.C., other Southern states feel left out of proposal

Washington CorrespondentJune 10, 2012 

  • Greatest peanut producers (by county) Martin: 30.3 million pounds Bertie: 24 million pounds Columbus: 20.5 million pounds Halifax: 20 million pounds Edgecombe: 19.6 million pounds Source: N.C. Dept. of Agriculture, 2011

Jerry Hamill saves his best, most porous dirt on his 3,500-acre Enfield farm for his prize-winning nuts.

Thousands of the 68-year-old farmer’s peanuts have been cracked open by children and families at ballparks across the country. A stash of trophies on his file cabinet for North Carolina Peanut Farmer of the Year attests to his success.

But fresh in his mind is the summer drought in 2010 that wiped out half his peanut production. And peak hurricane season is just months away.

Hamill fears the government is about to pull away the safety net that so many peanut farmers have depended on during tough times.

The concerns of peanut growers such as Hamill are at the center of a battle that may hold up a massive new farm bill that seeks to cut billions of dollars from the federal subsidy system.

The bill has pitted farmer against farmer as North Carolina, Georgia and other Southern peanut and rice growers charge they’ve been left out of a Senate proposal skewed in favor of Midwest corn and wheat growers.

The current system of direct cash payments to farmers would be abolished under the proposal and replaced by a variety of new crop insurance options. Much of the debate is expected to center on cuts to the national food stamps program, which accounts for 80 percent of the $100 billion in annual spending under the legislation. Farmers say they know subsidies will get cut, but they want to keep parts of the current protections against loss. They say the proposed farm bill doesn’t take into account both the peanut pricing system and the long-term investments that peanut farmers make in their crop.

“There are so many uncertainties in peanut farming,” said Hamill, who also grows cotton and wheat and has cattle on his farm an hour east of Raleigh. “It’s a risky game. It’s a risky livelihood. It takes a lot of money to get in it. And it takes a lot of hard work, and luck, to stay in it.”

Cracking down on abuse

With the government facing massive deficits, the Senate Agriculture, Nutrition & Forestry Committee presented a bipartisan bill that would cut $24 billion in spending over the next 10 years.

The bill also seeks to consolidate programs and cracks down on food assistance abuse. Committee Chairwoman U.S. Sen. Debbie Stabenow, a Michigan Democrat, said the bill closes loopholes and would put a stop to farmers getting paid for acres that are not planted and others who are no longer farming.

In North Carolina, direct farm payments totaled $65 million in 2010, according to an Environmental Working Group database.

Peanuts are a top 10 crop in North Carolina, where farmers are expected to harvest 100,000 acres of peanuts this year. Cash receipts for peanuts last year were $57.8 million, which ranked eighth in the state.

Most of the state’s crop is grown in the northeast around Martin, Bertie and Halifax counties. The state specializes in so-called “ball park” peanuts, or Virginia-style peanuts.

Georgia, the largest producer of peanuts, supplies the majority of peanuts for peanut butter and candy products.

Southern concerns

On Thursday, the Senate moved forward with the bill, but a group of Southern senators feels the bill has a long way to go to address Southern concerns.

Georgia Republican Sen. Saxby Chambliss said Thursday that the bill wrongly “seeks to place a one-size-fits-all on every region of the country.”

And North Carolina Sen. Richard Burr said the bill shifts resources to corn and wheat farmers in the Midwest while leaving peanut and rice farmers in the South out of the mix.

“If the Southeast is not on board, there is no way you get a farm bill through the Congress of the United States,” said Burr, a Winston-Salem Republican.

Hurricane Irene’s destruction in 2011 made the need for an adequate safety net apparent, said Sen. Kay Hagan, a Greensboro Democrat.

Hagan complimented the agriculture committee for bringing the bill forward, but said more work needs to be done to address “unique challenges” facing North Carolina peanut growers.

The key provision of the bill is a new insurance program known as Agriculture Risk Coverage, which compensates farmers for losses in revenues measured over a five-year average.

Supporters say the program ensures coverage payouts are based on the market and not on numbers invented by government officials.

Volatile prices

But peanut farmers say the program would lock in low market prices for peanuts in recent years and doesn’t take into account the high costs of specialty equipment.

“Our risk coverage is way below the cost of production,” said Robert Sutter, chief executive officer of the North Carolina Peanut Growers Association.

“If you just decide, well, I’m not going to plant this year, the banker wants his payment.”

And, unlike crops such as corn and wheat, which are traded on a commodities exchange, making it easier to establish prices and insure against volatility, peanuts are not traded on an exchange and, therefore, they are more vulnerable to price swings.

The University of Georgia’s National Center for Peanut Competitiveness applied the proposal’s measures to 22 peanut farms across the South and found that it wouldn’t provide the same protection as it would for corn and soybean farmers in the Midwest.

The peanut industry is pushing for modified countercyclical payments, another farm subsidy issued when crop prices drop below a certain level.

Peanut farmers would rather make their living off the marketplace, but Northampton County grower David Grant said they know how quickly “high prices can go to heck in a handbasket.”

“American farmers are willing to do their part,” he said. “It’s just hard to know what is your part and what (are) you doing more than everyone else is doing.”

Email: fordonez@mcclatchydc.com; Twitter: @francoordonez

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