Agriculture, Rural Development, Food and Drug Administration, and Related Agencies Appropriations Act, 2007

AGRICULTURE, RURAL DEVELOPMENT, FOOD AND DRUG ADMINISTRATION, AND RELATED AGENCIES APPROPRIATIONS ACT, 2007 -- (House of Representatives - May 23, 2006)

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Mr. BISHOP of Georgia. Mr. Chairman, I move to strike the last word.

Mr. Chairman, I rise in strong opposition to the point of order that was offered by my good friend, the chairman of the Agriculture Committee, Mr. Goodlatte, and in support of the peanut storage and handling language that was included in the 2007 agriculture appropriations bill.

As the Representative of the Second Congressional District of Georgia, which I am proud to say is the largest peanut producing district in the Nation, I would like to lend my full support and endorsement of language that was included in the bill extending the peanut storage and handling program for an additional year.

During consideration of the 2002 farm bill, the peanut industry, including growers, manufacturers, and processors, asked that the House Agriculture Committee change the Nation's peanut program from a supply management structure to a more market-oriented program.

At the time, I had the pleasure of serving as a member of the Agriculture Committee. The House Ag Committee made these changes, working in cooperation with the peanut industry, and the transition to the new market-oriented program was a part of a very carefully crafted compromise that was developed and approved by the House Agriculture Committee.

The 2002 farm bill provided storage, handling fees and related costs for the peanut program through the 2006 crop year. Our concern centered on the fact that growers would have to absorb the storage costs associated with peanuts placed under loan.

The language included in the committee bill would simply continue the peanut storage and handling fees program through 2007, terminating at the beginning of fiscal year 2008. The language was reviewed by the CBO and will not have a 2007 cost, primarily because the payments will come after the 2007 harvest. There will be a cost of approximately $77 million in 2008. By all measures, the new peanut program is a true success story.

The storage and handling fees paid on peanuts by this loan program are very limited in scope. And more importantly, the storage and handling segment of the peanut program will actually expire at the end of this fiscal year.

As the chairman will recall, the original intent of this program was to provide an efficient and practical transition from the old supply-management structure to the new market-oriented approach. Without the bridge provided by this program, producers would not have participated in transitioning to the new program.

Every licensed warehouse operator has a structure for storage and handling fees. These fees will be passed on to the peanut producer if they are not paid by the Department of Agriculture. Much of the 2006 peanut crop has already been contracted, and the underlying business decisions associated with these transitions are in large part based on the program provisions that are in effect under current law.

Peanut producers entered this crop year and planned for this farm bill period based on the commitment that Congress made in the 2002 farm bill. Warehouse operators will not absorb these costs. It will be the producer who will pay if these fees are not paid as designed by the current bill.

Peanuts, unlike many other crops, can't practically be stored on the farm. Specialized handling and storage by knowledgeable warehouse operators is necessary to preserve the value of this semi-perishable commodity. So it is an expense that is absolutely necessary and one that the grower can't avoid by doing it himself.

Without this language, what is now a $355 per ton marketing loan program will effectively be reduced to a loan program that will not be profitable for the peanut producer.

Mr. Chairman, this language is crucial to the future of the peanut industry and continuation of the program into 2007. It could literally mean the difference between profitability and loss, between success and failure, between farmers surviving or forcing even more family farmers off the land. These farmers are real people, Mr. Chairman, real people whose lives will be profoundly changed if this point of order is upheld by the Chair.

I strongly oppose the point of order and ask the Chairman to retain the language in question which is vital to the American peanut farmer, particularly those in the State of Georgia.

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