Sens. Chambliss-Isakson Urge USDA to Stop Plans to Change Peanut Program Loans

U.S. Senator Saxby Chambliss (R-Ga.), Ranking Republican Member on the Senate Agriculture Committee, and Johnny Isakson (R-Ga.) today (July 11, 2008) sent a letter to U.S. Department of Agriculture Under Secretary Dr. Mark Keenum urging the Department to continue using the current peanut loan differential method for 2008 and 2009. The proposal made by USDA last month would result in a significantly lower marketing loan rate for the Runner variety, which makes up almost 100 percent of Georgia production. Georgia produces nearly 45 percent of all the peanuts produced in the United States, making it the number one peanut producing state.

Text of the letter is below:

July 10, 2008

Dr. Mark Keenum
Under Secretary
Farm and Foreign Agricultural Services
Room 205 Whitten Building
United States Department of Agriculture
1400 Independence Ave., SW
Washington, DC 20250

Dear Dr. Keenum:

Now that the 2008 farm bill has finally been enacted into law the responsibility of implementing the legislation consistent with Congressional intent falls on the Department of Agriculture. This task can be as daunting as crafting the legislation and we are appreciative of the efforts you have taken to expedite the implementation process.

However, we are concerned about proposed changes to the peanut program. Shortly after the passage of the farm bill, a white paper was distributed at the direction of Deputy Under Secretary Floyd Gaibler highlighting proposed changes to the method of determining marketing loan differentials for peanuts. The proposal to move to a market-based loan differential for peanuts was met with little to no support within the peanut industry. We find it very disturbing that since Congress made minimal changes to the Peanut Title of the 2008 farm bill that USDA would make such a drastic proposal, which was never discussed during the many farm bill meetings attended by the Department.

Recently you held an industry wide meeting to discuss the peanut market-based loan differential proposal. You made it clear to the industry that the proposal would not be implemented for the 2008 crop of peanuts, but that a decision for the 2009 and subsequent crop years has not yet been made. We are appreciative of the fact there will be no changes for the 2008 crop and that you assured the industry there would be an open dialogue on the subject before a final decision is made for the 2009 and subsequent crop years.

After the industry wide meeting, we both received a letter from the American Peanut Council (APC). The APC is the trade association representing all segments of the U.S. peanut industry. The letter stated that APC members, at your request, reviewed the proposal again and still determined that if enacted the proposal, “…will harm the peanut industry and subject the federal government to the risk of increased financial losses.”

Dr. Keenum, we respectfully request that the peanut market-based loan differential proposal not be considered and that the Department continue to use the existing peanut loan differential method. The proposal is not supported by any segment of the industry and we are fearful that if the Department continues to pursue this proposal there will be a significant deterioration of USDA’s relationship with the peanut industry.

Please do not hesitate to contact us or our staff if you have any questions about our request.

Very truly yours,

Saxby Chambliss
Johnny Isakson