By Karl Terry: PNT Managing Editor
A farm bill approved by the Senate Agriculture Committee Thursday is likely to make eastern New Mexico peanut farmers happy, but disappoint some dairy farmers.
According to a press release from Sen. Pete Domenici, R-N.M., the committee gave approval to a $280 billion farm bill Thursday which would restore the peanut storage and handling payment program. He said that program was critical to financial stability of peanut farmers in New Mexico.
“If it’s the same as the House bill that includes storage and handling, that’s good news,” said New Mexico Peanut Producers President Wayne Baker of Portales.
Baker said he’s optimistic that the storage and handling will survive as the bill undergoes debate in the full Senate, possibly next week.
“Being an election year, we hope that’ll help,” Baker said.
Arch peanut grower Bill Walker agreed that it was good news for local peanut farmers.
“We needed it back in there and it’s such a small part of the farm bill, it’s hard to draw attention to it,” Walker said.
Walker said having the storage allows the grower to avoid being charged for storage and handling up front by the processor, which in turn allows the industry to remain more competitive.
Baker and Walker said growers had pressed their case hard in Washington and they said they had received a good reception from both Domenici and Sen. Jeff Bingaman D-N.M. as well as the New Mexico Congressional delegation.
The press release from Domenici said that peanut growers could be facing an additional $50 to $60 per ton in costs without the program which was cut last year when a temporary farm bill was passed.
“The peanut provisions should allow New Mexico peanut growers to remain viable, and I will work to ensure the Senate bill retains this program,” Domenici said.
The committee-passed bill would extend the life of MILC throughout the five-year farm bill and beginning in October 2009 the payment rate would increase from 34 to 45 percent, according to the release. The bill also increases the quantity of milk eligible to receive MILC payments fro 2.4 million pounds to 4.15 million pounds.
In the same release, Domenici said he was disappointed that a Milk Income Loss Contract program he fought to have eliminated would actually increase payment rates in the future under the proposed bill.
“Our producers are penalized with MILC, having to pay into a program that basically benefits less productive and efficient dairy operations in other states” Domenici said. “I am very disappointed this program will remain on the books.”
Critics say the bill devotes too much money to wealthy farmers and should divert those dollars to conservation programs that protect the land, food aid to the poor or reducing the federal deficit.
The legislation does attempt to limit subsidies with a provision that would eventually ban government payments to “non-farmers” whose income averages more than $750,000 a year. The bill defines farmers as those who make more than two-thirds of their income from agriculture.
Many Eastern New Mexico dairy farmers, mostly larger operations which don’t benefit from the MILC program, would like to see the program eliminated.
The legislation is expected to face obstacles on the Senate floor. Sen. Charles Grassley, R-Iowa, a committee member who called the payment limits “window dressing,” has said he and Sen. Byron Dorgan, D-N.D., will offer an amendment to lower payment caps to $250,000 a year, as opposed to the current annual cap of $360,000.
Sen. Richard Lugar, R-Ind. and Sen. Frank Lautenberg, D-N.J., plan to offer an alternative bill that would eliminate direct payments completely and replace them with crop insurance for all farmers.
The Associated Press contributed to this report.