TIFTON, Georgia— Congressman Jack Kingston, R-Ga., along with Congressmen Sanford Bishop, D-Ga., and Allen Boyd, Jr., D-Fla., offered an amendment recently in the House Appropriations Committee that would continue the peanut storage and handling fees program through 2007. The amendment was approved unanimously by the House Appropriations Committee during discussion on the agriculture funding bill on May 9, 2006.

“Our grower leadership met with Jack Kingston earlier this year and asked him to help restore the storage and handling fees language for the 2007 crop,” says Armond Morris, chairman of the Georgia Peanut Commission. “Congressman Kingston’s amendment will allow the Georgia peanut industry to continue as a vibrant component for our state’s economy, providing jobs and a significant impact on rural communities.”

Georgia growers planted 755,000 acres of peanut in 2005. Total peanut production was 2.152 billion pounds. Georgia producers would lose an average of approximately $9500 each if the storage and handling fees are excluded for the 2007 crop year. The estimated loss for the Georgia peanut industry, without the storage and handling fees, is $43 million for 2007.

In response to concern that growers would absorb the storage costs associated with peanuts placed under loan, the 2002 Farm Bill conferees directed the U.S. Department of Agriculture to use Commodity Credit Corporation funds to pay storage, handling, and related costs through the 2006 peanut crop. The amendment would extend this until the Farm Bill is reauthorized in 2008. Because payments would be made after harvest in the 2008 Fiscal year, this amendment does not have a cost for the 2007 Fiscal year.

In order for the marketing loan to be fully effective for growers they have to be able to delay their marketing if appropriate. Unless there is an economical way to do that (i.e., not having the expense of storage and handling) then the marketing loan itself becomes an illusory benefit. The cost of using the marketing loan will just be too high for the grower to use effectively.

Peanuts, unlike many other crops are difficult to store 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 absolutely necessary expense and one that the grower can't avoid by doing it himself.

If the marketing loan is a policy of the 2002 Farm Bill then this is a necessary component for that policy to be viable.