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Peanut Program Emerging Largely Unscathed in GOP Budget Bill

November 15, 1995

WASHINGTON (AP) _ Despite a yearlong campaign to kill it, the government’s controversial peanut program is emerging largely unscathed in the final balanced budget plan being negotiated by House and Senate Republicans this week.

Under an agreement that’s being incorporated into the budget bill, the peanut program would be continued for seven more years, but the price guaranteed farmers with government-issued peanut quotas would be cut by 10 percent.

``It’s astounding that with all the fervor and the tremendous rhetoric in Congress to change things, the peanut program has been able to weather the storm,″ said Mark Epstein, president of Public Voice for Food and Health Policy.

The agreement would reduce the price the government guarantees farmers with peanut quotas from the current $678 a ton to $610 a ton. It also eliminates an existing provision that permits that guaranteed price to rise each year as the cost of production increases.

But the price reduction is far less than was sought by companies that buy peanuts from farmers and shell them, and by the manufacturers who take the shelled peanuts and process them into candy bars and other peanut products.

Shellers wanted the support price cut to $550 a ton, while manufacturers argued that the current support price should be halved over five years so it would match the world market price for peanuts.

Outside the industry, consumer groups and influential lawmakers like House Majority Leader Dick Armey, R-Texas, had campaigned all year to kill the program. They contended that the high support price adds millions of dollars annually to the consumer cost of peanut products.

Wilbur Gamble, chairman of the Georgia Peanut Commission, said farmers who depend on the program ``did well to survive at all,″ given the widespread opposition to it both inside and outside of Congress.

Republican leaders are hoping to push the massive budget bill through the House and Senate this week. President Clinton has promised to veto the measure, and it’s unclear how that veto and future negotiations with Congress would affect the peanut agreement.

But if it eventually becomes law, the new peanut program will be structurally similar to the one that began during the 1930s and last underwent a major rewrite in the late 1970s.

It reserves the bulk of the domestic peanut market to farmers with quotas, which are issued by the government to owners of land traditionally used for peanut production. Farmers without quotas can grow peanuts, but can’t sell them in the domestic market. The government price support for that crop, known as ``additionals,″ is just $132 a ton.

The agreement is designed to save the taxpayers $500 million over the next seven years, primarily by reducing the volume of peanuts eligible for the higher quota support rate.

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