U.S. has spent $79 million backing peanut farmers

Liz Sauchelli Contributor
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The U.S. has spent $79 million in support of U.S. peanut farmers thus far in 2011.

According to the USDA FY 2012 Budget Summary and Annual Performance Plan, the U.S. spent $103 million on peanut subsidies in 2010 and the USDA has estimated that it will spend another $55 million in 2012.

A Citizens Against Government Waste press release estimates that based on the 2012 forecast that if the trend continues, Americans will spent $275 million in support of peanut farmers over the next five years.

Federal assistance for peanut farmers has existed since the 1900s. A formal program was established through the Agricultural Adjustment Act in 1933.

According to the Farm Subsidy Database, Georgia peanut farmers received more of the subsidies than farmers in any other state in 2009. Texas and Alabama peanut farmers ranked number two and three, respectively.

Executive director of the Georgia Peanut Commission Don Koehler said that subsidies provide a safety net for farmers during an off year.

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However, “Our costs are running through the roof right now, and we’ve got a farm program that doesn’t even cover what a farmer would lose in a year like this,” Koehler said.

One way subsidies are given out is through base land. Peanut farmers are given $36 for every acre of base land, which is based off of their production history with the government. They receive a direct payment on 85 percent of their base land.

If a farmer, however, chooses not to plant their crop that year based on individual market predictions of how much they think peanuts will sell for, they still receive base payments.

“The whole reason for the subsidies is to smooth out supplies or one that doesn’t spike from oversupply one year to under supply the next,” said Bob Sutter, executive director for North Carolina Peanut Growers.

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Liz Sauchelli