Specialty Crop Growers Look for Bigger Share

By Eric Mortenson, The Oregonian, Portland, Ore.

Jan. 24–Oregon farmers usually have little stake in the federal farm bill. The state grows high-value crops ranging from pears and blueberries to grass seed and wine grapes, but in the world of federal farm policy those are considered specialty crops.

They aren’t eligible for the billions of dollars that flow primarily to Midwest and Southern growers of the big commodities: wheat, corn, rice, cotton and soybeans.

The growers of those five crops receive more than 90 percent of subsidy payments, even though specialty crops account for slightly more than half of the nation’s farm production value.

Now versions of the 2007 federal farm bill moving through Congress have Oregon’s diverse producers thinking their time is coming. Most aren’t interested in direct payment subsidies such as the commodity growers. But they would welcome more help with conservation practices, marketing, disease and pest problems, export assistance and other issues.

The commodity price support system is “ridiculous” at a time when wheat is selling at a record $14 a bushel, said Peter McDonald, a Wilsonville hazelnut grower.

Hazelnuts, also known as filberts, are a specialty crop and don’t benefit from farm bill support. McDonald said he would welcome federal to help to develop trees resistant to Eastern filbert blight. Farmers stave off the disease now by extensively pruning their orchards, but it eventually will kill the trees.

“I would like to see increased research funding,” McDonald said. “Some might say that’s a subsidy, but it would be short term.”

Many Oregon farmers and activists strongly support shifting commodity money to specialty crops, conservation and renewable energy programs, but change is likely to be gradual, said Brent Searle of the state Department of Agriculture.

“People in agriculture recognize that you don’t yank the rug out from under people,” Searle said. “You don’t want to collapse the whole Midwest economy by suddenly changing these programs.

“It’s a question of timing and method rather than a philosophic issue,” he said. “How do you pay for it and make the transition without hurting other farmers?”

It’s unclear how funding contained in the $286 billion farm bill will be divided. Two-thirds of the bill, which is renewed every five years, goes to food stamps, school lunches and other nutrition programs.

Commodity subsidies, estimated at $42 billion in the current version, have long been criticized for paying millions to farming conglomerates or absentee landowners. In some cases, payments are made with little regard to market conditions or whether recipients have any connection to farming.

In Oregon, 1,088 farm subsidy recipients from 2003 to 2005 had addresses in Portland. The figures come from a database established by the Environmental Working Group, based in Washington, D.C. (Go to www.ewg.org to see the database.) Veto threatened

The U.S. Senate and House have passed farm bill versions that would make more money available for specialty crops, conservation and nutrition programs, but the Bush administration doesn’t like either and has threatened a veto.

Meeting Jan. 11 with the editorial board of The Oregonian, Agriculture Undersecretary Mark Rey said that neither version took the “hard step” of reforming the commodity program. With farm income and exports at record levels, he said, “you’ve got to ask yourself how it’s justified.”

Among other changes, the Bush administration favored eliminating subsidies to farmers with an annual income of more than $200,000; the cap now is $2.5 million. The administration also proposed targeting $5 billion for specialty crop programs, including $3.2 billion to buy fruit and vegetables for school lunch programs and $1 billion for plant breeding, genetics and other research.

Raising taxes or manipulating the budget to increase funding to other programs is unacceptable, Rey said. “If you take reform off the table, you don’t have money to fund specialty crops, conservation or nutrition programs.”

The Bush administration has an unusual mix of allies on farm bill reform: environmental groups, organic food growers and grocers, the World Trade Organization and conservative think tanks such as the Cato Institute. “It needs it now”

The Oregon Farm Bureau is pleased that both House and Senate versions of the farm bill would increase support for specialty crops but wary of cutting commodity support, bureau President Barry Bushue said. “Agriculture needs a farm bill, it needs it now, and it needs to include a well-funded commodity program.”

Bushue, who farms near Boring, grows nursery stock, flowers and pumpkins — none of which qualifies for federal support.

“The farm bill has its naysayers, but often times it’s based on a lack of understanding,” Bushue said. “It’s less than 2 percent of the entire nation’s expenditures. It’s a damn cheap investment in national food security.”

Oregon receives $70 million to $100 million annually in federal farm support. About half goes to commodity growers and the other half to programs such as water and erosion projects, wetland restoration and animal waste management.

The previous farm bill expired Dec. 31, and lack of replacement legislation is causing problems for the one group of Oregon farmers most dependent on commodity payments: the 4,000 producers and landholders who farm about 1 million acres of wheat.

Uncertainty over the farm bill’s resolution is holding up seasonal operating loans that wheat farmers typically secure during the winter months, said Tammy Dennee, executive director of the Oregon Wheat Growers League. Banks consider federal crop payments to be secure collateral and are reluctant to loan money until the farm bill is approved, Dennee said.

“If direct payments are stricken . . . then those operating loans will be rejected,” she said.

Wheat prices are at a record high — recently topping $14 a bushel when $6 used to be considered good — but bankers are unwilling to loan money based on the potential value of harvests, Dennee said. “There’s no guarantee for any producer that they’ll have a substantial harvest. Every farmer is the ultimate risk-taker; they put a crop in ground and say a prayer.”

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