Farm policy's blossoming dilemma

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Farm Policy's Blossoming Dilemma

Apple Growers' Plea Reveals Strains on Agriculture Safety Net

By Dan Morgan, Washington Post Staff Writer

Thursday, May 10, 2001; Page A01

ALBION, N.Y. -- In the narrow fruit belt that clings to the southern shore of Lake Ontario like some fertile Yankee Monterey, apple growers are a flinty breed who have prospered for nearly two centuries without the federal support that many American farmers take for granted.

Country roads lined with sugar maples cross a reminder of the region's former economic importance -- the Erie Canal, known locally as "DeWitt Clinton's Ditch" for the 19th century New York governor who helped create it. But this year, as a late spring once again begins to transform the gnarled fruit trees and orchards into a blanket of sweet-smelling blossoms, the apple industry is turning in desperation to Washington in what could mark the beginning of an expensive new chapter in American agriculture.

The apple growers are at the heart of a debate that is just now beginning on Capitol Hill over how far the federal government should go to protect domestic agricultural interests in the increasingly globalized food economy. Perennial boom and bust cycles have always winnowed out weak farmers. But many fruit and vegetable growers believe they are facing something fundamentally different.

Foreign agribusinesses, using sophisticated Internet marketing, quickly fill gaps in U.S. supplies of everything from asparagus to garlic. Surging Latin American investments in transportation, packaging and marketing have turned countries such as Chile into tough competitors for U.S. citrus growers.

With Internet access, any farmer in the world can log onto Cornell University's database and check on new fruit varieties, "down to how deep to put the roots in the ground," said one grower.

American apple growers complain that foreign competitors as diverse as Moldavia, New Zealand, Chile, Argentina, Mexico and China do not have to observe costly U.S. environmental and labor laws.

Congress responded last fall with an unprecedented step: approval of $100 million of aid to the nation's 9,000 apple farmers to help compensate them for "market losses."

While the federal government occasionally has made modest payments to fruit and vegetable growers for losses from floods, storms or pests, it has never helped them just because economic times were hard. But with U.S. agriculture experiencing a prolonged slump, new groups of farmers have begun clamoring for a government safety net similar to that which has funneled $45 billion to grain and cotton farmers since 1996.

"We're independent and proud of it, but we're beyond principles," joked Karen Watt, an Albion fruit grower whose 250 acres produce apricots, peaches, pears, nectarines, plums and strawberries along with 100,000 bushels of apples annually. Faced with growing debts and declining assets, Watt said she will gladly accept the $28,000 for which she may be eligible under the cash program.

The $100 million that Congress approved last year for the apple growers -- about equal to the annual budget of the National Endowment for the Arts -- could be only the beginning. Apple growers, backed by the powerful American Farm Bureau Federation, have urged Congress to provide $500 million of assistance this year.

The industry has plenty of friends in Congress, ranging from New York's new senator, Hillary Rodham Clinton (D), to Sen. Robert C. Byrd (D-W. Va.), ranking member of the Senate Appropriations Committee.

This year, hard-pressed Idaho potato farmers, Arizona lemon producers, Oregon pear growers and California avocado farmers are eyeing federal aid as well. In addition to paying subsidies to grain and cotton farmers, the federal government buys milk to support dairy prices, uses sugar import quotas to protect domestic beet and cane growers and sets quotas and land allotments to undergird U.S. peanut and tobacco prices.

"The issue of equity is being raised more and more. They're saying they ought to have a shot at the pie," said American Farm Bureau President Bob Stallman.

He has asked Congress to approve a $1.5 billion annual contingency fund to aid fruit and vegetable growers, a sum that would gobble up $15 billion of the budget surplus over the next decade.

Others, arguing that the free market is the best answer to low prices and surpluses, strongly disagree.

John B. Campbell, a Nebraska agribusiness executive who helped draft a recent report for Congress on 21st century agriculture, said government intervention in the fruit and vegetable sector would be "an unmitigated disaster," because it would entice other farmers into the business, encourage more production and perpetuate the problem.

Many of this region's apple farmers say they are willing to take that risk. In some fields, piles of dead apple trees -- bulldozed last fall and now waiting for spring bonfires -- are signs of changing times.

In March, Susan and Gary Davy auctioned off the machinery that they had used to tend orchards and vegetables on a farm that had been in his family for a century. "You feel like you're letting them down, both past generations and your own children," she said.

Meeting around a table at a farm office in Albion on a recent weekday, one grower choked up as he talked about his plans to walk away from 40 newly planted acres of apples and take a job as a farm manager in Florida.

Several growers said they were using credit cards to pay this spring's spraying bills because they could not get new bank loans or credit from chemical companies. One grower's wife talked only half-jokingly of taking a job as a cocktail waitress.

The gloomy talk seems incongruous in a region rich in agricultural lore.

For generations, farmers living along the edge of Lake Ontario have thrived in a microclimate shielded from the howling blizzards and deep freezes that pummel Buffalo a mere 45 miles to the west. What farmers call a "slow" spring delays the blossoms and shields them from late frosts.

In the fall, the warmed lake waters postpone the onset of cold snaps until after harvest, and the sunny days add color to apples, grapes, cherries, peaches, plums and pears.

But in the last three or four years, the apple market has been so tricky that temporary setbacks -- such as the ruinous hailstorms that hit in 1997 and 1998 -- can set the stage for financial ruin.

Upstate New York apple growers, who supply more than half their crop for processing or juice rather than the higher-price fresh apple market, say they have been particularly vulnerable to surging foreign competition.

In 1996, U.S. juice imports from all sources jumped from the equivalent of 61,000 bushels to 81,000 bushels -- about one-third of the U.S. apple crop -- and have stayed there since. Average prices of apples nationwide have plummeted from more than $8 a bushel to less than $6, according to the U.S. Department of Agriculture. The United States still ran a $214 million trade surplus in apples in 2000, but that was down $100 million from 1996.

Last year, the Clinton administration ruled that barrels of imported Chinese concentrate, a syrupy liquid used by companies such as Mott's, were being "dumped" in the United States at a price below the cost of production.In April, the apple industry filed a complaint charging that stiff new U.S. duties were being circumvented by shipments through Canada.

The orchards of Bruce Krenning, an apple grower who is also vice president of the New York Farm Bureau, were struck by hail on Labor Day 1998, resulting in an uninsured loss of $525,000 in just a few minutes. But it was his apple broker who delivered the bigger blow the following year, informing Krenning that he could find no buyer for Krenning's Greenings and Twenty-Ouncers, two common apple varieties.

Krenning's first thought, he recalled, was "that's why they made whiskey." He finally sold the produce to an apple slicer for less than what he says the fruit cost to grow and harvest.

Then last year, Krenning, a plain-spoken man of 57 whose worry shows in the baggy flesh piling up below his eyes, decided to try a new tack. He broached the idea of seeking direct government aid to a neighbor. After dismissing it out of hand, the neighbor called back the same night and said it might be worth considering.

The state and national farm bureaus supported his initiative, and at a meeting with Sen. Charles Schumer (D-N.Y), the senator told him, "Go for it, Bruce -- I'll help you all I can."

Apple growers from Michigan, Pennsylvania and Virginia joined the movement, drumming up backing from their congressional delegations, and things "went like wildfire," Krenning said. Krenning and the national Farm Bureau worked closely with the staff of Rep. James Walsh (R-N.Y.), who used his position on the agricultural appropriations subcommittee to include the $100 million aid provision, along with another $38 million for potato and apple farmers whose crops had been hurt by fire blight, hail or other weather disasters.

At a Farm Bureau-sponsored meeting in Chicago in December that was also attended by Washington state apple growers, a decision was made to press for $500 million in 2001.

Yet even some apple growers who have supported the aid express uneasiness about it. "We need a safety net, but we should have alternatives other than direct government payments, such as a crop insurance program that works," grower George Lamont said.

Not all upstate fruit and vegetable farmers are close to bankruptcy. Some with financial reserves are still planting new trees this spring, banking on a turnaround.

But without a better safety net, say spokesman for growers and farm organizations, the domestic fruit and vegetable industry could one day vanish like the tomato processing plants that used to turn the creeks of this region red during canning season.

"I truly think that what we're deciding here in very rapid fashion," Krenning said, "is, are we going to have food production in the United States of America?"

2001 The Washington Post Company

-- Swissrose (cellier3@mindspring.com), May 10, 2001


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