Chairman Frank Lucas today released the following statement on Scott O'Malia's last day as Commissioner of the Commodity Futures Trading Commission (CFTC). Last month, O’Malia announced he would resign to pursue other opportunities.
Fruit and Vegetable; Honey Industry Look to Farm Programs for Assistance
(May 2, 2001)
Two industries that have not been participants in traditional farm programs made their pitch to the House Agriculture Committee today for increased support for their operations. Representatives of the fruit and vegetable industry, as well as the honey industry, explained how the economic crisis that is facing all of American agriculture has affected their industries.
Chairman Larry Combest (R-Texas) explained, "While these commodities are not supported in the same way as traditional program crops, federal agricultural policy is no less important to them. What's more, both the honey and fruit and vegetable industry are facing many of the same challenges that producers of all commodities face today—from a strong U.S. dollar giving foreign competitors a leg up and depressing domestic prices, to invasive pests and labor shortages threatening our ability to produce."
Mr. L. John Milam, Chairman of the Sioux Honey Association, presented testimony on behalf of the honey industry. Their recommendations for legislation included:
· To use the Commodity Credit Corporation funds to make non-recourse marketing assistance loans to honey producers at a national average rate of 65 cents per pound.
· The repayment of marketing assistance loans at the loan rate plus interest, or the prevailing domestic market price, as determined by the Secretary, whichever rate is lower.
· Eligibility of a producer of honey to obtain a loan deficiency payment if the producer agrees to forgo obtaining a marketing assistance loan; the LDP to be at a rate by which 65 cents per pound exceeds the marketing assistance loan repayment rate multiplied by the quantity of honey the producer is eligible to place under loan.
· Marketing assistance loan gains and loan deficiency payments a person may receive for a crop of honey would be subject to the same limitations that apply to loans and LDP's received by producers of the same crop of other agricultural commodities.
· The program would be implemented in such a manner so as to minimize forfeitures of honey marketing assistance loans, and a commodity certificate program, similar to the program currently in effect for other commodities, made available to honey producers so as to encourage the orderly marketing of honey pledged as security for loans.
· A producer that has marketed or redeemed a quantity of a crop for which the producer has not received a LDP or marketing loan gain could receive such payment or gain as of the date on which the quantity was marketed or redeemed.
Mr. Tom Stenzel, President and CEO of United Fresh Fruit and Vegetable Association (United) presented legislative proposals to the Committee on behalf of the fruit and vegetable industry. According to the industry, "The goal of any farm policy should be to enhance the tools necessary to drive demand, utilization, and consumption of our agricultural products and market place." Recommendations of the fruit and vegetable industry included::
· Enactment of legislation to increase funding authority for the Market Access Program (MAP) from $90 million to $200 million. The MAP program would also be altered to provide flexibility in expanding the five year stipulation for international product promotions under the MAP based on existing market access and trade barriers.
· The current planting restrictions for fruits and vegetables, as stated under the 1996 FAIR Act, should be maintained.
· The current limit on direct operating loans of $200,000 should be increased to $500,000 for producers of perennial fruit and vegetable crops.
· The current limit on guaranteed operating loans of $731,000, which is adjusted annually for inflation, should be increased to $1.5 million for producers of perennial fruit and vegetable crops.
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