Cover Story: The last peanut warrior
After 60 years, Congress wants to end the peanut program. But no government program that’s lasted this long disappears overnight. And Wilbur Gamble’s not making it any easier.
Let’s say you own a few thousand acres in south Georgia. You’ve lived there all your life, even served as chairman of the county commission for 30 years. But your passion is peanuts, and that passion has brought you around the world, from Scandinavia to Monte Carlo, from Argentina to Australia. Now you’re 67, an age when a lot of people start taking afternoon naps.
Then you hear that Congress is about to pass a new farm bill, and as part of that bill, you stand to get more than $100,000 a year from the government for the next five years.
So, here’s a question: What do you do?
Well, one thing you probably wouldn’t do is work the phones all day trying to figure out a way to sue the very govern-ment that’s planning to cut you those 100 grand checks.
But if you did, you’d have a lot in common with Wilbur Gamble, Terrell County commission chairman, gentleman farmer, member of the Georgia Peanut Commission, and, these days, a royal pain in the ass to those who believe it’s time to finally put an end to the way America grows and sells its peanuts.
Gamble is one of the 27,000 Georgians who own a peanut quota — essentially, permission from the U.S. government to grow peanuts and sell them at a hefty price. A quota holder might have permission to grow a thousand pounds of quota peanuts each season, or all the way up to a million pounds or more. Quota holders who no longer farm can rent out the quota to their neighbors. In south Georgia, there is an irrefutable calculus: Quotas equal money.
Their days, though, are numbered. Over-generous support prices and falling trade barriers have meant manufacturers are buying peanuts shipped in from Mexico or Argentina, avoiding for as long as they can the expensive ones raised on the red fields of Georgia and Alabama. Members of Congress want to end the quotas and pay out the quota holders.
They want to cut Wilbur Gamble a check, only he doesn’t want it.
“It gets down to being a personal thing,” he says from his office in Dawson, a sleepy burg on the road between Columbus and Albany. “OK, well, we’ll see. They might win. I won’t say they won’t. But I know one thing — it’s gonna be a harder job for them to win ‘cause of me and some other people who are out there. What they did was wrong, it was unfair and they did it with a lot of money being paid by the same people being taken away from.”
As Tyrone Spearman, editor of a peanut industry newsletter, describes it, scrapping the quota program will trigger a “gigantic transfer of wealth” in south Georgia and other peanut-producing regions. It also could lower the price of candy bars and peanut butter — although by how much is a matter of contention.
Or, as Chad Gunter, a 28-year-old peanut farmer from Worth County, says, “Just like everything else — some are gonna win, some are gonna lose.”
To city slickers, farming seems a simple proposition. Grow a crop, harvest it, sell it. If the growing season is good, hope that it’s not so good that there’s a glut and prices plummet. If it’s bad, hope that you harvest enough to take advantage of the higher prices. Rotate crops. That will help keep your soil healthy and act as a hedge if one crop tanks.
The equation, though, fails to take into account the government, which for decades has been vitally interested in how America farms. It’s an interest that served the country well during the Depression, when government subsidies first began flowing into farms. For example, beginning in 1941, peanut farmers were assigned “allotments”; for every pound of peanuts produced up to a certain amount, farmers were guaranteed an attractive price.
Over time, allotments gave way to quotas. Peanuts produced over a set amount also could be sold, but at a much lower price. These are called “additionals.” Without a quota, a farmer is free to grow peanuts, but they can be sold only as additionals — hardly worth the trouble.
So if a farmer with no quota wants to grow peanuts and make money, he has two choices: rent quota from someone, or buy it outright.
Not surprisingly, a system like this is enough to make free-market proponents apoplectic.
“It’s a total scam,” says James Bovard, a policy analyst at the Cato Institute and author of The Farm Fiasco. “It’s almost like a system of indentured servitude. ... You’ve got Congress year after year voting to perpetuate these monstrosities.”
“Government-appointed monopolies,” grouses the Peanut and Tree Nut Processors Association, a manufacturers’ group.
Initially, though, the idea was a noble one: By maintaining minimum prices, the government would encourage farmers to grow a wide variety of crops, keeping the pantries of America well-stocked. What’s more, rural America would share in some of the prosperity enjoyed by industrial America.
Even today, as he bids it a likely adieu, Sen. Zell Miller talks about the peanut program in wistful tones. “It provided economic security to some of our country’s poorest areas,” he said last month on the Senate floor.
If only that were true. After 60 years of the peanut program, south Georgia is still stuck in the economic doldrums. In Gamble’s own backyard, Terrell County, per capita income is just over $16,000, compared to a statewide average of $27,324. One out of every five county residents takes food stamps. In 1990, almost half of the adult population lacked a high school degree.
From this evidence, you can reach one of two conclusions: Either the government needs to subsidize agriculture even more in Terrell County and counties like it, or the only difference these entitlements are making is to the farmers and quota holders who share in them.
What’s more, the same measures designed to protect American peanut farmers have paradoxically harmed the health of the industry overall. Take the case of Mexican peanuts.
Marshall Lamb has printed out a chart tracking the cost of Mexican import peanuts to manufacturers. Lamb, an agricultural economist at the USDA’s National Peanut Laboratory in Dawson, speaks with the quiet confidence of one who’s used to explaining the byzantine world of peanut economics to outsiders.
A straight red line cuts across the center of the chart. The line signifies the $610 that quota holders right now are guaranteed per ton of peanuts. Current import duties raise the cost of Mexican peanuts to well above that red line. But thanks to the North American Free Trade Agreement, that cost diminishes each year. As each vertical bar marches across the page, the price gets lower and lower; in 2005, Mexican peanuts will cost less than $610 a ton for the first time. By 2008, those import duties will disappear altogether.
To understand just how much manufacturers crave imported peanuts, consider this: The import season begins April 1. By April 3 last year, all the available foreign peanuts had been bought, Lamb says.
The irony is that if there’s one thing all sides agree on is that when it comes down to health, quality and taste, nothing beats the American peanut. All things being equal, manufacturers would prefer to buy domestic peanuts.
Heaven knows there’s enough of them. Last year, Georgia and the rest of the peanut-producing states in the Southeast and West saw one of their best crops ever. The average yield per acre in Georgia was its second highest on record. Nationwide, farmers grew about 2.3 million tons of peanuts.
But it was the wrong time for a bumper crop. Exports were off by a third. Americans were eating less peanut butter and fewer candy bars. And as the current farm bill was edging toward its 2002 expiration date, there was talk once again in the nation’s capital of ending the program that has been a part of the south Georgia economy for 60 years.
Terry Everett, Republican congressman from Alabama and peanut farmer, is speaking about the peanut industry in apocalyptic terms.
If we don’t make some changes, he’s saying, it will spell the end of the American peanut farmer. “I don’t think anybody could doubt that,” he says.
Wilbur Gamble, just feet away from him on the dais, shifts in his seat. He looks down, then up. He looks bored.
We are in the Albany Civic Center for the Georgia Peanut Farm Show and Conference. On the other side of the blue curtain behind Everett, farmers mill about, checking out the peanut diggers, the news about peanut diseases, the latest in peanut irrigation techniques. A few carry yardsticks, compliments of one of the distributors.
About 150 are seated before Everett, the keynote speaker, who is gently reminding farmers why he believes it’s time to end the quota program.
“We had a lot of critics,” Everett says of the peanut program. “NBC, ABC, CBS, every national news media that you name have for years told people how bad the quota system was. It was evil, un-American. ... I don’t much care what the national media says, but the problem it presented is if you go to a congressman who doesn’t have the knowledge and he doesn’t grow peanuts and his constituents think he voted for something that’s un-American, it’s pretty difficult to convince him that he ought to vote with you.”
In 1996, the program survived in the House of Representatives by three votes. Everett, along with Rep. Sanford Bishop and Rep. Saxby Chambliss of south Georgia, say those votes are impossible to secure now.
Last summer, the Georgia Peanut Commission sniffed the wind and decided that rather than let politicians decide, it would choose which limb to offer up for amputation. Before a House of Representatives subcommittee chaired by Everett, the Peanut Growers Association suggested it was time to end the quota. The House obliged. Its version of the bill would compensate quota holders to the tune of 10 cents a pound every year for five years. That means a 100,000-pound quota would be worth $50,000 over five years.
The bill also calls for a complex combination of loans and grants that would guarantee growers at least $350 a ton.
But those farmers who have been growing quota peanuts over the last four years would, through a complex series of loans and grants, get even more help from the government; they would be assigned a “base” — a calculated average of their last four years’ production — and then guaranteed a selling price of $480 a ton. What’s more, these producers would have six months to decide on what land to assign that base.
To Gamble, this is a double-whammy to quota holders. Bad enough that Congress is offering a paltry compensation for quotas, he says, but politicians also are effectively taking the asset of the quota holders and giving it to the farmers who have been renting it from them.
After Everett’s speech, Gamble points out the absurdity. “If they passed a bill that if you rented a piece of property anywhere in America for four years, it becomes the property of the person renting it, I’ll go along with it.”
Just days earlier, Gamble had called a rally of quota holders across south Georgia. Almost 1,000 showed up. In addition to booing congressional aides, the quota holders agreed to pony up some cash to start a legal fund. Now, on the floor of the civic center, a quota holder approaches Gamble, and asks where he can give.
“We need all we can get,” says Gamble, sounding not unlike Jerry Lewis at the MDA telethon.
If Congress wants to take quotas away, it could expect a fight.
Wilbur Gamble’s first farm was 17 acres. That was more than 40 years ago. Since then, his business philosophy concerning property acquisition has been simple: Buy more.
“Some other people who farmed just like I did, my same age, didn’t decide to buy. They decided to buy a boat. Only boat I ever owned in my life cost $185. Bought the paddle for $7 and a half. So my friends got a boat, but I have more land than some of ‘em.”
Like many quota holders in Georgia, Gamble inherited some — in his case, 85,000 pounds. As he got older, he added to the total, mostly by purchasing land and quota together.
Today, Gamble owns 4,900 acres, spread over three counties. Just as importantly, he owns more than a million pounds of quota, although how much more he won’t say. “I’ll tell you how I got it. By workin’ and buyin’. Probably the least I bought was less than 2,000 pounds, and the most I bought was about 180,000 pounds.”
It’s no surprise then, that what Congress decides to do with the quota stands to affect Gamble greatly. He doesn’t deny it. But he knows that it affects the smaller quota holders more — the retirees on fixed incomes who view their asset as a kind of 401K, who rent out their quotas for 10 or 12 cents a pound to the farmer down the road.
Gamble’s former allies at the Georgia Peanut Commission say his energy is misdirected.
“They haven’t focused on what’s doable and what’s not. They haven’t looked far enough forward,” says Don Koehler, executive director of the Georgia Peanut Commission. “What they’ve missed is the opportunity to increase their buyout payment a little bit.
“I’d wish they’d listen. Nobody’s listened to the realities of Washington, D.C. The Washington, D.C., they’re trying to live in is the Washington, D.C., of 20 years ago. We’ve got a very urban Congress now. I remember when a half-dozen of our representatives had rural districts.”
In Washington, Bob Redding has worked as a lobbyist for the commission for 21 years. He’s one of the people Gamble believes has betrayed quota holders. But Redding is confident that this bill is the best option.
“If this bill passes, we can recapture our import market for the first time in many, many years. And we have an opportunity to participate in a serious way in the export market.”
“If we can’t get to Zell Miller, we ain’t gonna do nothin’. I might as well try to get to George Bush. You can’t get to Miller. I’ve tried everything I can. Last time I talked to him personally, he was asking me for a thousand dollars. Since then, I ain’t heard a damn word from him.”
Wilbur Gamble is talking into his cell phone, which jingles every few minutes as he steers his red pick-up around Terrell County. On some fields, vast irrigation systems stretch into the distance like elongated jungle gyms. A crane takes wing from a pond. But Gamble’s eyes stay on the road, his mind on peanuts.
“I believe that Zell Miller by himself could change it in the U.S. Senate,” Gamble says into the phone.
To help with the last-minute lobbying, Gamble has joined forces with Jimmy Allen, an accountant from Adel and quota holder. Allen, who either by himself or through partnerships owns around 700,000 pounds of quota, has a diplomat’s way with words that Gamble lacks, or chooses not to employ. As such, it’s easy to understand why Allen is the emissary for the quota holders in Washington and the designated spokesman for the group.
Of a possible lawsuit against the government, Allen says, “There are segments of the quota holders that talk in that direction. I don’t think we need to do that personally. I think that’s counter-productive. It’s hard to hold a hammer over somebody’s head and say, ‘Do this for me.’ What we need to do is negotiate sensibly and talk about the issues sensibly.”
Don’t mistake Allen’s verbal finesse with a lack of commitment, though. He believes firmly that quota holders are getting the shaft.
“What the quota holder is giving up is a property right,” he says. “So the question is, is he being properly compensated for his property? Basically, the answer to that is no. Ten cents a year for five years is nothing more than the rent he gets.”
A quota, he explains, can be taxed 45 cents a pound when it’s passed down — a worst-case scenario, to be sure.
“So if you have a property right that you’ve paid 45 cents in an estate tax to inherit it, it’s difficult to say, ‘Here’s 10 cents a year for five years.’ Ten cents a year for five years is about 38 cents in present value.”
Last week, Spearman, the newsletter editor, said it didn’t appear the quota holders were finding much sympathy in Congress.
“The word we got is that the protesters did not get very far in Washington,” said Spearman, who predicted a farm bill will pass the Senate no later than President’s Day — Feb. 18.
One of the sticking points is who will pick up the cost of grading and storing peanuts, a process that can add $50 to each ton.
And of course, the bigger question is how any of these changes will affect the American consumer. Logic would seem to dictate that if manufacturers pay less for their raw products, they’d pass at least some of those savings on to the consumer.
That’s Spearman’s argument, anyway. “Raw product costs will drop by a third. That will probably not convert to a full third on your process product. A Snickers bar won’t go down. Peanuts is only 3 cents of that 65 cents. But a jar of peanut butter, which is 90 percent peanuts, will go down. The price will go down at least 20 to 25 percent and therefore we can grow 20 to 25 percent more because demand will go up with the lower price.” (Spearman, it should be noted, also has a dog in this fight: In addition to his writing gig, he acts as a buyer, purchasing peanuts from farmers for the companies that shell the peanuts.)
Others aren’t so optimistic. “The processing end of the peanut industry is an oligopoly,” according to an analysis written last year by Stanley Fletcher and Nathan Smith, economists at the University of Georgia. “The effects of lower farmer prices would not likely be passed on to the retail level. If full savings were passed on, the amount would be small.”
Actually, the cost of peanut butter has already been dropping. In April 1991, a 16-ounce jar of peanut butter cost $2.21; a decade later, it had dropped to $1.95, according to the Bureau of Labor Statistics. Factor in inflation, and the price of peanut butter has gone down 32 percent in 10 years.
“This product is a bargain,” Art Jaeger, associate director of the Consumer Federation of America and opponent of the peanut program, grudgingly admits.
The price of peanut butter, though, is a long way from the mind of Wilbur Gamble, who is busy working the phones to save some vestige of the program that has helped make him a wealthy man. Last Thursday, he planned to meet with an attorney. And he also got a call from Sen. Max Cleland’s office. They wondered if he might make a meeting at 3 p.m. that day in Savannah with the Secretary of Agriculture, Ann Veneman.
Problem is, the call came at noon and Savannah is a 4 1/2-hour drive from Dawson. The only way he’d make it is by plane. The battle, it seems, will have to wait for another day.
“Well,” Gamble says, “at least they called.”
steve.fennessy@creativeloafing.com??