WASHINGTON -- A new Agriculture Department rule for grading this year's peanut crop took effect Monday, with lawmakers contending it will save farmers in the Southeast millions of dollars.
Agriculture Secretary Dan Glickman, in a meeting Friday with lawmakers from Georgia, Alabama and Florida, said the department for the first time this year will allow farmers whose peanuts are graded of poor quality to clean them before a second and final grading.
Previously, when peanuts were classified as "segregation 3" because of mold or other quality problems, none of the peanuts in that lot could be sold for domestic use. Peanuts sold domestically bring a minimum of $610 per ton, guaranteed by the government. Those not sold for domestic use must be crushed for oil or exported, with farmers receiving as little as $135 a ton.
"Tens of millions of dollars in potential losses could be saved through this policy change," said Rep. Terry Everett, R-Ala., a member of the House Agriculture Committee.
Sen. Paul Coverdell, R-Ga., said the rules change "is another step toward helping Georgia farmers get back on track," after suffering from weather-related crop failures over the past two seasons.
After a drought last year hurt the quality of peanuts grown in the Southeast, the House agriculture subcommittee on risk management and specialty crops held a hearing in Dothan, Ala., in January on the Agriculture Department's grading policy.
Losses on last year's crop also prompted three Alabama growers to sue in U.S. District Court in Montgomery challenging the Agriculture Department's policy requiring classification of an entire lot as "segregation 3" if any of the peanuts in the lot were of poor quality.
The suit was dismissed because the growers had not first attempted to get the department to change its policy administratively.
The new rule will be effective only for this year's crop, but the department is accepting public comment on a proposed permanent change.
Under the new rule, farmers whose peanuts are found to have quality problems will have 24 hours to clean them and have them visually reinspected at the same site. Only one reinspection will be permitted for any given lot.
Rep. Bud Cramer, D-Ala., who helped arrange Friday's meeting with Glickman, said the new rule is a "win-win situation" for farmers and the government.
"For our farmers, USDA's decision means we have a grading system that's more practical and more reasonable," he said. "For the people at USDA, they can be more confident than ever in the quality of the crops."