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Idaho seeks financial help from USDA for potato growers

by Rand Green | January 24, 2010
In a Jan. 12 letter to Rayne Pegg, administrator of the U.S. Department of Agriculture's Agricultural Marketing Service, the congressional delegation of the state of Idaho urged consideration of a request for the "purchase of fresh potatoes under your authority to remove surplus products under the Section 32 program."

"The growing conditions for the 2009 Idaho potato crop were almost perfect, resulting in record yields and excellent quality," the letter said. "Therefore, the percentage of saleable potatoes is above average this year, and currently Idaho potato stocks on hand are nearly 13.5 percent more than last year's stocks, despite Idaho shipping 4.5 percent more than [2008-09] volumes. This situation has caused prices to drop, and prices have continued to be low for quite some time."

As a result, the letter continued, potato growers in Idaho and throughout the United States are "struggling," and "without action, the combination of a high supply and low prices will drive many growers … out of business."

Section 32 is, according to the Congressional Research Service, "a permanent appropriation that since 1935 has earmarked the equivalent of 30 percent of Customs receipts to support the farm sector." The appropriation, which currently approximates $7 billion, is used mainly to finance USDA child nutrition programs such as the purchase of fruits and vegetables for school lunch programs.

"We support the effort" of the Idaho congressional delegation to secure Section 32 assistance, Frank Muir, president of the Idaho Potato Commission, told The Produce News Jan. 19. "It is not something we would commonly do - - to ask the federal government to help us like this - but we would rather see these potatoes go into areas where they can have a benefit … rather than just rot. The problem is if we can't move up the prices, this could end up being a year where literally the growers grew a crop they didn't make any money on. You can't do that for too many years."

The total size of the 2009-10 Idaho potato crop is not unusually large. "We've moved a crop this size for three out of the last five years," Mr. Muir said. But this year, Idaho has "one of the prettiest crops [of potatoes] we have had in many years, yet it is selling at "almost record low prices." High yields, combined with "an economy that is still not recovering, especially on the food sector side, has resulted in a very downward spiral of prices."

All the industry wants, said Mr. Muir, is "a fair return for the growers each year." Ordinarily, that can be achieved with "market conditions," he said. But this year, even though "we are doing all the right things, … we have got behind in terms of pricing." The hope is that a purchase of part of the inventory under Section 32 will "ratchet prices up a little bit."