FARMERS TO BE COMPENSATED FOR FRENCH-FRY IMPORTS
by Gintautas Dumcius
Wall Street Journal (Eastern edition).
March 28, 2005. p. A2
WASHINGTON -- Imports of processed French fries from
Canada depressed prices for the 2003 potato crop, the U.S.
Department of Agriculture ruled, and Idaho potato farmers
stand to receive government aid payments as a result.
The department last week approved and is expected today to
certify a petition by the Potato Growers of Idaho stating that
imports of Canadian French fries depressed Idaho
fresh-market prices by more than 21% in the 2003 season.
The import flood was another blow to an industry already
hurting from the low-carb diet craze and a slowdown in the
expansion of fast-food restaurant chains, which sell about 90%
of the fries consumed in the U.S.
"The last several years have been very brutal for growers in
the fresh market," said Paul Patterson, an agricultural
economist at the University of Idaho. The government aid,
called trade adjustment assistance, would have no affect on
current potato prices, he said.
Trade adjustment assistance, long available to manufacturers
hurt by foreign competition, was expanded by Congress to
include farmers in 2002. It allows producers to receive up to
$10,000 in cash as well as technical and marketing training if
they can demonstrate to the Department of Agriculture's
satisfaction that foreign countries hurt domestic prices.
Petitions are made by individual states.
Idaho growers who sell potatoes in the fresh market have 90
days starting today to apply at their county's Farm Service
Agency to participate in the program.
Once growers are approved for the assistance, they can
receive cash benefits based on their production, according to
Dennis Fiess, a trade adjustment assistance specialist at
Washington State University. The payment comes to 3.5 cents
per hundred pounds of potatoes, and Idaho's Farm Service
Agency expects the estimated 285 eligible farmers to collect a
total of roughly $1 million. There were 818 potato farms in
Idaho in 2002, according to the Idaho Agricultural Statistics
Office.
Idaho produced 12.3 billion pounds of potatoes in 2003, down
from 13.3 billion in 2002. Production rebounded to 13.2 billion
pounds in 2004.
Agriculture experts and Idaho growers said imports of
processed French fries from Canada surged 24% to 1.72
billion pounds in 2003, displacing 670 million pounds of Idaho
potatoes. The fresh potato price dropped to 3.85 cents per
pound in the 2003 season, from the five-year average price of
4.9 cents per pound
The government program's cash benefits will soften the blow
of the French fry imports, but in terms of the overall cost for
farmers it may not help much, Idaho farmers say. "It's a drop
in the bucket for any average potato farmer's cost," said Keith
Esplin, executive director of the Blackfoot, Idaho-based Potato
Growers of Idaho, who brought the petition. "It won't
anywhere near begin to make up for his losses."
Mr. Fiess will be working with Foreign Agricultural Service
and Idaho farmers to come up with "shotgun" business training
for the farmers. It will include workshops, some available over
the Internet, on such basic business-management skills as
using a balance sheet and cash-flow statement.
"We're not going to provide them with an M.B.A.," said Mr.
Fiess. "It's more of an overview."
More articles are available at the Wall Street Journal's website.
by Gintautas Dumcius
Wall Street Journal (Eastern edition).
March 28, 2005. p. A2
WASHINGTON -- Imports of processed French fries from
Canada depressed prices for the 2003 potato crop, the U.S.
Department of Agriculture ruled, and Idaho potato farmers
stand to receive government aid payments as a result.
The department last week approved and is expected today to
certify a petition by the Potato Growers of Idaho stating that
imports of Canadian French fries depressed Idaho
fresh-market prices by more than 21% in the 2003 season.
The import flood was another blow to an industry already
hurting from the low-carb diet craze and a slowdown in the
expansion of fast-food restaurant chains, which sell about 90%
of the fries consumed in the U.S.
"The last several years have been very brutal for growers in
the fresh market," said Paul Patterson, an agricultural
economist at the University of Idaho. The government aid,
called trade adjustment assistance, would have no affect on
current potato prices, he said.
Trade adjustment assistance, long available to manufacturers
hurt by foreign competition, was expanded by Congress to
include farmers in 2002. It allows producers to receive up to
$10,000 in cash as well as technical and marketing training if
they can demonstrate to the Department of Agriculture's
satisfaction that foreign countries hurt domestic prices.
Petitions are made by individual states.
Idaho growers who sell potatoes in the fresh market have 90
days starting today to apply at their county's Farm Service
Agency to participate in the program.
Once growers are approved for the assistance, they can
receive cash benefits based on their production, according to
Dennis Fiess, a trade adjustment assistance specialist at
Washington State University. The payment comes to 3.5 cents
per hundred pounds of potatoes, and Idaho's Farm Service
Agency expects the estimated 285 eligible farmers to collect a
total of roughly $1 million. There were 818 potato farms in
Idaho in 2002, according to the Idaho Agricultural Statistics
Office.
Idaho produced 12.3 billion pounds of potatoes in 2003, down
from 13.3 billion in 2002. Production rebounded to 13.2 billion
pounds in 2004.
Agriculture experts and Idaho growers said imports of
processed French fries from Canada surged 24% to 1.72
billion pounds in 2003, displacing 670 million pounds of Idaho
potatoes. The fresh potato price dropped to 3.85 cents per
pound in the 2003 season, from the five-year average price of
4.9 cents per pound
The government program's cash benefits will soften the blow
of the French fry imports, but in terms of the overall cost for
farmers it may not help much, Idaho farmers say. "It's a drop
in the bucket for any average potato farmer's cost," said Keith
Esplin, executive director of the Blackfoot, Idaho-based Potato
Growers of Idaho, who brought the petition. "It won't
anywhere near begin to make up for his losses."
Mr. Fiess will be working with Foreign Agricultural Service
and Idaho farmers to come up with "shotgun" business training
for the farmers. It will include workshops, some available over
the Internet, on such basic business-management skills as
using a balance sheet and cash-flow statement.
"We're not going to provide them with an M.B.A.," said Mr.
Fiess. "It's more of an overview."
More articles are available at the Wall Street Journal's website.
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