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Apple Industry Meeting with August Schumacher, Jr., Under Secretary for Farm and Foreign Agricultural Services
On Sunday, August 8, Gus Schumacher, Under Secretary for Farm and Foreign Agricultural Services, met with Vermont apple growers (his 2nd meeting in less than a month in Vermont). The reason for this meeting is the concern the government has about the economic situation of the US apple industry. Under consideration is a government relief package for the industry. One concern from the northeast growers is that the Washington industry, being so large, might gain the most from any relief package. Mr. Schumacher suggested that instead of reacting to a relief package from Washington state, that the northeast prepare its own package. The main issues discussed at this meeting are enclosed in the agenda below:
Discussion of possible funding assistance programs to provide economic relief to the U.S. apple industry
FSA Loan Limits
Increase size of operating loan programs administered by FSA
Increase ceiling on loans from $200,000 to $400,000
Funding for Orchard Replanting
Allocate matching funds for replanting orchards
Increased MAP Allocation
Increase Market Access Program for exports from current $90 million to $140 million (previous program funded at $200 million)
Improved Crop Insurance Program
Develop program based on actual value of crop.
Section 32 Funds
Increase funds for the procurement of surplus agricultural commodities, including apples.
Antidumping Decision
Encourage Commerce Department to rule on anti-dumping case against China by October 5, with duties retroactive 90 days.
MAAPL Grants
Support "one-time" grants to apple producers, through Market Assessment for Apple Price Losses (MAAPL), based on program similar to the swine industry.
Comments from Steve Justis on the proposed relief package:
Some actions helpful to the apple industry would require little or no cost. Pressuring Commerce to rule on the China anti-dumping case would be one. Increasing Section 32 funds for government purchases of apples for schools would be another. For the economic relief package, based on several discussions with FSA staff and apple growers, I'd put the priority on the long-term, low-interest loans program (including raising the loan ceiling). The rationale for the ceiling is that the overhead on apples tends to be higher on apples than on row rows such as soybeans and corn. Apple growers typically require operating capital of about $5 per bushel to carry them from pollination to harvest. The current $200,000 ceiling would only cover a 40,000 bushel orchard.
The l-t, l-i loan program should perhaps be written to include: operating loans, capital improvements (on packing lines, storage facilities, etc.) and replanting (new, improved varieties, but NOT for new acreage). I see no need for a specific replanting program, unless there's a "grant" section.
Since FSA cannot loan to cooperatives, it would be useful to have a directive to Rural Development to include apples as a priority (so the Shoreham Apple Co-op would be able to take advantage of the loan program).
Exports remain important to the U.S. apple industry, including Vermont and the Northeast, so increasing Market Access Program funds would benefit apples, dairy, processed foods, etc.
From what I've gathered, the MAAPL proposal started out of Washington State, and the idea of direct grants to growers seems like a long shot.
This relief package is meant to help you, so please participate on its development. Call or write Steve Justis with you comments at:
Steve Justis
Vermont Dept. of Agriculture & CEO Vermont Apple Marketing Board
116 State Street, Drawer 20
Montpelier, VT 05620-2901
Phone: 802-828-3827
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