The United States is one step closer to creating a subsidy program for
pulse crops.
The U.S. Senate voted 58 to 40 in favour of a five-year farm bill that
establishes floor prices for peas, lentils and chickpeas. Beans are not
included in the subsidy package.
It’s a development that has spooked Canadian growers and traders.
“No one expected it to get past this level and it has,” said Larry
Weber, a trader with Weber Commodities Ltd.
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“There is still two more hurdles that it has to overcome, but it’s
getting too close for my comfort.”
Next, the Senate will duke it out with the House of Representatives,
which approved a 10-year farm bill that doesn’t include pulse crops.
Once there is a compromise both legislative bodies can agree on, the
bill goes to U.S. president George Bush for veto or approval.
Tim McGreevy, executive director of the USA Dry Pea and Lentil Council,
hopes the Senate and the House of Representatives can compromise before
they break for Easter.
American farmers seed in late April and early May and what crops are
included in the new farm bill will determine seeding intentions.
McGreevy is pleased the Senate adopted the pulse grower stance that
peas, lentils and chickpeas should be on equal footing with crops like
wheat and canola, which have been receiving subsidies for years.
But he’s not celebrating yet.
“There will undoubtedly be a push from the House to lower the loan
rates.”
The subsidies in the Senate bill amount to $6.47 Cdn per bushel for
peas, 20.34 cents per pound for lentils, 27.73 cents per lb. for kabuli
chickpeas and 12.88 cents per lb. for seven millimetre chickpeas.
Canadian market analysts say those floor prices would distort world
pulse markets, especially for peas and lentils.
Weber has heard estimates that it could cause pea acreage in the U.S.
to rise to one million acres in two or three years from its current
level of 100,000 acres.
“If the market price is $4.50 for peas, these guys are still going to
be guaranteed $6.47 a bushel,” he said.
Stat Publishing newsletter is forecasting as much as five million acres
of U.S. peas within the decade if the loan rates are approved.
Weber has contacted 2,000 Canadian farmers imploring them to lobby
their politicians.
“I don’t think that the MLAs, MPs and ministers of agriculture realize
the severity of this bill,” he said.
“A phone call to each and any of them should be undertaken so they
realize how serious that it is.”
Weber is convinced that adding grains into the U.S. Loan Deficiency
Payment Program contravenes World Trade Organization rules.
“There’s no way that adding grains into the LDP program can be
considered green (allowable). It has to be red.”
