Farm Leader Calls for Federal Action On Farm Crisis.

News Desks/Government Writers

SACRAMENTO, Calif.--(BUSINESS WIRE)--May 8, 2001

The president of the California Farm Bureau Federation, backed by a new poll showing public support for farmers, outlined steps the federal government can take to shore up the state's weak farm economy. Bill Pauli, a winegrape and pear grower from Mendocino County, carried a strong message to Capitol Hill today about California's farm crisis in a speech to the California Institute for Federal Policy Research.

California farmers and ranchers are squeezed by depressed commodity prices, intense and often unfair foreign competition and skyrocketing input costs, according to a report issued this week by the CFBF Farm Crisis Task Force.

"While much of the state and nation has enjoyed a booming economy the past few years, agriculture has gone bust," said Pauli. "Many farmers have fallen on hard times. For many commodities, returns to farmers have fallen below the cost of production. Some prices are at 20-year lows."

Pauli, joined by 18 county Farm Bureau leaders in Washington this week, urged federal action to strengthen California agriculture. Farm Bureau supports market-loss assistance and disaster aid for the farmers of commodities that have suffered from scarce water, high energy costs, unfair trade practices, increased environmental costs and the strong dollar.

Pauli said a recent survey of 800 Californians shows strong support for a federal role to provide relief to farmers.

"When asked if they believe the federal government has a financial responsibility to help keep California family farmers in agriculture production, 71 percent agreed," said Pauli.

During that last three years, Congress has provided emergency economic assistance to the agricultural community. Pauli said USDA projections show that farm income will not improve in the near future making it extremely important that additional assistance be included for 2001 and 2002 to help distressed commodities.

"California farmers prefer to earn their income from the marketplace. However, as long as higher input costs, restricted markets abroad and low commodity prices are the norm, federal assistance is needed until fundamental conditions improve," said Pauli.

The Farm Bureau leader said farmers need a strong federal commitment to boost agricultural trade and faster response when countries violate trade rules. He said $200 million in subsidies from the European Union to Greek peach farmers has "smothered" California cling peach growers in a flood of imported canned peaches.

"This year, it's estimated that Greek imports will reach 2 million cases as compared to U.S. canned peach exports of only 720,000 cases," said Pauli. "The U.S. government has been unable to ease the commercial pressures on U.S. growers and processors created by the excessive and unchecked EU subsidies. Unless something is done soon to stop additional losses in the U.S. market to Greek canned peaches, the California industry will disappear."

Farm Bureau's task force report recommends U.S. negotiators shorten the dispute resolution process and increase export promotion funds under the Market Access Program.

Water availability has been an annual concern of Farm Bureau. Pauli, citing results of the statewide survey, said a growing number of people fear water shortages will rival the state's energy crisis.

"We found 53 percent of registered voters believed that California is headed for a water crisis similar to the current electrical energy crisis," said Pauli. "California was ill prepared for the energy crisis. It is ill prepared for water shortages, which have become chronic and more severe."

When asked who should have first priority when water is in limited supply, respondents in the Farm Bureau poll ranked farmers and ranchers first (42 percent) followed by residential uses (39 percent), environmental uses (4 percent) and industrial/commercial uses (3 percent.)

"We're heartened by the polling data and grateful for the public support," said Pauli. "Farmers have been the first to feel the tightening grip of the chronic water shortages, which will eventually face all Californians."

Pauli said the water crisis has arrived for 1,400 farmers in the Klamath Basin, which straddles the California-Oregon border. Irrigation supplies from the Klamath River Project have been cutoff by the U.S. Interior Department in response to drought and allocations for endangered fish.

"The decision leaves hundreds of farmers in the Klamath Basin without a source of water," said Pauli. "Water is the lifeblood of agriculture. With it, fields, orchards and rural communities flourish. Without it, farmland becomes a dusty, unproductive landscape. Communities are drained of economic lifeblood. The environment is diminished too."

Farm Bureau places a high priority on elimination of the estate tax. The House approved H.R. 8 last month to repeal the tax. Pauli said there are many victims in California agriculture who risk losing all or part of the family farm to satisfy estate taxes.

"Death taxes can destroy family-owned farms and ranches when the tax, which can be as high as 55 percent, forces farmers and ranchers to sell off land, buildings or equipment otherwise needed to operate their businesses," said Pauli.

He cited a Fresno County farm family that had to take out a loan and sell part of the farm to pay estate taxes.

"Now is the time to finish the job and send President Bush legislation that eliminates the estate tax. Now, more than ever, it is important that the Senate act to keep 'family' in California's family farms," said Pauli.

Based on the polling data and encouraging support from key members of Congress, Pauli expressed optimism about support for California agriculture.

"Farm issues like water and federal help to assist struggling farmers resonate with voters. We think they will resonate with members of Congress," he said. "When supermarket shelves are full of food at affordable prices, farmers wonder if consumers and lawmakers are aware of their plight. More people are aware and there appears to be a solid foundation for agriculture to build on that awareness and support."

Note: The text of Bill Pauli's remarks to the California Institute for Federal Policy Research, a copy of the CFBF Farm Crisis Task Force report and additional information on the California Statewide Omnibus Survey conducted April 22-24 are available on the CFBF Web site at www.cfbf.com.