For Immediate Release:

Thursday, April 13, 2000

Today Senator Patty Murray introduced a bill (S.2442) to help apple growers.

Senator Murray's remarks follow:

Mr. President, I rise today to introduce the Apple Orchard Diversification Act of 2000.

Mr. President, I am proud that Washington state produces more apples than any other state in the nation. The apple industry is an independent group. It has made Washington state and U.S. apples and apple products popular in many corners of the world. In the mid-1990s, growers were doing well, markets were opening and expanding, and the future looked bright.

But in 1998 and 1999, the bottom fell out from under them. Low prices and weather-related disasters devastated apple producers, and growers of hundreds of other commodities nationwide. In northeastern and mid-Atlantic states, fruit and vegetable growers were hit hard by freezing temperatures and drought. In the Pacific Northwest, some growers were hurt by bad weather.

But the biggest problem is low prices. These low prices are caused by the Asian financial crisis; by market access problems; by below-cost apple juice concentrate dumping by China; by record world-wide production and oversupply; and other factors.

The results are devastating, especially in my home state of Washington. Nationwide, the industry lost an estimated $300 million on the 1998 crop. In Okanogan County in Washington state, some organizations have estimated that 90 percent of apple growers will not recover their 1999 expenses. Okanogan County already experiences high unemployment. It cannot afford a long-term, depressed farm economy. The county declared an economic disaster and urged the state to do the same. Meanwhile, other counties, especially in north central Washington, are trying to respond to this disaster. Many growers will go out of business. Others will not be able to get commercial lending this year.

The Administration and members of this Congress are working to resolve some of the issues facing the industry and rural communities.

Last year, Congress passed a large disaster relief package for agriculture. I supported this package because it kept many producers above water for another year. However, like many of my colleagues, I was frustrated this package did not do more for specialty crop producers. Congress provided $1.2 billion in crop loss assistance. Specialty crop producers, including apple growers, were eligible to receive assistance to address weather-related disasters, and some growers did. But, in states like Washington, the aid package did too little.

Fortunately, action is occurring on the most important issue facing the apple industry. Earlier this month, the U.S. Department of Commerce levied anti-dumping duties of 51.74 percent on the majority of imports of below-cost apple juice concentrate from China. The Administration's preliminary anti-dumping duty ruling in November 1999 helped our producers by raising the price of both juice apples and concentrate. By May 22, the U.S. International Trade Commission will make its final injury ruling. If an injury determination is made, the Administration will

implement anti-dumping duties at the levels prescribed by the Commerce Department.

Our second victory was to address pest control in abandoned orchards. During my trip to central Washington last August, I heard from community leaders that this was a real problem.

Low prices have caused many producers to abandon their orchards, and some of these orchards became infested. Infested orchards impact the operations of other producers and create potential trade problems. In response, counties tore out trees and sprayed orchards. But last year, funds in many counties were running low.

USDA holds defaulted loans on some of these abandoned orchards. Last year, I urged the agency to take responsibility for pest control on those properties. The Farm Service Agency in Washington state created a strategy for reimbursing counties for pest control In October 1999, I wrote to Secretary Glickman to urge him to approve FSA's reimbursement strategy. Shortly thereafter, USDA implemented this initiative so counties could continue to control pests.

The third victory for apple and specialty crop producers may come soon, when President Clinton signs risk management reform legislation into law. The bill passed by the Senate would make major changes to federal crop insurance policy to ensure that all producers, including specialty crop growers, will have access to more viable risk management products.

But more needs to be done. My highest priorities for agriculture remain investing in research, expanding trade, and providing a safety net when economic and natural disasters strike.

Last November, I introduced S. 1983, the Agricultural Market Access and Development Act. My bill would authorize the Secretary of Agriculture to spend up to $200 million--but not less than the current $90 million--for the Market Access Program. And it would set a floor of $35 million for spending on the Foreign Market Development `Cooperator' Program. Senators Craig, Boxer, Feinstein, Gordon Smith, Gorton, Wyden, Cleland, and Coverdell have all cosponsored this legislation, and I appreciate their support.

The USDA Foreign Agricultural Service has reported that in 1999 we experienced our first agricultural trade deficit with the European Union. We imported $7.7 billion of EU agricultural products and exported $6.8 billion. Our competitors have increased market promotion spending by 35 percent, or $1 billion, over the past three years. Our spending, however, has decreased one percent.

Agricultural exports are key to maintaining a reasonable trade balance. Other nations have invested in market development, and it's worked. We need to enhance our trade programs to give our producers a more level playing field and a fighting chance.

Besides expanding trade, we must strengthen the safety net for producers. We should not go back to our old Federal farm policies. Our program commodity growers do not want that, and our specialty crop producers do not want a new, permanent relationship with the federal government.

But I believe this farm crisis has taught us that we need flexible tools available for all producers when economic or natural disasters strike. For some commodities this may mean counter-cyclical payments. Or it may mean a variety of flexible loans that meet the needs of all producers or specific commodities. As we debate the next farm bill, we should give USDA flexibility, within fiscally-responsible guidelines, to respond to crises in agriculture.

Today, I am introducing legislation to create a one-time Apple Orchard Diversification Program. I have heard from growers that they could very much use a loan program to diversify their orchards into more commercially-viable varieties. Many of our producers invested heavily in Red and Golden Delicious apples, which are the varieties hardest hit by the economic crisis. We need a mechanism to allow these growers to diversify their orchards.

My bill would do just that. It would authorize USDA to provide up to $75 million in long-term, low-interest loans to apple producers. The loans could be used by producers to purchase trees for converting existing apply orchards into more profitable apple varieties.

My bill waives much of the regulatory process. USDA has been overwhelmed with managing disaster programs, and that has delayed relief. Instead, my bill bill requires USDA to conduct a stakeholder process, which would include three hearings around the country. The industry would help develop the program, and address issues such as income and acreage qualifications for growers who receive loans, and parameters on payments, acreage and varietal stock quality.

The concept of orchard diversification was born when Under Secretary Gus Schumacher visited Quincy, Washington, in July 1999. The Under Secretary has spent a great deal of time in apply producing regions around the country. Mr. Schumacher has been criticized by some elected officials and individuals for holding the listening session in Washington state. But I appreciate, and I know many of our family farmers appreciate, his interest in these issues.

In conclusion, my grandfather moved to the Tri-Cities in the early 1990s to work for Welch's. As a young child, I remember many trips to central Washington at harvest time to visit my grandmother, who remained in the area after my grandfather's death. To this day, the smell of fresh picked peaches and apples remind me of my childhood. To my Dad, it meant much more; it meant how his family put food on the table and paid the mortgage. We grew up understanding how important family-run orchards were to our state's economy.

As I raised my own family, I always made sure we had a fruit tree in our yard. I wanted to remind myself of my years growing up and also to show my kids what a resource we have in our state. I could not imagine discussing Washington's economy without a box of apples being part of the picture. I want to make sure it stays that way for many generations to come.

Mr. President, I urge my colleagues to cosponsor and help pass this important legislation.