Market Prospects for Groundnut in West Africa COMMON FUND ...

3.3 The United States of America
Having supplied over 17% of the world’s shelled groundnut exports and over
22% of in-shell exports over the past decade, the United States is the second
largest exporter of shelled groundnut in the world. However, the US share of
the world groundnut market has declined precipitously over the past two
decades, from approximately 32.9% between 1981 and 1985 (corresponding
to a trade volume of 354,000 MT) to 19.8% between 1996 and 2000,
corresponding to a trade volume of 294,000 MT (Revoredo and Fletcher
2002).
Export of US-origin groundnut has historically been strongly regulated
by the US government, linked directly and legislatively to the domestic
market. Perhaps the clearest synopsis of the former US government regulation
of the groundnut sector is provided by the American Peanut Coalition, as put
forward on their website:
The [US] federal peanut program consist[ed] of a system of
restrictive production quotas, high price supports and severe import
restrictions. Together, these features fix the domestic price for
peanut quota owners well above the world market price. The
program mandates by law the amount of peanuts that can be grown
for domestic consumption, fixes the excessive price that quota
holders receive for peanuts and fixes the quantity of imported
peanuts that are eligible for access to the US market.
American Peanut Coalition, ‘www.go-peanuts.org’
Given the grand scope and Byzantine intricacies of US government
intervention in the groundnut sector, it would be easy to become lost in a
tangential history, which would ultimately be of little practical use here. What
follows is a very brief account of this history and current US production and
market conditions as they may specifically relate to the assignment.
Government regulation of the US groundnut market in general, and
exports in particular, began with the Agricultural Adjustment Act of 1933, a
piece of classic ‘New Deal’ legislation which initially provided commodity
loans and set marketing quota limits on groundnut, tobacco, sugar and milk.
Section 22 of the 1933 Act authorized the US president to set quantitative
import restrictions on agricultural products for which price support programs
were administered by the United States Department of Agriculture (USDA).
The 1933 Act effectively established what was to become the ‘peanut
program’ of the USDA.
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