In the closing months of the last administration one of Jimmy Carter's political friends and benefactors was making fervent efforts to be allowed to share in a federal peanunt bonanza.
The deal almost flew.
It was stopped finally by cries of "foul" from the peanut industry, pressure from Congress and then-Agriculture Secretary Bob Bergland's fear of political payoff charges.
The story involves Gold Kist Inc., a huge Atlanta-based argibusiness cooperative run by farmers, which wanted the right to use low-interest federal loans in financing its extensive peanut business.
Gold Kist is the same outfit that rescued the Carter family's economically troubled peanut warehouse in Plains, Ga. It leased the operation in 1977, at rates and raised industry eyebrows, and lifted it back to solvency.
Top co-op officials have been among Carter's political supporters since his days as Georgia governor. In the recent presidential campaign, Gold Kist President D.W. Brooks strongly urged natinal farm leaders to back the president's reelection.
The co-op's campaign to win U.S. Department of Agriculture support for entry into the low-cost federal loan program began shortly after its 1977 lease of the Carter facilities, reaching a full but discordant crescendo after the Nov. 4 election.
But there were problems. Gold Kist, with 125,000 members, is no humble little co-op. It already was the country's dominant peanut sheller, a major market force. Others in the industry, protesting bitterly, contended the government help would only make Gold Kist stronger and more dominant.
Gold Kist and the nation's other privately owned peanut warehouse-sheller operations with which it competes now finance their peanut operations with high-interest loans from commercial banks.
USDA approved of Gold Kist's entry into the federal program would have given the co-op access to Commodity Credit Corp. (CCC) loans at about 11 percent, a competitive advantage that industry sources valued at $20 to $30 per ton -- a bonanza in a market that involves hundreds of thousands of tons.
Gold Kist withdrew application for special status last month after Bergland, wary of potential political fallout, told officials "there was just nothing I could do for them."
Bergland said when interviewed on the issue that he had refused to deal with a longstanding Gold Kist request until after the election, and then finally dropped the matter because "it had gotten into a full-fledged firestorm."
"One major reason I did not go ahead was that I was aware that it was politically sensative. Gold Kist had leased the Carter warehouse and some people said this would be returning a favor -- which absolutely was not true," Bergland said.
"When we took office, the president told me absolutely not to consult him on peanut matters and i have not. I have protected him."
Gold Kist Vice President Paul Brower, professing to see no political sensitivity in the co-op's recent actions, said it would attempt to revive the issue with the Reagan administration.
The new administration's attitude toward the Gold Kist proposal is yet to be defined. But USDA and congressional sources said Reagan transition team officials had asked Berland to take no action on the matter.
The peanut question is certain to surface on Capitol Hill this year as Congress rewrites the basic farm legislation that governs peanuts and other commodities.
Since its inception in 1971, the peanut price support program has been a tightly structured mechanism overseen by three quasi-governmental marketing associations in the country's three major peanut growing areas.
The regional associations act as the government's agents in running the program, using the low-interest CCC money to assure that growers receive no less than the official government support price for their peanuts. If market prices fall below the support level, a grower puts his crop in his regional pool and is given a loan in the amount of the support price. Peanuts then are resold out of the pool to warehouser-shellers, generally at higher prices.
With the proceeds from these further sales, the associations repay CCC loans and distribute any leftover funds to the farmers. Gold Kist, as a sheller, must finance its peanut purchases with higher-interst money from commercial lenders. With the new status it sought from USDA the co-op could, in effect, be treated as a farmer as well as sheller, and use cheaper CCC money to finance its operations.
In each of its revisions of the support program (the last was in 1977), Congress has carefully left control of the loan program in the hands of the three regional associations.
Gold Kist and the other private sheller firms, which in turn sell their peanuts to processors and food companies, must bid on the stocks held by the marketing associations.
The Gold Kist proposal, first sent to USDA in 1978, would have altered that dramatically. The co-op would have been able to use CCC money to buy peanuts from its own members and other farmers.
The private firms, led by the Southwestern Peanut Shellers Association of Dallas, bitterly resisted four different Gold Kist bids for special treatment at USDA, arguing that it could undermine the entire program.
Many peanut farmers feared Gold Kist, already the country's dominant peanut sheller, would then have the power to depress prices and control selective markets.Peanut users -- processors and candy companies -- feared a more powerful Gold Kist might become an OPEC of the goober.
USDA marketing experts are less certain about the possible impact of changes in the peanut loan scheme, but Bergland noted that cooperatives have been allowed into loan programs for other commodities without harm to other private entrepreneurs.
"It is nothing new," Bergland said. "Cotton, wheat, corn, soybean cooperatives, among others, have commodity pooling authorization. The grain program was authorized by this administration. It simply allows the cooperative to act as a marketing association for its members."
Gold Kist's Brower argued that his co-op, if it had access to the CCC money, would simply be providing "more convenience" to its farmer members, giving them virtually instant payment for their peanuts. He denied Gold Kist stood to reap a "bonanza" and said he did not understand why other shellers were resentful.
The catch in Gold Kist's move for help on peanuts lay in the specific congressional language limiting loan activity to the three marketing associations in the Southwest, the Southeast (Georgia-Florida) and the Mid-Atlantic (Virginia-North Carolina).
When word filtered out that Gold Kist was pushing its proposal at USDA, other sheller and grower groups "inundated" the secretary, as he put it, with protests.
"As a citizen, I'm outraged by it," said Sydney C. Reagan, counsel for the Southwestern Shellers in Dallas. "It was obviously intended to be a good-bye present to a good friend. . . . Ever since Jimmy Carter has been president, Gold Kist has tried to cash in its chips."
As Gold Kist continued to seek USDA support, its adversaries were working Capitol Hill. Then-senator Henry Bellmon (R-Okla.) added language to an agriculture appropriations bill reiterating congressional intent that only the three marketing associations get CCC money.
Further help came from Sen. Jesse Helms (R.-N.C.), now chairman of the Senate Agriculture Committee, who sent a hand-delivered letter to Bergland asking that the Gold Kist issue be deferred. Regan transition aides sent similar entreaties.
By then, however, Bergland already had decided to let it slide. "The peanut program as it is now set up makes no sense whatsoever," said a top aide to Bergland, "but had a decision been made to put the Gold Kist proposal out for public comment, it would have been iterpreted as an absolute payoff to Gold Kist for the Plains warehouse deal. . . . The courts have ruled that the co-ops cannot be denied, but in light of the politics, this was a bad decision for USDA to have to make."