U.S. Farm Policy Must Provide a Stabilizing Balance to Markets and a Reliable Planning Horizon for Producers

WASHINGTON, September 20, 2006 — The U.S. rice industry supports maintaining an effective farm safety net that includes a marketing loan program, as well as price support payments and planting flexibility, USA Rice Producers’ Group Chairman Paul T. Combs told members of the House Agriculture Committee today.

“The U.S. rice industry supports extending the 2002 farm bill [the Farm Security and Rural Investment Act of 2002] until a Doha Round trade agreement is negotiated to completion and approved by Congress,” Combs said. Any unilateral reduction of current farm bill programs and spending levels would effectively constitute a unilateral disarmament by the United States, ultimately weakening the U.S. negotiating position with other countries, he explained.

“We urge you to recognize how well the current Farm Act is working for U.S. agriculture, and to consider ways to maintain its structure as we begin the debate on the next farm bill,” said Combs, a Kennett, MO, rice, cotton, wheat, and soybean producer. Combs represented the USA Rice Federation and the US Rice Producers Association at the committee hearing.

The U.S. rice industry opposes any further reduction in the payment limit levels provided under the current farm bill. While U.S. rice yields are among the highest in the world, per-acre production costs are significantly higher than those of other grains.

Even with the safety net in place, rising costs, particular for fuel and fertilizer, “will continue to reduce rice profitability far below levels previously expected,” Combs declared. “Rice farming has the highest cost of production of any major grain crop,” he continued. “Payment limits have the negative effect of penalizing viable family farms the most when crop prices are the lowest and [the need for] support is the most critical,” Combs said.

“Our current farm programs are a fiscally responsible approach to farm policy and provide a safety net when needed,” and over the 2002-2005 period total farm bill costs — which include costs for commodities, conservation, trade, and any ad hoc disaster — are approximately $17 billion below the total level estimated in 2002, Combs said.

“Rice producers call on Congress to continue sound, fair agricultural policies in the next farm bill, including those policies in the current farm act that help to provide: producers with stability and reliability; and consumers with an abundant, affordable, stable, safe, and secure food supply,” Combs told committee members.

In addition to calling for an extension of the 2002 farm bill, Combs informed the committee of the critical needs of rice farming families, the economic and environmental contributions of the U.S. rice industry, and the market access needs of the industry.

Also outlining in their testimony support for an extension of the current farm bill were: the American Farm Bureau Federation, the American Sugar Alliance, the National Farmers Union, the National Cotton Council, and the National Sorghum Producers.

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USA Rice Federation is the national advocate for all segments of the rice industry, conducting activities to influence government programs, developing and initiating programs to increase worldwide demand for U.S. rice, and providing other services to increase profitability for all industry segments.