Ag Economists Warn House Lawmakers that Rice Farmers Need Immediate Assistance

 
Grain silos sit idle, Brian-Baer-photo
Loss of infrastructure is a real threat when farm economy falters (photo by Brian Baer)
Jun 10, 2022
WASHINGTON, DC -- On Thursday, the House Agriculture Subcommittee on General Farm Commodities and Risk Management held a review hearing on the commodity and crop insurance titles of the 2018 Farm Bill from the perspective of agricultural economists.

Among the topics discussed was the current financial situation of the rice industry, particularly farmers facing flat rice prices while their input costs continue to rise.

During his testimony, hearing witness Dr. Joe Outlaw, professor, extension economist, and co-director of the Agricultural and Food Policy Center (AFPC) at Texas A&M University, explained how high commodity prices will likely result in positive net cash farm income for most crops.  Rice, however, is a noticeable outlier.

Representative Rick Crawford (R-AR), who represents the largest rice producing Congressional District in the U.S., referenced a March 2022 hearing (see USA Rice Daily, March 17, 2022) where he acknowledged that the Price Loss Coverage (PLC) program for rice isn’t working under current circumstances.  Crawford asked Outlaw to provide the Subcommittee with an overview of recent reports published by the AFPC as they pertain to rice.  Outlaw explained that two-thirds of the AFPC representative rice farms will have negative cash flow this year, and of all the representative farms across all commodities, rice farms are the only ones expected not to turn a profit.

Outlaw went on to say, “there are a lot of reasons why rice is different, but certainly I would think that there would be cause for this body and the larger body to do something for rice starting this year.”

Crawford then asked about potential solutions.  Outlaw said the first solution is to “hold other countries accountable to what they have agreed to do in trade negotiations.”  Another solution was targeted assistance for rice producers.  Outlaw acknowledged that he “normally doesn’t say these types of things, but this is completely different than for every other crop as basically rice has got a different infrastructure.  We’re going to lose that infrastructure and lose producers unless we provide some help relatively soon.”

Specifically, Outlaw suggested that Congress use formulas from the Coronavirus Food Assistance Program (CFAP) and adjust them to provide assistance to rice producers.

Other opportunities to improve the farm safety net for farmers, such as indexing the PLC reference price to cost of production, were discussed.

USA Rice is working with Congress and the Biden Administration to secure financial assistance for rice farmers in the near term (see USA Rice Daily, May 26, 2022), and will work throughout the development process for the next Farm Bill to strengthen the farm safety net.