WASHINGTON, D.C. – Mississippi rice farmer and chairman of USA Rice Kirk Satterfield testified on behalf of the rice industry on Wednesday during a hearing held by the House Agriculture Subcommittee on General Farm Commodities, Risk Management, and Credit on “Producer Perspectives on the 2023 Farm Bill.” Witnesses included leaders from nine other major commodity organizations.
Satterfield began his testimony with an overview of U.S.-grown rice, including the economic impact and sustainability achievements the industry is extremely proud of.
Satterfield then transitioned to issues impacting the rice industry over the past few years, and thanked Congress for providing much needed ad-hoc assistance for rice farmers for the 2022 crop year.
“Rice did not experience a large runup in market prices in 2020 and 2021, and the current PLC program could not adapt to the dramatic increases in cost of production,” said Satterfield. “This led to the need for additional assistance for rice farmers for the 2022 crop year. Thank you for providing the critical funding in the FY 2023 Omnibus Appropriations bill.
“Rice prices remain very close to the reference price—calculated using 2012 costs of production and established in the 2014 Farm Bill—rendering the program unworkable for rice at its current level, since the current cost of production is nowhere near 2012 levels. Texas A&M conducted a study in 2022 that showed two-thirds of rice farms were predicted to have negative net cash farm income for the 2022 crop year. USDA also reports a 30 percent increase in operating costs in 2022.”
Satterfield then went on to explain the global rice market issues caused by bad trade actors like India, as well as the pressures rice farmers face from massive input cost increases.
“As a high-cost input crop subject to severe global market distortion thanks to predatory trade practices of foreign countries, U.S. rice farmers are more vulnerable to the impacts of inflation and other global events that have caused increases to the cost of fuel, fertilizer, and labor, as well as facing the highest interest rates many farmers today have ever experienced.”
The take home message left with the Subcommittee members is USA Rice’s top Farm Bill priority: increasing the rice reference prices for the Price Loss Coverage (PLC) program.
“We need a permanent fix to the rice farm safety net in the 2023 Farm Bill to ensure the long-term viability of the U.S. rice industry… The PLC program has traditionally been our true safety net. It’s allowed us to better compete on a lopsided global playing field impacted by foreign subsidies, tariffs, and non-tariff trade barriers.
“USA Rice strongly believes reference prices under PLC need to be meaningfully increased and indexed in order to provide a safety net that remains relevant over the long haul.”
Regarding other Farm Bill Commodity Title components, Satterfield discussed the need to update woefully outdated payment limitation, adjusted gross income (AGI), and actively engaged rules, and underscored that USA Rice believes any updates or reallocations to base acres should be voluntary.