A “one-size-fits-all” farm bill approach may no longer be a good fit for agriculture, and it certainly doesn’t fit the rice industry.
That seemed to be the gist of the comments made at a panel on “Farm Policy Outlook and Analysis: Where We Are and What that Means for Rice” at this morning’s session of the USA Rice Federation’s annual Outlook Conference in Austin, Texas.
The mini-farm bill proposal submitted by the House and Senate Agriculture Committees to the Select Committee on Deficit Reduction included a provision for target prices that could be used to provide revenue insurance coverage for the row crop commodities.
Although the Select or “Super Committee” approach failed, panelists at the Outlook Conference said provisions of the Ag Committees proposal could provide a starting point for the 2012 farm bill discussions. Unfortunately, some groups have complained the target price included for rice – $13.98 per hundredweight – was too high.
“One of my friends from a different commodity said we would plant 10 million acres of rice if that proposal became law,” said Dr. Joe Outlaw, a panelist and co-director of the Agricultural and Food Policy Center at Texas A&M University.
“They seem to think that with a target price of around $14 per hundredweight that somehow we would find a lot of water and a lot of financing and land to put all this rice on. Frankly, I don’t think it is very helpful to the process for people to be making those kinds of statements.”
The Agricultural and Food Policy Center Outlaw helps direct provides detailed analyses of farm bill proposals for members of the House and Senate Agriculture Committees. The Center looked at about 25 of those during the preparations of the joint proposal to the Super Committee.
“Our work shows that all but two of the target price recommendations from one of the other commodity group’s proposal would be below the cost of production for those commodities.” (The average cost of producing an acre of rice in the U.S., according to the Center’s analysis, is $13.10 an acre.)
“It’s an unfortunate part of the process when the commodity groups do not at least acknowledge that there are differences regionally in cost of production and practices that need to be accounted for,” Outlaw said in an interview. “As long as you keep the prices within the natural relationship the commodities have to each other, I don’t think you’re going to get any planting distortions like what was in the press recently.”
Under the proposal developed for the Super Committee, producers would be able to choose between price or revenue coverage options for the life of the farm program. Outlaw believes such a choice would offer a much better fit for rice producers.
The House and Senate Ag Committees have been criticized for reportedly conducting “farm bill negotiations in secret” while preparing the budget proposal for the Super Committee.
Bart Fischer, a member of the House Ag Committee staff, told Rice Conference attendees that was not the case. “It was an accelerated process because we had far less time to, in effect, draft a farm bill, but all of the constituents had their say.”