“Chairman Crawford, Ranking Member Nolan, and Members of the Subcommittee, thank you for holding this important hearing to examine the farm safety net. I am honored to have the opportunity to offer testimony on behalf of the
“My name is
“Rice planting is currently underway on my farm and throughout the rice growing regions in the
“Today, about 81 percent of all the rice that is consumed in the
“Beyond the substantial economic and nutritional benefits of rice is the environmental dividend from winter-flooded rice fields that provide critical habitat for migratory waterfowl and other wetland-dependent species. All of the major rice-production areas in the
State of the Rice Industry
“Recent analysis conducted by Texas A&M's Agricultural and Food Policy Center concluded that on average, each rice farmer in the
“When the current Farm Bill was enacted in early 2014,
Trade and Export Factors Influencing
“The industry heavily relies on exports. Approximately 50 percent of our annual crop is exported to more than 120 countries around the globe, accounting for 10 percent of global rice trade. These exports are critical to rice farmers, millers, and merchants. The volatility of the global rice export market makes it difficult to project sales beyond several months and the levels of
“According to a 2015 study on the global competitiveness of the
“The USITC report lays out these problems in great detail. The key conclusions are well known to our industry and my fellow producers. It outlined the pervasive extent of foreign government involvement in global rice markets and the high levels of foreign tariffs that keep
Examples of Export Challenges
– No access to the Cuban market.
– With the appropriate statutory changes, the
– No access to the Chinese market.
– Irregular/non-transparent tenders for rice to be shipped to
– Lack of meaningful, quality access to
– While the
– Little to no access to the
“In addition to trade and export challenges,
“Rice is one of the primary commodities utilized by a number of these programs, whether it is by direct aid or through monetization. Unfortunately, the administration's recent budget proposal threatens to reduce or even eliminate that already small market for
Export Marketing and Development Programs are Worth the Investment
“Trade and exports are not self-sustaining without regular, strategic marketing of our products. The majority of
Increasing Costs for Production
Price Loss Coverage and Other Safety
“It is safe to say that the reason I am still in business today is because of the safety net provided by the 2014 Farm Bill and, specifically, Price Loss Coverage (PLC). When prices were as high as they were during the last farm bill's development,
“The 2014 Farm Bill allowed growers to choose between PLC and the Agriculture Risk Coverage (ARC) within Title I. While a small number of rice farmers elected to use ARC, the vast majority enrolled in PLC. In total, 99 percent of long grain rice farms and 94 percent of medium grain rice farms selected PLC as their safety net of choice.
“Rice is unique in that it has different market prices for Southern-grown long grain and medium grain rice types and
“While, overall, we feel that PLC is working the way
“We acknowledge the political and budgetary considerations at play in writing the last farm bill, and the subsequent need to shift assistance timing for Commodity Title benefits until the crop year is fully completed. If triggered,
“There are multiple problems created at the farm level as a result of this delay. The bills for our input costs ahead of planting season do not wait until a year after the crop is harvested before coming due. When farmers go to the bank after harvest, it is nearly impossible to predict a year and a half in advance what kind of assistance they may qualify for – making it impossible to accurately predict cash flow. That has a big negative impact on the ability of farmers to access capital through financing.
“We request that this Committee look into mechanisms to accelerate at least a portion of the PLC assistance which growers are anticipated to receive. I believe that the assistance will be more effective if producers can start utilizing it sooner during the year. More importantly, bankers would be more apt to approve our annual operating loans if the PLC assistance is advanced or accelerated.
Actively Engaged in Farming
“Actively Engaged in Farming regulations brought forth a lot of confusion and disruption throughout farm country following the publication of
“In addition, the regulations should not include a cap on active personal farm managers. Invoking an arbitrary limit of one to three farm managers completely ignores the diversity and unique needs of farming operations across different crops and regions. Southern family farming operations are often larger than three individuals, and are most affected by this limit. While a family operation can have as many farm managers as required to manage the complexity and scope of the operation, it is irrational to then limit the number of eligible farm managers in similar operations that involve non-lineal family members, friends, or neighbors. The diverse sizes and scopes of farming operations across the nation require different types of expertise and numbers of individuals to adequately manage such operations. A limit ignores economies of scale, the increasing need to achieve efficiencies in agricultural production, and the complexity of such operations.
Adjusted Gross Income and Payment Limitations Should be Eliminated
Crop Insurance Needs Improvement
“Crop insurance has not been as valuable a risk management tool for rice as it has been for other crops and areas. Rice farms are 100 percent irrigated, and on average, our yields are very consistent. Our financial problems occur with higher production costs due to irrigation or as the result of a weather event in the fall that disrupts our harvest and affects the quality of our crops.
“Revenue Protection policies work well when prices are high and were increasingly utilized by rice farmers through 2014, but have faced challenges and diminished sales in recent years. Revenue-based insurance uses averages from the Rough Rice Futures Contract in the fall to set the expected price used to calculate revenue. Unfortunately, because rice is a thinly traded commodity in the futures market, in 2015 there was not an adequate amount of activity for RMA to determine an expected price. Therefore, revenue policies were not available for that year and producers were forced to use Yield Protection coverage, which did not provide adequate protection.
“Though rice yields do not tend to be as variable as other crops due to our irrigation practices, crop insurance rates remain high relative to other crops. For example, a 75 percent Revenue Protection policy for corn in
“The 2014 Farm Bill created a county-wide insurance-based policy called Supplemental Coverage Option (SCO) that we had hoped, coupled with PLC in the Commodity Title, would provide a complementary set of risk management tools for our growers. However, after the product was rated by
“Finally, we have made attempts to improve crop insurance for rice farmers through the promotion of a downed rice policy that indemnifies producers for increased harvest costs associated with late-season storms that lay the rice down. This policy has been fairly successful in certain areas but problems with the overall range of the policy persist. As an industry, we plan to continue to work to improve crop insurance coverage and options for rice farmers and will continue to utilize basic coverage options to, at least partially, insure our crop in the event of catastrophic losses due to weather.
Farm Policy is Necessary for National Security
“Our nation's strong farm safety net would not be what it is without all of the pillars that make up farm policy. Agriculture is not a partisan issue. We divide ourselves by region and sector but not by political beliefs. Fortunately, the Commodity Title and other titles make sure that each of our different sectors and regions have something that works. Without the certainty of this legislation, our already high-risk career would take on a new level of risk.
“While some of the factors affecting the farm economy are within the control of the farmers themselves, most of them are not. Illegal and over-subsidizing of rice production by our foreign competitors, phony sanitary and phytosanitary barriers, lack of private financing options, etc. all play into the need and justifications for strong farm policy to protect our basic agricultural infrastructure.
“When threats are made to cut or eliminate funding and policy for the farm safety net, the very existence of the full-time family farmer is put in jeopardy. Without a strong and predictable safety net, only a small number of truly consolidated operations would survive. These would not be the competitive family enterprises we know today.
“Please keep in mind that if it were up to us as farmers, we would prefer to prosper solely on the great prices our crops bring at the market. Unfortunately, commodity markets are not always kind, and agricultural markets are distorted by our foreign competitors. The simple fact is that right now our crops are not bringing enough at the market to pay our loans and buy our supplies for next year without the assistance provided by the farm bill.
“I am here to ask for this Committee's consideration in not only maintaining our Commodity Title policies, but strengthening them by using our recommendations as you prepare to reauthorize the farm bill.
“I want to again thank you, Chairman Crawford, Ranking Member Nolan, and the Members of the Subcommittee for inviting me here today to provide insight on behalf of the