Farmers warn of increased imports if rice payments end

By TIM HEARDEN

Capital Press

CHICO, Calif. -- For the California rice industry, receiving federal subsidies has become an important part of doing business.

From 1995 to 2010, an estimated $2.48 billion in rice subsidies have been given to more than 7,000 California recipients, according to a database of federal statistics compiled by the Environmental Working Group. That includes more than $505 million in direct payments and nearly $113.2 million in countercyclical payments, according to the database.

During times of low returns, the subsidy has helped rice farmers stay in business, said Live Oak grower Frank Rehermann, who handles Farm Bill issues for the California Rice Commission.

"We have found that it's important to have a safety net because we don't have any control over our input costs, so we have valued these programs," Rehermann said.

Rehermann and his wife, Judith, are growing about 820 acres of medium-grain rice on plots through the middle Sacramento Valley. Their business, FJR Farms, has received more than $1.7 million in commodity subsidies since 1995, including $486,288 in direct payments, according to EWG.

Frank Rehermann declined to say what percentage of his income comes from subsidies. He declined to speculate about what would happen to the industry if the subsidies are eliminated in the 2012 Farm Bill because "a lot of things could change."

Prices for farmers have been good in recent years, raising the possibility that farms could make it without the government's help. However, water remains a concern for growers, he said.

As it is now, while a rice farmer could theoretically refuse to take subsidies as a matter of principle, he or she would be put at a severe competitive disadvantage, Rehermann said.

If the programs are cut, growers will have to consider how many acres they want to plant, perhaps keeping land fallow to push prices up or planting other crops to augment their incomes, said Doug LaMalfa, a Richvale rice grower and California state senator.

Pressure will mount on federal lawmakers to enact trade policies that don't allow foreign competitors to undercut domestic growers, LaMalfa said.

"If we're going to have an ag economy that's decided by the world market price, you have to have something that changes the world market price or trading practices that allow (competitors) to dump their cheap products on us," he said.

The Dsl LaMalfa Family Partnership has received nearly $4.7 million in farm subsidies since 1995. That includes nearly $1.2 million in direct payments and $182,912 in countercyclical payments, the EWG's database reports.

Though he's taken some political heat for them over the years, LaMalfa defends such payments, maintaining they're a small national expense considering the country's food security is at stake.

"The price has to be stabilized here, and American growers have to make a profit," LaMalfa said. "So when the world is setting the price below the cost of production for any one of those crops ... you don't have American growers very long without some structure to keep them in the black instead of the red."

Still, LaMalfa -- a Republican known as one of the Legislature's most staunch conservatives -- said his family has been farming rice for 80 years and would continue, somehow, even if the subsidies were lost. He said his soil is more conducive to growing rice than other crops.

Likewise, Rehermann said he would continue to farm rice if the subsidies were removed.

"Most other competent producers of rice would have the same answer, given what we have seen today," he said. However, much would depend on whether farmers could continue to handle the cost of production, which for him is more than $1,000 an acre.

One of California's oldest crops, rice was introduced here during the Gold Rush, and commercial production began in Butte County in 1912. Today, California is the largest producer of short- and medium-grain japonica rice in the United States, harvesting more than 2 million tons of rice annually and contributing over $1.3 billion a year to the state's economy, according to the California Rice Commission.

However, the fact that their industry has come to rely on subsidies in recent decades is a touchy issue for rice growers. More than 90 percent of California farmers do not collect subsidy payments, according to the USDA.

For LaMalfa, a decade in politics has made him aware that the subsidies are ripe to be cut, if not discontinued entirely. They're unpopular not only with urban lawmakers and environmentalists but also conservative rural voters who've read stories of payments going to large conglomerates that invest in farms, he said.

Rehermann said he realizes that "this government is worse than broke," and the value of government programs needs to be reassessed.

"I'm certainly in agreement that our programs need to be assessed as well," he said.

But both Rehermann and LaMalfa argue that rice is one of the staple crops whose abundance determines whether or not a nation goes hungry.

"I think the last thing we want to have in this country is to be reliant upon people in other nations to feed us," Rehermann said.

"We've already reached the point where we import more food than we produce in the United States. I think that's a signal that's worth watching.

"When we get to the point when we're over a barrel (for food) like we are with oil ... we've got big problems," he said.

Online

EWG Farm Subsidy Database California summary: http://farm.ewg.org/region.php?fips=06000