11th hour farm bill victim: Rice target price trimmed 32 cents

They say they tried hard to prevent it, but rice producer organizations came out on the short end of a fight over target prices in the closing hours of the farm bill conference committee negotiations.

Although they began with a target price of $10.82 per hundredweight in the initial conference compromise proposal, rice producer representatives saw the rice target price fall from that $10.82 to $10.65 and then to $10.50 per hundredweight as conferees trimmed spending to meet the budget target of $73.5 billion over 10 years.

Initial reports said the reductions were part of a trade-off for a higher yield adjustment factor of 93.5 percent in the final conference report. But officials with the two rice producer organizations say that was not the case.

“We were adamantly opposed to that increase (from 70 percent to 93.5 percent) when we saw it meant a 15 cent reduction in the rice target price,” said Kevin McGilton, government relations director for the USA Rice Federation.

McGilton said the federation's U.S. Rice Producers' Group sent e-mails to the congressmen and senators from each of the rice-producing states asking them to contact the conferees and tell them that rice farmers were “very much opposed” to the target price reduction.

“It was our position that few rice producers were helped by that increase in the yield adjustment factor (from 70 percent to 93.5 percent),” said McGilton. “The only people it really helped were the corn farmers in the Midwest.”

“At first, they were saying they wouldn't take dollars from one commodity and move it to another,” said Nolan Canon, chairman of the U.S. Rice Producers Association. “Then, that changed as they tried to cut the spending to meet the budget target.”

Canon, a rice producer from Tunica, Miss., said the Producers Association had received calls questioning the target price reduction, “but I think everyone is just glad we passed the farm bill. They're not ready to go through this process again.”

McGilton said the USA Rice Federation battled the target price reduction up to the final night of the House-Senate conference committee's closed-door negotiations on the night of April 25-26.

“Hunter Moorhead, Sen. Thad Cochran's agricultural aide, went to the negotiating session at 11 p.m. and asked them to at least give part of the reduction back,” said McGilton. “Hunter said the yield adjustment should not have cost 15 cents. But they said it was too late.”

The first reduction in the target price — from $10.82 to $10.65 — came when it was discovered that the Congressional Budget Office had underestimated the cost of the original 70 percent yield update factor in the House compromise proposal.

Later, Senate conferees demanded the yield adjustment factor be increased to 90 percent as part of the compromise agreement on the higher loan rates they had been seeking. The conferees finally settled on a 93.5 percent yield adjustment factor.

“When they went to 93.5 percent, that put it over the top,” said McGilton. “The conference leaders said they had to come up with more savings. We asked them to exclude rice from the yield adjustment provision, but they said they couldn't go that route. That's how far along they were at that point.”

“The conference leaders said they wanted to make the yield adjustment apply across the board,” said Canon. “Everybody was trying to wrap the agreement up and that was the end of the discussion.”

The U.S. Rice Producers Group is one of the founding members (with the USA Rice Council and the Rice Millers Association) of the USA Rice Federation. The U.S. Rice Producers Association is an independent organization of rice producers in Arkansas, Mississippi, Missouri and Texas.

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