Getting something for nothing is not the American way. But apparently the Farm Security and Rural Investment Act of 2002 is making it possible for a number of landlords who own rice acreage along the Texas Gulf Coast.
That was the general consensus among attendees of a recent USDA listening session on the impact of the last two farm bills on the rice industry and rural communities and businesses in Texas.
The listening session was provided for under a section of the Farm Security and Rural Investment Act of 2002 which calls for a case study related to the decline of rice acreage and infrastructure in Texas. The session was moderated by Rodney Brown, deputy undersecretary of agriculture for Research, Education and Economics, USDA.
Texas has lost about a third of its rice acreage since 1996, most of which is due to the 1996 farm bill and its “decoupling effect” according to Bill Dishman, president of the Texas Rice Council, among 25 people who spoke at the listening session.
“It allows participants to collect without having to farm. It also relaxed requirements for program participants to be actively engaged to collect those payments. The requirements for control of noxious weeds on contract acres is basically non-existent.
“The results of these changes have been disastrous for rice farmers,” he said. “Landowners have figured out that they can get the tenant farmer off and collect the program payments. While this is an apparently profitable and short-term decision for many landowners, it has a devastating and long-term effect on tenant farmers and the rest of the Texas rice infrastructure.
“We believe there are remedies,” Dishman said. “We request the secretary of agriculture enforce requirements for participants to be eligible for program payments. First, they must successfully control noxious weeds and otherwise maintain the land in accordance with sound agricultural practices as required by law.
“Secondly, USDA should require that the producer or landowner meet the actively engaged requirements — having the practical capability and personal knowledge and skill to produce a rice crop and effectively control noxious weeds.
“We also request that suggested regulatory procedures or other congressional action required to remedy these problems be put in place prior to planting the 2003 rice crop in Texas. Many of our current farmers' leases expire at the end of this year.”
If the issue can't be addressed through regulation, “then we would like recommendations from USDA on ways we can alleviate our problems in Texas,” said Steve Balas, a rice producer and president of the Texas Rice Producers Legislative Group.
Balas recommended a pilot program in Texas “which encourages the landlord to actually farm rice contract acres or rent those acres at a fair market value.”
L.G. Raun, an El Campo rice producer, proposed that for rice only, in Texas only, “the farm program do away with the countercyclical payment of a maximum of $1.65 per cwt. and raise the loan rate for Texas rice by $1.65. “That's it. The result would be that landowners who do not plant rice would only be eligible for direct payments of $2.35 instead of the potential now of $4.00.”
“It's sad to see an industry decline and to know that the decline is directly related to the federal farm program,” added Linda Raun, who serves on the Farm Service Agency state committee, El Campo. “We need help from Washington or we could lose the rice industry in Texas. That loss would be devastating for all of us in this room as well as our rural communities.”
“If you want to protect tenant farmers, put the acreage base on the farmers and not on the land,” said William Kondo, rice farmer from Beaumont, Texas.
“The farmer provides knowledge, equipment, capital, land and raw inputs to produce a crop. The landowners I deal with have neither the knowledge nor the desire to produce a crop. They look at the land as only an asset with which to make money.
“Countercyclical payments should go to only those producers who actually produce a crop,” Kondo added. “What is the logic to compensate a person for low market prices when they've never even tried to produce a crop? They had no risks, no inputs, yet get compensated.
“I ask that you do what you can to insure that farm program payments go to those people who are actually taking the risk of producing the crop.”
Edwin Gangl, a tenant farmer for 37 years, said that in 2001 he sold rice for the lowest price in his life. “Even with the low price, my landlords are asking for higher rents because of the direct and countercyclical payments.
“It's obvious that the people representing the Texas rice industry in Washington are more worried about landowners… in Texas than they are with tenant farmers.”
Gangl suggested farm law be changed. “I have asked the leaders of the Texas Rice Producers to ask for a $2 or lower direct payment and a $2 or higher countercyclical payment and for the CCP to only be made to people who actually plant some type of a crop.”