Current commodity prices remind Tunica, Miss., rice producer Nolen Canon of a saying by friend and fellow farmer, Paul Battle: “When this business is good, ain't nothing better and when it's bad, ain't nothing worse.”
Canon has been spending much of his time recently trying to get Congress to understand the analogy.
The producer has been a leader in developing the rice industry's position on ag policy for a future farm bill, and recently testified before the House Agriculture Committee.
Canon farms about 7,000 acres in Tunica, Miss., including 2,300 acres of rice, 800 acres of milo, 1,800 acres of cotton, 250 acres of wheat, and the balance in soybeans.
Canon recently received the Mississippi Network and Mississippi Farm Bureau's Row Crop Farmer of the Year award, based on his success in farming and involvement in agri-business issues. “I was surprised to win the award and doubly honored for the fact that it's named after such an outstanding educator and administrator as Dr. Louis Wise,” he said.
Farming “hasn't always been the easiest of occupations,” said Canon, who followed his father and grandfather into farming when he graduated from Mississippi State University in 1975.
“Profitability and survivability are the two biggest problems facing us today,” he said. “The two go hand-in-hand. It's extremely difficult to make any kind of profit under the current commodity price structure.”
For example, “On the week ending May 18, we hit contract lows on cotton and rice, my two biggest cash crops right now. September rice is $5.35 a hundredweight. That's $2.41 a bushel. That's cheap.
“Soybeans are $4.38 a bushel on the November contract. That's way below the loan. For years, we automatically thought that you can't get any cheaper than loan and here we are $1 below loan.”
At those prices, quite a few farmers are going into their net worth to stay in farming, according to Canon. “They're just hoping to hang on. It's no secret. Just look in the paper and see all the equipment sales from middle-aged people quitting farming.”
Low prices could be here for a while, says Canon. That's one reason the producer is lobbying hard for a safety net for farmers “to adequately address some of the tremendous market losses we've seen the last couple of years.”
A big challenge is getting congressional leaders to understand that the 1996 farm bill “was fatally flawed in that it predicted higher prices for almost all the commodities (over the duration of the bill),” he said. “What we've seen since are declining market prices. So there was no mechanism there to address a disaster in the pricing structure.”
Canon would like any new mechanism designed by Congress to be counter-cyclical and harmonious among the various commodities. “For example, when prices go up, there'll be no subsidy. When prices go to low levels, there'll be an increasing level of support to maintain that farm income. It makes sense to have something like that.”
Such a solution is not without problems, according to Canon. “We have WTO (World Trade Organization) constraints that we have to address. But I believe it's very doable. There's a way to structure subsidies where we don't go against our WTO commitment.”
Another message that Canon is trying to get across to Congress is that consumers should consider ag subsidies not as handouts to producers but as a small price to pay for food security, safety and to keep grocery prices low.
“I would much rather have the consumer pay more for food and me not have to worry about the government's safety net for income. But as it is, it's not that bad for consumers. They're getting extremely inexpensive food and fiber. They're also getting the most regulated, analyzed, and sometimes over-analyzed, food product anywhere in the world.”
He pointed out that other countries “still use practices and chemicals that we no longer use because we deemed them unsafe. Thailand uses fungicides on their rice production that we outlawed 25 years ago, because our EPA considered them cancer-causing.
“Yet we import 300,000 tons of rice from Thailand. I don't mind doing what's right and healthy for U.S. food production. But I think that it's a little strange that we still import a lot of these products produced under conditions that we've deemed unsafe.”
Some areas of trade are much more complicated, however, noted Canon. For example, many foreign countries keep coming up with creative ways to subsidize their agricultural communities, for example subsidizing fertilizer costs to producers.
“We could dominate the European food industry if we were allowed to compete on a level playing field. Japan is a tremendously subsidized agricultural community. Their producers are paid five times what ours are, but there is a minimum amount of rice that's brought into that country. We face many trade barriers that are beyond our control.”
Embargoes and sanctions are the most frustrating action of the U.S. government, because in Canon's eyes, they hurt the wrong people.
“The Middle East used to be a big purchaser of U.S. rice, and we've been restricted from those markets. When they take a huge market away from someone, it's their politics, but it's not my politics. When you embargo some country, you don't hurt that country, you just help another country.
“Cuba is an example of a phobia of a small country that is absolutely no threat to the United States. But because a few people politically exert influence, they're undermining the best interests of many other businesses. The more dialogue we have on that issue, the sooner we will be able to normalize some type of trade relations with Cuba.”
The rice industry's effort to formulate agricultural policy has been constrained in the past because it's represented by two organizations, the USA Rice Federation which represents California, Arkansas and Louisiana, and the U.S. Rice Producers Association, which represents Mississippi, Missouri and Texas.
The two groups have often gone head-to-head on issues, and neither side has shown a willingness to back down.
“Our biggest problems are in trade,” said Canon, who is chairman of the USRPA. “We support PL-480 rice shipments. We don't not support PL-480 milled rice shipments. But if a customer wants PL-480 rough rice, we think they ought to be eligible to receive it.”
The two groups knew that when it came to a farm bill, they had to speak as one voice. “The differences between our organizations pale in significance to the structuring of a farm bill that is going to support the entire industry,” Canon said.
“We met in Little Rock in the fall and at Las Vegas at the Rice Outlook Conference. We've had several conference calls on a consensus for farm policy for the rice industry. We've been very productive.”
Nolen Canon on rice issues…
By Elton Robinson
Farm Press Editorial Staff
Following are Nolen Canon's thoughts on a few of the issues facing rice farmers today. Canon is a Mississippi rice producer, president of the Mississippi Rice Council, and chairman of the U.S. Rice Producers Association.
U.S. Rice Producers Association
Canon wants “to have a unified, producer organization from all the rice-producing states. We want an organization of producers that speaks from the farm level. It's not that we won't recognize the mills or their importance. But in many cases, their politics are different from our politics and a lot of times producers don't realize that often the best interests of a rice mill is not the best interests of a rice producer.”
Farmers' propensity to overproduce
“The only thing a farmer can do is grow as much as he can as cheaply as he can. You might design some ag policy around that, but when you get down to the individual level, that's all he can do, because he has absolutely no control over the price.
“The flip side of overproduction is underproduction. Underproduction would make us rely on other countries for food and if there was severe underproduction, they'd feed their own and worry about us later. This country is totally unprepared and totally unfamiliar with food shortages. It's always there and there's always plenty of it.”
Sanctions and embargoes
“Sanctions are very frustrating for the American farmer. It seems like we are at times pawns of the State Department. It's almost like they trump us at every turn. But I think they're somewhat misguided about what they're trying to accomplish. One of the cornerstones of Freedom to Farm was that the government would do everything it could to open up trade for the American farmer. I'm disappointed in a lot of the efforts it's made to do that.
“We can understand not trading under the enemy nation status, if a government becomes a military threat. But when every other country in the world is trading with a country 90 miles away from us, it seems odd that we stand alone in trying to form some agenda that's not realistic.”
“It's a constant struggle and fight. We have to press for more administration and adherence to the trading rules in the WTO and compliance. There are many trade distorting practices that are somewhat hidden. Some countries subsidize fertilizer so it can be sold cheaply to producers. These have to be investigated and fully understood.”
“We need to be very deliberate in our research efforts. Our greatest advantages are our understanding and use of technology and our modern farming methods and productivity. We are the unquestioned world leader in productivity. The only way we can maintain that is through continued research and the use of all the technologies available to us.”
Genetically enhanced crops
“There is a lot of anxiety and misplaced fears about GMOs. We are at the tip of the iceberg with it. If we let sound science replace hysteria, then there are many wonderful opportunities through GMOs for farmers and consumers.
“Everybody should be making as efficient a crop as possible. There's only a certain amount of hunkering down you can do. You can cut your personal lifestyle back to a degree, but as far as your farming operation, you can only skinny so much. It takes a certain amount of capital and investment to produce.
“The outlook on commodity prices for the short term is not good. And that's one reason why the rice industry is trying to implement this counter-cyclical approach.”
Role of government.
That farmers need subsidies because other countries are being subsidized “is only part of it. Stabilization is a very under-appreciated word. Having a stable agriculture is absolutely to the benefit of the American consumer. We don't need wild swings in prices or being dependent upon foreign countries. I was concerned when they removed that word from the name of the government agency (when the Agricultural Stabilization and Conservation Service became the Farm Service Agency).”