WASHINGTON -- U.S. rice producers apparently will have until Oct. 31 to repay an advance counter-cyclical payment for 2003 after the final payment proved to be much lower than anticipated in USDA’s initial calculations.
Rice industry leaders said that Jim Little, administrator of USDA’s Farm Service Agency, told them rice producers would not be held delinquent on the repayments and that no interest would accrue until November.
The USA Rice Federation and the U.S. Rice Producers Association had asked for the extension and that interest charges be delayed until after the October deadline. The request came during a conference call between the two organizations and Little and other FSA officials on Feb. 2.
USA Rice leaders said they questioned what they called a “significant adjustment” that was made between the September World Agricultural Supply and Demand Estimates and the final National Agricultural Statistics Service season average price used to calculate the final counter-cyclical payments.
On Jan. 31, USDA announced a final counter-cyclical payment of 7 cents per hundredweight. That was substantially below the advance payment of 63 cents per hundredweight that many growers had requested and received in 2004. As with any overpayment, rice producers will have to repay the difference.
That could amount to more than $22 an acre for a producer with a 4,000-pound per acre program yield.
“The final price announcement was a significant increase over the most recent USDA projected price,” said John Denison, chairman of the Louisiana Farm Bureau Federation Rice Advisory Committee. “This caught the industry off guard and is going to require cash-strapped growers to repay 56 cents of the 63 cents they have received in 2003 advance counter-cyclical payments.”
Speaking before the Louisiana Farm Bureau’s board of directors in Baton Rouge, Denison urged the organization to support the rice industry’s request for USDA to extend the repayment period and to waive any interest accrual until October 2005.
“Members of both organizations discussed with FSA methods used by USDA’s National Agricultural Statistics Service to calculate the final 2003 season average price for rice, as well as USDA procedures for repayment,” said USA Rice’s Bob Cummings.
Cummings said the rice industry is “strongly urging” FSA and NASS to enhance both external and internal communications in order to avoid such significant adjustments in the future.
“The USA Rice Federation looks forward to working closely with USDA to discuss adjustments to the mechanism under which the calculation is made so this problem does not occur again,” he said.