WASHINGTON, D.C. — Rich Hillman, an Arkansas rice farmer and member of the USA Rice Farmers Board of Directors, testified before the Senate Agriculture Commodities, Credit, and Trade Subcommittee during a hearing Tuesday on Farm Bill commodity programs.
The hearing, which was split into two panels, featured leaders from two general farm organizations as well as 10 commodity organizations. One theme became evident from the hearing – U.S. farmers need an improved safety net.
Hillman focused his testimony on the need to increase and index the Price Loss Coverage (PLC) program rice reference prices to ensure rice farmers have a reliable safety net – USA Rice’s number one priority for the 2023 Farm Bill.
He reviewed the rice financial situation over the past several years and the extraordinarily dire situation rice farmers faced in 2022.
“Rice was not as fortunate as many other commodities that saw large run ups in market prices in 2020 and 2021 all while contending with an unprecedented increase in costs of production,” said Hillman. “A Texas A&M University study in 2022 predicted two-thirds of rice farms would have negative net cash farm income for the 2022 crop year. USDA also reports a more than 30 percent increase in operating costs for 2022. On our farm that was even higher.
“Thank you all, and particularly Senator Boozman, for providing vital assistance to rice farmers for the 2022 crop year in the 2023 Omnibus Appropriations bill. It was truly critical for rice farmers.”
Hillman then spoke to the inadequacies of the current rice reference prices.
“Current cost of production is nowhere near 2012 levels – when the current PLC reference price was calculated, and established in the 2014 Farm Bill, rendering the program unworkable for rice presently,” Hillman told the Subcommittee members. “The importance of economies of scale has only become more evident. To keep pace with capital and other costs, we must farm more land and take on more risk.”
He expanded on why a strong farm safety net is important for rice farmers.
“As a high-cost input crop subject to severe global market distortions due to predatory trade practices of foreign countries, U.S. rice farmers are more vulnerable to the impacts of inflation and global events that have caused cost increases to fuel, fertilizer, labor, as well as the highest interest rates many farmers today have ever experienced.”
Hillman also noted that rice is one of the most government-manipulated commodities in the world, and the egregious actions of countries like India that put U.S. rice farmers at a disadvantage.
“The PLC program has traditionally been our true safety net. It’s allowed us to better compete on a lopsided global playing field impacted by foreign subsidies, tariffs, and non-tariff trade barriers. India subsidizes its rice producers by upwards of 90% and injected billions to offset escalating input costs.”
Hillman’s underlying message to the Subcommittee was simple: “USA Rice strongly believes reference prices under PLC need to be meaningfully increased and indexed to provide a safety net that remains relevant over the long haul to ensure the long-term viability of the U.S. rice industry.”
In response to a question from the Subcommittee’s ranking member, Senator Cindy Hyde-Smith (R-MS), on the need to increase the rice PLC reference prices Hillman explained that costs to produce a crop of rice are “out of control” and that U.S. rice farmers can compete against any other farmer around the world, but U.S. rice farmers cannot compete against foreign governments that step in and over-subsidize their rice producers-one of the leading factors to why U.S. rice farmers need a functioning farm safety net.