Federal subsidy phaseout threatens Butte’s rice industry
Rice subsidies, which for generations have propped up Butte County growers and boosted the local economy, may gradually become a thing of the past.
Butte County rice growers took in $24.8 million in rice subsidies in 2004, a little more than half of the $46.6 million paid out in 2003. While much of the decline is due to higher rice prices occurring naturally in the market, it also reflects farmers beginning to shift away from rice in anticipation of a thorough reworking of the federal Farm Bill in 2007.
“Under the Bush administration, they are definitely trying to reduce subsidies to all farmers, not just rice farmers,” said Tod Kimmelshue, a director in both the Butte County Farm Bureau and the statewide California Farm Bureau Federation. As the World Trade Organization leans on countries to level the playing field, and the Iraq war and natural disasters draw political attention and dollars in the U.S., it will be hard for subsidy supporters—traditionally Democratic legislators—to make the case for the $12.5 billion-a-year program.
Kimmelshue, who works at Northern California Farm Credit, said it’s a shift that will have far-reaching implications for the Butte County economy, which depends on $350 million in farming revenues annually.
"[Rice growers] see the writing on the wall,” he said. “Everyone who can is planting almonds, walnuts and pecans.
“If they can’t make money growing rice, they will sell their water [rights] and fallow their land,” Kimmelshue predicted. That would mean a blow to conservation and the environment.
Environmental Working Group of Washington, D.C., last week released its Farm Subsidy Database, listing recipients of subsidies that totaled $143 billion in the last 10 years. The nonprofit thinktank opines that the subsidy program continues to be abused by factory farms and landowners who are making plenty of money without taking more from taxpayers. Meanwhile, conservation programs must fight for even small government grants.
“So many producers get no support,” said EWG President Ken Cook, who recently returned from a visit with Farmers Rice Cooperative in Sacramento. “It’s hard to look at all the data and think of the all the farmers who have never gotten anything just because they grow the wrong stuff.”
Nationwide, 10 percent of crop producers collected 72 percent of all subsidies, which amounted to $104 billion over the 10 years between 1995 and 2004, the EWG reported. Those top 10 percent averaged $33,283 in annual payments, while the bottom 80 percent saw an average of only $721 per year. Sixty percent of farmers aren’t eligible for subsidies. In Butte County last year, the payments averaged $39,946 for each of the 621 recipients.
“Taxpayers have the right to ask, ‘What is the plan?'” Cook said. “There’s no means test, no requirement to repay and no time limit. We need to look at a completely different investment strategy.”
Rice subsidies—price supports, the industry prefers to call them—are a touchy subject for local farmers, a hard-working lot who don’t appreciate being called out on what many see as a handout from taxpayers, coming from the same U.S. Department of Agriculture pot as food stamps.
This time, the EWG also broke the subsidies down by Congressional district. The 2nd District represented by Wally Herger, R—Chico, collected $1.75 billion in subsidies from 1995 to 2004. Herger crosses party lines to vote in favor of subsidies.
But everything will be up for debate when the Farm Bill is reviewed in 2007.
Subsidies will likely continue, but in a different, diminished form. The EWG’s Cook expects payment limitations, a retooling of the types of payments farmers will be eligible for and a shifting of money toward conservation benefits.
“People who have little or no debt on their land can continue to grow rice,” Kimmelshue predicted. “Basically, we’ll be at the whim of the free market. … It’s going to be very interesting to watch over the next five to 10 years.”
The changes could also draw a line in the sand between rice growers and nut growers, the latter of whom could resent the selling of needed water south, especially at a profit.
EWG had a hard time getting its hands on some of the data, with part of its Freedom of Information Act (FOIA) request being turned down by the USDA. Just this week, the EWG got word it won its FOIA appeal and the government will be releasing the names of members of farming cooperatives, which shared $1 billion in 2004.
In the 1980s, several Butte and Glenn county families created “paper farms,” with entities set up so farmers—and even nonfarmers—could collect as much money as possible.
That’s when the News & Review began publishing a much-hated list of the area’s top recipients. In 1996, the USDA refused to release the figures, and legal challenges by this paper and The Washington Post affirmed that the payments are public record.