Texas Tenacity

Husband and wife duo tackle the tough issues

Editor’s note: El Campo, Texas, rice producers Linda and L.G. Raun, Jr. recently sat down with Rice Farming magazine to share their expertise on the state and federal levels on farm policy and the local and state levels on water policy. Linda currently serves as the USA Rice Producers’ Group chairman and just rotated off the Lower Colorado River Authority (LCRA) board last April. LCRA’s primary focus is on surface water.

For the past six years, L.G. has served as chairman of the Texas Rice Producers Legislative Group, which deals with legislative issues on the state level, including topics such as water and environment, and farm policy on the national level through the USA Rice Federation. He also was instrumental in establishing the Coastal Bend Groundwater Conservation District and serves on the board of directors.

 
Writing a Farm Bill in an election year and experiencing a historic drought in Texas set the stage for a challenging 2012 for the U.S. rice industry. Luckily, dedicated and conscientious industry-wide, state and local leadership have taken a proactive stance in addressing these issues early on.

L.G. Raun, Jr., whose grandfather moved from Nebraska to Texas in 1913 and started growing rice in 1915, notes that the new Farm Bill will contain different language and, more than likely, monetary cuts to agriculture. Hence, the USA Rice Federation staff encouraged its members at the beginning of 2011 to begin analyzing all of the different options that would be beneficial, and bankable, to U.S. rice producers based on a lesser amount of available farm program monies.

“The USA Rice Producers’ Group hit the ground running early in the year to determine our priorities before the Budget Control Act was passed during the summer to deal with the deficit reduction,” says Linda Raun.

The Budget Control Act passed by Congress set up the Joint Committee on Budget Reduction, which was eventually referred to as the Super Committee. The premise was for all of the House and Senate committees to figure out how best to take their proportionate share of cuts and then give their recommendations to the Super Committee. The House and Senate Agriculture Committees did their work, but the Super Committee process failed before they could present their recommendations.

“In addition to the USA Rice Producers’ Group staff, the Federation has reached out to consultants to help with policy development,” Linda adds. “It is very valuable to have these resources available as we analyze and consider options that are presented.”

Establishing Farm Policy Priorities

A 30 percent cut in funding is expected for all of agriculture, so, in preparation, each commodity is looking at its baseline and taking off 30 percent, then trying to figure out how to best work with the remaining amount.

In the rice industry, direct payments are the most important safety net, but, unfortunately, they have been targeted as potentially not being available under the new program. And the futures market does not really work for rice because it’s too thinly traded.

With all of this in mind, the USA Rice Producers’ Group came up with a list of rice-industry priorities for consideration moving forward. They are as follows:

1. Make sure that price protection is relevant relative to the current cost of rice production so that it is truly something that is bankable.

2. Give rice producers options – a target price option or a revenue option – taking into account regional differences and differences in farming practices, so that producers can choose what works best for them.

3. The farm program should be tailored, easy-to-understand and defendable.

4. With a shrinking amount of money going out into the ag industry, the farm program needs to be tied to current production and current yield to protect rice farmers who are taking the risks. The true goal is to keep farmers in business when there is a multiple-year price decline.

5. The reduction to the baseline should be proportional to all commodities so that acreage doesn’t shift from one commodity to the other because of the way the farm program is written.

6. Because of the dollar amount it takes to be in agriculture, don’t limit farmers access to the program with the payment limit eligibility test. Even though a farm may increase in size to justify the cost of production, it is still a family farm operation.

Timing Is Key

Besides the language of the new Farm Bill, another critical factor is timing, considering that the current Farm Bill expires on Sept. 30. Had the Super Committee process been successful with an up or down vote, the Farm Service Agency would have had a year to work out the details and be ready to implement the new Farm Bill in 2013.

Now, however, a typical Farm Bill process, which is much more difficult and public, begins in January with House and Senate Ag Committee hearings. Then the farm program will be taken to the floor of Congress where, potentially, it can be amended by those who don’t understand farm policy and how what they are proposing affects farmers.

Meanwhile, the clock is ticking.

“The timing involved with a new Farm Bill is especially challenging for the South,” Linda says. “We begin our loan process and land preparation in the fall, so if we don’t have a new Farm Bill in place by Sept. 30, farmers won’t know what to do.”

L.G. also points out the challenge of writing a new Farm Bill in an election year.

“If it’s not done by Sept. 30, then it’s probably not going to get done between then and the elections, which puts us into a lame duck session between the November elections and Jan. 1,” he says. “We’ve already started encouraging our leaders to get the farm program written by Sept. 30 to give us time to educate producers and our lenders on the new language and the changes in farm policy.

“The first step going forward is for all of the commodities in the nation to sit down together and iron out our differences, educate each other about our concerns and come to a common agreement,” L.G. adds. “It’s imperative that the participants – farmers and the commodity groups – present a united front to the ag committees.”

Another positive, Linda notes, is that during the Super Committee process, the House and Senate ag committees had the opportunity to do a lot of research and analyzing to try to find a farm program that works for all of the crops.

“I think they will be able to move forward,” she says.

Water, Water, Anywhere?

Another important area in which the Rauns have dedicated time and energy involves the historic drought that the state of Texas is experiencing and the water issues associated with it.

To put into perspective how these water issues affect Texas rice production, consider that three counties – Colorado, Matagorda and Wharton – raise 50 percent or more of the rice in the state.

“In Texas, we typically use 60 percent surface water and 40 percent groundwater to irrigate our rice,” L.G. says. “Of the three counties that account for 50 percent of the rice in the state, Colorado and Matagorda are 100 percent surface water, and Wharton is 50-50 – surface and groundwater. All of the surface water comes from the Highland Lakes and the Colorado River.

“In the middle of December, we were at 13 inches of rainfall for the year in Wharton County compared to the normal amount of 42 inches per year,” he explains. “That’s the lowest I’ve ever seen for this area. Specific to the Colorado River, if it doesn’t rain significantly between now and March 1 to fill up the reservoirs, allowing them to release water, there will be zero surface water from the Colorado River for rice irrigation.”

Comparing 2011/2012 Water Supplies

L.G. says although there was enough water to grow rice in 2011, the Texas rice industry will be more affected by surface water availability, not groundwater, in 2012 because 60 percent of the irrigation depends on surface water.

“Crop insurance provisions for prevented planting may cover some costs for the farmer for a year, but that doesn’t help employees who are laid off or Texas seed sales, fertilizer sales and equipment sales or the rural community as a whole,” he says. “We are all going to feel the effects if this happens.”

In addition, the rice mills in Houston will have to look outside of Texas if the acres aren’t there to keep the mills operating, which will incur more expenses for these mills.

Although the dearth of surface water in Texas is an obvious detriment to rice production, even farms like the Raun’s located on the west side of Wharton County, which utilizes groundwater for irrigation, the drought has affected them, too.

“Groundwater was available, but we had to pump more in 2011 because we had no help from rainfall at all,” L.G. says. “And it’s very expensive to pump groundwater; it was a really high cost year for us.”

The Coastal Bend Groundwater Conservation District board of directors, on which L.G. serves, is, for the most part, responsible for determining policy and regulating the withdrawal of groundwater within the boundaries of the district for the purposes of conserving, preserving, protecting and recharging the groundwater within the district and preventing waste of groundwater within the district.

L.G. gives particular credit to the work done by Texas rice producer Ronald Gertson, who serves as current president of the board and Policy Committee chairman of the Lower Colorado Regional Water Planning Group.

Long-Term Water Planning

The last drought of record that occurred in the 1950s prompted the building of more reservoirs to increase water supplies. However, in the past 40 years, nothing has been done looking forward.

L.G., who has been involved in water planning and environmental issues for the past 15 years, notes that Texas has a population of 25 million, and the projection for 2050 is 40 million.

“Today, we are not going to meet the demand for water with that increase in population unless we begin developing more water supplies for the state,” he says. “To do that, we need to build more reservoirs. The other principle technology available right now for increasing water supplies is desalination.”

One of the consequences of not taking action, he says, is that water curtailment for irrigation will start happening more frequently. If more water supplies are not created, then existing supplies will be reallocated to the cities and industry that can pay more. And, obviously, people have to have water to drink.

“In the state water planning process, we have been looking at current supplies and projected supplies for the next 50 years to see if those equal out,” L.G. says. “Right now, we believe the demand will be much higher than the water supplies that we have. It’s imperative that we dedicate funding to infrastructure water supply projects, although it’s difficult to do in our present economy.

“However, as we start climbing out of this present drought, we’ve got to have the leadership to drive the development of more water supplies in the state of Texas,” he says. “We’ll always have droughts, but with effective water planning, we will be better prepared to deal with them.”

Contact Carroll Smith at (901) 767-4020 or csmith@onegrower.com.