Sunday, September 25, 2022

We need to talk about input costs 

Betsy Ward
By Betsy Ward
President and CEO
USA Rice

Input costs have risen alarmingly in recent months. The causes are many, complex and unsustainable. The supply chain issues of the past two years continue to plague commodity industries. The conflict in Ukraine has worsened supply chain disruption, and Russia has suspended fertilizer exports. Energy costs have increased, and we’re also contending with historically high inflation. The cost of everything, it seems, is going up and up. Meanwhile, rice prices have stagnated, giving U.S. rice farmers no relief. 

Why? India. 

They aren’t alone in over subsidizing their rice industry — covering input costs for their growers in violation of their World Trade Organization commitments — but they are able to dump more than triple the annual U.S. rice production on the world market. These and other factors have placed an unacceptable burden on U.S. rice producers. The problem is, as I see it, existential. 

Look at the numbers

Our rice farmers need a lifeline, and they need it now. In fact, for some, it may already be too late with planting underway. Compounding the issue is the fact that reference prices for rice, set by the 2014 Farm Bill and based on data from a decade ago, are woefully out of date. These reference prices are a key factor that determines Price Loss Coverage assistance, and the PLC program is not designed to take into account the steep rise in input costs rice farmers are currently contending with. 

Make no mistake, rice is taking the biggest hit. Other crops are benefitting from rising prices that help offset their heavy input costs, but rice is not. According to a February study from the Agricultural and Food Policy Center at Texas A&M University, the average per-acre cost of production for rice is up $174.20 over 2021, much higher than any other commodity. Prices aren’t keeping pace, and it could result in a $504.9 million loss to rice farmers. And as numbers get worse day by day, rice farmers stand to lose even more than the study suggests. 

The Price Loss Coverage program has offered some assistance in the past, but it isn’t keeping up with rising foreign subsidization and skyrocketing costs at home.

But you know this. What you may not know is what USA Rice is doing about it. 

USA Rice steps up

USA Rice in initiating efforts to provide relief to rice farmers as the cost of everything continues to rise.

We are in near constant contact with our allies in Congress, and they are asking the right questions and inviting us to testify before their committees. Representatives Rick Crawford, Julia Letlow, House Agriculture Committee Ranking Member GT Thompson and others have all brought attention to the issue at recent hearings, as has Senator John Boozman, Ranking Member of the Senate Agriculture Committee.

We’ve formally reached out to U.S. Department of Agriculture Secretary Tom Vilsack, as well as Under Secretary Robert Bonnie, urging them to take action immediately and use all resources available to provide relief to rice farmers. We are working on a new economic study that will provide more current and accurate data and help us sharpen our ask to the Administration. We have launched a campaign in traditional and social media to call attention to the issue, and we are keeping pressure on the Biden Administration to hold India and other bad actors accountable at the WTO.

The current situation is untenable. We’re doing what we can to make sure Washington understands what it would mean to do nothing. The toll on rural communities, on families, on the environment and on a hungry world is too great. You cannot fail, so we can’t either. 

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