Rice Farmers Benefit from $3 Billion in Taxpayer-Funded Programs

Boosting Farm Subsidy Payments: The Impact on Rice Farmers

Boosting Farm Subsidy Payments: The Impact on Rice Farmers

Rice Farmers Already Reaping Rewards

Recent proposals by agriculture groups and Republicans in Congress aim to increase crop price guarantees in the upcoming farm bill to boost farm subsidy payments. However, an analysis conducted by the Environmental Working Group (EWG) reveals that rice farmers have already been benefiting financially.

Between 2017 and 2021, rice farmers received payments totaling over $3 billion from three taxpayer-funded farm support programs. These payments often compensate farmers multiple times for a single decrease in crop prices. The majority of these payments went to the largest subsidy recipients, likely concentrated in a small number of counties.

Controversial Proposal: Taking Away from Conservation Programs

Despite the financial success of rice farmers, industry organizations and their Republican allies in Congress are pushing to increase crop price guarantees by diverting $19.5 billion from conservation programs in the Inflation Reduction Act (IRA).

EWG’s analysis reveals that co-opting the IRA money would primarily benefit around 6,000 farmers in Southern states, many of whom are rice farmers.

Rice Farmers and Taxpayer-Funded Programs

The analysis by EWG shows that rice farmers have received payments from three types of taxpayer-funded programs:

  • An indemnity from their taxpayer-subsidized crop insurance policy
  • A payment from traditional commodity farm subsidy programs tied to crop prices or revenues
  • A payment from the Coronavirus Food Assistance Program (CFAP), designed to offset the effects of the Covid-19 pandemic on crop prices

It’s important to note that the $3 billion figure is likely an underestimate. Rice farmers also collected payments between 2018 and 2020 through the Market Facilitation Program (MFP), which compensated farmers for income reductions caused by the trade war initiated by then-President Donald Trump. Unfortunately, the exact amount of money paid out to rice farmers through the MFP is unclear as the Department of Agriculture no longer discloses that information on their website. However, MFP payments to farmers of non-specialty crops, such as rice in Arkansas, exceeded $443 million.

Primary Sources of Payments to Rice Farmers

Between 2017 and 2019, the majority of payments to rice farmers came from traditional commodity programs called Agricultural Risk Coverage (ARC) and Price Loss Coverage (PLC). It’s worth noting that the 2021 payments for ARC and PLC have not been fully accounted for in the data, so the total payments are expected to be even higher once finalized.

In 2020 and 2021, crop insurance became a significant source of payments to rice farmers, and CFAP payments were also made to rice farmers in 2021.

Taxpayers’ Contribution and Geographic Distribution

Both farmers and taxpayers contribute to crop insurance premiums annually. On average, taxpayers shoulder 63 percent of the cost, and indemnity payments are made from the collected premiums. Traditional commodity farm subsidy programs and CFAP are entirely funded by taxpayers.

Rice farmers in just 105 counties across eight states received a crop insurance payment in 2021. In contrast, over 1,700 counties received crop insurance payments for corn, and almost 1,600 counties received payments for soybeans. These programs primarily benefit rice farmers in a limited number of counties.

Furthermore, rice farmers have experienced record profits, as highlighted by the United States Department of Agriculture (USDA). The profits earned by rice farmers have increased more than five times from 2003 to 2022, with returns above operating costs also showing significant growth in Arkansas, the largest rice-producing state.

The Need for Conservation Programs

Proposals to increase price guarantees would result in more subsidies flowing through the ARC and PLC commodity programs, primarily benefiting a select group of rice, peanuts, and cotton farmers in Southern states. However, it is vital that this money remains within the conservation programs as intended by Congress in the IRA. Doing so would benefit a significantly larger number of farmers, the environment, and the climate.

Read More of this Story at www.ewg.org – 2023-11-29 05:19:00

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