Skip to comments.AP: California's rice, cotton groups aim to fight Bush subsidy cuts
Posted on 02/09/2005 11:39:53 AM PST by NormsRevenge
SACRAMENTO (AP) - California's cotton and rice farmers, who receive more than $500 million a year in federal farm subsidies, are preparing for a fight over President Bush's proposed subsidy cuts.
The president proposed a $587 million budget cut in farm subsidies nationwide. That would most affect the state's farmers of cotton and rice, which have a combined acreage of about 1.2 million acres throughout California.
Bush proposed a 5 percent reduction in support payments, a new $250,000 ceiling on payments to individual farmers and an end to loopholes that allow some farmers to claim multiple owners of their farm to get more.
Conservatives, environmentalists and small farmers call the subsidies corporate welfare for the nation's largest growers. But officials with California's cotton and rice industries said Tuesday the subsidies are necessary to guarantee profits while keeping prices low.
California rice and cotton growers received about three-fourths of the state's $757 million in federal crop subsidies in 2003, according to the Environmental Working Group, a Washington, D.C.-based advocacy group that maintains a computer database of U.S. farm subsidies. Both crops, while second-tier players in the state's $27 billion agricultural economy, are heavily exported.
Subsidies have "kicked in when prices are low and times are tough, but at the same token the benefits are terminated or lowered when prices are good," said Gene Lundquist, vice president and corporate secretary of Calcot, Ltd., a Bakersfield-based cotton cooperative with 1,100 member farmers in California and Arizona.
Scott Rogers, a fourth-generation farmer who grows 450 acres of cotton in Tulare County, said he's not a welfare case. Instead, the subsidies give him a little more breathing room financially.
"The profit margins are pretty slim right now, and any amount that's cut is going to affect us somewhat," Rogers said. "It's not going to put us out of business, but we'll take a hit on it."
While critics point to the subsidies paid to huge corporate farms, such as $6.6 million received by the J.G. Boswell Co., of Kings County, between 1995 and 2003, Rogers said he gets about $40,000 to $50,000 a year. Boswell is the nation's largest cotton grower.
As Lundquist, Rogers and their counterparts in California's rice industry find themselves on the defensive over subsidies, their state and national organizations are gearing up Washington lobbying campaigns to soften the blow. Congress traditionally has proved itself unable to make major cuts in the nation's farm support payments, which reached $16.4 billion in 2003.
"The president issued his budget and we look at it as being a framework for discussion of possible budget cuts," said Bill Huffman, a spokesman for the Sacramento-based Farmers Rice Cooperative. "That argument will be made before Congress."
Already, the California Rice Commission has retained a Washington lobbying firm to make its case against such reductions for the next federal farm bill, which is due in 2007. The Memphis-based National Cotton Council and USA Rice Federation in Virginia and congressional backers in Southern states are also preparing for a fight in Congress over the subsidy reductions.
The Environmental Working Group analysis showed that 17 percent of federal rice subsidies go to California, while about 11 percent of cotton subsidies are paid to California farmers.
"If budget cuts are a reality - and they may well be - ag would do its part," said Tim Johnson, president and chief executive officer of the Sacramento-based California Rice Commission. "But we would seek to have those cuts be equitable."
California grows about 600,000 acres of cotton, largely in the San Joaquin Valley, and exports nearly all of it to Asia, industry officials said. The state's rice acreage, mostly in the Sacramento Valley, stands at about 595,000 acres this year, second nationally to Arkansas. Forty percent is exported, while the rest is consumed in the United States as table food and a chief ingredient in beer.
On the Net:
California Rice Commission: http://www.calrice.org
Farmers Rice Cooperative: http://www.farmersrice.com
Environmental Working Group: http://www.ewg.org
I want to know when I'm going to get a subsidy from the government for working on electronics. I mean, this is an economically hard-hit profession I'm in. Can't the government take money from other people and give it to me to help me out?
Corporate welfare, pure and simple. The family farm is extinct.
Enough of this SOCIALISTIC CRAP!!!! End ALL farm subsidies. There is no point in it, the whole idea is PORK, and a huge waste of taxpayer dollars.
The government should not be paying farmers to grow or not to grow, or to shore up farmers when prices are low. All farmers know they can hedge with futures contracts. You sell short and the lower the prices go, the more money you make. The futures markets were created for the farmers so they could do this. If a farmer can't make money in farming, he should do something else. He doesn't deserve money from my pocket.
Let California pay them a subsidy! I hear they are really progressive out that way.
Someone point me to the part in the Constitution where all businesses in the US were to be guaranteed profits?
Subsidies for cotton and rice growers in California are dumb and counterproductive.
First, recognize that the central valley of California is a desert; every few years big cities have problems maintaining a sufficient supply of water. It takes lots of water to raise cotton and rice. So these farmers get water at subsidized prices to raise water intensive crops in a desert, and thus compete with farmers in the South that get the water naturally.
Next, they get subsidies for the crops themselves, which keeps the prices of rice and cotton higher than it would be otherwise.
Then, because cotton is so high, we subsidize textile manufacturers to make cloth.
So we the consumers pay for the subsidies with taxes and then pay the higher prices for the commodities.
What a country!
The last thing the government should be doing is subsidizing the growing of cotton in deserts. I also think farmers should pay market rates for water. If that ends the farming of "thirsty" crops like cotton in places where water is scarce, that's the way it goes.
Amen to that
Also consider, many of the farms receiving government subsidies are foreign-owned.
Example: Many of the farms, are owned by the same Japanese companies that import their rice (grown in California).
Gee, and here I thought the whole point of hiring illegals to work the fields was to keep the prices low...
Only efficient operators will be "guaranteed" a profit.
Reminds me of OPUS in Bloom County who used to say in order to be a successful farmer in America you had to be able to say
"GET THE GUBMENT OFF MY BACK WHERE'S MY ALLOTMENT CHECK"
in one breath!
100% welfare and unconstitutional. The disgusting Reps in Congress will likely keep the subsidies. I just wish Bush would have completely eliminated them with this budget. Phasing them out is a joke and will NOT work. After a few years, the payments will be increased by a new Congress. All of Bush's "decreases in the budget increases" will only amount to a drop in the bucket. The MSM and the demoRats will always scream. It is so frustrating to think the spineless Reps don't have the will to do what the Constitution requires. ALL subsidies should be COMPLETELY eliminated this year. Any Federal worker handling the subsides should be immediately terminated. We need to REDUCE spending and the number of govenment employees. I don't think Bush truly understands just how smothering are the taxes we pay. I think he is afraid to be bolder. He is probably holding back because he realizes the little girlie men members of his party are too damn chicken to do the right thing. God, I get frustrated with how utterly spineless is the Republican leadership. They should all be ashamed. We need a Grover Cleveland to cut the Budget!
Cotton and Rice grown in the desert country. Yea, makes a lot of sense.
Consider who many of those corporate farmers are. Quite a number are addressed as "Congressman" or "Senator," and others are major contributors to the Republican Party. It's pretty hard to find political courage when the people who write the laws benefit directly from them.
Farmers are Socialists.
Every every every thin dime of farm subsidies should end TODAY.
You know, the grape industry doesn't seem to have these problems. When a glut of low quality grapes became an issue in the Central Valley, Fred Franzia bought them and turned them into "Charles Shaw Wines."
The family farm is not extinct by any means. That there are many corporate farms is also true. Lets get the facts right. I personally know MANY family farmers and ranchers. My wife's relations among them.
Cotton actually likes desert climates (like Egypt). It needs hot weather AND water, which is why the San Joaquin Valley of California is prime cotton country. It would not grow in large quantities there without Central Valley Project water (led by Bernie Sisk D. Fresno [deceased] and former chairman of the House Ag Committee for 20 years). Rice is grown in the California delta around Sacramento where there is ample water. I am for ending subsidies, but lets get the facts right.
Actually the grape industry is doing poorly (profit-wise). I know the wine grape and raisin side of the business personally via my wife's family. Prices are down and production is up.
I am sorry, but in this day and age, they need to face the music and compete just like the rest of us. If they cannot make a profit with rice and cotton, then grow other crops or raise livestock.
Years ago I offered to not grow corn but they would not pay me because I did not own a farm.
A major problem for Central Valley growers that will not go away is the fact that for years, their bread and butter was the "jug wine" business (Carlo Rossi, Gallo Port, etc.). As more Americans have grown more savvy about the wine they drink, and more foreign growers (Australians, Chileans, Argentineans) export low price, high quality wines, people are increasinly avoiding jug and box wines. Since Central Valley grapes are lower quality than those in Napa, Sonoma, Mendocino, etc., which can be sold at a premium, alot of growers from Lodi down to Fresno are caught in a bind.
Reminds me of when cotton farmers in California cried 'foul' when they were caught growing the same amount of cotton as previous years, even though they had been paid to take 50-75% of their acreage out of production. They claimed they had: the space between the rows!
If they still can't compete after all these years of recieving subsidies and incentives and guarantees, then maybe they shouldn't be in business.
Lobby Sacramento instead, CALIFORNIA Rice Commission.
You're right -- my comment was a stretch. Unfortunately, many family farms are hooked on subsidies too. It's a strange situation. Part of the rationale for subsidies originally was to make sure family farms didn't go under so as to assure the country of a continuing food supply. Yet the economies of scale -- and subsidies -- have been incentives for more corporate farming.
Now the government is creating agricultural "outsourcing" through NAFTA, to the detriment of our own farmers who must compete against foreign growers who aren't restricted by EPA rules, etc. It's well past time to start unsnarling this tangled ball of twine. I don't want to see family farms go under but I'm tired of some of the games farmers play. I used to own a farm so I know a little about the subject.
yes, that's the big problem. Probably only a handful of Congressman would do right by the Constitution.
"It's well past time to start unsnarling this tangled ball of twine." Darn right you are. And doubly so for fingering the different regulatory regimes here vs elsewhere. Many folks don't quite get that part. The subsidies are bad in and of themselves, the EPA and other rules are REALLY perverse.
As do I. Most Americans believe their food produce is grown in the back of their local grocery store, if in fact they even realize it has to be grown.
I was just recalling an article I read years ago that stated if there was no interference in the market (through irrigation subsidies, farm subsidies, govt interference ...) that there would be no market reason for growing cotton in the West. The article stated without subsidies, more cotton would have grown in the delta regions down South and that the farmland in Calif would have been used for other crops. It highlighted the fact that since cotton requires very large quantities of water, the increased expense out West for water would resulted in farmers moving to other crops. Of course with NO subsidies, we would get our sugar (and many other crops) overseas at much cheaper rates. If I have time I will locate the article.
Trying to remember some funny saying about not knowing how the sausage was made... You are very correct that the lack of experience with agriculture (except as a consumer) affects people's understanding of ag policy. And not for the better.
Keep in mind that there is also dryland cotton, i.e., the storm-proof varieties grown around the High Plains of Texas. Much of this cotton did really well this past wet year.
I am reminded of the long-distant telephone conversation with my wife today regarding her inability to find out why a buzzer continued to sound when she got out of her 2004 Pontiac minivan. I made the statement that I will never again buy an American automobile until they get kick the politicians out of the engineering rooms. In a democracy, we are given a lot of power to destroy an industry through sheer ignorance.
thanks for the info, you..learn something every day.
I fully understand that cotton likes heat and water. I am at the moment sitting in an office in Huntsville Alabama, and I assure you that there are hundreds of thousands of acres of cotton fields around me because there is lots of heat and lots of water here, and neither the heat nor the water is subsidized.
The point is, many cities in California periodically suffer from water shortages, while cotton and rice are grown with water sold at prices much below the rates of water sold to those cities. It gripes citizens of Los Angeles or San Francisco suburbs to no end when they are told there is such a water shortage that they can't water their lawns or even take showers, and then they drive down Interstate 5 and see acres and acres of rice and cotton sucking up water in the desert.
Even with those subsidized water prices, the California cotton growers need additional subsidies to make enough of a profit to stay in business.
You don't see anything wrong with this picture? The market is telling these farmers that their way of life is no longer profitable, so they should find something else to do -- just like people who made buggywhips, or 8-track tapes, or ...
It's one of those penumbras, like the right to dismember your unborn children.
The market also has been telling AmTrac, the Post Office, public schools, museums, libraries, NASA, etc, that the people who work in these institutions should find something else to do but Americans keep them going with subsidies. Every American business is subsidized in some fashion either directly or indirectly, e.g., tax benefits or laws to protect them. For me, I would rather subsidize a cotton farm than the auto industry, but that's just me.
>>While critics point to the subsidies paid to huge corporate farms, such as $6.6 million received by the J.G. Boswell Co., of Kings County, between 1995 and 2003...
I notice the $4 million to the Jones family didn't make the cut.
America has a very strong agriculture industry, partially because of enlightened gov't policy. By abandoning price supports, we are doing the will of liberals, as cheap Chinest Communist imports destroy American jobs.
So the question is this: Do you want your money supporting American businessmen or Red Communists? I don't know about you boys, but I am not anxious for the USA to become a servile economic colony of China.
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