LSU AgCenter economist Mike Salassi tells central Louisiana farmers about the provisions of the new farm bill during a meeting at the Rapides Parish LSU AgCenter Extension Office recently. The program eliminates direct payments and relies more on crop insurance. Photo by Bruce Schultz

News Release Distributed 03/14/14

CROWLEY, La. – Rice farmers across Louisiana learned how the new farm bill will affect their operations in a series of meetings held by the LSU AgCenter and the USA Rice Federation.

Large crowds showed up for the meetings held in Abbeville, Kinder, Crowley, Alexandria and Rayville.

The new farm bill eliminated direct payments and relies heavily on two new income support programs as well as placing more emphasis on crop insurance programs.

“This bill is focused on providing assistance when you need it,” said Reece Langley, USA Rice Federation vice president for government affairs.

The commodity title of the new farm bill has two options – the Agriculture Risk Coverage or Price Loss Coverage. Langley said farmers in the northern states are more likely to use risk coverage because it is affected more by a farm’s yield, while rice farmers probably will want to sign up for the price loss coverage, he said.

LSU AgCenter economist Mike Salassi said price loss coverage would provide better protection for rice because market price risk is of much more concern for rice growers compared to other crops.

Salassi provided several scenarios to show how the programs would work for rice, soybeans and corn crops. He said once the U.S. Department of Agriculture finalizes the farm bill rules, he will have detailed posted online examples to show how the programs will work.

The PLC program for rice would pay only if the market price drops below $14 per hundredweight ($22.68 per barrel or $6.30 a bushel), said Salassi.

The threshold prices under the price loss program for other commodities are $8.40 per bushel for soybeans, $3.70 per bushel for corn, $3.90 for grain sorghum and $5.50 for wheat. Cotton is ineligible for this program and has loan rates ranging from 45 to 52 cents per pound.

Salassi said the farm bill could have been much worse for rice farmers had it not been for U.S. Sen. Thad Cochran of Mississippi, who helped promote the idea of a price-based option. ”Rice growers could have ended up with just an ARC program option with no target price,” he said

The price loss program would be paid on a farmer’s base acres established for the program up to 85 percent of a farm’s total base acreage. In addition, the program for rice allows growers to update program payment yields using 90 percent of an average yield from the 2009 through 2012 crop years.

The maximum payment is limited to $125,000 per individual, Langley said, and any payments for the 2014 crop would be disbursed until fall 2015.

Lauren Echols, USA Rice Federation government affairs manager, said the farm bill still requires the foreign food aid program, PL480, to buy American-grown agricultural food.