Wednesday, August 31, 2011

Have Rice Growers Capitulated on Direct Payments

I noted the change of position on the part of the cotton growers here supporting a revamped crop insurance program over direct payments.

Al Cross also notes it here, calling it a seismic shift.  In the context of our 5.8 earthquake last week, I'd call it a 7.0 in the political landscape.  It shows how much impact the emphasis on cutting the 10-year deficit projections is having.  Just a year ago I'm sure I could have found many references to the idea that current programs were doing the job and the 2012 farm bill should just be a simple extension of the 2008 (which was mostly an extension of 2002, which was a modification of 1996...)

I checked the Rice Producers website, but no positions on farm bill that I saw.  I suspect they'll not fall into line.  The problem for them is: rice is irrigated, that cuts their production risk, so the major risk they have is market prices.  It will be hard to come up with crop insurance to cover that.  On the other hand, to the extent that my cynical mind suspects the cotton producers of waking up to the fact that payment limitation doesn't apply to crop insurance, maybe the rice producers will be swayed by the same consideration?

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