AGES No. (AGES-8949) 81 pp

November 1989

Rice: Background for 1990 Farm Legislation

This report address considerations in the 1990 farm bill debate for rice, including market conditions, policy proposals, trade agreements, and the interactions between policy and markets for selected commodities. Rice ranks ninth among major U.S. field crops in terms of value of production. All U.S. rice production is irrigated, providing more stable yields than many other crops. Three classes of rice are produced in the United States-long, medium, and short grain-with long grain predominant. Domestic use and exports of U.S. rice have increased in recent years due in part to the implementation of the marketing loan program in the mid-1980s following declines in both domestic use and exports in the early 1980s. As a result, carryover stocks have declined from a record high of 77.3 million cwt in 1985/86 to 32.4 million cwt in 1988/89. Costs of rice programs, however, rose to an estimated record $1 billion in fiscal year 1989 due to marketing loan costs and increased deficiency payments. Rice growers in the southern rice growing States are rapidly adopting high-yielding, semidwarf varieties of long-grain rice which could raise U.S. production. Rice issues facing farm legislators relate to rising production capacity, stagnant world trade, multilateral trade negotiations, high costs of marketing loans and other rice programs, loan rate differentials between long and medium/short grains, and adjusting the world price formula to further enhance U.S. competitiveness in the world rice market.

Keywords: production, domestic use, farm programs, farm returns, rice, prices, program effects, world trade

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Last updated: Wednesday, November 01, 1989

For more information, contact: Nathan Childs and William Lin