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Rice groups sparring over P.L. 480

If anything, the gulf between the USA Rice Federation’s Rice Producers Group and the U.S. Rice Producers Association over the issue of milled rice vs. rough rice in such shipments appears to be widening.

On June 12, the Houston-based U.S. Rice Producers Association, which claims to represent growers in Mississippi, Missouri, Texas, California, Louisiana and Arkansas, sent out a press release headlined “Rough rice in food aid programs a win-win policy.”

Although it began with praise for Uzbekistan’s intention to purchase milled rice with a P.L. 480 allocation, the release cited the willingness of the USDA Foreign Agriculture Service (FAS) to allow the Uzbekis to purchase whatever form of rice they desired as a “win-win” policy.

Three days later, the U.S. Rice Producers Group, which claims to represent producers who grow 80 percent of the nation’s rice crop, issued a press release calling rough rice in food aid a “lose-lose” proposition.

“The inclusion of unmilled or rough rice in food aid is a lose-lose proposition that will contribute to the collapse of the domestic milling industry and negatively impact U.S. rice producers as competition for their rice is reduced,” said Gary Sebree, an Arkansas rice farmer and chairman of the U.S. Rice Producers Group.

Sebree, who farms near Stuttgart, noted that nearly half of the U.S. rice crop — about 2.7 million metric tons — is exported annually, with up to 20 percent shipped as food aid.

“USA Rice supports commercial sales of all types of U.S.-grown rice in rough or processed form, a separate issue from food aid. Food aid programs are not commercial sales; they are transfers from the U.S. Treasury to the needy overseas,” Sebree said.

“We need to maximize the benefit of these taxpayer funds by adding value in the United States, not giving the value to a foreign miller.”

In its release, the U.S. Rice Producers Association (USRPA) said it applauded the decision by the Uzbekis to use the P.L. 480 allocation announced by USDA on June 1 to purchase milled rice.

“As U.S. rice producers, we are always pleased when our export customers choose to purchase U.S. milled rice,” said President and CEO Dwight Roberts. “But, we believe that we should offer such customers the opportunity to buy commodities, including rice, in the form of their own choosing.”

“This is a clear indication that USDA/FAS is also aware of the need to offer rice buyers whatever form of rice they want,” said Nolen Canon, Rice Producers Association chairman. “The world marketplace is changing and rice producers and suppliers must change with it.”

The Rice Producers Association also commended the House Appropriations Agriculture Subcommittee for approving language directing the secretary of agriculture to ensure that all forms of rice (rough, brown and milled) are fairly represented in all USDA food aid, export market development, export promotion and other export related programs.

Any loss of milled rice shipments damages the U.S rice milling industry and, ultimately, rice farmers, the U.S. Rice Producers Group said in its response to the USRPA statement.

“When rough rice rather than value-added rice is shipped to the hungry overseas, it costs American jobs while helping build up milling interests in other countries,” said the Rice Producers Group’s Sebree.

“Those in the rice industry who advocate shipping rough rice as food aid need to think carefully about what their local communities will look like when the local rice mill shuts down because there is no demand for milled rice. Cash prices for rice are the lowest in eight years — how much will they drop without a local mill to bid on and buy rice?”

In a response to the Rice Producers Group’s June 15 press release, the USRPA said that if the domestic milling industry is in financial trouble, dependency on government food aid cannot save it.

“In fact, if embargoing rough rice from food aid was the panacea for the domestic milling industry, the milling industry should not be in trouble at all, since the rough rice embargo should have kept the industry in good health,” the response said. “It has not.”

Rice Producers Association leaders said they do not favor including rough rice in food aid shipments at the expense of milled rice, but only when potential customers request rough rice or some other commodity rather than milled rice.

Besides the impact on domestic mills, P.L. 480 rough rice shipments also don’t make sense for food aid recipients, the Rice Producers Group Sebree says. “Rice hulls aren’t good to eat, but they cost money to ship. They account for 21 percent of the weight of the product, so recipients getting rough rice would actually get less usable product than if milled rice were shipped.

“Countries in need of food aid assistance are in need of food right away. It wouldn’t make sense to supply seed nor does it make sense to provide raw product.”

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