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Farmers get economic assistance in CR – but barelyFarmers get economic assistance in CR – but barely

A total of 132,000 tons of U.S. rice has been sold to Iran under the first five months of the 2024-2025 Marketing Year Memorandum of Understanding.

Forrest Laws

January 17, 2025

5 Min Read
Shipping containers
The Iraq sale is scheduled for March delivery and was a “real (Christmas) present, which is 66% of the way through the 200,000 metric tons included in the 2024-25 Memorandum of Understanding with Iraq. Getty Images/iStockphoto

U.S. merchants have sold another 44,000 metric tons of U.S. rice to Iraq, providing a touch of stability to a market that is being buffeted by several headwinds as producers begin the new calendar year.

The announcement brought the total to 132,000 metric tons sold under the first five months of the 2024-2025 Marketing Year Memorandum of Understanding between USA Rice and Al Awees, the private agency that buys rice for the Government of Iraq.

Last April, the outlook for any U.S. rice sales to Iraq in 2024-25 was dim after the Treasury Department’s Office of Foreign Assets Control banned eight commercial banks in Baghdad from buying U.S. dollars. The dollars were needed to enable Al Awees to complete purchases from U.S. merchants.

“We know there are challenges with security and financial restrictions in Iraq, and we are grateful for all of the hard work from the U.S. Department of State and the U.S. Department of Agriculture in finding workable solutions,” said Keith Glover, chair of the USA Rice Federation, commenting on the latest sale.

Real present

The U.S. Rice Producers Association said the sale, which is scheduled for March delivery, was a “real (Christmas) present that gets us 66% of the way through the 200,000 metric tons included in the 2024-25 Memorandum of Understanding with Iraq.

Related:ADM makes second 2024 sale of U.S. rice to Iraq

“As we’ve discussed in previous issues of The Rice Advocate, Iraq’s continued procurements of U.S. rice are a huge victory when they have been sourcing rice from Thailand at just over $500 per metric ton which costs $775 per metric ton from the United States,” the USRPA said. “Iraq keeping a positive global relationship with the U.S. is certainly worth $225 per metric ton.”

The importance of the sales to Iraq were further demonstrated by the drama surrounding the passage of a continuing resolution to fund the U.S. government that included $10 billion in economic assistance for U.S. farmers.

USA Rice and many other farm organizations had urged that economic assistance for rice and other farmers be included as a part of any continuing resolution that would be used to avert a government shutdown that could have occurred on Dec. 20 if new funding was not authorized.

Members of both political parties had negotiated an agreement for a continuing resolution that would have funded several government priorities, including the $10 billion in economic assistance and $20 billion in disaster assistance for farmers who suffered damage from multiple hurricanes and drought conditions in 2024.

“USA Rice adamantly opposes any extension of the 2018 farm bill or end-of-year federal government spending package that excludes meaningful economic assistance for rice farmers,” it said, noting that U.S. rice farmers are expected to lose more than $400 million due to “artificially low prices and unchecked production costs in 2024 alone.

Related:U.S. rice exports to Iraq at risk after restrictions imposed

“As we look to 2025, the situation is grimmer with even deeper negative margins projected. The failure of Congress to provide immediate and direct relief for rice farmers given the lack of a new farm bill with an adequate safety net coupled with these extreme losses is irresponsible and short-sighted.”

Initial resolution

When House Speaker Mike Johnson, R-La., announced the initial continuing resolution on Dec. 16, Tesla CEO Elon Musk called the proposal “pork barrel spending” and told Republican members of Congress not to pass any legislation until the inauguration of President-elect Donald Trump scheduled on Jan. 20, threatening them with primary challenges in 2026 if they did so.

Despite Musk’s warning, Johnson introduced a “slimmed down” continuing resolution that included the $10 billion in economic assistance on Dec. 18. Trump gave his support to the bill because it also included a two-year suspension of the Federal debt ceiling beginning in 2025. That bill was defeated 235-174 with 34 Republican House members voting against.

While Washington and the world waited, Johnson and House leaders put together another, smaller continuing resolution that did not include the debt ceiling suspension but did contain the $10 billion in economic assistance for farmers and $100 billion in disaster aid. That bill passed 366-34 at 7 p.m. on Dec. 20 and was adopted by the Senate shortly after midnight on Dec. 21.

According to an analysis prepared by Hunter Biram, University of Arkansas Extension economist, rice farmers would receive payments of $69.75 per acre and soybean growers $30.61 per acre from the $10 billion economic assistance provision in the initial continuing resolution proposal (and the final CR assuming no changes were made).

(Payments for corn would be $43.80 per acre; cotton, $84.70; grain sorghum, $41.85; peanuts, $76.48; and wheat, $31.80, according to the analysis.)

Resolution payments

Biram said the continuing resolution payments would be 26% of estimated economic losses, compared to 60% in the Farmer Assistance and Revenue Mitigation or FARM Act introduced by Rep. Trent Kelly, R-Miss., in October. That bill never came up for a vote in the House.

The continuing resolution passed on Dec. 20 extended the 2018 farm bill into 2025. The legislation first expired on Sept. 30, 2023, and was extended to Sept. 30, 2024. Although it expired three months ago, most of its provisions continued through the end of the current calendar year and will now continue through 2025.

Rice producers face continued uncertainty because of Trump’s promise to place 25% tariffs on imports from Canada and Mexico, two of the rice industry’s largest markets. Producers of other crops could also see fallout from the tariffs.

“The status quo is unacceptable,” USA Rice leaders said in a statement on Sept. 17. “The agriculture financial crisis is real. Not only are our farms at stake, but let’s remember, an abundant and sustainable domestic food supply is national security, as well as economic security for rural communities. Congress ignores this reality at all our peril.”

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About the Author

Forrest Laws

Forrest Laws spent 10 years with The Memphis Press-Scimitar before joining Delta Farm Press in 1980. He has written extensively on farm production practices, crop marketing, farm legislation, environmental regulations and alternative energy. He resides in Memphis, Tenn. He served as a missile launch officer in the U.S. Air Force before resuming his career in journalism with The Press-Scimitar.

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