>>World Rice Glut Hits Home
By GUY COATES
Associated Press Writer
February 4, 2002, 5:34 AM EST
KAPLAN, La. -- On the other side of the world, the big players in the rice industry are turning out bumper crops,
and the reverberations are being felt in the heart of Louisiana's rice belt.
The world has a glut of rice because of good weather the past few years in Thailand, Vietnam and India. For this
southern Louisiana town, the consequence is the closure of its nearly 70-year-old rice mill, upgraded just a few
years ago to turn out 1.7 million barrels of table-ready rice annually. Ninety-nine percent was sold overseas.
"It's the third mill we've taken over in four years, and only one is still in business," said Bill Boudreaux, a state
agriculture department employee who supervised the closing of Liberty Rice Mill.
Farmers and millers in all six rice-producing states are having problems but the pressure is felt more in Louisiana
and Texas, where a large majority of the crop is for export.
"The rice producers overseas don't have our labor costs and they can sell the product as much as $100 cheaper
than we can per metric ton," said Richard Hardee, a farmer in Vermilion Parish.
In Arkansas, the largest U.S. producer, most of the rice is for domestic use. Still, the glut brings down prices and
farmers there are feeling the pinch.
The ripple effect of low prices hits the mills even harder. Unlike farmers, the mills do not get subsidies from the
government.
A mill buys the rice straight from the field and puts out a finished product. The price can fluctuate so much that
the mill can wind up taking a substantial loss.
"We had 20 mills in 1980 and now we're down to five or six," said Boudreaux. "In four or five years, we may be
down to two if we don't get more markets where we can compete and get a decent price."
Sammy Noel, who farms near Kaplan, looks longingly toward Cuba, hoping the federal government will allow
more sales of rice there.
Noel said U.S. farmers can compete with Asian farmers in Cuba and South America because of transportation
costs.
With the Kaplan mill's closure, Noel must look for another buyer before he plants his new crop this spring. "With
fewer mills, there is less competition and the prices aren't as good," he said.
Noel also must worry about the new farm bill under consideration in the Senate.
A large group of producers and millers from the six states will be in Washington this week, pressing for higher
subsidies and to open new markets now off limits because of U.S. sanctions.
The lobbying force also will ask the Bush administration to buy more surplus grain for needy nations.
Mary Aldrich, a food aid specialist for the USA Rice Federation in Washington, said grain purchases by the
government have slowed since a big wheat purchase in 1999.
Kevin McGilton, government affairs specialist for the rice federation, said he hopes the final congressional
product will include a safety net for farmers -- a subsidy plus, if prices fall in times of glut, additional payments. <<
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