SACRAMENTO, Calif. (AP)--California's cotton and rice farmers, who receive more than $500 million a year in federal crop subsidies, are preparing to fight President George W. Bush's proposed subsidy cuts.

On Feb. 7, the president proposed trimming $587 million nationally from farm price supports this year. That would most affect the state's farmers of cotton and rice, which have a combined acreage of about 1.2 million acres throughout California.

Bush proposed a 5 percent reduction in support payments, a new $250,000 ceiling on payments to individual farmers and an end to loopholes that allow some farmers to claim multiple owners of their farm to get more.

Conservatives, environmentalists and small farmers have stepped up their criticisms of such subsidies, calling them corporate welfare for the nation's largest growers. But California's cotton and rice industries, while they say they want to help fix the overall budget problems, said Feb. 8 the subsidies also guarantee them a profit amid low prices.

California rice and cotton growers received about three-fourths of the state's $757 million in federal crop subsidies in 2003, according to the Environmental Working Group, a Washington, D.C.-based advocacy group that maintains a computer database of U.S. farm subsidies. Both crops, while second-tier players in the state's $27 billion agricultural economy, are heavily exported.

Subsidies have "kicked in when prices are low and times are tough, but at the same token the benefits are terminated or lowered when prices are good," said Gene Lundquist, vice president and corporate secretary of Calcot, Ltd., a Bakersfield-based cotton cooperative with 1,100 member farmers in California and Arizona.

Scott Rogers, a fourth-generation farmer who grows 450 acres of cotton in Tulare County, said he's not a welfare case. Instead, the subsidies give him a little more breathing room financially.

"The profit margins are pretty slim right now, and any amount that's cut is going to affect us somewhat," Rogers said. "It's not going to put us out of business, but we'll take a hit on it."

While critics often point to the subsidies paid huge corporate farms, such as $6.6 million received by the J.G. Boswell Co. of Kings County, between 1995 and 2003, Rogers said he gets about $40,000 to $50,000 a year. Boswell is the nation's largest cotton grower.

As Lundquist, Rogers and their counterparts in California's rice industry again find themselves on the defensive over subsidies, their state and national organizations are gearing up Washington lobbying campaigns to soften the blow. Congress traditionally has proved itself unable to make major cuts in the nation's farm support payments, which reached $16.4 billion in 2003.

"The president issued his budget and we look at it as being a framework for discussion of possible budget cuts," said Bill Huffman, a spokesman for the 900-member Farmers Rice Cooperative based in Sacramento. "That argument will be made before Congress."

Already, the California Rice Commission has retained a Washington lobbying firm, Lesher and Russell, to make its case against such reductions for the next federal farm bill, which is due in 2007. The Memphis-based National Cotton Council and USA Rice Federation in Virginia and congressional backers in southern states are also preparing for a fight in Congress over the subsidy reductions.

The Environmental Working Group analysis showed that 17 percent of federal rice subsidies go to California, while about 11 percent of cotton subsidies are paid to California farmers.

"If budget cuts are a reality--and they may well be--ag would do its part," said Tim Johnson, president and chief executive officer of the Sacramento-based California Rice Commission. "But we would seek to have those cuts be equitable."

California grows about 600,000 acres of cotton, largely in the San Joaquin Valley, and exports nearly all of it to Asian nations, industry officials said. The state's rice acreage, mostly in the Sacramento Valley, stands at about 595,000 acres this year, second only to Arkansas nationally. Forty percent is exported to countries including Japan, South Korea and Taiwan, while the rest is consumed in the U.S. as table food and a chief ingredient in beer.

Date: 2/24/05

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