Summary: The rice program, run by the Agriculture Department, cost an average of $1 billion annually between 1986 and 1992 to support rice producers and rice exports. These costs remained substantial because of (1) increased government costs resulting from the marketing loan provision and (2) continuing high deficiency payments. In addition, the government spent $157 million annually over this period to promote exports. The rice program has increased the percentage of farmers' income derived from government support. Government payments as a percentage of producers' total rice revenues nearly doubled, from an average of 27 percent in 1982-84 to 50 percent in 1992. Without the program, some producers would probably go out of business. However, with the program, producers receive rice revenues that, on average, exceed the amount needed to stay in business over the long term. Moreover, although all rice producers benefitted from the program, the benefits were concentrated. For the 1990 crop year, 15 percent of the rice farms received 52 percent of the deficiency payments. Despite federal efforts to boost U.S. exports, the U.S. share of the world rice market dropped from 24 percent in 1980 to 15 percent in 1992. This decline occurred because Thailand began exporting rice of comparable quality at a lower price, some countries lowered their rice imports, and U.S. exports were limited by increased domestic consumption and supply restrictions on the U.S. rice program.
