Rice Growers Offered Extension on Debt

Members of West Sacramento-based Rice Growers Assn. of California, who last month were shocked by getting bills instead of checks in the mail as settlements for their 1985 crops, learned Monday that they will have nearly a year to pay off the debt--but only if they stick with that cooperative in 1986.

That action came after the smaller, cross-town rival, Farmers Rice Cooperative--whose members earned $1.50 more per 100-pound sack--announced that it will accept new members in an effort to increase rice volume by at least a third next year. This would cut further into Rice Growers’ dominant share of California’s crop, the nation’s second largest.

Farmers Rice said it expects to be able to market the equivalent of 3 million more 100-pound sacks of rice than the 9 million sacks that it milled and marketed this year. It said 100 growers--who would account for half of the anticipated new volume--already have requested membership. About 75 of these growers are presently members of Rice Growers, it said.

The two cooperatives--once the closest of allies--have become highly and sometimes acrimoniously competitive in the last two years. Once-docile Farmers Rice has increased its market share at Rice Growers’ expense--to 33% of the 1984-85 crop, up from 25%, while Rice Growers’ share dropped to 42% from about 48%.

Rice Growers had about 1,600 members this year. Most of them received unexpected settlement bills instead of anticipated checks amounting to about $1 per 100-pound sack. Instead of the $7-per-sack final price that Farmers Rice reported for the dominant medium- and short-grain varieties, however, Rice Growers realized only about $5.50 a sack.

Rice Growers’ shortfall was triple that of last year. Rice Growers’ chief at the time, James Errecarte, attributed Farmers Rice’s better return to “accounting creativity” on the part of the rival. Not surprisingly, his remark triggered a rebuke from Farmers Rice President Ralph S. Newman Jr., who predicted--correctly--that the cooperative would again outperform Rice Growers this year.

Errecarte has since resigned. He was succeeded in September by Michael L. Cook, a former vice president of Farmland Industries in Kansas City, Mo. Cook and Newman, a Texan well versed in the marketing savvy of the dominant Southern Rice Belt (which accounts for about three-fourths of total U.S. sales), have recently met twice in an effort to call a truce while maintaining the competitive spirit.

Anticipating Rice Growers’ annual membership meeting Thursday in Sacramento, Cook has been meeting with groups of members since the bad news became public, seeking to retain their loyalty and assuring them that last year’s results were a correctable fluke.

At a special meeting last Thursday, the association’s board of directors offered a series of options designed to soften the financial blow to members in paying off their unexpected debts, which for many mount into the thousands of dollars.

Under the new program, the 490 members who held up paying for their spring seed until the last crop was settled were given an interest-free extension on its due date from Oct. 21 to Dec. 1.

More tellingly in terms of the rivalry with Farmers Rice, however, members who elect to stay with Rice Growers for the new crop year will have until the end of its fiscal year next summer to settle their 1984-85 accounts. Those who break ranks, on the other hand, will have to pay in full by Feb. 16, the close of the annual membership sign-up period.