Cotton, Rice Farmers to Get Nearly $800 Million

Cotton and rice farmers soon will get nearly $800 million in cash payments as final “deficiency” subsidies for participating in last year’s government programs, the Agriculture Department said Monday.

Milton Hertz, administrator of the department’s Agricultural Stabilization and Conservation Service, said cotton farmers will get about $450 million and rice farmers $337 million.

About $537 million has already been paid to cotton producers in advance payments, including $393 million in cash and $144 million in Commodity Credit Corp. certificates, which can be redeemed in surplus commodities or sold for cash.

Rice farmers collected about $208 million in advance deficiency payments, including $155 million in cash and $53 million in certificates.

In all, the final settlements will boost total cotton payments for 1986 to about $987 million and rice payments to $545 million.

Under the program, deficiency payments are due eligible farmers when market prices during part of the marketing year drop below a target level. The payments make up the difference between the target price and the market price average or the price support loan rate, whichever is higher.

In the case of cotton, the 1986 target was 81 cents per pound, the loan rate 55 cents and the market price average 53.8 cents. Thus, the total payment was 26 cents per pound.

The rice target was $11.90 per 100 pounds, the loan rate $7.20 and the average market price $3.87. The total payment, therefore was $4.70 per hundredweight.

Last month the USDA announced $2.1 billion in final payments for 1986 participation by wheat, barley and oats producers. Those also received advance payments totaling almost $1.6 billion, making a total of almost $3.7 billion. Final deficiency payments for corn and sorghum will be due next month.