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Subsidies figure into water sale equation The decision on whether or not to take part in proposed land fallowing to sell water to Southern California is complicated for rice farmers. There are many contingencies upon the plan by government water agencies and uncertainties of how the move will affect a grower's future. Selling water for $100 an acre-foot can be an economic gain this year. Commodity prices are low and federal farm subsidies for rice are currently in place. With the income from a water sale and decreased farming costs, many farmers could take in more money if they don't grow rice. However, current payments by the government are based on the amount of planting the grower did over time. It wasn't too long ago that many in Congress were poised to do away with farm subsidies, which are paid to staples including rice, wheat, corn, grain sorghum, barley, oats, upland cotton, soybeans and other oilseeds. Yet congressional backing for the price support system held and the subsidies for crops including rice were continued through 2007. Janice Schoonhoven, executive director of the Butte County Farm Services Agency, explained that water sales now and in the future have the potential to affect subsidies in the future. But nobody knows for sure. In the most recent farm bill revamp of 2002, farmers are given "base acres" that help determine how much they receive in subsidy. Growers could choose between taking their base acreage from 1996, or the four-year average of planting from 1998-2001. In this way, the grower could add base acreage if he had planted more rice in 1998-2001 than he did in 1996. When local growers contemplate selling water this year and fallowing land, they have no idea whether this decision will affect their "base acreage" when Congress revamps the farm bill in 2007. Schoonhoven said she has had a couple of calls from farmers wanting to know whether fallowing now could hurt them in the future, and she said the answer is Congress could go in any direction. "There basically is no crystal ball to look through," Schoonhoven said. Another factor for farmers is that about 60 percent of the land used to raise rice is rented. The government payments go with the land, so a grower who rents would need to figure out what deal to work out with the property owner. Chico Enterprise Record - Copyright Policy
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