Production and Marketing Economics-69

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Recognizing rice producer interest in mounting economic problems related to rice production and marketing, the California Rice Research Board initiated research work in the field of economics in 1969-70.

Currently, two related projects are under way: 1) To evaluate economic developments in the industry, an analysis is being made of recent and prospective changes in the rice industries of California, the United States, and the world. 2) A statistical analysis is being made of the demand and consumption of rice produced in California and other rice areas of the United States.

The work was begun in January 1970, and information already available has been tabulated. Preliminary statistical analysis of the data is now under way. A research assistant has been employed for that work.

This work is expected to further understanding of recent and prospective changes in the rice industry. Such is essential to helping the industry examine alternative courses of economic action to meet changing market conditions. Improved industry and public programs in rice marketing will depend on deep analysis of demands for rice.


This federally funded research on rice production and marketing economics aims at developing information to guide the industry in assessing opportunities for adjusting the economic position of the industry.

The specific aims are forecasting long-run supply schedules for rice in the major rice-producing areas of the United States, determining various leasing arrangements, and analyzing management strategies associated with leasing or buying of land and rice allotments on California rice farms.

Results indicate that major increases in rice acreage over 1969 would occur at any rice price above $3.40 in the Mississippi River Delta and the Northeast area of Arkansas if allotment restrictions were removed. The Sacramento Valley rice acreage from the 1969 level would undergo major adjustments with rice prices falling below $4.00 or rising above $4.20, assuming no allotments. If allotments were released and the rice price maintained at $4.60 or above, U.S. rice producers would more than double the 2.0 million acres grown in 1969 .

An economic supply-demand model, designed to indicate the probable effects of alternative rice support programs, shows that about 98 percent of the production from any increase in rice allotments would have to be exported if there were no change in price supports.

Analysis of leasing data indicates that of the 1969 rice acreage about 23 percent was farmed under a 33/67 percent share lease, 32 percent was farmed by the owner, and 20 percent was farmed under other types of leases.


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