What Changing the Scale Means for South Texas Rice Farmers

In the late 1800’s the city of Danbury, Texas was established.  The town’s rice farming industry that still exists there today grew in the beginning of the twentieth century with two major factors.  For starters, an influx of immigrant families, largely Czech, settled in the area and took up rice farming (or the city’s other major industry, cattle ranching).

The second key change that allowed rice farming to flourish in the city was the improved access to water, which was a direct result of the implementation of canal systems that augmented the already existing bayous.  According to the Texas State Historical Association, farmers began to dig canals in Danbury around 1935.  Their data shows that the acreage used for farming in Danbury grew from 6,000 in 1903 to 16,000 in 1940.

Bieri farms is a multigenerational farm that has been in Danbury since 1946.  Stewart Bieri currently manages the farm and said that when his grandfather first began farming the land, establishing sources of water was a primary task.

“When my grandad built the farm, one of the first things he tried to do when he got started was building reservoirs,” Bieri said.  “Then he built, of course, the canal system and the drainage system.”

Access to water is crucial to the industry because rice is a very water dependent crop.  Smithsonian magazine estimates that it takes farmers about 16.3 gallons of water to grow an ounce of rice.

a3.JPG

Back when rice farming was just beginning in Danbury, large amounts of land and labor were also needed.

Jacko Garrett is a Danbury rice farmer and was the owner of Garrett farms back when it was still a family operation.  Garrett said when his father began the farm, much of the labor required to produce the rice harvest came from tenant farmers, while his father focused on cattle ranching.

These tenant farmers left Garrett farms in the mid-fifties, so his father began farming the rice himself. Since then, Garrett farms has been a multigenerational rice farm that also raises cattle.

In the early eighties, Garrett got into the seed rice business. Seed rice is the seed used to grow market rice the next year. Market rice is then the product sold to the public for consumption.

a19.JPG

Farms first began to increase their scale by finding ways to increase their yield per acre. The US Department of Agriculture (USDA) measures rice by hundredweight, or cwt, which is equal to a hundred pounds of rice.  A farmer’s cwt per acre is a baseline measurement for their productivity, and reflects the quality of their farming environment and practices.

The design of the land can have a large influence on the yield per acreage.  Recently farmers have found ways to manipulate this in order to produce more rice.

“What’s interesting to me is the whole landscape of the farm would be so much different if the farm had been bought in this day and time,” Bieri said.  “We really have some odd shaped fields and a lot of that has to do with where the high ground was, where the low ground was, the way God made it, and there wasn’t a reasonable way to change that. What we’ve done a whole lot of the last twenty years is land forming, with lasers and satellites and so on, moving dirt to make fields more rectangular and more manageable.”

Garrett said that his farm utilizes precision grading in order to reduce the amount of water they use, which in turn reduces the cost and the amount of labor required.

“We have somebody come in and they’ll map the whole field,” Garret said. “We reduce the number of levies that we have in the fields and the levies are all perfectly straight. It’s basically like you take a piece of rough ground and when you get through with it, it’s exactly like a tabletop and all you do is raise one end of the tabletop and the water runs downhill.  So it’s perfectly flat and it’s very easy to manage.  I used to have a crew of about 20 men and now I can do it today with about 5 men. It just really makes irrigating the fields very efficient.”

According to Bieri, the improvements made to farming equipment have had a similar effect of largely increasing yield, while at the same time decreasing the amount of labor required.

“We used to have probably at the peak, going back to the mid-80s, myself, my dad and as many as seven to eight employees,” Bieri said. “Now I have one full time employee, two part time guys that come and go from Mexico on the H-2A migrant worker program. So for a portion of the year I have three hired hands, but for a big portion of the year, I just have one. And we farm more acres now than we ever have before, and it’s due to the changes in equipment. We run one combine now.  Back in the day we’d run three combines during harvest.”

This change in the efficiency of equipment also means less fuel is required, lowering both the cost and the environmental impact of harvesting the rice.

a4.JPG

Throughout the history of farming, one method of increasing productivity has been protecting crops from identified pests.  In the past, this was done through the heavy and frequent use of chemical pesticides.  But according to Garrett, he has seen the rice farming industry recently shifting away from strong chemicals and towards the modification of seeds.

“I’ve been farming over 55 years and the thing that I’ve noticed is the chemicals that we use today are not nearly as harsh on the environment as the ones we used to use 20, 30 years ago because we have a lot of knowledge about the consequences of using certain herbicides or pesticides,” Garrett said. “I think the farming industry as a whole is doing things to eliminate the use of pesticides and some of it has to do with genetic modification of the plant.”

This overall increase in productivity has put additional pressure on private farmers though.  As the same amount of land can be used to produce greater amounts of rice, there is now a surplus of rice in the market, which pushes prices downward.

In the business of farming, the cost of maintaining production has already increased exponentially. A major investment of production is equipment costs. The advances in equipment design means greater productivity but also greater cost. For example, a combine that farmers will use for a couple of weeks out of the year can easily cost them over a quarter million dollars.

According to research by the USDA, of all the factors that influence the cost of production, the size of a farm has the least effect.  Because of this, family farmers who operate on their own in the market will wind up with a similar bill as farms with corporate owners behind them.

This change in the cost of farming operations combined with the downward pressure on prices mentioned earlier, means small farmers feel more pressured to sell-out.  Other factors can also leave them feeling like they have fewer options, such as a lack of interest in farming by the next generation. Typically, farmers will sell their property to a land developer for housing. At a certain point, the amount of money they can get for selling their land is greater than the money they can make if they continue to operate on their own.

clxp766-sm.jpg

One of the biggest changes to the scale and structure of the farming industry was the introduction of agricultural corporations.  Partnering with one of these companies reduces some of the risk for the farmer, but it also takes away certain decisions that they would be able to make themselves, if they were operating on their own.

In Danbury, Texas, this agricultural company is RiceTec, an example of the new paradigm, where rather than farmers owning and controlling their land, a corporation oversees and makes decisions about the operations.

RiceTec is an international company that uses technology and policy to operate rice farms at a larger scale.  They provide seeds to the farmers that work with them, set the market price of this rice, and buy the harvest from the farmers at a pre-determined price range at the end of the growing season.

Because of his knowledge in the seed rice business, in 1999 RiceTec approached Garrett to grow seeds for them.  Then in 2008, RiceTec bought out Garrett farms.

“They bought out my processing facility, my office, and 20 acres of ground around it,” Garrett said.  “And in that deal, I agreed that I would grow seed rice for them only.  And so that’s what I’ve been doing since 2008 is seed rice for RiceTec only.”

There are definite pros for the farmers that work with RiceTec.  For starters, they know what they will make that year, a form of stability not usually available to independent farmers who depend on the market and its price that year. The aforementioned downward pressure on prices due to an overabundance of rice for sale would incentivize private farmers to partner with a corporation who can ensure the farmer that they will make a profit that year.

Garrett said that he likes working with RiceTec because he can let them handle decisions regarding how the crops are managed and maintained.

“They do things different than what I’m used to doing a lot of times, but they know what they’re doing because they’ve done a lot of research on the way that they want to grow their varieties and how they treat them when they plant them,” Garrett said. “I’m just there to do whatever they ask me to do and I think that it’s important that I don’t have too much input into it, in case something goes wrong.”

Some farmers choose to own and operate their own farms but enter into temporary contracts with RiceTec, usually for a year.  Basically, if RiceTec needs more product that year, they will approach these independent farmers and make a deal with them.  They will pay for the farmer’s seeds and agree to a pre-determined price range for the harvest at the end of the growing season.

However, RiceTec can and has in the past pulled contracts, meaning farmers go from  a guaranteed buyer to a market risk situation.  RiceTec has farmers that are a part of their program, but if there is an anticipated change in the need for seed rice next year, RiceTec’s solution is to reduce their number of active farmers.  Though they won’t pull contracts once the rice is planted, they can still wait as late as right before planting time, which leaves the farmer with less time to plan for that season.

Contracts with RiceTec include a non-disclosure policy, meaning that the farmers cannot talk about their numbers or specific practices.  When making deals with farmers, RiceTec maintains their power in negotiations by keeping certain information inaccessible.  The non-disclosure policy is a key part of this strategy.

Some farmers, like Bieri, still maintain their independence.  Bieri farms keeps all of their operations run by the family; they do not even purchase seeds from RiceTec.

Image-1.jpg

Some of RiceTec’s farming practices can be harmful to conservation efforts.  For example, they require farmers to hold deeper reservoirs ever since the South Texas drought in 2011 that made water more scarce.  This policy ensures water for the growing season, but can have negative effects on the nearby wildlife, like the ducks, by removing vegetation from their habitats.

RiceTec uses a method of pest control where rather than spraying the entire field of crops with pesticide, they treat each seed individually before it is planted.  Though this practice is supposed to be safer for the pesticide workers, it’s unclear if this is any safer for consumers.

The rice agricultural industry as a whole has definite impacts on the environment, such as land degradation, heavy water usage, and fuel consumption. Because of the variety of scale within the farming community, there becomes an issue with regulating these impacts.  Environmental regulations cannot be blanket rules across all farms because what might work for a small family farm more than likely would not be applicable for a large-scale corporate farm.

A general truth is that family farmers will naturally have a deeper connection to the land than corporations.  The more that farms shift away from the people living on the land and towards the corporate world, the greater the disconnect between the growers and the environment.  According to Garrett, farmers as a whole tend to recognize the need for conservation and environmental protection.

“I think you find most farmers are very conscientious about the environment,” Garrett said.