July 18, 2006

Politics swayed decision to provide assistance to catfish farmers

A US newspaper is questioning a US$34 million assistance programme for catfish farmers to tide over drought losses when in actual fact it was used to shore up the industry. 

While the programme was ostensibly used to compensate catfish farmers who suffered from severe drought and faced rising feed costs, catfish farmers were actually given credits when feed prices were at a record low, an article in the Washington Post said. 

The 2003 Catfish Feed Assistance Programme was part of Congress's drought-relief efforts giving catfish farmers in some states government credits for feed equal to US$34 a tonne.

While such a programme would normally have compensated farmers for losses, the amount received was based on the volume of feed bought in 2002, not actual losses.

The USDA had said at the launch of the programme that it provided relief to catfish producers who have experienced losses due to adverse weather and natural disasters, adding that the 2002 drought had driven up the price of feed.

However, feed prices for catfish for that year was among the lowest in 10 years and not all areas entitled to the credits had been affected by drought. 

The newspaper hints that the programme was more about politics and economics than drought. Underpinning the basis of the assistance programme was a catfish industry that had been contracting since 2002 and faced competition from foreign imports that drove prices to record lows.

These factors caused many to give up catfish farming despite low feed prices, said Terry Hanson, an agricultural economist at Mississippi State University.

Mississippi stood to benefit most from the programme since it has more catfish farms than any other state. Its senator, Republican Thad Cochran, then chairman of the agriculture committee, was also largely responsible for the bill.

Cochran recommended relief for catfish farmers in an appropriations bill in 2003 and also lobbied USDA officials to adopt feed credits instead of actual losses, citing higher feed costs and parasites which have affected catfish farmers profits.