Thank you, Commissioner Irvin for your warm words of welcome to Georgia. Next on the agenda, I would like to offer some opening remarks regarding this conference.
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I appreciate the opportunity to participate in this meeting and to be able to address this large gathering of people who have cotton at the center of their livelihoods.
The Beltwide Cotton Conferences are like none other, especially when you consider the diverse groups they bring together. Just within the cotton industry, there are producer representatives here from all reaches of the Belt. Joining them are cotton handlers and processors, as well as those who supply our industry with a wide array of goods and services.
In addition, leaders from USDA, State Experiment Stations, Cooperative Extension Service, universities, and news media are a prominent part of the Conferences.
A diverse audience indeed and yet this year's conference theme reminds us that all Beltwide participants are bound together by "Technology -- The Common Thread."
The partnership that brings these varied interests together is an undertaking coordinated by the National Cotton Council. We are very pleased at the Conferences' growth through the years and especially gratified with the excellent attendance this year despite our industry's economic situation and the events of last September which have caused many to exercise caution in planning travel.
I do want to say thank you to the Conferences' organizers and recognize their hard work and the excellent job they have done in planning these events.
Our current situation makes it more important than ever for our industry and those who serve it to rally around the common bond of technology.
It has been difficult to find solutions that adequately address the problems that have multiplied over the past several years. We now face a cumulative result, and that is a chronic absence of profitability, continued dependence on government assistance, and closing of enterprises across all sectors of the industry.
As Conference attendees understand very well, technology is an essential element in the effort to restore profitability. The role that technology plays within all sectors of the cotton industry is the focus of my brief remarks this morning.
First, though, I would also like to use this forum to provide a short summary of Council activities related to several important events this past year.
An already poor U.S. cotton business climate worsened in 2001. Cotton prices at the farm level were hammered by a sluggish world economy, a strong dollar, China's internal cotton policy, a world glut of man-made fibers, too much worldwide textile capacity, more than enough retail counter space and over production and weak prices for alternative crops.
A healthy increase in U.S. raw cotton exports was welcome, but it provided only mild support for prices. U.S. mill use, on the other hand, experienced a pronounced downturn. Failing to get a needed boost from implementation of the Caribbean Basin Trade Partnership Act, U.S. mill consumption fell below 8 million bales.
The National Cotton Council sought help from the Administration and Congress to combat the effects of the strong dollar. Federal help was sought for the U.S. textile sector in the form of special loss carryback, loan guarantees, elimination of the alternative minimum tax and elimination of the 1.25 cent Step 2 threshold.
Congress did recognize agriculture's financial condition and provided growers with $5.5 billion in emergency economic assistance for the 2001 crop. That included $85 million in supplemental cottonseed assistance, which was based on the 2000 crop gin applications.
Progress on crafting new farm legislation has offered some optimism for the future. Even before 2001 began, the Council began formulating policy objectives. The industry was persistent in getting lawmakers to recognize that their foreign counterparts heavily subsidize agriculture and contribute to a supply/demand imbalance. Council members mobilized on our action requests and helped defeat two amendments that would have weakened a House bill containing many of the Council's farm policy recommendations.
House action was timely, despite September 11, and the industry is grateful to Agriculture Committee Chairman Combest, committee members and staff for their determined and successful efforts to craft this important legislation.
The Senate, influenced by the Administration's reluctance to move ahead on farm legislation, got a later start on the farm bill. Despite the best efforts of the Council and other commodity and farm organizations, the Senate was not able to pass a bill before the December adjournment.
In recent communications to Senate leadership, we strongly urged them to resume farm bill deliberations as quickly as possible after their return to session on January 23.
When Congress returns later this month, we will once again need the help of our members to ensure passage of workable farm policy. I commend those of you in the audience who have added your strength to our efforts through Council membership and active participation. I urge all others who are eligible for Council membership but not currently supporting to join with other cotton leaders in the Council's fight to restore and maintain industry-wide profitability. The broader our base of support, the better our chances of success.
Returning once again to the Conference theme, "Technology-- the Common Thread", many in our audience may find it curious that an international cotton merchant would stand before you exhorting the industry to unite in this area. While it is true that my company sells growths from all over the world, the economic health of Hohenberg Brothers is closely linked with the economic health of the U.S. cotton industry. Both as CEO of Hohenberg Brothers and as chairman of the Council, I am very familiar with the need for industry unity. I am also keenly aware of the critical importance of combining technology transfer with our political efforts in Washington as key components in our mission to restore the industry's economic viability.
Throughout 2001, Council staff and various industry committees worked to carry out the industry's priority goals. Many of these priorities required technology-based solutions.
Quality and Yield
The Council's Quality Task Force continued to emphasize quality and yield improvement by reviewing public cottonseed breeding programs to encourage more participation in localized breeding programs and ensure the maintenance of publicly developed strains as public property. The Task Force has initiated research on fine leaf trash to determine its sources and effects on various textile processes. They also will review the results from an investigation by NCC staff into the factors that contributed to a higher-than-expected percentage of the 2001 crop with short staple length and high micronaire.
Flow
The Council's Bale Packaging Committee updated educational programs on bale size requirements and has urged the industry to move, where practical, to put recessed ties on all bales. Both of these initiatives are aimed at increasing storage and handling efficiencies.
The Council's task force on electronic documents met with USDA to expedite the implementation schedule for the new U.S. Warehouse Act. This law's regulations will govern electronic warehouse receipts and other electronic documents involved in commodity transactions. This group is also closely monitoring and providing input on USDA's efforts to develop a procedure to allow centralized electronic loan redemptions.
Plant Protection
The Council, in close consultation with Monsanto and EPA officials, worked on refuge options for Bt cotton. EPA announced an extended registration for Bollgard that you will hear more about later this morning. This came in a season in which U.S. cotton producers planted transgenic seed on 11.2 million acres or 69 percent of total cotton acreage. The Council will continue educational efforts on grower compliance of insect resistant management.
The Council also maintained dialogue with EPA on such products as Bidrin as the agency continued its risk reassessments of organophosphates under the Food Quality Protection Act and re-registration of older products under the Federal Insecticide, Fungicide and Rodenticide Act.
The Council's Boll Weevil Action Committee reached agreement on a plan to allocate federal cost-sharing funds and voted to support development of a federal quarantine as a means to provide both state and national protection for eradicated areas against weevil re-introduction.
Strides were made toward eliminating one of cotton’s most lethal pests as 10.9 million acres in nine states will come under the National Boll Weevil Eradication Program in 2002. Post eradication areas designated as "weevil-free," cover about 4.5 million acres in 10 states.
The Council's Pink Bollworm Action Committee sought increased support for USDA’s Animal & Plant Health Inspection Service (APHIS) to begin sterile insect release in the pink bollworm eradication program now underway in Texas’ Trans Pecos/El Paso zone. They agreed to pursue federal cost share funding to make sterile insects available no later than the 2003 season.
Health/Safety
The Council joined other organizations in a public service effort to remind families about safe sleepwear choices for children. This move came in advance of legislation that was introduced to overturn Children’s Sleepwear Flammability standards.
The Council, the American Textile Manufacturers Institute and the Sleep Products Safety Council continued to sponsor research aimed at developing an effective open flame test for use in a mattress flammability standard. The Consumer Products Safety Commission issued rulemaking to develop a flammability standard to reduce the hazard of open flame ignition of mattresses and bedding.
During public forums held by the U.S. Department of Labor, the Council asked the Occupational Safety and Health Administration to recognize the unique aspects of agriculture and seasonal and temporary jobs and exclude them from any approach that OSHA takes to address ergonomic injuries. We suggested the most useful approach would be voluntary "best practices."
OSHA acted on a recommendation from the Task Force for Byssinosis Prevention and approved a rule that exempted textile manufacturers who use batch washed cotton from all OSHA cotton dust standard provisions except medical surveillance. The Council is an active member of this task force.
The Council, in concert with the National Cottonseed Products Association, worked to get less severe solvent extraction rules for vegetable oil production. As a result, two standards instead of one were approved for two sizes of cotton oil extraction mills and a three-year compliance period was established
Environment
The Council and other groups are working closely with EPA as they complete their five-year review of the national ambient air standards by July 2002. The Council's efforts are to ensure the use of sound science and minimize the impact of any new standards that may result from the review.
The Council's legal challenge to EPA’s non-point pollution source regulations resulted in the agency reviewing its entire approach to regulating agriculture as a non-point water pollution source. This was an important first step in convincing EPA to take a rational, reasonable approach to regulating non-point water pollution sources.
Precision Agriculture-- Ag 20/20
The promise of precision agriculture continues to generate a great deal of discussion. To assure the cotton industry can be an early beneficiary of new space age technologies, the Council has been working with NASA and USDA on Ag2020, a program to find practical applications of remote sensing technology for agriculture. In 2000, the Council, along with the soybean, corn, and wheat associations, entered into cooperative agreements in Ag2020 to begin field testing certain applications for its respective growers. For cotton, remote sensing using satellite imagery for determining the locations of certain insects offers promise of selectively applying insecticides rather than on the whole field. Similar concepts are proposed for use of plant growth regulators and water management.
Last year, the Council, working with members of its Precision Ag Task Force, helped coordinate proposals for requesting federal research funding. LSU was awarded a grant to conduct research on Jay Hardwick's farm. In addition, NASA and USDA are conducting research projects in cooperation with Mississippi State on Kenneth Hood's farm and with Cotton Incorporated and University of California-Davis on Ted Sheely's farm.
Clearly, the Council continues to devote significant resources to technology development and transfer and bringing resolution to the technology-based priorities has in many ways been facilitated by this Conference.
In concluding, I encourage your full participation in this morning and tomorrow's general sessions as well as the specials sessions, workshops and seminars being conducted both afternoons. This is excellent example of the efforts underway in a wide array of scientific disciplines to lower costs and apply our technology to a host of regulatory issues.
This morning, I look forward to a program that explores the yield vs. quality dilemma in cotton improvement, current and new developments in cotton cultivars, cost-cutting cultural practices, and the latest with the Bt cotton situation.
Again, "Technology-- the Common Thread" is certainly the appropriate theme, as our industry unites behind technological advances and moves forward with the best of these.
I hope you enjoy the Conference and I extend best wishes for the year ahead.