NCC Outlines Farm Bill Needs to Key Senate Panel

The NCC described to Senate Committee on Agriculture, Nutrition and Forestry the farm policy concepts that can support cotton farmers while indirectly underpinning U.S. cotton’s processing and handling infrastructure.

July 17, 2001
Contact: Marjory Walker
(901) 274-9030

WASHINGTON, DC – The National Cotton Council (NCC) described to a key Senate committee the farm policy concepts that can support cotton farmers while indirectly underpinning U.S. cotton’s processing and handling infrastructure.

In testimony today before the Senate Committee on Agriculture, Nutrition and Forestry, NCC Chairman James Echols relayed the NCC’s recommendations for the upland cotton title of the next farm bill.

He said the industry supports continuation of a nonrecourse marketing loan, with redemption provisions keyed to the world market price. He also urged continuation of the 3-step competitiveness program for cotton with elimination of the 1.25-cent threshold for Step 2 and continuation of the issuance of marketing certificates.

"Elimination of the 1.25-cent threshold would not provide nearly enough adjustment to fully offset the adverse effects of a strong dollar," Echols said. "However, it would be a move in the right direction and one that our industry fully supports. Beyond this, we are continuing to explore other options that could help avert the devastating exchange rate impact on our industry."

He told the panel the NCC favors augmenting these programs with a combination of fixed and counter-cyclical payments, which, together with returns from the market, will provide producers a return equivalent to what they have received in recent years from all sources, including emergency assistance.

"We encourage you to retain as much cropping flexibility as possible," Echols testified. "We support base acreage provisions that will offer farmers the choice of keeping their current payment base or opting for an updated payment base."

Echols told the panel the NCC also supports: 1) the retention of frozen yields, 2) the establishment of a permanent program for cottonseed, 3) other adjustments in program provisions to offset the double impact on cotton of a strong dollar, 4) elimination of payment limits or, at a minimum, retention of the 3-entity rule, and separate and reasonable limits for each category of benefits.

The Memphis cotton merchant told the panel the NCC also supports "a re-invigoration of our export assistance programs," including changes to the export guarantee program and increased support for the Foreign Market Development Program (FMD) and Market Access Program. That includes $43.25 million per year for the FMD program and restoration of annual support for the Market Access Program to its 1992 level of $200 million.

"We need to meet our competition aggressively," he said. "We look forward to working with this committee to improve our export programs and to enhance our competitiveness."

Regarding conservation, he said the NCC supports the continuation of the existing conservation programs such as Environmental Quality Incentive Program, the Conservation Reserve Program and the Wetlands Reserve Program assuming adequate funding is available.

"There is also support for incentive-based programs that encourage conservation and environmental enhancements to agricultural land," he noted. "But, commodity programs remain the funding priority and there are concerns about restrictive payment limitations."

Echols told the lawmakers that until commodity titles are amended, the NCC urges Congress to continue to provide relief to cotton producers similar to the emergency assistance provided during the last three marketing years.

That includes: 1) supplementing existing Agriculture Marketing Transition Act (AMTA) payments with additional marketing loss payments at the highest rates possible; 2) allowing producers to receive supplemental payments on the higher of existing crop bases or an average of recent planting history, provided adequate funds are available, 3) mitigating the impact of limitations on supplemental payments, enabling producers to qualify for total payments of not less than the amount of AMTA and marketing loss payments received for the 2000 crop, and 4) reauthorizing cottonseed payments when seed prices are low.

The National Cotton Council of America’s (NCC) mission is to ensure the ability of all U.S. cotton industry segments to compete effectively and profitably in the raw cotton, oilseed and manufactured product markets at home and abroad.