MEMPHIS -- National Cotton Council Chairman James Echols told the American Cotton Producers (ACP) that he was encouraged with the House's progress on enacting a new farm bill - one that meets many of the NCC's goals.
In an address at the ACP's meeting in Monterey, CA, he said the farm bill process will boil down to decisions about money and its allocation.
"I know every (industry) segment will have its own 'wish list' as we continue to work for the best possible farm bill," the Memphis merchant said. "Everything I hear suggests that we may have trouble holding what we have in the House bill."
He said that although Senate Agriculture Committee Chairman Tom Harkin (D-IA) has some farm policy ideas considerably different than NCC's, U.S. cotton will be able to work closely with Senators Cochran (R-MS), Helms (R-NC), Lincoln (D-AR), Hutchinson (R-AR) and Miller (D-GA).
NCC priorities in future farm legislation, Echols said, include elimination of the 1.25 cent threshold under step 2, permanent cottonseed assistance and freezing the Extra Long Staple (ELS) loan rate. In addition, the NCC continues to seek additional ways to help offset the negative impact on cotton of the strong U.S. dollar.
"Throughout the past two months," he noted, "we have communicated these objectives to Congressional leaders and Administration officials, pointing out the destructive impact the strong dollar has had on our industry, the continuing weak prices of cottonseed and the need to ensure that ELS cotton remains a viable choice for western producers."
Echols suggested that elimination of the 1.25 cent step 2 threshold in the cotton competitiveness program needs to be among the industry's highest. He said that may not be enough to help salvage the U.S. textile sector, but would be a start.
"Beyond that, we need to find a way to help the mills offset the devastating impact of the strong dollar," Echols said.
He said the NCC's Economic Services staff estimates that if the dollar's value had not risen from its 1995 relationship to other currencies, today's U.S. mill consumption rate would be 12.3 million bales - about 4.5 million bales higher than the actual rate.
"Think how far that would go toward solving our price and offtake dilemma," he said.
Echols said exchange rate provisions will cost money and the House already spends all of the $73.5 billion that was authorized for the farm bill. He said the industry may have to consider the possibility that funding for exchange rate adjustments for cotton might have to come from cotton's share of that amount.