The House Committee on Agriculture’s Subcommittee for General Farm Commodities and Risk Management unanimously adopted a five-year extension of current law as the basis for the commodities title of the 2007 farm legislation.
After rejecting three alternative proposals, including a proposal put forward by the Administration, the subcommittee adopted Chairman Bob Etheridge’s (D-NC) proposal to extend current law, replacing an earlier proposal which would have adopted most cotton industry recommendations to improve the operation of the program but would have reduced the base loan to 50 cents, the target price to 70 cents and imposed direct attribution on direct and counter- cyclical payments.
The Subcommittee then adopted an amendment by Rep. Jim Marshall (D-GA) that includes a majority of the recommendations adopted by the National Cotton Council’s Board as developed by a special industry working group. The provisions would, if enacted and implemented, improve market orientation of the program, competitiveness in all markets and the flow into marketing channels while enhancing market income and preserving an effective safety-net for growers.
The provisions require USDA to establish loan premiums and discounts for the 2008 and subsequent crops using spot market data weighted by production; to modify the calculation of the weekly AWP to more accurately reflect the competitive environment; and, provide a competitiveness payment to domestic mills for all upland cotton consumed.
American Cotton Producers Chairman Jay Hardwick, who attended the subcommittee meeting, expressed appreciation to Chairman Etheridge for his leadership and to all members of the subcommittee for their willingness to consider the industry’s recommendations. Hardwick complimented Rep. Marshall (D-GA) for his explanation and support for a very comprehensive proposal and appreciation to Cotton Belt members Jerry Moran (R-KS), Mike Conaway (R-TX), Randy Neugebauer (R-TX), Frank Lucas (R-OK), Kevin McCarthy (R-CA) and David Scott (D-GA) for their bipartisan support.
Hardwick expressed disappointment that the budget estimates of the proposal’s cost, which had to be offset in order for the amendment to be considered, increased dramatically in the final hours leading up to the subcommittee meeting -- necessitating a more significant adjustment to the target price.
Hardwick also expressed appreciation to the members for committing to revisit the score and offsets prior to consideration by full committee. He said, “We are hopeful that a re-visited score will result in a smaller reduction to cotton’s target price.”
Under the provisions of the subcommittee bill as amended, the upland cotton program for 2008 and subsequent crops would include a 52 cents base loan; a 6.67 cents direct payment; and 68.61 cents target price. The payment base and yield used for direct and counter-cyclical payments are unchanged. Payment limitations are unchanged and the extra long staple program is extended in its entirety.
The full agriculture committee will consider all titles of the new farm legislation when Congress returns from the July 4 recess.
NCC Chairman John Pucheu reiterated the industry’s commitment to work for an effective, market oriented farm program available to all growers regardless of size or organizational structure.