House Ag Committee Hears Cotton's Farm Program Specifics

Feb 15, 2001

House Ag Committee Hears Cotton's Farm Program Specifics
National Cotton Council first to answer Chairman's commodity challenge

(February 15, 2001)

House Agriculture Committee Chairman Larry Combest (R-Texas) on Thursday convened the first of what promises to be an intense and interesting set of hearings on specifics for future national farm policy. First to volunteer specifics on its own farm commodity program was the National Cotton Council. Chairman Combest has challenged commodity and farm groups to provide detailed policy proposals, as well as how their proposals would affect related industries, impact America's ability to move product in the world market, how it would comport with U.S. trade agreements, and the impact on the federal budget and overall spending on farm programs.

"Now it is time we move beyond generalities and search for concrete ideas that will improve the economic conditions of agriculture," said House Agriculture Committee Chairman Larry Combest (R-Texas). "I expect that these hearings will be challenging, both for our witnesses, and for Members as we engage in very detailed discussion about the complexities of farm policy. But we have a serious obligation before us, and it is only by putting the ideas on the winnower's table that we will be able to refine our thoughts, and eventually build consensus around policy that will support a robust agricultural industry in this great nation for all times."

National Cotton Council Executive Committee Chairman Robert E. McLendon testified that the organization's farm policy concepts are full-production programs that provide a reasonable level of support for farmers and ranchers while indirectly underpinning cotton's processing and handling infrastructure. Projected costs are generally in line with outlays over the past several years, including special emergency appropriations.

National Cotton Council made separate recommendations regarding upland cotton, the predominant variety of cotton grown in the United States, as well as Extra Long Staple (ELS) cotton known as "American Pima" and prized for its fineness and high fiber strength for use in sewing thread and expensive apparel.

For upland cotton:

Continuation of a marketing loan, with redemption provisions keyed to the world market price

Continue the 3-step competitiveness program for cotton

Augmenting with a combination of coupled and decoupled payments, which, together with returns from the market, will provide producers a return equivalent to recent years’ receipts from all sources

Retain as much cropping flexibility as possible

Base acreage provisions that will offers farmers the choice of keeping their current payment base or opting for an updated payment base

Eliminate payment limits or, at a minimum, retain the 3-entity rule and provide for separate and reasonable limits for each category of benefits.

For ELS cotton:

Retain the current non-recourse loan without change

Establish the competitiveness program as an entitlement

Implement a counter cyclical payment to help ensure returns of approximately $1.00 per pound

Thursday's proposal from the National Cotton Council brings together all seven segments of the U.S. cotton industry, including producers, ginners, seed crushers, and warehousemen, shippers, cooperatives and textile manufacturers.