Legislative Affairs

Legislative Affairs

Major activities carried out during 2008.

New Farm Legislation

Early in the year, the National Cotton Council expressed serious reservations regarding the 2008 farm bill package announced by House Agricultural Committee Chairman Collin Peterson (D-MN) and Ranking Minority Member Bob Goodlatte (R-VA). The NCC noted that the proposal reduced cotton loan values by introducing changes to the calculation of Commodity Credit Corporation loan premium and discounts but failed to address associated competitiveness provisions also linked to the loan. It also pointed out that their proposal did not include the much-needed economic assistance for the U.S. textile industry.

The NCC joined 41 other agricultural associations and farm groups on a letter to the chairmen and ranking members of the House and Senate agriculture committees urging them to initiate a farm bill conference and stay within the two bills’ boundaries.


NCC Chairman Larry McClendon, right, met with USDA Undersecretary Mark Keenum to emphasize that Congressional intent be maintained in farm bill rulemaking.

NCC Action Alerts asked leaders to contact Congressional Members: 1) during the Easter recess and urge prompt action on the Food, Conservation and Energy Act of 2008 and 2) after that Conference report was issued, ask their Members to support it.

A NCC statement praised the Conference members for their work on the legislation and called on the President to sign it but did note the NCC’s concern about the potential adverse impact of the significant change made in the means test. After the farm bill’s passage, the NCC praised Congress for its overwhelming approval and then its override of President Bush’s veto.

During June, the NCC, supported by interest organizations, conducted 45 farm law information meetings across the Cotton Belt. Throughout the summer and fall, the NCC worked closely with Congress and the Administration to ensure the farm bill’s timely implementation.

That included a letter to Agriculture Secretary Ed Schafer in October urging him to approve the regulation implementing the Food, Conservation and Energy Act of 2008. NCC Chairman Larry McClendon met with House and Senate agriculture committees’ members and with USDA Undersecretary Mark Keenum to underscore the NCC message that no changes in regulations should be initiated by USDA where Congress did not alter existing legislation.

The NCC supported a bipartisan group of Cotton Belt Senators and House members who wrote Schafer and urged that no unwarranted changes should be made to ‘actively engaged in farming’ determinations. That letter also asked USDA to expedite publishing of rules and regulations pertaining to new adjusted gross income and payment limit reforms.


In summer 2008, the NCC conducted 45 farm bill information meetings across the Cotton Belt that were well attended by cotton producers, industry firms and agribusiness representatives.

Shortly after that, the NCC, joined by the National Council of Textile Organizations, AMCOT, the American Cotton Shippers Association and the American Cotton Producers, wrote the Secretary about their serious concerns with the agency’s delay in publishing the regulation. The letter cited the expectation that USDA would provide adjustments for industry members that had to: 1) redeem significant amounts of cotton from the loan or 2) accept a loan deficiency payment based on an adjusted world price that was not calculated in accordance with the new statute.

The NCC also publicly thanked Senator Saxby Chambliss (R-GA) for drafting and shepherding the legislation through and ensuring the cotton program was implemented in accordance with Congressional intent.

Market Volatility

The NCC sent a letter of concern to the InterContinental Exchange and the Commodity Futures Trading Commission (CFTC) regarding the extraordinary volatility with the No. 2 cotton futures contract that occurred in early March. The letter urged immediate action taken as cotton producers and merchandisers had lost the ability to hedge price risk.

The CFTC responded by holding a public meeting to discuss the events affecting agricultural markets. American Cotton Producers Chairman Chuck Coley, representing the NCC, called for decisive action to restore confidence in the markets. Included in his comments was urging CFTC to use its authority and exercise its responsibility to protect market participants against manipulation and provide more transparency in trading.

Later, the NCC submitted comments to a House Agriculture subcommittee that expressed skepticism over CFTC’s charge that the market instability was not affected by speculation or the infusion of large amounts of institutional money. The comments, most of which were aligned with NCC Executive Committee member Andy Weil’s on-site testimony, urged the panel to take appropriate action to bring transparency to the cotton market and limit disruptive speculation unrelated to market fundamentals.

The NCC also submitted a statement for inclusion in the record of House Agriculture Committee hearings on various proposals to amend the Commodity Exchange Act. That testimony urged Congress to provide the CFTC with the necessary authority and resources so that the markets could return to their historical functions of price discovery and risk management.

After the CFTC announced several policy initiatives – including a cotton market investigation – NCC President/CEO Mark Lange said the U.S. cotton industry remained concerned about the futures markets’ ability to provide meaningful risk management and price discovery so that commodity market participants could be better protected against manipulation.

After urging from a coalition of commodity and general farm organizations, including the NCC, the Commodity Markets Transparency and Accountability Act eventually was passed by the House but the Administration signaled it would veto that bill in its present form.

In other farm policy/legislative-related activity, the NCC:

  • joined with a number of other commodity and farm organizations urging prompt action on a House bill requiring USDA to allow reconstitution of farms with fewer than 10 base acres; legislation that President Bush eventually signed;
  • generated and posted a selected provision summary of the final rule implementing the Upland ELS cotton programs for 2008-12.
  • offered NCC Vice Chairman Jay Hardwick’s testimony before the Senate agriculture committee asking for expedited disaster assistance for producers and some form of financial assistance for gins, warehouses and other key U.S. cotton infrastructure components in states hit by hurricanes Gustav and Ike; and
  • sent a letter to USDA’s Risk Management Agency requesting expedited appraisals of crops damaged by Tropical Storm Fay in Florida; Hurricane Gustav in Louisiana and Mississippi; and Hurricane Ike in Arkansas, Louisiana and Texas.