NCC Issues Statement on Budget Proposal

National Cotton Council Chairman Woods Eastland stated, “This budget outline is just the first step in a long, important budget process. Congress will be evaluating these proposals and other options as it seeks ways to trim the federal deficit. It is important to remember that this debate will be about prospective, not retrospective, program changes; and it is important that Congress evaluate its options within the context of our need to remain competitive in world markets and the impact unilateral changes can have on our position in world markets.” Eastland is a cooperative official from Greenwood, MS.

Stability for U.S. agriculture is vital to interests of all U.S. consumers and taxpayers. Our federal farm law acts as a multi-year contract upon which thousands of farm families make their business and investment decisions. The stability provided by the 2002 farm program, written to last through 2007, has allowed unprecedented growth in farm investment. Any reduction or weakening of the safety net provided by the 2002 farm law will negatively impact the security of all Americans. The American consumer could quickly find the price volatility and supply difficulties associated with our reliance on imported energy would also characterize our food and fiber markets.

President George W. Bush said, “American farm and ranch families embody some of the best values of our nation: hard work and risk-taking, love of the land and love of our country. Farming is the first industry of America -- the industry that feeds us, the industry that clothes us, and the industry that increasingly provides more of our energy. The success of America’s farmers and ranchers is essential to the success of the American economy.” The programs embodied in the 2002 farm bill are uniquely suited to the unique challenges farmers face. As noted by President Bush at the farm bill signing, “[Farmers] livelihood depends on things they cannot control: the weather, crop disease, uncertain pricing. They need a farm bill that provides support and help when times are tough.”

The federal budget for agriculture accounts for about ½ of 1% of the entire federal budget, yet provides the underpinning for industry that is 15% of the nation’s GDP. Federal budget deficits adversely impact the entire American economy and efforts to address deficits should strive for equity in sharing the pain of adjustment. Agriculture should not be singled out or asked for greater sacrifice than other federal departments.

Within agriculture, equity should be an important guide to reductions in support. No sector or region should be targeted. The 2002 farm law introduced further tightening of benefit eligibility and formed a commission to study the distribution of benefits in 2002 farm law. The Payment Limit Commission clearly recommended that no change in benefit eligibility should be implemented in the middle of the current farm law.

The Council urges Congress to consider that the nation’s growers are already making planting decisions for 2005. Adding uncertainty to their eligibility for program support could cause many producers to make decisions based on unclear, ill-defined prospective changes in federal legislation, rather than market signals.

Reductions in U.S. agricultural support prior to the completion of the Doha round of international trade negotiations is the equivalent of unilateral disarmament. Substantial changes in U.S. commodity programs can weaken our negotiating position, undermine current proposals, and send the wrong signal to other WTO member countries. Should the U.S. unilaterally disarm in agriculture, there will be little reason for other countries to reduce subsidies or open their markets to U.S. agricultural products.