To: Cotton Industry and Agri-Business Leaders and Interest Organizations
From: Larry McClendon, National Cotton Council Chairman
The House and Senate Conferees have concluded their work on the new farm bill -- Food, Conservation and Energy Act of 2008. The House and Senate are expected to vote on the conference report the week of May 12. In fact it is possible the legislation will be considered by both bodies on May 14. The National Cotton Council is asking members of the House and Senate to approve the conference report by a wide margin to discourage a veto. It is very important for you to contact your Representative and Senators to ask them to support the conference report and to ask them to contact their colleagues to urge their support.
Personal phone calls to your Representative, Senators or their agricultural legislative assistants will be most effective. On the NCC's web site is contact information for Cotton Belt Representatives and Senators (including their agriculture assistants) or you can call the Capitol Switchboard (202-224-3121). Please make your contact as soon as possible.
The conference report contains many of the cotton industry’s priorities including:
- Continuation of the target price, direct payment and marketing loan programs at or near current levels
- Adjustments in the world price calculation and loan premiums and discounts to enhance competitiveness in domestic and international markets
- Inclusion of a textile competitiveness payment to assist our domestic customers who are competing with heavily subsidized imports
- Mandatory storage credits
- Elimination of limitations on LDPs and marketing loan gains; enhancement of spousal eligibility; and expanded definition of farm income for purposes of the new means tests
- No change in beneficial interest rules used to determine loan deficiency and marketing loan gains
Effective for the 2009 crop, the conference agreement does make significant changes to payment limitations and program eligibility including elimination of the three-entity rule, direct attribution of benefits and a significant modification of the means test first enacted in 2002. The conference report includes a new optional crop revenue program beginning in 2010 and a permanent disaster program. The legislation includes increased funding for nutrition, conservation and renewable energy programs. In addition, the legislation is completely paid for without use of tax increases or revenue raisers.
While certainly not perfect, this five year bill is preferable to a one or two year extension that would likely include significant changes to commodity programs and payment limitations and would then require a future Congress and Administration to write a new bill under even tighter budget constraints on farm bill spending.
A strong bipartisan vote on the conference report in both the House and Senate will send an important signal to the President and possibly discourage a veto. It will take a strong effort by our industry along with other commodity, conservation, nutrition and agri-businesses to ensure passage. Thank you in advance for your efforts. Please contact the Memphis office if you have questions and to report responses to your call.
