In addition to expressing strong support for the ’08 farm law and solid opposition to efforts to re-open it in order to further restrict farm program benefits, the NCC letter cited the essential need for successful completion of the boll weevil eradication program, full implementation of the pink bollworm eradication effort, new technology developed through research, and demand building export programs including the Market Access Program (MAP), the Foreign Market Development (FMD) program and GSM credit.

The NCC’s request included $22.19 million for USDA’s Animal & Plant Health Inspection Service (APHIS) to provide a federal cost share for boll weevil eradication and pink bollworm eradication programs which are combined into a joint Cotton Pests account. Included in the NCC’s request are $7.86 million for the pink bollworm eradication program and $14.33 million for boll weevil eradication. The FY10 request was for $23.39 million to distribute between the two eradication programs.

The letter noted, “As these programs near completion, the requests become even more critical to insure the complete eradication of these cotton pests for the benefit of those in post eradication maintenance.”

The NCC requested sufficient funding to allow the Farm Service Agency (FSA) to make at least $100 million in loans to eligible Boll Weevil Eradication Foundations. The NCC also conveyed strong support for providing FSA with continued authority to make loans for activities associated with the pink bollworm eradication program as previously provided in the FY05 and subsequent years’ appropriations legislation.

The letter strongly supported funding levels authorized in the ’08 farm law for the MAP noting that activities carried out using MAP (and FMD) have been responsible for increased export sales of cotton fiber and value-added cotton products. The industry asked that funding for the FMD be continued at the same level as provided for FY09 or higher provided the increase is not at the expense of other export promotion programs. The industry also noted its support for sufficient funding to ensure the Foreign Agricultural Service is adequately staffed to carry out important market development and trade enhancing functions.

The NCC said it was pleased to see that the USDA’s Agricultural Research Service (ARS) budget is proposed for a modest increase from $1.18 billion in FY10 to a proposed $1.20 billion for FY11. The subcommittees were urged to provide $2.1 million for the ARS Cotton Production and Processing Research Unit (Ginning Laboratory) of the Cropping Systems Research Laboratory in Lubbock and $4.096 million under section 406 for Integrated Pest Management Centers under the National Institute Of Food and Agriculture.

In their letter, they stated that, “While we agree that reducing the deficit is necessary, we do not believe America’s farmers and ranchers should have to bear a disproportionate burden of the cuts. Notably, the farm safety net cuts included in the President’s budget appear to be proposed not for the purpose of deficit reduction but, rather, to offset the cost of spending increases contained elsewhere in the USDA budget. All told, the President’s budget proposal for USDA actually increasestotal outlays by more than $4 billion.”

Their letter pointed out that the budget cuts to the farm safety net also appear to disregard the fact that the ’08 farm bill, which contains the farm safety net provisions cut in the President’s budget, was fiscally responsible and completely offset so as not to add to our country’s deficit. In fact, it noted, these provisions were already cut by $7.4 billion in ’08 -- the only core provisions to experience a cut, bringing their share of the total federal budget down to less than one quarter of one percent and just 17% of the USDA budget.

“Yet the President’s budget proposal breaks a five year commitment made to America’s farmers and ranchers by seeking to further cut the farm safety net,” they said.

The letter also stated that payment eligibility requirements for the farm safety net were debated extensively during the two years of debate on the farm bill, and the commitments in the ’08 farm law represent a contract with America’s farmers and ranchers.

“Producers have made business decisions based on this contract with the government,” they stated, “and to break these commitments would be destabilizing to a rural economy that is already impacted by this country’s severe recession and credit crisis.”

The Senators pointed out that the President’s budget also proposes billions of dollars in cuts to the federal crop insurance program through the Standard Reinsurance Agreement.

“We believe it is important to note that the federal crop insurance program sustained cuts in the 2008 Farm Bill,” they wrote. “Congress debated and rejected additional cuts to crop insurance during consideration of the last budget resolution.”

According to Brazil’s announcement, the 21 categories would be subject to a suspension of patent and intellectual property rights with the latest sanctions estimated at $238 million. General products listed include agricultural chemicals and biotechnology products, veterinary medicines, software, books, music and films. The proposed retaliation against US intellectual property rights is now subject to a 20-day period of public hearings. By moving into broader sectors of the US economy, Brazil’s latest actions are expected to bring increased pressure for a negotiated resolution between the two governments.

Brazil’s announcement is the latest step in the ongoing dispute brought by Brazil against the US upland cotton program and US export credit guarantee programs in general. After a WTO compliance panel ruled that the United States had failed to make the necessary program changes to comply with the original WTO decision, Brazil obtained retaliation authority through an arbitration process and has been taking steps to implement the retaliation. The arbitration panel’s determination established a fixed amount due to the upland cotton marketing loan and counter-cyclical payment (CCP) programs. Retaliation associated with the export credit guarantee programs varies annually based on a formula defined by the panel. A second formula calculates the threshold value that allows cross-retaliation into intellectual property rights if total damages exceed the threshold.

For ’10, Brazil has claimed total retaliation authority of $829 million and determined a threshold value of $591 million. Under the Panel’s methodology, the US cotton program’s share of the current $829 million in retaliation claimed by Brazil is relatively small and fixed at $147 million. The remaining damages of $682 million are associated with the export credit guarantee program.

Subcommittee members also indicated that they have an open mind concerning the legislative options they may pursue to help export initiatives and expressed concern that the lack of ship capacity is undermining agricultural exports.

Subcommittee members repeatedly asked Federal Maritime Commission (FMC) representatives, carriers, exporters and others about carrier "collusion," carrier "cartels," whether carriers were collectively manipulating capacity and if the Shipping Act of 1984 (P.L. 98-237) that re-affirmed carriers’ antitrust immunity should be revisited.

During his testimony to the Subcommittee, FMC Chairman Richard A. Lidinsky, Jr. announced that his agency has initiated a fact finding investigation into ocean vessel capacity and shipping equipment availability for US exports and imports. He stated that "available shipping space is a key ingredient to the financial recovery of American exporters and importers."

Prior to the hearing, a briefing memorandum on ocean carrier capacity was prepared by the House of Representatives professional staff and is available online at http://transportation.house.gov/Media/file/Coast%20Guard/20100317/SSM_CG.pdf. A recent Journal of Commerce video interview with Donna Lemm, Mallory Alexander International Logistics, explains how container shortages and the lack of ship capacity negatively affect agricultural exporters like cotton.

A coalition between Cotton Council International (CCI) and other international natural fiber organizations established the DNFI to extend the partnership initiated by the International Year of Natural Fibers (IYNF) Steering Committee organizations. The DNFI will build on the success of the IYNF and adopt the same objective, which is “to raise the awareness and profile of natural fibers, including cotton, and emphasize their value to global consumers while helping to sustain farmer income.”

The decision to continue working closely together was the result of an IYNF committee meeting held in Frankfurt, Germany in January.

DNFI is an alliance of key international natural fiber organizations including CCI, the International Wool Textile Organization, the International Cotton Advisory Committee, the Bremen Cotton Exchange, the International Textile Manufacturers Federation, the International Forum for Cotton Promotion and others.