Sen. Lincoln (D-AR), chairman of the Senate Committee on Agriculture, Nutrition, and Forestry, announced that the Committee will begin hearings this month on the reauthorization of the Food, Conservation and Energy Act of 2008.
The first hearing, entitled “Maintaining Our Domestic Food Supply through a Strong U.S. Farm Policy,” is scheduled for June 30 and will focus on maintaining a strong US farm policy. The hearing will be held in the Senate Agriculture Committee, Room 328A, of the Russell Senate Office Bldg.
Dates and locations of future hearings will be announced in the following weeks but the topics of the next three are: “Revitalizing the Rural Economy through Robust Rural Development,” “Promoting Conservation Practices that Preserve Our Natural Resources and Wildlife Habitat for Future Generations,” and “Ensuring Agriculture is Part of Our Nation’s Energy Future.”
“The farm bill is one of the most important pieces of legislation Congress considers on behalf of rural America and our nation’s farmers and ranchers,” Sen. Lincoln said in a news release. “As we look toward the upcoming farm bill, I will use these hearings to gather feedback on how the current bill is working and lay the ground work for the future of our nation’s farm, nutrition, conservation, rural development, research, forestry and energy priorities.”
As Chairman, Sen. Lincoln is charged with leading the Committee through the multi-year process of writing and passing the nation’s next farm bill. She plans to hold multiple hearings over the next few months, which will be focused on various issues that will be addressed in the legislation and covering the scope of American agriculture.
In addition, the House Agriculture Committee has announced three upcoming public hearings to be held at 1300 Longworth House Office Bldg., Washington, DC. On June 9, the Subcommittee on Conservation, Credit, Energy, and Research will review the implementation of the ’08 farm law energy title. On June 17 and 24, the Subcommittee on General Farm Commodities and Risk Management will conduct hearings to review US farm safety net programs in advance of the ’12 farm bill.
Bill Calls for Brazilian Payment Offset
Reps. Flake (R-AZ) and Frank (D-MA) introduced legislation (HR 5439) on May 27 that, if enacted, would reduce the Direct Payment rate for upland cotton by an amount necessary to reduce outlays by $147.3 million per year.
The reduction would offset scheduled Commodity Credit Corp. annual payments into the special fund established by US and Brazilian negotiators as part of a settlement. That settlement resulted in Brazil temporarily suspending retaliation on almost $1.0 billion in US exports authorized as part of the WTO ruling in the Brazil case.
In a Dear Colleague letter urging their colleagues to cosponsor the legislation, Reps. Flake and Frank contend that the United States is “paying off Brazilian farmers in order to keep subsidies flowing to U.S. farmers.” They also contend that since ’00, US cotton farmers have received an average of $3.5 billion per year in subsidies while the value of annual production averaged about $4.3 billion.
As was the case with recent editorials in the The Wall Street Journal and The Washington Post (see next article), Reps. Flake and Frank have misstated some facts and ignored others. For example, they contend that the funds will go to Brazilian farmers while the actual agreement between the United States and Brazil prohibits use of the funds to make payments to farmers. They also ignore the fact that most of the $1.0 billion in retaliation results from the WTO panel’s ruling that the GSM export credit guarantee program -- used by virtually every commodity -- violates WTO rules. And, they have ignored the fact that for CY10-11 and beyond, most projections indicate that expenditures for the US upland cotton program will be limited to Direct Payments which were not found to be out of compliance with WTO rules because they are decoupled from production and prices.
In summary, Reps. Flake and Frank want to require cotton farmers to pay 100% of the cost of a fund necessitated in large part by a WTO ruling against the export credit guarantee program used by all commodities. This fund has at least temporarily headed off retaliation that could have caused significant job losses in the US manufacturing sector.
Response Issued toWashington
Post Editorial
The NCC, as it did last week in response to a Wall Street Journal (WSJ) editorial (see 5/28/10 Cotton’s Week), sent a letter to the editor pointing out inaccuracies in a Post editorial regarding the Brazil-US WTO case.
The NCC letter noted that in the Post’s crusade against the cotton industry, the editors are “quick with inflammatory adjectives but short on facts when it comes to agricultural policy and trade disputes.”
The letter points out that the editors cite historical spending but decline to note that spending on the price-based provisions involved in the Brazil dispute likely will be zero for the ’10 crop.
“They fail to note that the WTO found no fault with direct payments and crop insurance, which are included in the total payments cited in the editorial,” the letter stated. “The WTO did not rule that cotton programs under the current 2008 farm bill violate U.S. trade commitments, but instead ruled that selected cotton provisions from the 2002 farm bill, along with export credit guarantee programs for essentially all commodities were either causing significant price suppression or were prohibited subsidies.”
Like the WSJ editorial, the Post editorial does not mention the export credit programs even though the vast majority of possible trade retaliation is associated with these programs.
The full response to the Post editorial is on the NCC’s home page at www.cotton.org.
CSP Final Rule Issued
Agriculture Secretary Vilsack announced that USDA published the final regulations governing the Conservation Stewardship Program (CSP). Authorized in the ’08 farm law, the CSP is a voluntary program that offers payments to producers who exercise good land stewardship and want to improve their conservation performance.
Vilsack also announced that the enrollment period for CSP's second year, which is currently open, has been extended an additional two weeks, now closing on June 25, ’10. Producers must fill out the basic Natural Resources Conservation Service (NRCS) application by this date in order to be eligible for this year’s acreage allotment.
CSP is available to all producers regardless of operation size, crops produced or geographic location. Eligible lands include cropland, pastureland, rangeland and non-industrial private forest land. Effective immediately under the June 4th final rule, the program retains the broad features outlined in the interim final rule, including:
CSP pays participants for conservation performance – the higher the performance, the higher the payment.
Producers get credit both for conservation measures they already have implemented and for new measures they agree to add.
NCC staff developed a summary of the CSP program that includes changes in the final rule. The summary and the program’s final rule can be accessed from the NCC’s home page at www.cotton.org.
Potential applicants are encouraged to use the CSP self-screening checklist to determine whether CSP is suitable for their operation and to apply prior to the closing date of June 25, ’10, when applications will be scored, ranked and funded. The checklist may be obtained from the national CSP website, www.nrcs.usda.gov/programs/new_csp/csp.html, or individual state NRCS offices website, www.nrcs.usda.gov/about/organization/regions.html.
EPA Releases Draft Permit for Certain Pesticide Uses
EPA announced the public release of its draft National Pollutant Discharge Elimination System (NPDES) permit for discharges from the application of pesticides to US waters, which is being called the Pesticides General Permit (PGP). The PGP was developed in response to a decision by the Sixth Circuit Court of Appeals (National Cotton Council, et al. v. EPA). The court vacated EPA’s ’06 rule that said NPDES permits were not required for applications of pesticides to US waters under the Clean Water Act (CWA).
As a result of the Court's decision, discharges to US waters from the application of pesticides will require NPDES permits when the court's mandate takes effect on April 9, ’11. Any use patterns not covered by this proposed draft permit would need to obtain coverage under an individual permit or alternative general permit if these involve pesticide applications that result in point source discharges to US waters.
The PGP will provide coverage for discharges where EPA is the NPDES permitting authority, which includes Arkansas; Idaho; New Hampshire; Massachusetts; New Mexico; Oklahoma; Washington, DC; Puerto Rico; certain discharges in the state of Texas; US territories; and Indian lands in 30 states. For discharges in NPDES authorized states, state NPDES authorities will be issuing their permit. EPA estimates that the Sixth Circuit's ruling will affect approximately 365,000 pesticide applicators nationwide that perform 5.6 million pesticide applications annually.
The pesticide use patterns covered under the PGP are mosquito and other flying insect pest control, aquatic weed and algae control, aquatic nuisance animal control, and forest canopy pest control. The PGP does not authorize coverage for: (1) discharges of pesticides or their degradates to waters already impaired by these specific pesticides or degradates or (2) discharges to outstanding national resource waters (also known as Tier 3 waters). These discharges will require coverage under individual NPDES permits. Also outside the scope of the PGP are terrestrial applications to control pests on agricultural crops or forest floors.
Additionally, the PGP does not cover discharges that, by law, are not required to obtain NPDES permit coverage. Notably, the CWA specifically excludes from the definition of point source, “agricultural stormwater discharges and return flow from irrigated agriculture.” Nothing in this permit changes the effect of those statutory exemptions. Therefore, the application of a pesticide to an agricultural crop for the control of terrestrial pests that later runs off the field, either as irrigation return flow or stormwater runoff, is exempt from permit coverage even if that discharge to a US water is known to contain pesticide residuals. However, discharges from the application of pesticides to irrigation ditches and canals that are either US waters or convey to US waters now require NPDES permit coverage.
The draft PGP describes the technology-based effluent limitations and water quality-based effluent limitations that must be met under the permit. For the technology-based limitations, all operators must minimize pesticide discharges into US waters by "using the lowest effective amount of pesticide product per application and optimum frequency of application to control the target pest ... [and] maintain pesticide application equipment in proper operating condition" among other steps. For water quality limits, the discharge "must be controlled as necessary to meet applicable numeric and narrative state, territorial or tribal water quality standards."
The draft PGP also describes the threshold of area of treatment above which operators must file a Notice of Intent (NOI) to obtain coverage under the general permit and when such a notice must be submitted to EPA. Operators that must file a NOI also must follow integrated pest management practices, including an evaluation of the management options that consider the "impact to water quality, impact to non-target organisms, pest resistance, feasibility and cost effectiveness." The permit also includes monitoring, recordkeeping and annual reporting requirements.
EPA is soliciting public comments with a deadline of July 19, ’10. The agency also will provide outreach via a webcast on June 17 and seek further public comment in a series of public meetings: on June 14 in Albuquerque, NM; on June 16 in Boise, ID; on June 21 in Boston, MA; and on June 23 in Washington, DC. The final permit will be issued in Dec. ’10 in preparation for the April 9, ’11 effective date of the court decision.
Favorable Ruling Given Farmers in Water Cases
San JoaquinValley farmers received good news regarding water allocations when US District Judge Oliver Wanger ruled that federal agencies "completely abdicated" their responsibility to protect economic interests in California alongside endangered delta smelt. The decision comes shortly after he issued a similar ruling on salmon that led to the lifting of pumping limits.
Two years earlier, Judge Wanger had invalidated permits on California dams and pumps, ruling that they were too lenient and posed a threat to endangered salmon and the Delta environment. The federal government, buoyed by environmental groups, continued to argue for the tighter limits, but urban and agricultural interests sued to overturn the more stringent permits. In his latest decision, Wanger said officials at the US Fish and Wildlife Service and the Bureau of Reclamation failed to comply with the National Environmental Policy Act when they wrote a recovery plan for the smelt, which resulted in severe restrictions on water for farmers.
Survey Affirms Consumer Cotton Preference
Global consumers predominantly prefer cotton (59%) for the clothing that they wear most often, according to results from the sixth Global Lifestyle Monitor.
Conducted by Synovate and sponsored by Cotton Council International (CCI) and Cotton Incorporated with USDA support, the survey queried 5,000 consumers aged 15-54 in 10 countries across Europe, South America and Asia on consumer attitudes toward fashion and fibers.
CCI’s Executive Director Allen Terhaar presented the survey results to key trade and consumer media in Germany and the United Kingdom.
Sales Steady, Shipments Strong
Net export sales for the week ending May 27 were 212,200 bales (480-lb). This brings total ’09-10 sales to approximately 12.4 million bales. Total sales at the same point in the ’08-09 marketing year were approximately 13.4 million bales. Total new crop (’10-11) sales are 1.5 million bales.
Shipments for the week were 343,400 bales, bringing total exports to date to 9.4 million bales, compared with the 10.5 million bales at the comparable point in the ’08-09 marketing year.
Effective June 4-10, ’10
Adjusted World Price, SLM 11/16
72.75 cents
*
Fine Count Adjustment ('09 Crop)
0.00 cents
Fine Count Adjustment ('10 Crop)
0.00 cents
Coarse Count Adjustment
0.00 cents
Marketing Loan Gain Value
0.00 cents
Import Quotas Open
10
Special Import Quota (480-lb bales)
686,949
ELS Payment Rate
0.00 cents
*No Adjustment Made Under Step I
Five-Day Average
Current 5 Lowest 3135 CFR Far East
89.79 cents
Forward 5 Lowest 3135 CFR Far East
84.69 cents
Coarse Count CFR Far East
NA
Current US CFR Far East
89.13 cents
Forward US CFR Far East
86.81 cents
'09-10 Weighted Marketing-Year Average Farm Price
Year-to-Date (August-April)
61.75 cents
**
**August-July average price used in determination of counter-cyclical payment
