Meeting information, including housing and travel, as well as online registration, for the NCC’s ’11 Annual Meeting, Feb. 4-6, at the JW Marriott San Antonio Hill Country in San Antonio, TX, is now available. The annual meeting site, www.cotton.org/news/meetings/am, also can be accessed from the Annual Meeting icon on the NCC’s home page, www.cotton.org.
Room reservations also can be made by calling 1-866-822-4420. For air and car rental reservations, contact Mary Saemenes, the NCC’s travel consultant at Travelennium, at 888-232-1738 or msaemenes@travelennium.com.
The ’11 annual meeting is the first under a new, shortened meeting format. The convention’s first events begin at 1:30 pm on Friday, Feb. 4. The final event, the General Session, begins at 10 am and concludes at noon on Sunday, Feb. 6. The joint session of delegates will convene on Saturday morning at 8:00 am and include the NCC’s planting intentions survey.
NCC Conveys Estate Tax Concerns at Press Briefing
The NCC believes Congress should promptly enact a permanent solution to estate taxes – a message that was delivered during a news conference at the National Press Club in Washington, DC, by Taylor Slade, a Williamston, NC, cotton and peanut producer.
Slade, a NCC delegate and a past North Carolina Cotton Producers Assoc. president, told the news media assembled at the event that if estate taxes are allowed to be reinstated at the beginning of ’11 with only a $1 million exemption and top rate of 55%, US agriculture will be affected very negatively. He said the US cotton industry will be particularly hard hit as family-owned cotton farms and associated small businesses, including gins, warehouses, processors and merchandizing firms, will be affected.
Slade, whose family’s operation has been in business since 1722, emphasized that farming is a land-based, capital intensive industry with few options for paying estate taxes when they come due. He also explained that not just farms but much of cotton’s infrastructure, which creates key employment in rural areas, also will be hard-hit.
He pointed out that as much as 80% of cotton production occurs on farms that would be affected by an estate tax with a $1 million exemption. In the Mississippi Delta and Southeastern regions, for example, average cropland values equate to just 333 to 500 acres necessary to reach $1 million in assets, and this simple approach overstates the number of acres because it does not account for the value of machinery and buildings.
Slade stated that while the NCC supports the complete elimination of estate taxes, the short term may require a compromise that would be less draconian than the reinstatement of the $1 million exemption. An acceptable intermediate outcome would include raising the exemption to no less than $5 million per person and reducing the top rate to no more than 35%. He said it also is imperative that the exemption be indexed to inflation, provide for spousal transfers and include the stepped-up basis.
Other organizations that participated in the news conference included: the American Farm Bureau Federation, the American Soybean Assoc., the National Association of Wheat Growers, the National Cattlemen’s Beef Assoc., the National Corn Growers Assoc., the National Farmers Union, the National Milk Producers Federation, the National Pork Producers Council and the Public Lands Council.
Disaster Program Deadline Dec. 9
USDA’s Farm Service Agency (FSA) reminds producers they have until close of business on Thursday, Dec. 9, to apply for assistance for ’09 losses under the Crop Assistance Program (CAP). Producers interested in signing up for CAP must do so at the FSA county office where their farm records are maintained.
Up to $550 million in disaster assistance will be issued to producers of upland cotton, rice, soybeans and sweet potatoes for eligible losses in counties that received Secretarial disaster designations because of excessive moisture or related conditions in ’09. A list of eligible disaster counties for CAP is located at http://disaster.fsa.usda.gov/.
Producers of eligible crops on farms in disaster counties who certify to a 5% or greater crop loss in ’09 because of excessive moisture or related conditions may be eligible for compensation based on a predetermined payment rate multiplied by the planted and considered planted acres of the crop. Per-acre payment rates will be prorated by FSA, if applicable, to keep expenditures within established program funding limits. Producers initially will receive 75% of their calculated CAP payment. After signup is complete, producers may receive up to an additional 25%. The predetermined payment rates for eligible crops are: upland cotton – $17.70 per acre; long grain rice – $31.93 per acre; medium or short grain rice – $52.46 per acre; soybeans – $15.62 per acre; and sweet potatoes – $155.41 per acre.
The general eligibility provisions, payment limits and adjusted gross income limits that apply to other FSA programs also apply to CAP. No person or legal entity (excluding a joint venture or general partnership), may receive, directly or indirectly, more than $100,000 in CAP benefits. Additionally, CAP payments will be treated as ’09 revenue when determining payments under the Supplemental Revenue Assistance Payments Program.
For more information about FSA disaster assistance programs, visit a local FSA county office or http://disaster.fsa.usda.gov/.
Senate Votes on Form 1099 Legislation
The Senate rejected two amendments that would repeal a new requirement that businesses must file an IRS Form 1099 whenever they pay more than $600 to an individual vendor.
The new requirements were created to raise $17 billion as part of the Patient Protection and Affordable Care Act and were expanded to include spending by landlords in the Small Business Jobs Act. They have been severely criticized by business groups as overly burdensome paperwork.
Senate Finance Committee Chairman Baucus (D-MT) initially supported the new requirements and opposed efforts to repeal them as recently as September, but growing pressure from small businesses prompted him to introduce his own repeal bill (S. 3946).
The amendments to repeal the new reporting requirements were offered during debate on the Food & Drug Administration Food Safety Modernization Act (S. 510). An amendment by Sen. Johanns (R-NE) would completely repeal the new reporting requirements and offset the cost of the change. Sen. Baucus offered an amendment that would completely repeal the provision, but did not include an offset. The Senate rejected the Johanns amendment 61-35, which fell short of the required two-thirds vote. The Baucus amendment also was defeated by a vote of 44-53. Following the votes, Sens. Baucus and Johanns indicated they would work to develop a compromise that could be brought to the Senate. The new, expanded reporting requirements do not go into effect until ’12.
Food Safety Legislation Hits Constitutional Snag
The Senate passed the food safety bill (S. 510) by a vote of 73-25.
Like the House bill passed last year, the Senate bill would give the Food & Drug Administration (FDA) broad new authorities to issue mandatory recalls of suspected contaminated foods, increase the frequency of inspections for food facilities, and standardize information collected on food products to improve the agency’s ability to trace the history of those linked to outbreaks of food-borne illnesses. The FDA also would gain access to records of domestic food facilities in emergencies and would be empowered to bar importation of high-risk foods if the products lacked proper certification or if US inspectors were denied access to processing facilities.
Agricultural groups, including the NCC, successfully worked for a Senate bill that was significantly less onerous than the House bill. For example, the Senate bill does not include registration fees, focuses inspections on high risk operations, and concentrates on fruit and vegetable production. Cottonseed and cottonseed products would fall under the bill as food and feed products but, because of an exemption for commodities, the Senate version’s requirements would be no more than what is already required under the Bioterrorism Act.
The final Senate bill also includes a controversial amendment pushed by Sen. Tester (D-MT) that exempts from the new FDA regulations small producers who sell directly to consumers within a 275-mile area and average less than $500,000 in annual sales. The exemption could be rescinded for any producer or processor involved in an outbreak of food-borne illness.
Sen. Chambliss (R-GA), the ranking member of the Agriculture, Nutrition and Forestry Committee, was an original cosponsor of the bill but opposed final passage, contending that the Tester amendment would not provide similar exemptions for cotton producers also selling smaller quantities of food. Those farms often earn much more from their cotton crops than they do from their smaller food operations and would exceed the threshold in the Tester amendment.
The United Fresh Produce Assoc., an early supporter of the bill, and 19 fruit and vegetable groups also oppose the Tester amendment saying that exemptions based on size and geography undermine the legislative goal of strengthening US food safety.
The bill hit a Constitutional roadblock within hours after the Senate passage. The Ways and Means Committee flagged provisions that would levy fees for re-inspecting food facilities, for mandatory recalls, for registering food importers and for accreditation of third-party auditors that certify whether companies are meeting regulations. The fees were determined by the House Parliamentarian to be taxes, and any new legislation involving new taxes must originate in the House.
Under normal procedures, the House would send the bill back to the Senate without action under a process known as “blue-slipping.” House Majority Leader Hoyer (D-MD) said, “It has to be a House bill because it has revenues in it. That is a constitutional requirement, that is not a rule requirement.”
House Democratic leaders are reportedly exploring ways to solve the constitutional problem so the legislation can move. Rep. Hoyersaid one solution would be to pass the text of the Senate bill under a House bill number. His office stressed that is just one option under consideration and that no decision had been reached on the process moving forward.
If the House adopts this tactic, the bill would have to go back to the Senate for another vote where it will face further hurdles.All 42 Republican senators sent a letter to Senate Majority Leader Reid (D-NV) vowing to vote against bringing any legislation to the floor before the government has been funded for FY11 and Congress deals with the expiring Bush tax cuts.
WHIP Final Rule Issued
On Nov. 23 USDA’s Natural Resources Conservation Service (NRCS) issued a final rule for the Wildlife Habitat Incentive Program (WHIP) that adds a new national priority for restoration and enhancement of wildlife habitat.
WHIP, re-authorized by the ’08 farm bill, is a voluntary program for landowners who want to develop and improve fish and wildlife habitat on agricultural land, non-industrial private forest land and Indian land.
The final rule incorporates a number of changes to the original program, including: (1) restricting eligible lands to private agricultural land, non-industrial private forest lands and Tribal land; (2) clarifying that pivot corners and irregular areas are eligible habitat; (3) increasing the proportion of annual funds available for long-term agreements (15 years or longer) to 25%; (4) providing the Secretary of Agriculture with discretionary authority to address state, regional and national conservation priorities; and (6) establishing a $50,000 annual payment limit per person or legal entity. Applications are accepted continuously and are ranked by the state conservationist, based on criteria developed with input from the state technical committee. The program is available in all 50 states and territories.
The National Commission on Fiscal Responsibility and Reform appointed by President Obama and co-chaired by former Sen. Alan Simpson (R-WY) and Erskine Bowles, former Chief of Staff to President Clinton, released a six-part plan for reducing the federal budget deficit. Taken as a whole, the plan seeks to achieve almost $4 trillion in deficit reduction through '20. The Commission proposal includes provisions for discretionary spending cuts, savings in mandatory programs, health care cost containment, social security reform, and tax reform.
For agriculture, the Commission proposal recommends $15 billion in gross reductions in mandatory agriculture programs from FY ‘12 to FY ‘20, of which $10 billion will be dedicated to deficit reduction and $5 billion will be redirected to extending the Agriculture disaster fund. The Commission recommends: reductions in direct payments when prices exceed the cost of production; limits on conservation programs such as the Conservation Stewardship Program (CSP) and Environmental Quality Incentive Program (EQIP); and reduced funding for the Market Access Program.
However, the plan has failed to garner the 14 votes from Commission members necessary to officially send the plan to Congress, but many of the recommendations are expected to find their way into future Congressional Budget discussions.
In other developments, former Senate Majority Leader Daschle (D-SD) released the deficit reduction recommendations developed by a “Debt Reduction Task Force” created by the Bipartisan Policy Center. Daschle is one of the four founders of the Center. The others are Howard Baker (R-TN), Bob Dole (R-KS) and George Mitchell (D-ME).
The center created and endorsed the Task Force report which includes $3 billion in annual farm program spending cuts. The proposal includes a specific provision recommending elimination of “all payments based on production history to large commercial producers with combined farm and non-farm adjusted gross incomes (AGI) of greater than $250,000.”
Doha Negotiations to Intensify
Key members of the World Trade Organization (WTO) reportedly agreed during a Nov. 23 meeting to seek agreement on a Doha Round package covering all major sectors during ’11.
Representatives from the United States, the European Union, China, India and Brazil, agreed to launch intensified negotiations in early January. The ambitious timetable was dictated by the Group of 20 leaders who issued a joint statement at their Nov. 11-12 summit in Seoul directing negotiators to “promptly bring the Doha Development Round to a successful, ambitious, comprehensive, and balanced conclusion.”
There seems to be a common belief that the Doha round must either be concluded in ’11 or not at all. Elections in the United States and other major countries in ’12 make it unlikely that governments would be willing to make concessions which could lose them votes. There are also questions as to whether WTO members would be willing to renew negotiations in ’13 because the negotiations would be in their 12th year and likely be obsolete.
In comments to a Nov. 30 meeting of the Trade Negotiations Committee, WTO Director-General Pascal Lamy outlined a work schedule that called for revised texts to be developed by the end of the first quarter of ’11 with a goal of concluding an agreement by the end of the year.
Mill Cotton Use Steady
According to the Commerce Dept., October (four-week month) total cotton consumption in domestic mills was 150.6 million pounds for a seasonally adjusted annualized rate of 3.78 million bales (480-lb). Last year’s October annualized rate was estimated at 3.40 million bales.
The September (five-week month) estimate of domestic mill use of cotton was raised 4.2 million pounds to 174.7 million pounds. The revised seasonally adjusted annualized rate of consumption for September is 3.66 million bales. This is higher than last year’s September annualized rate of 2.82 million bales.
Preliminary November domestic mill use of cotton and revised October figures will be released by Commerce on Dec. 23.
Sales Strong, Shipments Steady
Net export sales for the week ending Nov. 25, ’10 were 371,700 bales (480-lb). This brings total ’10-11 sales to approximately 13.4 million bales. Total sales at the same point in the ’09-10 marketing year were approximately 5.1 million bales. Total new crop (’11-12) sales are 1.4 million bales.
Shipments for the week were 207,400 bales, bringing total exports to date to 2.8 million bales, compared with the 2.9 million bales at the comparable point in the ’09-10 marketing year.
Effective Dec. 3-9, ’10
Adjusted World Price, SLM 11/16
129.00 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
9
Special Import Quota (480-lb bales)
622,666
ELS Payment Rate
0.00 cents
*No Adjustment Made Under Step I
Five-Day Average
Current 5 Lowest 3135 CFR Far East
145.84 cents
Forward 5 Lowest 3135 CFR Far East
107.86 cents
Coarse Count CFR Far East
NA
Current US CFR Far East
143.45 cents
Forward US CFR Far East
109.50 cents
'10-11 Weighted Marketing-Year Average Farm Price
Year-to-Date (Aug.-Oct.)
77.46 cents
**
**August-July average price used in determination of counter-cyclical payment
