Budget Control Act Becomes Law

Congress to Consider FTAs

Textile Enforcement and Security Act Re-introduced

Proposed Rule Issued on New Insurance Product

JCIBPC Emphasizes Test Guidelines

EPA Denies Mississippi River Petition

Southwest Producers to See Georgia Operations

Sales, Shipments Steady

The House approved The Budget Control Act of 2011 (S.365), a deficit reduction/debt ceiling increase package that will reduce the budget deficit by more than $2 trillion over the next 10 years. Approval of the legislation (269-161) followed weeks of prolonged negotiations that were concluded late on July 31.

The Senate approved the legislation on Aug. 2 by a bipartisan vote of 74-26, then President Obama signed the bill into law just hours later, saying it would reduce the deficit and avert a default that would have devastated the economy.

The bill would save about $917 billion, including interest costs, over 10 years by placing statutory caps on annually appropriated discretionary spending. It would allow the debt ceiling to be raised by $900 billion in two steps if Congress does not have a two-thirds majority in opposition. It also would require Congress to vote on a balanced budget amendment to the US Constitution between Oct. 1 and Dec. 31. It establishes a 12-member, bipartisan Joint Congressional Committee tasked with reporting legislation that would reduce the deficit by at least $1.5 trillion from '12-21. The legislation would include further spending reductions, entitlement reform and possibly tax reform.

If the House and Senate approve the plan under an expedited process that prohibits amendments and it reduces the deficit by at least $1.2 trillion, the President would be authorized to further raise the debt ceiling by an equivalent amount up to $1.5 trillion. If the Joint Committee is unable to recommend a plan or Congress fails to approve its plan to generate at least $1.2 trillion in 10-year savings, automatic spending cuts (known as sequestration) would go into effect. To give the Joint Committee an incentive to reach agreement on a plan, sequestration would apply 50% to defense and 50% to non-defense programs.

Republican leaders said they are confident none of their members appointed to serve on the Joint Committee would agree to a plan that includes tax increases, effectively taking the "tax reform" portion of the Committee's charge off of the table. The legislation places extraordinary authority in the hands of the Joint Congressional Committee and could accelerate development of new farm law. The Committee must be appointed within 14 days of enactment, must meet within 45 days and must produce a plan by Nov. 23. If the Committee produces a plan, the House and Senate must consider the plan without amendment by Dec. 23.

Congressional committees, including the agriculture committees, may submit detailed recommendations to the Joint Committee by Oct. 14. If the agriculture committees conclude that providing the Joint Committee with proposed "fair share" savings and legislation to achieve those savings is more desirable than allowing the Joint Committee to develop a plan without guidance from the agriculture committees, they will have to develop those recommendations before Oct. 14. If the Joint Committee fails to act or the House and Senate fail to approve a plan, then sequestration is triggered.

The legislation includes a complex formula that will be used to determine how much each agriculture program will be reduced under a sequestration order -- and a number of programs are exempt. The sequestration procedure is similar to the reductions carried out under the Gramm-Rudman-Hollings statute.

Senate Majority Leader Reid (D-NV) and Minority Leader McConnell (R-KY) announced that when Congress returns from the August recess, they have agreed to consider free trade agreements (FTA) with Korea, Colombia and Panama and the Trade Adjustment Assistance (TAA) program.

The expanded TAA is designed to provide assistance to employees adversely affected by international trade agreements, including service workers and workers who lose their jobs due to competition from countries that do not have a free trade agreement with the United States.

As part of the informal "mock markup" under Trade Promotion Authority (TPA), the Senate Finance Committee reported the Korea FTA and attached an extension of TAA. The House Ways and Means Committee cleared the FTA without TAA. Attaching the TAA provisions in the Korea implementing bill—as the White House and Senate Democrats had proposed—protected them from amendments under TPA procedures, which calls for an up-or-down vote in Congress under a timetable once the implementing legislation is submitted by the Administration.

Sen. McConnell, House Speaker Boehner (R-OH) and other Republicans have insisted on separate consideration of a TAA bill not protected from amendments. Speaker Boehner said in a statement that Senate leaders have cleared an important hurdle. "I look forward to the House passing the FTAs, in tandem with separate consideration of TAA legislation, as soon as possible," he said.

Under a complex legislative procedure, the House would have four separate votes, one of which would be on legislation, including TAA, Generalized System of Preferences (GSP) and perhaps extension of the Andean Trade Preference Act (APTA). The four bills would go to the Senate for final approval. However, the lack of specific language in the leaders' statements on how the amendment process will be handled may indicate that a number of important procedural details have not been worked out yet.

The ruling Grand National Party in Korea has scheduled an Aug. 8 special parliamentary session to vote on and pass the US-Korea FTA. The ruling party had hoped that the agreement would have been ratified by the US Congress before the August recess and is seeking clear signals that the United States will move on the deal. The agreement between Sens. Reid and McConnell may, in part, be designed to send this signal.

The agreement on TAA allows workers access to income support during job training. Income support will continue for the period necessary to complete a degree or equivalent program, with a maximum of 130 weeks. There also were provisions under the deal that the GSP and ATPA provisions would be extended retroactively through July 31, '13. GSP expired at the end of '10 and ATPA unilateral trade preferences for Colombia and Ecuador expired on Feb. 12, '11.

Reps. Kissell (D-NC) and Walter Jones (R-NC), along with Reps. Coble (R-NC), DeFazio (D-OR), Ellmers (R-NC), Foxx (R-NC), Holden (D-PA), Kaptur (D-OH), Lipinski (D-IL), McGovern (D-MA), McHenry (R-NC), McIntyre (D-NC), Michaud (D-ME), Myrick (R-NC), Rogers (R-AL), Sutton (D-OH) and Westmoreland (R- GA) reintroduced HR 2754 -- the Textile Enforcement and Security Act (TESA) in the House.

The TESA legislation seeks to increase US Customs and Border Protection (CBP) enforcement activities as well as trade facilitation through improved targeting, increased resources and enhanced authority.

"We applaud Representatives Jones (R-NC) and Kissell (D-NC) for taking the lead on this important issue. Strong enforcement of our trade laws is imperative to the creation and preservation of jobs in the small towns and rural communities where our members operate," National Council of Textile Organizations (NCTO) President Cass Johnson said in a NCTO news release. "And we look forward to working with Senator Hagan (D-NC) over the recess to introduce the companion bill in the Senate."

CBP collects more than $30 billion in revenue annually, making it the second largest revenue generator for the US government, while 42% of all duties, more than $12 billion, are collected by CBP from textile imports.

The TESA legislation addresses many of these key concerns by providing US Customs with expanded authority to better target these goods, while also giving them additional tools and resources to increase their commercial enforcement efforts and reduce the prevalence of fraud that is occurring and damaging the US textile industry sector.

The bill includes provisions that would:
-- Increase the number of trained import specialists in textile and apparel verifications at the 15 largest US ports.
-- Mandate the government publish names of companies that intentionally violate the rules of trade agreements.
-- Allow Dept. of Homeland Security and Dept. of Treasury to use amounts from the fines and penalties collected to pay for expenses directly related to investigations and/or training.
-- Instruct the US government to establish an electronic verification program that tracks yarn and fabric inputs in free trade agreement countries.

Lorem The Federal Crop Insurance Corp. (FCIC) has issued a proposed rule regarding Area Risk Protection Insurance (ARPI). The NCC will review the proposed rule and submit comments to the FCIC prior to the Sept. 20 deadline.

ARPI will offer producers a choice of Area Revenue Protection, Area Revenue Protection with the Harvest Price Exclusion or Area Yield Protection.

The new ARPI would replace Group Risk Plan (GRP) provisions for cotton, corn, forage crop, sorghum, soybeans and wheat. In addition, the new ARPI provisions also will replace the Group Risk Income Protection (GRIP). GRP and GRIP were popular Cotton Belt insurance products.

Joint Cotton Industry Bale Packaging Committee (JCIBPC) Chairman Stan Creelman sent a memo to ginners emphasizing how important it is for companies with materials in JCIBPC Experimental Test Programs (ETP) to follow ETP guidelines. He reminded them that "...regular communication will help the JCIBPC evaluate the performance of (materials and systems)" and that by honoring ETP guidelines, the companies protect participating gins, cotton growers' marketing loan eligibility and JCIBPC test programs' integrity.

JCIBPC guidelines require each company with an ETP to ensure bales bagged or tied with their materials are properly marked or tagged. Companies are responsible for ensuring JCIBPC "Participating Gins/Warehouse" forms are submitted prior to the use of the materials or systems.

The memo also reviewed two new ETP guidelines:1) Guideline 8.b. asks companies with an ETP to "…encourage gins using their experimental packaging materials to recess their bale ties" and 2) Guideline 8.c. asks the firms to track the use of experimental materials by PBI number and to furnish bale tag lists to the JCIBPC. Both of these guidelines rely on participating gins' cooperation. Adherence to all ETP guidelines helps firms monitor the progress of their ETP, keeps NCC staff informed concerning the status of each ETP and helps the JCIBPC prepare for its '12 meeting.

In February, the JCIBPC granted seven ETPs that allow seven companies to pursue approval of modified packaging materials or systems. Four companies received permission to test cotton or woven polypropylene bags that are modified in a manner that prevents them from being marketed as approved bagging. A fifth company will test a system that uses an approved polypropylene bag construction with the exception of the bag's bottom seam. Two companies will test modified bale ties. In addition to these approved programs, NCC staff anticipates requests for field trials prior to the Dec. 15 deadline.

EPA has denied a petition from the Minnesota Center for Environmental Advocacy requesting the agency to develop national Nutrient Numeric Criteria (NNC) and Total Maximum Daily Loads (TMDLs) under the Clean Water Act for nitrogen (N) and phosphorus (P) in the Mississippi River Basin, the Gulf of Mexico and other related waterways where the standards do not currently exist.

The Mississippi River watershed drains all or part of the land area in 31 states between the Appalachian Mountains and the Rocky Mountains and carries that into the Gulf of Mexico.

EPA Deputy Assistant Administrator Michael Shapiro, in a letter to the environmental group, said that although EPA agrees that N and P pollution is a water quality problem, there already are many ways the agency is working with states and other government agencies like USDA's Natural Resources Conservation Service to establish NNCs and TMDLs, and to improve water quality.

Thirteen cotton producers from Texas, Oklahoma and Kansas will see operations in Georgia on Aug. 7-11 as part of the '11 NCC Producer Information Exchange (PIE) sponsored by Bayer CropScience via a grant to The Cotton Foundation.

The participants include:Kansas – Todd Tobin, Iuka; Oklahoma – Curtis Vap, Newkirk; Texas – Kevin Cave, Ackerly; Layne Chapman, Vernon; Justin Corzine, Stamford; Rex Henard, Wellington; Darren Jost, Garden City; Joe Matthiesen, Rowena; Jake Rieder, Sinton; Chase Street, Kress; Jason Svetlik, Port Lavaca; Charles Trompler, Malone; and Trey Weldon, III, Dimmitt.

The Southwest region producers will begin their tour on Aug. 7 with a briefing from Georgia Dept. of Agriculture Commissioner Gary Black. They will tour Swift Spinning Mills, Inc., in Columbus and then tour RCL Farms and other cotton farms in the Bronwood area. On Aug. 9, the group will see peanut shelling at McCleskey Mills in Smithville and utilization of automated machinery for product handling at Miller Brewing Company in Albany. They will tour McLendon and Webb Farms in Leary, where they also will learn about irrigation in South Georgia. Later, they will see cotton, peanut and sweet corn production at Pinecliff Peanut and Grain in Camilla and visit Funston Gin Company for a look at irrigated and dryland cotton production as well as pecan production and shelling.

On Aug. 10, the participants will see tillage equipment at Kelley Manufacturing Company in Tifton and Bayer CropScience's CAP trials at the Sunbelt Ag Expo in Moultrie. That afternoon, the group will learn about row and tree crop production at River Bottom Farms in Lakeland and about cotton production expansion in southeast Georgia at the Coffee County Gin in Douglas before visiting area cotton farms. The tour concludes on the 11^th with a visit to the Southeastern Gin Company in Surrency for a presentation on drip irrigation for cotton and peanut production and then tours of other cotton farms in the area.

In July, Mid-South producers travelled to California's San Joaquin Valley, while Far West producers toured the Mid-South. Southeast producers will visit W. Texas and S. Texas on Aug. 21-26. Upon completion of this year's four tours, the PIE program will have exposed more than 900 US cotton producers to innovative production practices in regions different than their own.

Net export sales for the week ending July 28 were 9,100 bales (480-lb). This brings total ’10-11 sales to approximately 15.1 million bales. Total sales at the same point in the ’09-10 marketing year were approximately 14.0 million bales. Total new crop (’11-12) sales are roughly 6.4 million bales.

Shipments for the week were 112,100 bales, bringing total exports to date to 14.2 million bales, compared with the 12.1 million bales at the comparable point in the ’09-10 marketing year. Total exports are approximately 305,000 bales below the USDA projection of 14.5 million bales.