Rep. Neugebauer (R-TX) has introduced the Crop Risk Options Plan (CROP) Act, which would amend the Federal Crop Insurance Act in order to provide producers with the opportunity to purchase an area-wide policy that would cover all or a portion of the deductible under their individual policy. According to a statement released by Rep. Neugebauer, the CROP Act "would enable producers to insure crops against shallow losses, which can be 25-30% of a farmer's expected production."
Additional coverage allowed under the Neugebauer bill would trigger when area losses reach 10%, and indemnities under the additional coverage are limited to the amount of the deductible under the underlying individual policy. Premium subsidies for the additional coverage shall not be less than 60%.
The bill also calls for changes in the determination of a producer's actual production history (APH). Specifically, the bill would move from a 10-year average to a seven-year average with the highest and lowest experience dropped from the average, otherwise known as a seven-year Olympic average.
China Currency Bill Advances, FTA Votes Expected
China currency legislation has advanced in the Senate and Free Trade Agreements (FTA) are scheduled for votes in the House and Senate the week of Oct. 10.
A final vote in the Senate on legislation targeting China's intervention in currency exchange markets is now scheduled for Oct. 11. Senate Majority Leader Reid (D-NV) pressed to wrap up the Currency Exchange Rate Oversight Reform Act of 2011 (S.1619) before the Senate takes up the President's jobs bill and three pending FTAs with Panama, South Korea and Colombia. The Senate voted 62-38 to invoke cloture and cut off debate on the China currency legislation but further progress on the currency legislation, which if enacted would deem undervalued currencies actionable subsidies, was delayed by disagreements over amendments.
A number of Republicans supported the legislation, which would impose sanctions on China for manipulating its currency in order to increase exports. Support from Southern Republican Senators whose states have lost manufacturing jobs in recent years appeared to deliver the key votes on the cloture motion. Sens. Graham (R-SC), Sessions (R-AL), Burr (R-NC), who are co-sponsors of S. 1619, were joined by Sens. Chambliss (R-GA), Cochran (R-MS), Isakson (R-GA) and Shelby (R-AL), in voting for cloture. Other Republicans voting for the motion to invoke cloture were Sens. Snowe (R-ME), Collins (R-ME), Brown (R-MA), Hoeven (R-ND) and Portman (R-OH).
Although the Senate cloture vote indicates that the currency bill is likely to pass the Senate, the legislation faces an uncertain future. In the House, Speaker Boehner (R-OH) has criticized the bill and made it clear he does not want to bring it up.
Approval of three FTAs, which were negotiated during the Bush administration, is expected to occur the week of Oct. 10. The House and the Senate are both scheduled to hold votes on the Colombia, South Korea and Panama FTAs on Oct. 12, one day before South Korean President Lee's state visit on Oct. 13. The House will vote on the three FTAs and a bill to renew Trade Adjustment Assistance (TAA) and Generalized System of Preferences (GSP) programs on that day.
The House Rules Committee issued a closed rule for all four measures, which allows a separate vote on each measure but does not allow for any amendments and stipulates that the House will have one hour of debate on the TAA/GSP bill and 90 minutes for each FTA bill.
Barring any objections, an agreement between Senate Majority Leader Reid and Minority Leader McConnell (R-KY) also will limit debate on the FTAs, allowing votes to happen in a more timely fashion. Trade Promotion Authority (TPA), which applies to all three trade deals when they come up in the Senate, allows up to 20 hours of debate for each of the trade agreements. The House closed rule is important for the Colombia FTA because it is not covered by TPA and would otherwise be open for amendments on the House floor.
In a related development, the Finance Committee announced that it will hold a mark-up of the three FTAs on Oct. 11, at which point it also will consider the nominations of several trade officials, including Ambassador Isi Siddiqui to be USTR's chief agricultural negotiator.
Industry Urges Prompt Approval of US-Colombia FTA
The NCC issued a statement welcoming the news that the enabling legislation necessary for Congress to approve the US-Colombia Free Trade Agreement (FTA) was formally transmitted to Congress – saying the US cotton industry urges immediate approval of the legislation by the House and Senate.
The statement noted that NCC members consistently have expressed support for Congressional approval of the Free Trade Agreement with the Republic of Colombia, which was signed in Nov. '06. US exports of cotton and cotton products have increased under the provisions of the Andean Trade Promotion and Drug Eradication Act (ATPDEA). However, approval of the FTA will enhance US competitiveness and benefit farmers and manufacturers by removing the tariffs which are currently applied to US products entering Colombia.
Colombia is an important export market for US raw cotton. In '10, the United States exported more than 230,000 bales of raw cotton to Colombia with an estimated value of $100 million. With an 80% market share, the United States is the primary supplier of imported cotton to the Colombian market. With the FTA in place, the United States is well positioned to capture a significant portion of growth in Colombia's demand for cotton fiber.
In addition, the statement pointed out that both Colombia and the United States benefit from significant two-way trade in cotton textile products. In '10, textile exports in predominantly-cotton products from the United States to Colombia totalled $56 million. During that same year, the United States imported $165 million in predominantly-cotton textile products from Colombia. Under the provisions of the ATPDEA, Colombian apparel products, containing US components, enter the United States duty-free. However, the failure to approve the FTA in a timely manner and the uncertainty associated with the need to extend the ATPDEA while the Administration and Congress consider the FTA, has disrupted trade and caused US exporters of cotton yarn and fabric to lose business to Asian sources.
Oil Spill Plan Deadline a Month Away
EPA's Oil Spill Prevention, Control and Countermeasure (SPCC) program requires farms and other regulated facilities to prepare a SPCC Plan to prevent oil spills into US waters. Farms in operation on or before Aug. 16, '02, must maintain or amend their existing plan by Nov. 10, '11. Any farm that started operation after Aug. 16, '02, but before Nov. 10, '11, must prepare and use a plan on or before Nov. 10, '11.
The EPA page on the SPCC rule site, (www.epa.gov/emergencies/content/spcc/index.htm) SPPC for Agriculture, (www.epa.gov/emergencies/content/spcc/spcc_ag.htm) is a valuable resource for producers and ginners. This page is dedicated to helping farms and gins prevent oil spills, as well as control a spill should one occur. The current example template and newly added documents, including one on how to fill out the template, contain background information for the example farm -- making this process much more understandable.
The SPCC program applies to a farm which:
Stores, transfers, uses, or consumes oil or oil products, such as diesel fuel, gasoline, lube oil, hydraulic fluid, adjuvant oil, crop oil, vegetable oil or animal fat; and
Stores more than 1,320 US gallons in above ground containers larger than 55 gallons or more than 42,000 US gallons in completely buried containers; and
Could reasonably be expected to discharge oil to waters of the US or adjoining shorelines, such as interstate waters, and intrastate lakes, rivers and streams.
SPCC Plans include measures such as using suitable containers, identifying contractors to clean up an oil spill, secondary containment for spills, and periodic inspections of pipes and containers.
Many farmers will need to have their plan certified by a Professional Engineer (PE). However, a farmer may be eligible to self-certify his plan if the farm has a total oil storage capacity between 1,320 and 10,000 gallons in above ground containers with no single container larger than 5,000 gallons and the farm has a good spill history.
On Sept. 2, '11, the US Dept. of Labor (DOL) issued a Notice of Proposed Rulemaking (NPRM) on Child Labor Regulations. A NPRM is the first step an agency makes before actually issuing a proposed rule. Commenting on a NPRM is the first opportunity the public has to influence a rule's content. The public has a second opportunity to affect the rule when it is published in a proposed or draft form. Public input at both junctures is crucial.
In the NPRM, the DOL proposed to revise child labor regulations, which set forth the criteria for the employment of minors under 16 years of age in agricultural occupations and under 18 years of age in non-agricultural occupations. The NPRM proposes to implement specific recommendations made by the National Institute for Occupational Safety and Health, increase parity between the agricultural and non-agricultural child labor provisions, and also target other areas for change.
Several agricultural organizations have identified many areas of concern raised by the proposed rule. Concerns range from the implications of multiple family members working for a family farm organized as a LLC, additional restrictions placed on young people working with and around agricultural equipment, to the future of agricultural education opportunities for youths and teens.
The NCC is working with these organizations in requesting an extension in the comment period to provide time for a thorough analysis of the rule's potential impacts. The comment period is now through Nov. 1, '11.
ESA Mega-Lawsuit Stay Continued
On Sept. 30, The Center for Biological Diversity, the Pesticide Action Network North America, EPA and Intervenors [Crop Life of America and American Farm Bureau Federation (on behalf of NCC and others)], filed a joint status report on settlement negotiations (no substantive agreements have been reached). The court now has granted the parties' request to continue the stay for another 30 days and postponed the status conference from Oct. 14 to Nov. 18.(see 9/30/11 Cotton's Week)The next status report is due on Nov. 10. Settlement discussions will continue.
In January, '11, the Center for Biological Diversity and the Pesticide Action Network (Plaintiffs) filed a complaint for declaratory and injunctive relief against EPA, alleging that EPA had failed to consult with the Fish and Wildlife Service and the National Marine Fisheries Service regarding the effects of registered pesticides on endangered species throughout the United States. The plaintiffs asked the court to require EPA to initiate and complete the consultation process, and to compel EPA to restrict pesticide uses that may result in their entering endangered species' occupied or critical habitat until the consultation process is complete (see 4/1/11 Cotton's Week).
There are more than 300 pesticides named in the suit, many of which are commonly used in cotton production (including Orthene, Finish, Karate Z, Bidrin, Cotoran, Imidacloprid, Lannate, Dual II Magnum, Diamond, Gramoxone, Caparol and Dropp — to name a few). The complaint alleges that 216 endangered species are affected. This action could potentially disrupt every type of agriculture – from row crops to specialty crops – nationwide.
RFID Lab Launches Test Program for Apparel
Retailers and apparel manufacturers continue to take the lead as interest in deploying RFID grows throughout the cotton supply chain.
Italy's U. of Parma is leading Europe's "RFID 4 fashion certified" initiative to determine how well a new generation of UHF RFID readers, tags and printer-encoders perform in real world use. In the United States, the U. of Arkansas' RFID Research Center tests RFID hardware performance on apparel items like denim at its Arkansas Radio Compliance Center and provides the results to end users.
CCI and Cotton Incorporated jointly exhibited at the Texworld and Première Vision trade shows in Paris. They were joined by Supima at the Texworld booth. Approximately 62,000 visitors from more than 100 countries attended the two shows, a 10% increase compared to last year. Texworld and Première Vision represent the largest combined exhibition of the world's apparel manufacturers, with 826 exhibitors from 27 countries for Texworld and 757 exhibitors for Première Vision.
During the show,CCI, Cotton Incorporated and Supima conducted meetings with new business contacts representing mills, manufacturers, brands and retailers. A key discussion topic at the "Promoting U.S. Cotton" booths was the evolving changes in the cotton supply chain. The booths, designed as a meeting point for all cotton industry segments, enabled producers, buyers, retailers and new media to find a comprehensive range of information on US cotton. The stands focused on sourcing support, the COTTON USA marketing and licensing program, and related developments in the field of consumer behavior, as well as the latest fashion trends and technical innovations. COTTON USA staff helped buyers and manufacturers looking for cotton garments and cotton yarn suppliers identify new business contacts.
CCI, Cotton Incorporated and Supima also supplied information on sustainable cotton production in the United States, global developments in the cotton and procurement sectors, and other relevant topics. A "Colors and Surface Forecast" presentation by Cotton Incorporated gave visitors the opportunity to learn more about fashion trends for Spring/Summer '13.
Many COTTON USA licensee mills exhibited at both shows and their presence was promoted at the CCI and Cotton Incorporated booths. Eight new companies approached CCI to inquire about becoming COTTON USA licensees.
Sales, Shipments Steady
Net export sales for the week ending Sept. 29 were 90,800 bales (480-lb). This brings total '11-12 sales to approximately 7.2 million bales. Total sales at the same point in the '10-11 marketing year were approximately 9.8 million bales. Total new crop ('12-13) sales are 192,500 bales.
Shipments for the week were 72,300 bales, bringing total exports to date to 881,800 bales, compared with the 1.7 million bales at the comparable point in the '10-11 marketing year.
Effective Oct. 7-13, ’11
Adjusted World Price, SLM 11/16
90.90 cents
*
Fine Count Adjustment ('10 Crop)
1.65 cents
Fine Count Adjustment ('11 Crop)
1.70 cents
Coarse Count Adjustment
0.00 cents
Marketing Loan Gain Value
0.00 cents
Import Quotas Open
1
Limited Global Import Quota (480-lb bales)
204,465
ELS Payment Rate
0.00 cents
*No Adjustment Made Under Step I
Five-Day Average
Current 5 Lowest 3135 CFR Far East
111.46 cents
Forward 5 Lowest 3135 CFR Far East
NA
Coarse Count CFR Far East
NA
Current US CFR Far East
117.50 cents
Forward US CFR Far East
NA
'10-11 Weighted Marketing-Year Average Farm Price
Year-to-Date (Aug.-July)
81.43 cents
**
**August-July average price used in determination of counter-cyclical payment
