ACP Focuses on Farm Policy

GAO Proposes Insurance Subsidy Cap

Prompt Action on Estate Tax Urged

USDA Puts US Exports at 11.4 Million Bales in '11-12

NCC Participates on Pollinator Protection Panel

EPA Denies Cancellation of 2,4-D

Court Strikes Down OSHA Citations

Sales Stay Weak, Shipments Steady

The American Cotton Producers (ACP), chaired by Clyde Sharp of Arizona, held its initial session of '12 in Dallas, TX, with a thorough review of the status of the '12 farm bill debate, which included special emphasis on cotton policy. Immediately preceding the meeting, the ACP Farm Policy Task Force, chaired by Shawn Holladay of Texas, discussed cotton farm policy issues and developed recommendations for the ACP's consideration.

Following a thorough review of the farm bill debate status that focused on the Senate Agriculture, Nutrition & Forestry Committee deliberations, the ACP Farm Policy Task Force recommended continuation of strong support for 1) the Stacked Income Protection Plan (STAX) and 2) proposed changes in the cotton marketing loan program aimed at meeting budget reduction obligations and providing the best avenue to settle the WTO Brazil case. Following additional discussion during the meeting of the full ACP, producer leaders reinforced their previous support of these proposals. As part of the discussion within the Task Force and ACP, NCC staff reviewed various program delivery options under consideration by the Senate Agriculture, Nutrition & Forestry Committee, which is expected to mark up new farm legislation as soon as the week of April 23.

The ACP also heard a detailed report on USDA Agriculture Marketing Service's (AMS) cotton classing operations by Cotton Program Deputy Administrator Darryl Earnest and AMS' Robbie Seals. Earnest reported that AMS has recommended no change in the classing fees for the '12 crop and that this recommendation is now open for public comment. He reminded ACP members of the upcoming Universal Cotton Standards Conference to be held in '13. Seals reviewed details of a new billing system and the industry's recent experience with module averaging.

The group also heard an economic update from Gary Adams, NCC's vice president, Economics & Policy Analysis, and a Washington report from John Maguire, NCC's senior vice president, Washington Operations.

In NCC Chairman Chuck Coley's address to the group, he reviewed his recent testimony before the Senate Agriculture, Nutrition & Forestry Committee and challenged producers to continue their diligent efforts to evaluate effective cotton farm policy. He complimented ACP Chairman Sharp and ACP Farm Policy Task Force Chairman Holladay for their leadership.

As part of the meeting, ACP members also conducted a highly successful auction for the benefit of the Committee for the Advancement of Cotton.

The Government Accountability Office (GAO) issued a report outlining possible savings of up to $1 billion a year on crop insurance if Congress capped the subsidies for the premiums paid by farmers and USDA took more aggressive steps to monitor for fraud and abuse in the program. The GAO proposed capping crop insurance premium subsidies at $40,000 per individual producer.

House Agriculture Committee Chairman Lucas (R-OK) issued a statement that said, "Over and over again we have heard from our farmers about the importance of crop insurance because it forms the backbone of the safety net. I do not support the repeated attacks on an actuarial sound risk management program that serves as a good example of a public-private partnership where producers pay for coverage. This proposal would discourage participation in the crop insurance program and as a result endanger its integrity."

Although the President's budget proposed reducing premium subsidies in cases where the federal government pays more than half of a policy's cost, Michael Scuse, acting undersecretary for the Farm and Food Agricultural Services, cautioned against congressional action to further limit or reduce premium payments without additional studies.

"In recommending a $40,000 limit in premium subsidy per individual, the report does not fully account for all potentially negative impacts and costs resulting from such a change," Scuse said. In addition, he said the report fails to show "whether some commodities or regions of the country may be disproportionately impacted by a limit on subsidy."

The program also has drawn the attention of reformers, fiscal hawks and the White House who are searching for ways to pare federal spending. Many of them have called for producers to pay a greater share of their premiums. 

The GAO study was conducted in response to a request by Sen. Coburn (R-OK).

The NCC joined a large number of commodity, general farm, livestock and agribusiness organizations in a letter to the House and Senate urging prompt action to ensure that the existing estate tax provisions are not allowed to expire on Dec. 31. The letters are on the NCC's website at www.cotton.org/issues/2012/upload/12estatetaxcomb.pdf.

If current law expires, then beginning on Jan. 1, '13 the exemption will drop from $5 million per person to $1 million and the top rate will revert to 55% from the current level of 35%. The letter conveys support for establishing a permanent exemption of $5 million per person and retaining the top rate of 35%.

The groups also stressed the importance of indexing the exemption for inflation, providing for spousal transfers, and preserving the stepped-up basis.

In its April report, USDA raised projected exports by 400,000 bales to 11.40 million bales for the '11-12 marketing year. US mill use was left unchanged at 3.40 million bales. This generates a total '11-12 offtake of 14.80 million bales. The '11-12 US crop is estimated at 15.56 million bales, down approximately 110,000 bales based on USDA's Cotton Ginnings report, released March 23. Ending stocks for '11-12 are projected to be 3.40 million bales for an ending stocks-to-use ratio of 23.0%.

USDA's April report lowered '11-12 world production estimates by 500,000 bales from the previous month, as reductions for India, the United States and others were partially offset by increases in Pakistan and Sudan. World mill use was lowered by 980,000 bales due to the reduction for China, whose mill use is down 1.00 million bales from March.

World cotton ending stocks were raised this month to 66.07 million bales, resulting in a stocks-to-use ratio of 61.3%. This is due, in part, to historical adjustments for India that increase beginning stocks by 3.25 million bales and ending stocks by 1.60 million bales. Also, the Chinese government's accumulation of cotton in the national reserve is constraining free supplies, thereby boosting its imports while limiting consumption -- resulting in an increase in China's stocks to 23.08 million bales, up 3.00 million bales from March.

Dr. Don Parker, NCC's manager, Integrated Pest Management, told attendees at a CropLife America & RISE (Responsible Industry for a Sound Environment) conference in Washington, DC, that the NCC supports collection of agronomic and other data to better identify the interaction between bees and cotton and identify best management (crop and bee) solutions. Parker noted research literature indicated that spines on cotton pollen made it difficult for bees to collect and that cotton sugars are not the preferred sugars of honey bees. In addition, literature shows honey bees feed on extra-floral nectaries, but does not relate the feeding back to the honey bee hive. Many data gaps limit the development of risk assessment with scientific relevance to field interactions.

The protection of pollinators has become a key priority for US beekeepers and the effects of row crop production on bee colony health have drawn the attention of EPA and other organizations.

Parker, who was a panelist on the conference's "Pollinator Protection at Work: Case Studies from Industry, Growers & Beekeepers," told attendees that the NCC supports science-based assessments. He said if the goal is hive protection and if there is concern that something in the cotton field is affecting bee colony health, "then we must be able to scientifically relate the field back to the hive. If we refine our concern, then we have pollen and nectar in the field, foragers as the link between the field and the hive, and impact on a hive caused by material brought back by a forager."

One of the other panelists was Gowan Company, LLC's Cindy Baker Smith who presented the plant protection product registrants' viewpoint. She noted that crop protection products are regulated under the Federal Insecticide, Fungicide & Rodenticide Act – a risk versus benefit statute – thus scientifically valid risks/benefits must be addressed. The other panelist, Arizona State Beekeeper's Assoc.'s Rick Smith, described case study highlights of the Yuma (AZ) producer/beekeeper cooperative effort,which included spraying at night time and selection of pesticide products with low residual activity.

Parker said that although the Yuma effort was a success, the cotton pest complex is not equal in the nation's various cotton production regions and such an effort may be more difficult to achieve on a national scale. He said the cooperation between Yuma's producers and beekeepers sets an example of how localized cooperation can identify solutions that meet the needs of all.

CropLife America is a crop protection association representing companies that develop, manufacture, formulate and distribute crop protection chemicals and plant science solutions for agriculture and pest management in the United States. RISE is the national trade association representing manufacturers, formulators, distributors and other industry leaders involved with specialty pesticide and fertilizer products.

On a conference call with NCC and other agricultural groups, EPA announced that it was denying a '08 petition from the Natural Resources Defense Council (NRDC) requesting the revocation of all tolerances and the cancellation of all registrations for 2,4-D – a phenoxy herbicide and plant growth regulator that has been used in the United States since the '40s. It is the third most widely used herbicide behind glyphosate and atrazine and is currently found in about 600 products registered for agricultural, residential, industrial and aquatic uses.

In '05, as part of the Food Quality Protection Act requirements, EPA completed a review of the registration and the safety of the tolerances for 2,4-D. EPA concluded that all products containing 2,4-D are eligible for re-registration with certain changes to the labels and additional data.

During the recent review of the petition from NRDC, EPA evaluated all the data cited by NRDC and new studies submitted to EPA in response to the re-registration decision. Included in the new studies was a state-of-the-science extended one-generation reproduction study, which provides an in-depth examination of 2,4-D's potential for endocrine disruptor, neurotoxic and immunotoxic effects. EPA's review confirmed their previous finding that the 2,4-D tolerances are safe.

EPA also considered NRDC's request that the Agency cancel all 2,4-D product registrations. Based on studies addressing endocrine effects on wildlife species and the adequacy of personal protective equipment for workers, the Agency concluded that current ecological and worker risk assessments for 2,4-D are sound and there is no basis to change the registrations.

Dow AgroSciences currently is developing transgenic cotton that will be 2,4-D tolerant. This cotton will be stacked with other traits and is planned to be commercially available in '15-16.

The Occupational Safety & Health Administration (OSHA) has had a longstanding practice of issuing recordkeeping citations that go back as far as five years – the period of time during which the Form 300 injury logs must be retained by businesses. This position had been upheld by the Review Commission (OSHRC) in '93 and, more recently, in '11.

In Nov. '06, OSHA issued citations to Volks Constructor for failures to record some workplace injuries between Jan. '02 and April '06. The US Court of Appeals for the DC Circuit unanimously ruled to strike down these citations. The court concluded that OSHA's and OSHRC's position had subverted the statute of limitations, contradicted its "clear" wording, was inconsistent with Circuit precedent and leads to absurdities.

"If the record retention regulation in this case instead required, say, a thirty-year retention period, the Secretary's theory would allow her to cite Volks for the original failure to record an injury thirty years after it happened," the court stated. "There is truly no end to such madness."

Net export sales for the week ending April 5 were -51,500 bales (480-lb). This brings total '11-12 sales to approximately 11.8 million bales. Total sales at the same point in the '10-11 marketing year were approximately 15.8 million bales. Total new crop ('12-13) sales are 958,100 bales.

Shipments for the week were 218,700 bales, bringing total exports to date to 7.4 million bales, compared with the 10.4 million bales at the comparable point in the '10-11 marketing year.