House Agriculture Committee Chairman Lucas (R-OK) and Ranking Member Peterson (D-MN) released a discussion draft of the Federal Agriculture Reform and Risk Management Act (FARRM). The Committee will consider the legislation during a business meeting scheduled for July 11.
In their news release announcement, they said FARRM is a bipartisan bill that saves taxpayers billions, reduces the nation's deficit, and repeals outdated policies while reforming, streamlining, and consolidating others. It is the product of a two-year process that examined every single policy under the jurisdiction of the House Committee on Agriculture. The legislation cuts spending, reduces the size of government, and makes common-sense reforms to agricultural policy.
Chairman Lucas stated, "I'm pleased to release this bipartisan legislation with my friend and colleague Collin Peterson. Our efforts over the past two years have resulted in reform-minded, fiscally responsible policy that is equitable for farmers and ranchers in all regions and will lead to improved program delivery. This bill is an investment in production agriculture and rural America. Those of us in the agriculture community are quick to point out that our producers provide us with the safest, most abundant, most affordable food and fiber supply in the history of the world. We say it because it's true. This legislation is a commitment to maintaining that tradition."
Ranking Member Peterson stated, "Congress needs to complete work on the 2012 Farm Bill before the current bill expires, otherwise we jeopardize one of the economic bright spots of our nation's fragile economy. The legislation released today brings us yet another step closer to achieving this goal and I am pleased to have worked with the Chairman in this effort. We have a commodity title in place that will work for all parts of the country as well as continued support for the sugar program and my Dairy Security Act. I have long believed every government program must contribute toward deficit reduction and while I would have found other ways to accomplish the bill's nutrition savings, the bottom line is that, working together, we need to keep this farm bill moving forward. There will be challenges ahead, but we will pass the bill out of Committee next week and, if the House leadership gets this right and brings the bill to the floor, we will ultimately finish the bill in September."
Some of the FARRM highlights include:
saves more than $35 billion in mandatory funding,
repeals or consolidates more than 100 programs,
eliminates direct payments, streamlines and reforms commodity policy that saves taxpayers more than $14 billion,
improves program integrity and accountability in the Supplemental Nutrition Assistance program (SNAP) that saves taxpayers more than $16 billion,
consolidates 23 conservation programs into 13, which improves program delivery to producers and saves taxpayers more than $6 billion, and
provides regulatory relief, including H.R. 872, to mitigate the burdens farmers, ranchers, and rural communities face.
The NCC issued a statement extending its appreciation to House Agriculture Committee Chairman Lucas (R-OK), along with Ranking Member Peterson (D-MN), for their introduction of farm legislation that includes cotton industry-supported provisions.
NCC Chairman Chuck Coley said, “We encourage members of the Agriculture Committee to pass the bill as introduced in the discussion draft of the Federal Agriculture Reform and Risk Management Act. Passage of the proposed legislation would be an important step to providing some certainty and predictability for farm programs, thus allowing the long-term investments necessary for maintaining our productivity and economic viability.”
"By providing cotton producers a choice of the Stacked Income Protection Plan (STAX) or the new Supplemental Coverage Option (SCO) enhancement to crop insurance along with a modified marketing loan,” Coley stated, “Chairman Lucas has offered programs that provide a safety net for upland cotton, while also offering a clear path to resolution of the Brazil case.”
Coley emphasized that, “Given the diversity of U.S. agriculture, we are pleased that the range of programs provides choices that offer a balanced safety net across commodities and regions, yet still allowing market-driven planting decisions.” While acknowledging the daunting challenge of maintaining a reasonable safety net given current budget constraints, Coley urged no further commodity cuts be adopted beyond those included in the proposed legislation.
He said the improvements to crop insurance, including making enterprise units with irrigated and non-irrigated provisions permanent and establishing the new SCO available to all growers, will provide important risk management options for cotton growers.
Coley expressed appreciation for the reasonable approach taken by the Chairman and Ranking Member regarding payment limits and income means tests.
“While we continue to oppose limitations on benefits and income eligibility tests, regrettably such restrictions are an inevitable feature of farm legislation,” Coley said. “We are encouraged that the Committee leaders are extending current policy of not placing limits on marketing loan benefits or any restrictions on the availability of insurance products.”
Coley said extension of the extra-long staple cotton loan and competitiveness provisions are important to Western cotton growers. He also expressed thanks to the Agriculture Committee’s leadership for extending the Economic Adjustment Assistance Program (EAAP) for US cotton manufacturers. Authorized in the ’08 farm bill, the EAAP is boosting the US textile manufacturing sector and adding jobs to the US economy.
Other positive features are the 1) continuation/streamlining of conservation programs and 2) ongoing support of the Market Access Program and Foreign Market Development Program -- two important trade titles that undergird U.S. cotton exports.
“Passage of this legislation by the Agriculture Committee will be an important step in the farm bill process,” Coley stated. “We look forward to working with the Committee leadership as the bill moves forward.”
Within the House Agriculture Committee’s 550-page ’12 farm bill discussion draft is a Horticulture Title that includes provisions addressing several regulatory issues important to production agriculture.
The bill’s Horticulture Title includes H.R. 872, the Reducing Regulatory Burdens Act, which would eliminate the permitting requirement under the Clean Water Act for certain pesticide applications. This requirement is the result of a court ruling in ’09. The NCC believes this is a costly and duplicative regulatory burden that provides no additional environmental protection. H.R. 872 passed the House with a bipartisan vote of 292–130 on March 31, ’11.
The bill also includes a provision that would prevent EPA from initiating a modification or cancellation of a pesticide registration based on the Biological Opinions (BiOps) of the National Marine Fisheries Service or the US Fish and Wildlife Service (“the Services”) until an unbiased, external scientific, peer review of these BiOps can be conducted and the scientific questions challenging the validity of these consultations can be resolved. The Endangered Species Act (ESA) requires all federal agencies to consult with the Services on all federal actions; pesticide registration is considered a federal action. Because of its extensive risk assessments for registrations which include effects on endangered species, EPA, in the past, has believed that its ESA obligations were satisfied. Anti-pesticide organizations have sued EPA in several cases and the courts have ordered these consultations to proceed under an expedited schedule. The results of these consultations to date are BiOps, which the EPA has testified are scientifically suspect.
The bill also includes the third reauthorization of the Pesticide Registration Improvement Act, a multi-year effort by pesticide manufacturers, non-governmental organizations and the EPA to provide additional resources through user fees for registration activities in return for a more predictable registration process.
Finally, the bill includes a provision reiterating that the sole and exclusive authority of the Secretary of Agriculture to regulate biotechnology products under the Plant Protection Act is to be limited to the evaluation of plant pest risk. That provision also outlines the environmental reviews to satisfy other federal statutes. Under the Plant Protection Act, the Secretary is authorized to regulate the introduction and cultivation of biotechnology products if the product poses a plant pest risk. When a petition for non-regulated status is received, a comprehensive plant pest risk assessment is conducted. Once it is determined that the product poses no plant pest risk, a final decision is made to deregulate the product.
Recent court decisions involving Roundup Ready alfalfa and sugar beets have required USDA to complete exhaustive environmental impact statements even after these crops had been deregulated and in commercial production. These challenges have strained USDA resources, imposed millions of dollars in unnecessary costs and endangered the United States’ leadership role in biotechnology. The court orders also have significantly slowed the regulatory process; recent petitions for deregulation have taken several years although USDA regulations set a maximum limit of 180 days.
Several grain trade members have sent a letter of opposition to this latter provision to Chairman Lucas (R-OK) and Ranking Member Peterson (D-MN) on the grounds that expediting the deregulation process would increase the likelihood of disruption in the domestic and export grain flow through comingling of functional traits such as amylase corn or traits not yet approved in import countries.
NCC Delegation Covers WTO Cotton Day
NCC Farm Policy Task Force Chairman Woody Anderson and Cotton Incorporated Chairman Jay Hardwick, both former NCC chairmen, traveled with NCC CEO Mark Lange to Geneva, Switzerland, for meetings with trade ambassadors from China, India, Brazil and West Africa. The group also met with US Ambassador Michael Punke, WTO Deputy Director Harsha Singh and WTO Deputy Chief of Staff Doaa Motaal. The trip also was timed to cover the WTO Cotton Development assessment conducted on June 29.
An excellent schedule of meetings was organized by Gregg Young, US Agricultural Minister-Counselor. The meetings clearly highlighted the increasingly difficult circumstances faced by West African cotton producers with declining yields and rising costs. The NCC has supported the continuation of the USAID outreach program for West African growers and has sought continued funding for the West African Cotton Improvement Program (WACIP). The delegation met with the trade ministers of Burkina Faso and Benin. The Ministers noted that the presence and concern of US cotton leaders for the WTO Cotton Day brought needed attention to the plight of West African growers.
In other meetings, the NCC delegation had an opportunity to point out that China’s choice of policy structure to support prices to their growers is pushing up Chinese mill prices and encouraging the use of polyester in that country. The delegation also reported that cheap yarn prices coming out of India, due to the several Indian raw cotton export bans, are disrupting sales of raw cotton in world markets. The point was continually emphasized that under the current agricultural draft text of the Doha Round, most developing countries already have met their cotton market access commitments if they exercise proposed rights in the special products category.
Delegation Completes Successful China Visit
A NCC leadership team visited China on June 9-19 to gather information from Chinese cotton industry officials and update them on key aspects of the US cotton industry.
The US cotton industry delegation was the fifth to visit China since the establishment of the US-China Cotton Leadership Exchange Program by the NCC and the China Cotton Assoc. (CCA). This visit, coordinated by Cotton Council International (CCI), the NCC's export promotions arm, was part of the ongoing exchange between the two countries as was established by a Memorandum of Understanding signed in '06 that promised cooperation between the countries' cotton industries.
The NCC delegation was led by American Cotton Producers (ACP) Chairman Clyde Sharp, a Roll, AZ, producer. Other members included NCC Secretary-Treasurer Sledge Taylor, a Como, MS, producer and ginner; NCC Director Allen McLaurin, a Laurel Hill, NC, producer; ACP Vice Chairman Barry Evans, a Kress, TX, producer; ACP Oklahoma Chairman Danny Robbins, an Altus producer; Farmer's Compress CEO Ron Harkey, a Lubbock, TX, warehouseman; CCI Director Kent Fountain, a Surrency, GA, ginner and warehouseman; CCI Director Hank Reichle, a coop marketer with Staplcotn, Greenwood, MS; and NCC Delegate Jeff Johnson, a private merchant with Allenberg Cotton, Cordova, TN.
While in Beijing, delegation members heard reports from the CCA, the China National Textile and Apparel Council, and Chinatex. In Henan Province, they met with the Henan Provincial Cotton Assoc. and visited the Zhengzhou Commodity Exchange. They also toured the Zhengzhou #1 textile mill along with the Cotton Research Institute. In Shanghai, they toured the CCI and Cotton Incorporated offices, met with the Entry-Exit Inspection and Quarantine Bureau and visited the Transwin Logistics Company, a bonded port warehouse.
Sharp said that one of the visit's primary purposes was to convey to key Chinese cotton officials the US cotton industry's continued commitment to deliver high quality cotton in a timely manner.
"China is the United States' largest customer of raw cotton and we are committed to meeting their needs in terms of both quality and timely shipments," Sharp stated. "It was apparent that the Chinese greatly appreciated our visiting them in their country and they expressed their desire for doing business with the U.S. cotton industry. This visit gave us the necessary platform to discuss issues surrounding U.S. raw cotton quality and reinforced our continued commitment to ongoing dialogue between our two countries."
Sales Rebound, Shipments Steady
Net export sales for the week ending June 28 were 93,400 bales (480-lb). This brings total '11-12 sales to approximately 13.0 million bales. Total sales at the same point in the '10-11 marketing year were approximately 15.2 million bales. Total new crop ('12-13) sales are 2.5 million bales.
Shipments for the week were 228,700 bales, bringing total exports to date to 10.7 million bales, compared with the 13.7 million bales at the comparable point in the '10-11 marketing year. With approximately one month remaining in the marketing year, weekly shipments must average roughly 224,000 bales to reach the USDA projection of 11.6 million bales.
Effective July 6-12, ’12
Adjusted World Price, SLM 11/16
62.84 cents
*
Fine Count Adjustment ('11 Crop)
0.32 cents
Fine Count Adjustment ('12 Crop)
0.52 cents
Coarse Count Adjustment
0.00 cents
Marketing Loan Gain Value
0.00 cents
Import Quotas Open
13
Special Import Quota (480-lb bales)
866,277
ELS Payment Rate
0.00 cents
*No Adjustment Made Under Step I
Five-Day Average
Current 5 Lowest 3135 CFR Far East
82.84 cents
Forward 5 Lowest 3135 CFR Far East
82.59 cents
Coarse Count CFR Far East
NA
Current US CFR Far East
86.55 cents
Forward US CFR Far East
81.40 cents
'11-12 Weighted Marketing-Year Average Farm Price
Year-to-Date (Aug.-May)
90.61 cents
**
**Aug.-July average price used in determination of counter-cyclical payment
