NCC Commends Ag Committees' Farm Bill Efforts

Agriculture Committees Report Farm Legislation

'13 DCP/ACRE Signups Encouraged

Supreme Court Rule Favors Biotech Patent

New Herbicide Resistant Crops Release Delayed

Panel Approves McCarthy to Head EPA

Members Launch ESA Working Group

'13 PIE Program Tours Set

Sales Weak, Shipments Strong

The NCC expressed appreciation to leaders and members of the Senate Agriculture, Nutrition & Forestry Committee and House Agriculture Committee for moving farm bills through those panels (see story below).

In one statement, the NCC thanked Chairwoman Stabenow (D-MI) for including many of the cotton industry's priorities in her mark-up document and expressed appreciation to Ranking Member Cochran (R-MS) and Sen. Chambliss (R-GA) for their successful efforts to ensure Sunbelt commodities received equitable treatment. It is a tribute to the Committee's leaders that the legislation was reported favorably by a bipartisan 15-5 vote.

The statement also noted that the bill includes significant policy reforms and cotton provisions that should resolve the longstanding Brazil World Trade Organization case.

In another statement, the NCC congratulated House Agriculture Committee Chairman Lucas (R-OK) and Ranking Member Peterson (D-MN) for their efforts in moving new farm legislation through that Committee. The NCC said it will encourage Cotton Belt Representatives to support their agriculture committee's work and oppose damaging amendments when the legislation is considered by the full House likely in June.

The NCC noted in the statement that it is especially grateful to Chairman Lucas for his leadership in including the Stacked Income Protection Plan (STAX) and transition payments to assist growers and their lenders until STAX can be fully implemented. This provides growers with certainty and provides the basis for a final resolution of the longstanding Brazil WTO case.

The full statements are available from the NCC's home page, www.cotton.org.

The Senate and House Agriculture Committees favorably reported their respective versions of new farm legislation with strong bipartisan support.

The Senate Agriculture, Nutrition & Forestry Committee reported the Agriculture Reform, Food and Jobs Act of 2013 (S. 954) by a 15-5 vote. The legislation, which is projected to reduce spending by more than $23 billion in the next 10 years, will be considered by the Senate beginning on Monday, May 20, and the debate is expected to last several days with final passage possibly coming after Memorial Day.

The House Agriculture Committee reported the Federal Agriculture Reform and Risk Management Act of 2013 (FARRM, H.R. 1947) by a 36-10 vote. FARRM is projected to reduce spending by approximately $40 billion over the next 10 years.

The Senate and House bills include similar provisions critically important to the cotton industry including:STAX, the Marketing Assistance Loan, the Economic Adjustment Assistance Program (EAAP) for cotton spinners, the Extra-Long Staple (ELS) loan and competitiveness provisions, authority for USDA's Risk Management Agency to offer a Supplemental Coverage Option (SCO) insurance policy, conservation programs; and continuation of current level funding for Market Access Program (MAP), and Foreign Market Development (FMD) export promotion programs.

The House Committee, led by Chairman Lucas (R-OK), added transition payments for two years to assist growers while STAX is fully implemented.

During debate in the Senate last year, an amendment was adopted that would require the same conservation compliance requirements for crop insurance as for direct and counter-cyclical payments and the marketing loan. Another amendment was approved to reduce the premium subsidy available on any crop insurance product by 15 percentage points for individuals with an adjusted gross income exceeding $750,000. At the request of Chairwoman Stabenow (D-MI), commodity and conservation groups hammered out a historic compromise whereby conservation compliance requirements (with modifications) will be required for crop insurance premium subsidies and the adjusted gross income test was removed. The House did not and does not have similar provisions.

The Senate bill also includes provisions added during floor debate last year -- a $75,000 limitation on marketing loan gains or loan deficiency payments and a requirement that to be determined as actively-engaged-in-farming, an individual must contribute active personal labor.The House bill does not have either provision.

The House is expected to schedule consideration of FARRM in June.

During the Senate debate, scheduled to begin on May 20, numerous amendments which would severely weaken the legislation, are expected to be offered. These include proposals to: reduce the 80% premium subsidy available for STAX; reinstitute a means test to determine eligibility for premium subsidies on all policies; reduce or terminate funding for the EAAP; and reduce or eliminate funding for the MAP and/or FMD program.

Summaries of the House and Senate agriculture committee bills are on the NCC's website under the Farm Bill Information section at www.cotton.org/issues/index.cfm.

USDA Farm Service Agency (FSA) Administrator Juan M. Garcia encouraged producers to enroll for the '13 Direct and Counter-Cyclical Payment Program (DCP) or the Average Crop Revenue Election Program (ACRE) before the deadlines. The deadline to sign up for ACRE is June 3, '13. The DCP sign up period ends Aug. 2, '13.

The '13 DCP and ACRE program provisions are unchanged from '12, except that all eligible participants in '13 may choose to enroll in either DCP or ACRE for the '13 crop year. This means that eligible producers who were enrolled in DCP in '12 may elect to enroll in ACRE in '13 or may re-enroll in DCP in '13 (and vice versa).

During the original period covered by the '08 farm bill, the DCP option was the overwhelming choice of upland cotton base acres. In '12, 17.8 million acres of upland cotton base were enrolled in the DCP program, while just 85,000 acres opted for ACRE. For '13, producers are encouraged to evaluate their choices for this year's program because, unlike previous years, this sign-up is a one-year commitment.

Producers are reminded that a decision to enroll in ACRE carries a 20% reduction in direct payments and a 30% reduction in the marketing loan rate. Although current market prices are well above the loan rate, a 30% reduction in the loan value could have implications on marketing arrangements. Producers may choose ACRE on a farm-by-farm basis, but the selection for the farm applies to all crop base acres on the farm.

For more information about the DCP and ACRE programs, visit any FSA county office or www.fsa.usda.gov.

The US Supreme Court voted unanimously to side with Monsanto and its claim that an Indiana farmer violated its patent on Roundup Ready soybean seeds.

The case involved Indiana farmer, Vernon Bowman, who bought Roundup Ready soybean seed for his first crop of each growing season in accordance with the terms of the licensing agreement. However, to reduce his costs for a riskier late-season planting, he purchased soybeans intended for consumption from a grain elevator. He planted them, treated the plants with glyphosate, harvested the remaining soybeans that contained that trait, and saved some of these harvested seeds to use in his late-season planting the next season.

Monsanto took Bowman to court for patent violations. In his defense, Bowman argued he was protected by the patent exhaustion doctrine, which essentially states that a patent holder's rights terminate after the first authorized sale of an article that embodies a patent. Monsanto disagreed, saying that under the original Agreement signed by Bowman, the seed could never be sold for purposes of replanting.

The Supreme Court also disagreed. Justice Elena Kagan, writing for the court, said, "Under the patent exhaustion doctrine, Bowman could resell the patented soybeans he purchased from the grain elevator; so too he could consume the beans himself or feed them to his animals. Monsanto, although the patent holder, would have no business interfering in those uses of Roundup Ready beans. But the exhaustion doctrine does not enable Bowman to make additional patented soybeans without Monsanto's permission (either express or implied). And that is precisely what Bowman did. If simple copying were a protected use, a patent would plummet in value after the first sale of the first item containing the invention. The undiluted patent monopoly, it might be said, would extend not for 20 years (as the Patent Act promises), but for only one transaction."

Kagan also wrote that she was rejecting another "seeds-are-special argument" by Bowman. He had claimed that soybeans naturally sprout unless stored in a controlled manner, and so it was the soybeans, rather than Bowman, that made replicas of Monsanto's patented invention.

According to a statement by Monsanto's Executive Vice President David Snively, "The court's ruling today ensures that longstanding principles of patent law apply to breakthrough 21st century technologies that are central to meeting the growing demands of our planet and its people."

The USDA Animal and Plant Health Inspection Service (APHIS) has announced that it is delaying its deregulatory decision in order to prepare two separate environmental impact statements (EIS) for crops genetically engineered (GE) to be resistant to the herbicides 2,4 dichlorophenoxyacetic acid (2,4-D) and Dicamba.

These are the first GE plants developed to be resistant to these specific herbicides, which have been approved by EPA and have been used widely across the country since the '60s to control weeds on crop and non-crop sites. If approved, these GE plants would provide farmers the flexibility for new applications of these herbicides, while also offering farmers additional crop planting options. Dow AgroSciences is petitioning for one corn and two soy varieties resistant to 2,4–D (a resistant cotton variety is expected in the next few years) and Monsanto is petitioning for a Dicamba resistant soy and cotton variety.

Under the National Environmental Policy Act, APHIS is required to evaluate the potential environmental impacts that could result from a deregulation of new GE plants by the Agency. If APHIS finds that its potential regulatory decision may significantly affect the quality of the human environment, the Agency must prepare an EIS before making a decision on the proposed federal action. There have been two recent lawsuits filed by anti-biotech groups in which the court mandated APHIS to complete an EIS.

APHIS' Notices of Intent to prepare these EISs will be officially published in the Federal Register in the near future, and each notice will be accompanied by a 60-day public comment period. In preparing the EISs, APHIS also plans to host public meetings that will be publicized through the Federal Register and the Agency's website.

In a published statement, Cathleen Enright, executive vice president for Food and Agriculture for the Biotechnology Industry organization, expressed the industry's disappointment in this decision saying, "we believe that this action by the Agency sets bad precedent for future consideration of safe and beneficial genetically engineered plant products. Not only does this decision come at a time when the Agency was looking to streamline its approval process and tighten timeframes, but at a time when American farmers need new tools to combat weeds and maximize yields – tools and technologies that are available to farmers in other countries. Unfortunately, the U.S. regulatory system for biotech products remains unnecessarily burdensome and unpredictable, and American farmers are paying the price."

President Obama's nominee to be EPA Administrator was approved, 10-8, along party lines, by the Senate Environment & Public Works Committee (EPW). The vote sends Gina McCarthy's nomination to the Senate floor. However, Sen. Blunt (R-MO) still has a hold on her nomination that will have to be withdrawn before a floor vote can occur.

Republicans on the Committee demonstrated their objections to McCarthy's nomination by boycotting a Committee vote on the nomination. Republicans have expressed frustrations with McCarthy's responses to questions they asked following her confirmation hearing on April 11. After McCarthy's confirmation hearing, EPW Ranking Member Vitter (R-LA) sent about 400 questions to McCarthy, including questions targeting her position on a carbon tax, greenhouse gas emissions and ethanol. In her reply, she provided Senate Republicans with few specific commitments for the Agency's regulatory agenda over the next few years while defending her work as EPA air chief since '09.

House members, representing a broad geographic range, announced the creation of the Endangered Species Act (ESA) Working Group. This Working Group, led by House Natural Resources Committee Chairman Hastings (R-WA) and Western Caucus Co-Chair Lummis (R-WY), will examine the ESA from many angles. Throughout this year, the Working Group will hold a series of events, forums and hearings that will invite discussion and input on ways in which the ESA (last reauthorized in '88) may be working well, how it could be updated ,and how to boost its effectiveness for both people and species.

Last Congress, the Natural Resources Committee held a series of hearings examining the impact of ESA-related litigation and settlement agreements. The Committee found that hundreds of ESA lawsuits have been filed over the past five years and that tens of millions of dollars have been awarded in taxpayer-funded attorneys' fees. Such litigation takes time and resources away from real species recovery efforts. In addition, the Administration will be making listing decisions on nearly 800 species by '16, including 160 this year, as a result of settlement agreements.

The Working Group will continue to examine the impacts of litigation along with a number of other specific topics and questions.

More Working Group information is at http://naturalresources.house.gov/ESAworkinggroup.

The NCC has scheduled dates and locations for the '13 Producer Information Exchange (PIE) Program. Sponsored by Bayer CropScience through a grant to The Cotton Foundation, the program is now in its 25th year of helping its US cotton producer participants maximize on-farm efficiency.

This season, Mid-South producers will see operations in Georgia and Alabama on June 23-28; Southeast producers will travel to Arkansas, Louisiana and Mississippi on July 7-12; Southwest producers will visit California on July 21-25; and Far West producers will tour Texas on Aug. 4-9.

The PIE program provides cotton producers with the opportunity to maximize production efficiency and improve yields and fiber quality by: 1) gaining new perspectives in such fundamental practices as land preparation, planting, fertilization, pest control, irrigation and harvesting; and 2) observing firsthand diverse farming practices and the unique ways in which their innovative peers have adopted new and existing technology.

Cotton Foundation President Barry Evans, a Kress, TX, cotton producer, said the US cotton industry is very appreciative to Bayer CropScience for underwriting the PIE.

The NCC's Member Services staff, in conjunction with local producer interest organizations, conducts the PIE program, including participant selection. Upon completion of this year's tours, PIE will have exposed more than 1,000 US cotton producers to innovative production practices in regions different than their own.

Net export sales for the week ending on May 9 were 85,400 bales (480-lb). This brings total '12-13 sales to approximately 13.2 million bales. Total sales at the same point in the '11-12 marketing year were approximately 12.2 million bales. Total new crop ('13-14) sales are 1.7 million bales.

Shipments for the week were 340,300 bales, bringing total exports to date to 10.6 million bales, compared with the 8.9 million bales at the comparable point in the '11-12 marketing year.