Responding to a study commissioned by USDA's Risk Management Agency (RMA) on prevented planting coverage levels, the NCC was joined by producer and ginner organizations in submitting comments conveying opposition to reductions to prevented planting coverage levels for upland and extra-long staple cotton.
RMA was seeking comments on lowering prevented planting coverage levels from 50% to 30%.
The comments challenged the methodology of analysis as incomplete and not representative of current economic conditions. Specifically, the organizations noted that the analysis failed to accurately account for realistic input costs and based its recommendations on significantly higher market prices.
The comments, on the NCC's website at www.cotton.org/news/cweek/2015/preoppose.cfm, stated that based on the cotton production segment's heavy reliance on crop insurance in current difficult economic conditions, no reduction in crop insurance coverage levels, including prevented planting protection, was justified. These comments were based on crop insurance issue discussions during a recent NCC Crop Insurance Implementation Working Group meeting.
ACP Meeting Focuses on Key Issues
The American Cotton Producers, chaired by Bowen Flowers, Clarksdale, MS, held its spring meeting recently in Dallas to discuss several key issues facing the producer sector.
NCC Chairman Sledge Taylor provided the opening address and briefly reviewed NCC efforts to address the cotton industry's priorities.
Dr. Jody Campiche, the NCC's director of Economic Services, provided a cotton economic overview. That was followed by a detailed Washington report by Reece Langley, NCC's vice president, Washington Operations, which included an update on the makeup of the 114th Congress and agriculture committees, budget and appropriations legislation, trade and regulatory issues, marketing loan gain payment limits, and proposed changes in actively engaged requirements for program eligibility.
Darryl Earnest, deputy administrator of USDA Agricultural Marketing Service's Cotton Division, presented a detailed report on its cotton classing operations.
NCC President/CEO Gary Adams reported on the topics discussed at a NCC Crop Insurance Implementation Working Group session that convened prior to the ACP meeting. His report covered recommendations for several changes in the implementation of the Stacked Income Protection Plan and other crop insurance provisions, including opposition to proposed prevented planting coverage levels (see previous article). He stated that these recommendations would be forwarded to USDA's Risk Management Agency.
The ACP discussed in detail possible cotton policy options to improve cotton's profitability. Based on the discussion, it was recommended that Chairman Flowers re-appoint the ACP Farm Policy Task force to evaluate these ideas and develop recommendations to the ACP.
Robbie Minnich, NCC senior government relations manager, reported on the main conservation provisions contained in the '14 farm law. The annual Committee for the Advancement of Cotton auction conducted during the group dinner successfully raised more than $32,000 for the NCC's political action committee.
House Aims to Block "Waters of the US" Rule
The House launched a two-pronged approach to block EPA's and the Army Corps of Engineers' (Corps) proposed rule that defines "Waters of the United States" under the Clean Water Act, which was sent last week to the White House Office of Management and Budget for a 90-day review before being finalized.
The House Transportation and Infrastructure Committee passed the "Regulatory Integrity Protection Act of 2015" (H.R. 1732). This bill, if enacted, would require EPA and the Corps to withdraw the "WOTUS" rule within 30 days.
The bill also charges the agencies with developing a new rule that must take into consideration all comments that were submitted on the original proposal and requires them to collaborate with state and local governments to find consensus.
The bill is waiting to be moved to the House floor for a vote. In an effort to encourage Congressional Members to support this bill, the Water Advocacy Coalition, of which the NCC is a member, sent a letter to leadership of the House Transportation and Infrastructure Committee urging Members to vote for the bill's passage. The letter can viewed on the NCC's website at www.cotton.org/issues/2015/upload/15wotuselet.pdf.
The second approach came from the House Appropriations Committee's Energy and Water Appropriations Subcommittee. The Subcommittee's FY16 spending bill contains a provision that would prohibit the Administration from enforcing the proposed "WOTUS" rule starting on Oct. 1 by preventing the Corps from using funds to implement the new rule. In addition, the bill denies the Administration's request for a $5 million increase in funding for the Corps' regulatory program, which likely would have been used to help implement the rule.
'15 Cotton Loan Rate Differentials Announced
USDA's Farm Service Agency (FSA) has announced the '15 crop loan rate differentials for upland and extra-long staple (ELS) cotton. The tables of loan rate differentials are available on the FSA Price Support Division website at http://go.usa.gov/3W8tV. The '15 loan schedule also is on the NCC website's at www.cotton.org/econ/govprograms/cccloan/index.cfm.
The differentials, also referred to as premiums and discounts, have been calculated based upon market valuations of various cotton quality factors for the prior three years. This calculation procedure is identical to that used in past years; however, the differentials for '15 reflect changes to the upland cotton staple lengths for which distinct color and leaf differentials are provided, and to the ranges and base-quality ranges for upland cotton strength and length uniformity.
The Commodity Credit Corp. (CCC) adjusts cotton loan rates by these differentials so that cotton loan values reflect the differences in market prices for color, staple length, leaf, extraneous matter, micronaire, length uniformity and strength.
The '15-crop differential schedules are applied to loan rates of 52.00 cents per pound for the base grade of upland cotton and 79.77 cents per pound for ELS cotton. The loan rate provided to an individual cotton bale is based on the quality of each individual bale as determined by Agricultural Marketing Service classing measurements.
Conservation Compliance Form Required
USDA reminds farmers that the '14 farm law requires producers to file a Highly Erodible Land Conservation and Wetland Conservation Certification form (AD-1026) with their local USDA service center by June 1, '15, in order to become or remain eligible for crop insurance premium support.
Most farmers already have a certification form on file because it's required for participation in most USDA programs such as marketing assistance loans, farm storage facility loans and disaster assistance. However, farmers such as those growing specialty crops who receive federal crop insurance premium support but may not participate in other USDA programs, also must now file a certification form to maintain their crop insurance premium support.
Producers should visit their local USDA service center and talk with their crop insurance agent before the June 1, '15, deadline to ask questions, get additional information or learn more about conservation compliance procedures. Producers who file their form by the deadline will be eligible for federal crop insurance premium support during the '16 reinsurance year, which begins on July, 1, '15. USDA will publish a rule outlining the linkage of conservation compliance with federal crop insurance premium support. A copy of the rule is at http://go.usa.gov/3Wy5J.
The Highly Erodible Land Conservation and Wetland Conservation Certification form is available at local USDA service centers or online at www.fsa.usda.gov/AD1026form. When a producer completes this form, USDA Farm Service Agency and Natural Resources Conservation Service staff will outline any additional actions that may be required for compliance with highly erodible land and wetland provisions.
Bipartisan TPA Bill Introduced
Senate Finance Committee Chairman Hatch (R-UT), ranking member Wyden (D-OR) and House Ways and Means Committee Chairman Ryan (R-WI) introduced the Bipartisan Congressional Trade Priorities and Accountability Act of 2015. The bill would provide trade promotion authority (TPA) or "fast track" provisions for the Administration to negotiate and finalize trade agreements to be presented to Congress for an up or down vote without amendment. TPA would be authorized for three years with an option for a three-year extension to allow the next Administration to have TPA authority. Previous TPA legislation expired in '07, and providing TPA to the Administration is seen as necessary to concluding the Trans Pacific Partnership (TPP) negotiations later this year.
The TPA bill specifically outlines Congressionally-mandated negotiating objectives for free trade agreements and establishes robust consultation and access to information requirements before, during, and after negotiations to ensure a more open and transparent process for Congressional Members and the public. The bill also preserves Congress' authority for final approval of any trade agreements and allows Congress to remove TPA procedures for any trade agreement if the Administration fails to meet the TPA negotiating requirements set out by Congress. Specific to agriculture, there are provisions for enforceable rules on sanitary and phytosanitary measures. The bill also includes negotiating objectives that address currency manipulation and ensure strong dispute settlement mechanisms in any new trade agreements. Of note, the bill would allow any Congressional Member to be designated as a Congressional advisor and attend trade negotiating rounds, and establishes House and Senate advisory groups on negotiations to oversee ongoing trade talks.
The Senate Finance Committee plans to hold a bill markup on April 23 with consideration by the full Senate expected later in April or early May. The House is expected to begin its consideration of TPA once the Senate has approved the bill.
A Trade Adjustment Assistance (TAA) bill also has been introduced and will move in tandem with TPA. TAA is intended to provide assistance to workers displaced by impacts of trade agreements. In addition, a package of other trade related bills is expected to move in tandem with TPA, including a 10-year extension of the African Growth and Opportunity Act, renewal of the Generalized System of Preferences and a 10-year extension of programs benefiting Haiti by allowing duty free benefits on apparel exports from Haiti to the United States.
By a largely party line vote of 240-179, the House passed the Death Tax Repeal Act of 2015 (H.R. 1105) that was sponsored by Reps. Brady (R-TX) and Bishop (D-GA). The NCC had joined other organizations on a letter in support of the legislation on March 24. (see March 27 Cotton's Week)
The White House has threatened to veto the measure and the companion bill in the Senate currently doesn't appear to have the votes necessary for passage.
The NCC joined other agricultural organizations on a letter to the Senate Finance Committee leadership to comment on several tax provisions important to the agricultural industry. Some of these provisions included: the importance of continuing cash accounting for farms and ranches; the restoration of Section 179 small business expensing to $500,000 indexed for inflation as it previously set for '14; recommending that there be no limitation on the amount of property values that can be reduced to reflect use valuation for estate tax purposes under Section 2032A; and discouraging any increase to the capital gains rates. The letter is on the NCC's website at www.cotton.org/issues/2015/upload/15taxreformlet.pdf.
NCC Comments on Rootworm Resistance Proposal
The NCC filed comments on EPA's proposal to change corn rootworm (CRW) resistance management provisions. The comments stated that the agency has proposed a mandate for resistance management without recognizing its detriment to the farming industry (see March 20 Cotton's Week).
In its notice for comments, EPA proposes that registrants must supplement insect resistance management refuges with specific integrated pest management (IPM) approaches that include:
crop rotation (preferably rotating to soybeans) with no more than two consecutive years of Bt corn, which can be accomplished either on a farm-wide basis or field-by-field within a farm;
use of multiple Bt modes of action for CRW control, preferably in pyramided varieties; and
use of non-Bt (conventional) corn with insecticide use for CRW management.
In its comments to Robert McNally in EPA's Office of Pesticide Programs, the NCC said it believes this represents an unusual precedent without fully evaluating implications and which can impede producers' ability to determine which crop mix best fits their farming operation.
The letter, on the NCC website at www.cotton.org/issues/2015/cornroot.cfm, urges EPA "to continue current resistance management provisions and consider alternative cooperative practices that accomplish the same CRW resistance management goal through voluntary programs." The letter stated that the NCC "continues to support voluntary educational programs that convey resistance management strategies and techniques supported by current science that encompasses the latest production practices. Unfortunately, the NCC believes the proposal presented by EPA for CRW resistance management demonstrates a lack of understanding of production agriculture and mandates the use of certain production practices without justification."
EPA also was urged to 1) respect producer operational and business decisions, including the necessity for producers to choose crop mixes based on current markets and other economic factors; and 2) recognize that best management practices identified by scientists are recommendations in "ideal" situations, but must have flexibility at the farm level to address day-to-day operational and business obstacles.
Shipping Order Update Education Urged
NCC President/CEO Gary Adams sent an educational bulletin to the leadership of certified interest organizations representing cotton shippers, marketing cooperatives, warehousemen and ginners regarding the Batch 23 feature. These organizations were urged to distribute the bulletin to their membership.
At a time when cotton's market share is threatened by synthetic fabrics, Cotton Incorporated has responded with a new television advertising campaign. Featuring a Cotton. It's Your Favorite for a ReasonTMtagline, the campaign's first commercial will launch on April 20 with 30-second and 15-second spots. Additional commercials will be rolled out over the course of the year.
Cotton Board Chairman David Grant, a North Carolina producer, said, "I'm very proud of this new campaign, and it is just the beginning of a concentrated effort by the Cotton Research and Promotion Program to regain market share for cotton. The campaign does a nice job reminding consumers about the emotional connection that keeps them coming back to cotton."
Ric Hendee, Cotton Incorporated's senior vice president, Consumer Marketing, noted that, "Cotton apparel has always been popular with most everyone but we may not be aware that the things we love are made with cotton. This new campaign will focus on many of our favorite clothing items and point out the reasons why we love them and keep on wearing them. The campaign uses real stories from real people."
