Cotton Industry Continues to Urge Prompt Action on New Farm Legislation; Expresses Concerns about Sen. Lugar’s Farm Bill Proposal
The National Cotton Council (NCC) has joined with other agriculture organizations in urging the Senate Agriculture Committee to expedite development of a new farm bill and in expressing concern with provisions of the proposal authored by Senator Richard Lugar (R-IN) that would phase out and ultimately eliminate the marketing loan in five years.
Chairman Tom Harkin (D-IA) had scheduled the committee to begin work on the bill on Thursday, Oct. 18, but the session was cancelled when House and Senate office buildings were closed for an anthrax inspection. Although supportive of committee action, the NCC and other agriculture organizations urged the chairman to present a comprehensive package which allocates funds among titles in a manner similar to the House-passed bill before proceeding with title-by-title consideration.
"We continue to emphasize how important it is to have a new farm bill in place for next year," said NCC Chairman James E. Echols of Memphis. "The House passed a bill that provides a fair and equitable allocation of $73.5 billion in additional spending, as authorized in the 2002 budget resolution and maintained in a hard-fought battle to reject amendments to reduce commodity title funding during the House floor debate. We urge the Senate Agriculture Committee to consider both the funding level and the structure of the House bill as the committee begins its work."
The NCC expressed concern with the five-year farm bill concept paper unveiled Oct. 17 by Sen. Lugar (R-IN), saying "we believe it falls short of meeting the needs of U.S. farmers, ranchers and consumers at a time when the stability and safety of our food and fiber supplies is so critical to national security."
"The commodity title of Senator Lugar’s bill is essentially a subsidized insurance product with inadequate coverage," said Echols. "It would phase down the marketing loan formula in its first three years and discontinue it entirely in the last two years. The marketing loan has been the cornerstone of the U.S. cotton industry’s success since its introduction in 1985.
"We have expressed our concerns to USDA and have very strongly discouraged the department’s support of the bill. We are deeply disappointed that USDA has expressed support for the concepts in the
legislation, which includes the elimination of the marketing loan, and has indicated that in spite of the budget resolution it will support an increase in funding of only $25 billion over the baseline."
Echols said the cotton industry’s leadership has requested a meeting with Secretary of Agriculture Ann Veneman to discuss ways in which USDA can respond to the financial stress faced by U.S. agriculture and join in the effort to enact effective new farm legislation.
Sen. Lugar’s bill is estimated to cost about $25 billion above current spending estimates for the 2003-07 period, in line with what the Bush Administration indicated it would spend for a new farm bill. The House bill was scored by the Congressional Budget Office at just under $40 billion for those years. In addition to phasing out cotton’s successful marketing loan, the commodity title of Sen. Lugar’s bill would discontinue fixed de-coupled payments and phase down "commodity specific" support programs in its first two years, NCC President and CEO Gaylon B. Booker noted.
The proposal incorporates a whole farm revenue insurance product and doubles spending on conservation programs. It requires participants to pay 52 percent of the premium for insurance that would guarantee, at best, 80 percent of a farm’s five-year average gross market revenue. A voucher would help cover the producer’s share of the premium, with the value of the voucher determined by a sliding scale that is inversely correlated to a farm’s gross revenue and capped at $30,000.
The value of vouchers for a farm large enough to be commercially viable is almost inconsequential.
"We are deeply concerned that, on initial review, Senator Lugar’s proposal would not provide the safety net, absent from the 1996 farm law, that commercially viable farming operations need to continue to provide the nation with high quality, affordable food and fiber products," Booker said. "In fact, we believe the legislation would likely lead to a continued need for expensive annual ad hoc financial assistance packages.
"The House-passed bill, which complies with the budget resolution and is consistent with current international trade commitments, provides predictable, effective long-term policy so desperately needed by farmers trying to compete in world markets and comply with expensive regulations. Congress approved an $8.2 billion overhaul of the crop insurance program in 2000. That legislation provides authority for development of pilot programs, including revenue insurance, as a complement, not a replacement, for sound farm policy."
The Memphis-based National Cotton Council of America’s mission is to ensure the ability of all U.S. cotton industry segments to compete effectively and profitably in the raw cotton, oilseed and manufactured product markets at home and abroad.