Farm Bill Finalization, Favorable Trade Negotiations Are Critical to U.S. Cotton Industry’s Economic Recovery

DALLAS, TX – National Cotton Council Chairman James Echols said U.S. cotton is on the threshold of economic recovery because it will be working under substantially improved farm policy and benefiting from improved retail demand for cotton products.

Addressing delegates at the NCC’s annual meeting here today, Echols said the NCC’s immediate objective is "to finalize a new farm bill that will apply to this year’s crop and will not impose additional significant restrictions on benefits. I remain optimistic that we can achieve this short-term objective."

Noting that the U.S. retail market for cotton textile products fell by about 1 million bale equivalents in 2001, Echols said the NCC also will press hard to solidify Administration support for textile trade provisions that are favorable to the U.S. textile industry in every trade agreement under consideration.

"I am pleased that the Council has been asked to be the coordinating organization for the Textile Alliance, a group formed several years ago to foster consensus-building and coordinated action on textile trade issues," he said. "To our textile members, I would say that we will take that coordinating role seriously and will work very hard to help the organization deliver on its defined mission."

The Memphis merchant said international trade issues would be among the NCC’s highest priorities in the months ahead. Among those will be attention to a new World Trade Organization round, renewal and expansion of the Andean Trade Pact and discussions on a Free Trade Agreement of the Americas.

"The cotton industry has a major stake in the outcome of these initiatives," he said.

For the longer term, Echols said the U.S. cotton industry must ensure "our government does not unilaterally discontinue or disproportionately reduce assistance for our farmers."

He said he believed that: 1) agricultural subsidies will still flourish worldwide and pressure will continue on reducing them, especially those considered to be trade distorting, and 2) farm policy will be on-going rather than every five years or so and linked to international trade initiatives and other national priorities. "In the future, I believe we should become more proactive in integrating farm policy with rural development and environmental preservation," Echols said. "To some extent, this simply means that we need to do a better job of making all interests understand that good farm policy should be the leading component of progressive rural development and good farm policy does make a valuable contribution to environmental preservation."

In recapping 2001 activity, Echols said the NCC worked to restore industry profitability in an economic climate that saw domestic mill consumption drop to the lowest level and carryover stocks rise to the highest level since the mid-1980s; 124 textile mills close with a corresponding loss of 60,000 jobs; and New York prices fall to 30 cents during harvest season.

"If not for the marked improvement in export sales of raw cotton, our industry would be in even worse shape," he said. The 9.8-million bale export estimate for this marketing year, he noted, will be the highest in 75 years and will boost U.S. cotton’s share of world cotton trade to 34 percent, compared to the normal 25 percent.

Among NCC achievements in 2001 were persistence in:

• seeing that most of U.S. cotton’s priorities were included in a House-passed farm bill and in the bill passed by the Senate Agriculture Committee;
• advancing Caribbean Basin Trade Preferences Act implementation and lessening the impact on U.S. textiles of other trade initiatives, including China’s accession to the WTO;
• getting increased appropriations for the boll weevil and pink bollworm eradication programs;
• increasing funding for Cotton Council International’s overseas market development efforts;
• keeping Bollgard registered and crop protection materials available;
• working through the NCC’s Quality Task Force to improve fiber quality;
• improving communications and reducing overall information dissemination costs; and
• maintaining an all-time high membership support level despite tough economic conditions.

As the unifying force of the U.S. cotton industry, the Memphis-based National Cotton Council brings together industry representatives from the 17 cotton-producing states to work out common problems and establish programs of mutual benefit for its 28,000 members. The NCC’s mission is ensuring the ability of all industry segments to compete effectively and profitably in the raw cotton, oilseed and U.S.-manufactured product markets at home and abroad.