MEMPHIS (Special) - The National Cotton Council today said its members are pleased that a framework agreement has been reached by House and Senate conferees on new farm legislation that can become effective in 2002.
"America’s farmers and ranchers have been under the most severe economic pressure that I can remember in my 42 years of farming," NCC Chairman Kenneth Hood said. "This agreement will provide a substantially improved level of income protection that certainly will be welcomed by all seven segments of the U.S. cotton industry."
"The U.S. cotton industry, from producer to textile manufacturer, would be helped by this bill, and there is not a segment of our industry that isn’t in need of some help. I urge Congress to approve the bill quickly so the uncertainty about policy for the 2002 crop can be removed and we move ahead with reasonable expectation for returns that will cover our costs."
Hood, a Gunnison, MS, producer, said NCC members are grateful for the dedicated, resourceful leadership of House Agriculture Committee Chairman Larry Combest (R-TX) and Ranking Member Charlie Stenholm (D-TX). "Both have been steadfast in their efforts to fashion new farm legislation that will help restore the economic viability of U.S. agriculture."
He also applauded the leadership of Cotton Belt Representatives, Chambliss (R-GA), Pombo (R-CA), Everett (R-AL), Lucas (R-OK) and Dooley (D-CA) and commended Senate Majority Leader Tom Daschle (D-SD) for stepping in at critical times, first to get a bill passed by the Senate and later to help bring the conference process to a completion.
Additionally, he said the industry is indebted to Senators Lincoln (D-AR), Miller (D-GA), Breaux (D-LA), Landrieu (D-LA), Edwards (D-NC), Cleland (D-GA) and Carnahan (D-MO) who played important roles in keeping the Majority Leader focused on cotton’s concerns in the conference’s waning days. Cotton Belt conferees Cochran (R-MS) and Helms (R-NC), although in the minority among Senate conferees, still managed to play an extremely important role.
Hood said the agreement includes many of the principles that were recommended by NCC delegates, including an effective marketing loan and a combination of fixed and counter-cyclical payments.
"This delivery mechanism," Hood said, "helps to optimize benefits while meeting spending restraints imposed by a congressional budget resolution and WTO commitments that limit certain farm subsidies that are considered to be trade-distorting."
Hood said provisions for updating bases and yields will be helpful to many farmers whose cropping patterns have changed in recent years and whose yields have improved. He also pointed to increased spending authority for the development of overseas markets for U.S. agricultural products as positives in the conference agreement, as well the maintenance of competitiveness provisions for extra long staple cotton and fixing the ELS loan rate at the current level.
With respect to new payment limit provisions, Hood said, "The framework agreement reduces the benefits available to larger enterprises, but it appears to strike a reasonable balance between the calls that have been made for payment-limit reform and the need to ensure that commercial size farming operations can remain viable."
Hood said that the imposition of a means test and the reduction in the amount of benefits a program participant may receive constitute significant reform.
"The means test will disqualify the pro athletes and media moguls that have been targeted," Hood said, "but some higher revenue, legitimate farm operators also will be affected by the means test. The reduced limits for payments and marketing loan gains could reduce benefits to a significant number of farmers, but, importantly, the 3-entity rule and provisions for loan redemptions with certificates are being maintained. This will permit U.S. agricultural commodities to continue to move to market rather than be forfeited to the Commodity Credit Corporation."
Hood noted that maintenance of provisions for certificate redemptions appears to reflect lawmakers’ understanding of the need to facilitate aggressive marketing on the part of American agriculture in a highly competitive global market.
W. Duke Kimbrell, NCC vice president and chairman of the largest U.S. cotton user, Parkdale Mills in Gastonia, NC, noted that, "Elimination of the 1.25-cent threshold for Step 2 payments will be extremely helpful to the U.S. textile industry in its efforts to recover from unprecedented economic stress due in large measure to a strong dollar and surging Asian textile imports."
The Memphis-based NCC has a mission of ensuring the ability of all seven U.S. cotton industry segments to compete effectively and profitably in the raw cotton, oilseed and manufactured product markets at home and abroad.