NCC Positioned to Tackle Industry Challenges

MEMPHIS – National Cotton Council Chairman Allen Helms said U.S. cotton’s central organization will continue to pursue the U.S. cotton industry’s priorities – both domestically and internationally – in 2006.

In an address to the Mid-South Farm & Gin Show’s Ag Update session here today, Helms said the NCC already is working with other agricultural groups and with Congressional members to protect producer eligibility for farm program benefits and reinforce the message that the 2002 farm law is a multi-year contract that provides stability for U.S. agriculture, U.S. consumers and rural businesses.

Helms said the NCC also will work closely with all cotton interest organizations to maintain funding for the critical research programs targeted for elimination or reduction in the Administration’s budget.

"This is certainly not the time to cut back on critical research, and we are particularly alarmed at the prospect of USDA closing the Lubbock and Las Cruces gin labs at a time when fiber quality and air quality issues are critically important to cost and competitiveness,” he said. “And we are working to urge Congress to provide much needed emergency disaster assistance to producers who suffered severe financial losses due to hurricanes, drought and upwardly spiraling costs of production due to fuel and input costs.”

On the trade front, the Clarkedale, AR, producer and ginner said the NCC is deeply concerned with the ramifications of the text from the latest WTO Doha Round talks because “despite our best efforts,” the WTO, led by the EU, is attempting to move away from a comprehensive negotiating strategy covering all commodities to singling out cotton for separate treatment. Cotton is being asked to give up more than others and we anticipate pressure for further concessions.”

He said the NCC will continue to work very closely with the U.S. Trade Representative’s office, USDA and Congress to counter any efforts to further isolate cotton.

“We are working with other agricultural groups to ensure US negotiators insist that countries commit to meaningful and permanent market access for US agricultural products before discussing reductions in US domestic support programs,” Helms said. “Following the Hong Kong Ministerial in December, we have had a number of meetings with USTR and USDA officials and participated in roundtable discussions other commodity organizations. In addition, Council leaders and key staff plan to be in Geneva for the period leading up to the next critical WTO negotiating session tentatively scheduled for April 30. The Council understands that we have to maintain a presence in Geneva just like we do in Washington whenever agricultural policy is discussed and formulated.”

Helms said that during Congressional farm bill hearings this year, the NCC's testimony will continue to stress the importance of maintaining current law to its scheduled expiration with the 2007 crop and to base the new farm bill on current law.

“An extension may be necessary to eliminate uncertainty if the WTO negotiations have not made sufficient progress,” Helms noted.

Helms added that several factors will shape a new farm bill, including any final WTO agricultural agreement, the federal budget and the balance between nutrition, conservation and commodity spending.

“In order to provide Congress the opportunity to write an effective farm law, the Council will continue to work to protect the current budget authority, structure and eligibility requirements in current law,” he said.

Helms said the NCC’s export promotion arm, Cotton Council International (CCI), will continue to play a key role in expanding export demand for U.S. cotton in the coming year.

Helms emphasized that the extraordinary volume of export trade is bringing a number of new pressures on the U.S. cotton industry infrastructure making it imperative that the industry renew its commitment to protect and enhance U.S. cotton’s reputation for producing high quality cotton, delivering it in a timely manner and honoring contracts.

“Our infrastructure is being tested and increasing costs are squeezing the production, processing and marketing sectors,” Helms said. “This industry has a well-earned reputation for producing top quality cotton, making timely delivery and honoring contracts. We must renew our commitment to those principles to remain competitive.”