NCC Welcomes Farm Bill Proposal

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July 28, 2005
Contact: T. Cotton Nelson or Marjory Walker
(901) 274-9030

MEMPHIS - The National Cotton Council commends the House and Senate Agriculture Committees for their diligent efforts in crafting a farm policy recommendation that is being delivered to the Joint Select Committee on Deficit Reduction. Although full details are not yet available, the current proposal includes a new crop insurance program for upland cotton. The program, known as the Stacked Income Protection Plan (STAX), is based on NCC recommendations.

"The Agriculture Committees have crafted a responsible set of farm programs that meets the target for deficit reduction and maintains vital safety nets for production agriculture," said NCC Chairman Charles Parker, a Missouri cotton producer.

STAX provides an income safety net by making available for purchase an affordable revenue-based crop insurance program consistent with crop insurance delivery and complementary of existing crop insurance programs. Specifically, STAX would address shallow revenue losses on an area-wide basis with producer premiums offset to the maximum extent possible using available cotton program spending authority.

The NCC believes the STAX structure will: 1) best utilize reduced budget resources, 2) respond to public criticism by directing benefits to growers who suffer losses resulting from factors beyond their control, and 3) build on existing crop insurance -- thus ensuring no duplication while offering program simplification potential. In addition, cotton faces the unique constraint of satisfying the longstanding trade dispute with Brazil. Coupled with the discontinuation of cotton's counter-cyclical payment program and adjustments to the level of the upland cotton marketing loan, the NCC believes a crop insurance delivery system addresses the Brazil case findings. These cotton program revisions are scheduled to go into effect for the 2013 crop year.

The NCC urges Joint Committee members to adopt the Agriculture Committees' recommendations. The comprehensive recommendations make significant modifications and reform to commodity policy to achieve budget reductions. Additionally, the recommendations improve and extend important risk management, conservation, trade promotion, research, and nutrition programs. These important programs underpin and enhance U.S. agriculture's ability to remain competitive and contribute to economic growth and job creation.