Legislative Affairs

The National Cotton Council and virtually every commodity and general farm organization filed detailed comments on an Interim Rule that USDA issued regarding actively-engaged-in-farming. The modified rule would affect the 2010 crop. Later, a group of 69 House members and 21 Senators cosigned a letter to the Secretary urging him to publish a final rule that more closely reflected the provisions in the Food, Conservation, and Energy Act of 2008 (farm law) and Congress’ intent.

The NCC issued a press statement saying President Obama’s FY11 USDA budget ignored the extensive changes to production agriculture support that were embodied in the 2008 farm law. The NCC noted that USDA already had announced unwarranted restrictions in program eligibility during that legislation’s implementation. The NCC emphasized that the Administration’s proposal to eliminate the upland cotton storage credits was a failure to discern critical differences between commodities, and said it was puzzled by the proposed reduction in Market Access Program funding,  especially in light of the Administration’s new emphasis on exports.

NCC Chairman Eddie Smith, left, discussed the 2012 farm bill and other key issues with Rep. Randy Neugebauer (R-TX) and other Congressional leaders.

In a letter to Agriculture Secretary Tom Vilsack, NCC Chairman Eddie Smith stressed the importance of preserving the agricultural baseline budget that ultimately will serve as the measuring stick for the 2012 farm bill. The letter noted that the farm bill will be developed amidst an even tighter budget situation than the current farm law and stated that if any program changes are necessary, USDA should structure those adjustments in a manner that did not lead the Congressional Budget Office to reduce the overall baseline.

Chairman Smith, joined by NCC President/CEO Mark Lange and NCC Senior Vice President of Washington Operations John Maguire, also met with key Congressional leaders and Administration officials to discuss key issues, including the 2012 farm bill. In visits with the Texas Congressional delegation, Smith thanked the Members for their support and stressed the need for maintaining a strong farm safety net.

The Senate Committee on Agriculture, Nutrition, and Forestry conducted hearings on reauthorization of the Food, Conservation and Energy Act of 2008. Johnny Cochran, a fourth generation Georgia cotton and peanut producer, and Dow Brantley, an Arkansas rice, cotton, corn and soybean producer, testified that the legislation provided a sound and stable farm policy foundation that is essential for farming operations.

In addition, the House Subcommittee on General Farm Commodities and Risk Management conducted hearings to review U.S. farm safety net programs in advance of the 2012 farm bill. In testimony before one of those House hearings, Chairman Smith stressed that stable farm policy was essential for the U.S. cotton industry and that sound farm policy should provide an effective financial safety net for producers while abiding by U.S. trade policy commitments. He noted that the NCC continues to support the 2008 farm law's cotton program components: the marketing loan and direct and counter-cyclical payments. At another hearing, Allen McLaurin, a North Carolina producer and president of Southern Cotton Growers, echoed the cotton industry’s general consensus in support of the 2008 farm law’s cotton provisions. He stated that the support given to bio-fuel crops must be taken into consideration when comparing relative levels of support across commodities, when evaluating payment limitations and before trying to mandate a one-size-fits-all farm program. 

Arkansas cotton producer, Dow Brantley, far right, and Georgia cotton producer, Johnny Cochran, second from right, testified before the Senate agriculture committee that the 2008 farm law provided a sound and stable farm policy foundation that is essential for farming operations.

In other farm program activity, the NCC:

• Posted on its website a copy of Notice FI-2950 regarding the Farm Service Agency’s (FSA) inclusion of an insert in the 2009 tax year CCC-1099-G to recommend recipients make certain all payments are listed correctly on that form. The NCC also prepared and posted a document that provided some background concerning changes from to the 2008 form to the 2009 form;
• Joined with other agricultural organizations onto a letter to Agriculture Secretary Vilsack expressing concerns about proposed cuts of $4 billion over five years to federal crop insurance – cuts that could affect the program’s availability;
• Supported Senate and House leaders, who also sent letters to USDA urging the Risk Management Agency not to make deep cuts in crop insurance during renegotiation of the Standard Reinsurance Agreement with crop insurance providers;
• Sent a letter to Agriculture Secretary Vilsack recommending that USDA make the determination of the advance counter-cyclical payment (CCP) for 2009 upland cotton on February 26 after the release of the Agricultural Prices report – and if price data warranted a payment that timely distribution in early March was made to eligible growers;
• Convened by conference call its Quality Task Force, chaired by Chuck Coley, to 1) hear reports on planned changes in spot price reporting and the possible implications of these changes on the Commodity Credit Corporation loan schedule and 2) agreed to coordinate industry consensus on the proposed loan schedule changes;
• Wrote to both the Senate and House Agriculture Appropriations subcommittees, noting support for: 1) adequate funding for FSA to continue to deliver essential farm and conservation programs and services and 2) FSA’s efforts to modernize its computer system;
• Joined with other agricultural organizations on issuing a letter to Senator Herbert Kohl (D-WI) to express support for legislation that would protect eligibility for farmer borrowers participating in FSA guaranteed farm loan programs; and
• Developed and posted on its website a Conservation Stewardship Program summary that included changes in the final rule.

Legislative Affairs

In letters to the chairmen and ranking members of the Senate and House Appropriations Committee’s subcommittees on Agriculture, Rural Development, Food and Drug Administration and Related Agencies, the NCC relayed the cotton industry’s request for FY11 funding for selected programs under those panels’ jurisdiction.

In addition to expressing strong support for the 2008 farm law and solid opposition to efforts to re-open it in order to further restrict farm program benefits, the NCC letter cited the essential need for successful completion of the boll weevil eradication program, full implementation of the pink bollworm eradication effort, new technology developed through research, and demand building export programs including the Market Access Program, the Foreign Market Development program and GSM credit.

At a Washington, DC, news briefing, Taylor Slade, a North Carolina cotton producer and NCC delegate, said that if estate taxes were allowed to be reinstated at the beginning of 2011 with only a $1 million exemption and top rate of 55 percent, U.S. agriculture would be severely harmed.

The NCC, along with other agricultural organizations, wrote to Senate Majority Leader Harry Reid (D-NV) and Republican Leader Mitch McConnell (R-KY) expressing support for permanently raising the estate tax exemption to no less than $5 million per person and reducing the top rate to no more than 35 percent. The letter also noted the importance for the exemption to be indexed to inflation, provide for spousal transfers and include the stepped-up basis. Late in the year, the NCC joined nine other agricultural organizations in a Washington, DC, press conference urging Congress to act on estate tax reform during the lame-duck session. Taylor Slade, a North Carolina cotton/peanut producer and NCC delegate, told the media that if estate taxes were allowed to be reinstated at the beginning of 2011 with only a $1 million exemption and top rate of 55 percent, U.S. agriculture would be severely harmed.

Market Volatility

The NCC issued a statement welcoming the Commodity Futures Trading Commission’s (CFTC) release of their findings from their investigation into the abnormal price fluctuations which occurred in the cotton market in February and March of 2008. The NCC also reiterated the U.S. cotton industry’s continuing concerns about the ability of the futures market to serve as an effective tool for hedging physical cotton. The NCC emphasized that no regulatory change had been promulgated that would prevent a recurrence of the early 2008 events and that absent legislative progress – the CFTC should use their regulatory authority to initiate much-needed changes.

In other activities, the NCC: