Changes in the Cotton Research and Promotion Program were authorized by the 1990 Farm Act. This paper describes those changes, presents methodology developed to assess fees on the raw cotton content of imported textiles, and discusses various rebate provisions.

The 1990 Farm Act authorized amendments to the Cotton Research and Promotion Act of 1966. Basically, the amendments provide for the collection of research and promotion fees on imported cotton and cotton containing textiles. The current act allows per-bale assessments on domestic cotton producers only. Funds collected and remitted to the Cotton Board support the research and promotion efforts of Cotton Incorporated. The USDA maintains oversight responsibility for the collection and disbursement of the funds.

U.S. cotton producers and importers voted to adopt the amendments in a USDA - monitored referendum July 17-26. Six hundred and twenty-five importers and 45,595 growers voted in the mailreferendum. Approximately 60 percent of those voting favored the amendments, with 40 percent opposed. Table 1 shows the State by State results of the cotton producer returns. In 14 of the 17 States shown, over 50 percent of the growers in the State approved, or voted yes, for the proposed amendments. Results ranged from a low of 9 percent yes in Florida to 89 percent yes in Kansas and North Carolina.

The specific amendments which were approved includes changes in the following areas:

1. Assess research and promotion fees on imported raw cotton, and the raw cotton content of imported textile products in the same manner as domestic cotton producers.

2. Allow importers representation on the Cotton Board; 4 members appointed by the Secretary of Agriculture.

3. Terminate the right of domestic producers to demand a refund of assessments. (Currently averaging about 34 percent a year).

4. Allow for the rebate of any importer assessments paid on the U.S. raw cotton content of imported products.

The implementation process is currently in the "Formal Comment" period. Details of the proposed rules for calculating, collecting and remitting assessments were published in the Federal Register on December 17, 1991. The comment period will be 30 days, after which the USDA will review all comments and make final recommendations on the proposals. Final approval is made by the office of the Secretary and OMB. A target date of March 1, 199 has been established for collections to begin. Craig Shackelford and Fred Mullins of the Agricultural Marketing service have been involved in this process on a day to day basis.

The purpose of this paper is to:

1. Explain how the proposed assessment process will operate.

2. Present details of the data and methodology to be used.

3. Identify the problems or concerns about the rebate provisions, and how they may be addressed, and hopefully solicit your comments and suggestions.