Thank you, Mr. Chairman. Ladies and gentlemen, first let me say that we fully recognize that american agriculture is in trouble. American farmers now owe more money than Brazil and Mexico put together -- roughly $200 billion. Land values have fallen as much as 25 percent in several communities. Almost 30 percent of FmHA's $22 billion of outstanding loans is delinquent. In contrast, when Continental Illinois Bank was reorganized, a mere seven percent of its loans were bad. It is estimated that 20 percent of American farmers are in serious financial straits, and perhaps as many as 10 percent may face bankruptcy due to worldwide economic turmoil that has drastically changed the terms of agricultural trade.

This was the setting in which the Council's farm policy development process was begun, and it will not be completed until the 29th of this month.

Four regional meetings -- in Atlanta, Memphis, Dallas, and Fresno -- were held to allow producer leaders to recommend farm program changes. A special legislative subcommittee of producers and association executives was activated to allow a more detailed study of some of the issues which must be dealt with in new legislation. That subcommittee met three times, and recommended a package of amendments which were tentatively adopted by the Producer Steering Committee of the Council last November. Those policy recommendations have been communicated to the other industry segments through the Council's Farm Policy Liaison Committee. The resolutions will be reviewed again by the Producer Steering Committee in San Antonio on January 25, finalized, and submitted to an Industry Practices and Policies Committee, the Council Board of Directors, and finally, the full delegate body. This may seem to be long and cumbersome process, but it points up the fact that any policy position taken by the Council has extremely broad-based support throughout the cotton industry.

In all meetings, it was emphasized again and again that producers are not alone in the industry -- all segments' needs must be considered. Producer goals must: not only be in the producer's interest, but must be in the industry's interest, fair to the public, and merit the support of our customers -- the mills -- and the taxpayer.