NCC Comments on USDA Reorganization Plan

June 14, 2017

Donald Bice
Associate Director
Office of Budget and Program Analysis
USDA
Jamie L. Whitten Building, Room 101-A
1400 Independence Ave. SW
Washington, DC 20250.

RE: Docket ID No. USDA-2017-0001. Request for Information: Improving Customer Service

Dear Mr. Bice:

The National Cotton Council of America (NCC) is pleased to submit comments on the United States Department of Agriculture’s (USDA) proposed reorganization and the establishment of an Under Secretary for Trade and Foreign Agricultural Affairs. The NCC serves as the central organization of the U.S. cotton industry.  Its members include farmers, ginners, cottonseed processors and merchandisers, merchants, marketing cooperatives, warehousers, and textile manufacturers.  The majority of the U.S. cotton industry is concentrated in 17 states across the southern half of the country, from the Pacific Ocean to the Atlantic Ocean.  Downstream manufacturers of cotton apparel and home furnishings are located in nearly every state.  The annual U.S. cotton crop is valued at more than $6 billion at the farm gate.  Overall, farms and businesses directly involved in the production, distribution and processing of cotton employ approximately 125,000 workers and generate direct annual revenue of more than $21 billion.  Including the indirect economic impact, the U.S. cotton sector supports the employment of more than 280,000 people with economic activity in excess of $95 billion.

The NCC believes this proposal will better align USDA’s mission areas and will improve the effectiveness of USDA in meeting the needs of cotton farmers throughout the country.  Under the existing USDA structure, the Foreign Agricultural Service (FAS), which deals with trade policy and overseas markets, and the Farm Service Agency (FSA), which handles domestic farm policy and program issues, were housed under one mission area, along with the Risk Management Agency (RMA).  It is our understanding that the new structure will situate FAS under the new Under Secretary for Trade, where staff can sharpen their focus on greater access for agricultural products in foreign markets and addressing trade policy issues and barriers.  Locating FSA, RMA, and the Natural Resources Conservation Service (NRCS) under a domestically-oriented undersecretary and mission area will provide a simplified, one-stop shop for USDA’s primary customers – farmers.  Cotton farmers frequently work with FSA and NRCS staff regarding farm and conservation programs and we believe having both housed in one mission area will improve the customer experience for farmers.  It is our hope that once this reorganization is complete, the two agencies can work together to better develop coordination and information sharing of data and computer systems.  This coordination could help reduce the time it takes for a producer to apply for a program and alleviate the need for the submission of duplicate information.

The U.S. cotton industry is heavily dependent on access to export markets and the creation of an Under Secretary for Trade will be extremely beneficial for U.S. agriculture and enhance the already exemplary job of FAS.   On average, roughly 75% of U.S. cotton production is sold to foreign buyers as raw cotton fiber, while another 20-25% is exported as textile products, whether in the form of yarn, thread, or fabric.  Therefore, approximately 95% of U.S. cotton is exported in some form.  Thus, the stability, growth, and openness of international markets are especially important.

Due to the heavy reliance on exports, global market factors can exert significant influence on the economic health of the U.S. cotton industry.  China and India are the two largest producers and spinners of raw cotton, accounting for approximately 50% of global production and mill use.  China also is the largest producer and processor of manmade textile fibers, principally polyester, that are substitutable for cotton fiber.  In fact, demand for U.S. cotton continues to face significant headwinds from increased competition from manmade fiber, which is characterized by significant overcapacity.  In recent years, the U.S. textile industry also has faced a surge in competition from textile industries in Vietnam, Bangladesh and Indonesia.  In the global market, U.S. cotton exporters feel the effects of competition from growths originating from countries/regions such Australia, Brazil, West Africa and Central Asia.

In closing, the NCC commends the Secretary for utilizing the authority granted to him in the 2014 Farm Bill to create the new Under Secretary for Trade, and believes the restructuring of USDA mission areas will better serve cotton farmers, the broader cotton industry, and all of U.S. agriculture.

Thank you for your consideration of these comments and please contact us with any questions or additional information you may need.

Sincerely,

Gary Adams
President & CEO