Comments to USDA on Agriculture Improvement Act of 2018 (Farm Bill)
Trade Title Implementation
National Cotton Council and Cotton Council International
The National Cotton Council (NCC) and Cotton Council International (CCI) look forward to continuing to work with USDA on implementation of the Agriculture Improvement Act of 2018. The NCC and CCI applaud FAS’ hard work to maintain the current Market Access Program (MAP) and Foreign Market Development (FMD) funding levels under the new farm bill. Since nearly all cotton grown in the United States is exported either in the form of fiber or yarn/fabrics, the importance of overseas promotion of cotton cannot be overstated. The cotton industry has long remained reliant on MAP and FMD export promotion programs, and these programs have taken on a greater importance in the current global trade climate. Despite current trade barriers, FAS’ export promotion program helped fuel the second-best year for U.S. cotton exports on record in MY 17/18, as the U.S. cotton industry exported 19.0 million bales of U.S. cotton and cotton textile products worth over $7 billion.
Cotton is an important agricultural business for the United States, accounting for $75 billion in business revenue in the U.S. economy with direct and indirect employment surpassing 280,000 people. Cotton is truly embedded in virtually every aspect of everyday life for billions of consumers around the world in what they wear, where they sleep, and in hundreds of other applications ranging from haute couture to industrial filters and even to ear swabs. There are 18,500 cotton farms in the United States accounting for nearly 21.0 million bales of production in 2017/18 or roughly 17% of the world crop, which ranks the U.S. as the third largest producing country in the world.
In early 2018, a third-party return on investment study (ROI) was conducted by Dr. Harry Kaiser from the Cornell University’s School of Applied Economics and Management to determine the impact of CCI’s FAS funding.(1) The economic evaluation found that that CCI’s export promotion activities increased total export revenue by $6.81 billion between 2008-09 and 2016-17, representing an 18.9% increase per year. These findings highlight the effectiveness of the CCI program and the large return on investment for FAS.
Dr. Kaiser’s ROI Study found that CCI’s export promotion activities supported the U.S. economy by providing 21,740 jobs and increasing economic output by nearly $3.7 billion in 2017. CCI’s activities were also a large generator of state and national tax revenue. Results of the economic impact study show that CCI’s export promotion activities resulted in $290.7 million in national tax revenue and $119.1 million in state tax revenue for a total of $409.8 million. These findings suggest that CCI’s export promotion activities not only positively impact the U.S. agricultural community but benefit all U.S. citizens.
While it is clear that MAP and FMD funding are having an enormous, positive impact on the U.S. cotton industry and as a result boosting the U.S. economy, more is needed. While MAP and FMD funding levels have remained flat for 13 years, costs of implementing these important programs continue to increase. Any effort by FAS to increase funding to cooperators, including use of priority funds under the farm bill Trade Title and minimization of FAS overhead costs, would be greatly appreciated.
Thank you again for the opportunity to provide these comments on the Trade Title of the farm bill. We look forward to working closely with USDA to ensure a smooth and timely implementation of these provisions. Please contact us with any questions or for any information that we can provide to assist in this regard.
(1) Kaiser, H. (2018). Economic Evaluation of the Cotton Council International’s Export Promotion Programs: An Analysis of the Direct and Indirect Impacts.