Ag Committee Reschedules Mark Up for June 20
House Agriculture Committee rescheduled mark up of emergency agriculture assistance package to June 20 to provide opportunity to review actions taken by Appropriations Committee on FY02 agriculture measure. Agriculture Committee was scheduled to mark up legislation that would authorize USDA to distribute $5.5 billion provided in budget resolution for '01 emergency assistance.
Funding is sufficient to make emergency market loss assistance payments available for '01 crops using '99 Agriculture Market Transition Act (AMTA) payment rates. This would provide same level of market loss assistance (MLA) payments as was provided for most '00 crops, but oilseeds and specialty crops would not receive assistance. Consequently, committee must determine if emergency assistance for all crops should be limited to $5.5 billion, thereby reducing MLA payment rate, or whether assistance for non-AMTA crops should be provided from funds budget resolution provides for '02. Using funds allocated for FY02 would reduce amount available to develop new farm legislation.
Meanwhile, Office of Management and Budget Director Mitch Daniels, in letter to Chairman Combest, indicated he would not recommend President sign legislation that makes more than $5.5 billion available for emergency assistance for '01 crops. While short of direct veto threat, Daniels' letter provides insight to Administration's views.
NCC has communicated strong support for making MLA payment available as soon as possible at 99 AMTA payment rate and also has communicated serious situation faced by textile industry and continued low cottonseed prices. NCC has suggested Congress consider including cottonseed assistance, elimination of 1.25-cent Step 2 threshold and modified payment base in emergency legislation if additional funding is made available and payment rate is maintained at least at 99 AMTA rate.
Spending Bill Includes $33.9 Million for Boll Weevil Eradication
In completing work on FY02 agriculture spending measure, House Appropriations Committee provided $33.9 million for US cotton industry's National Boll Weevil Eradication Program. Amount is significant increase from level provided in original FY01 appropriations measure but down from $78.98 million ultimately provided in final FY01 appropriations measure. NCC seeks $82 million for 30% federal cost share for FY02 and will continue to work for that level of funding as process continues.
Bill also authorizes Farm Service Agency to make up to $100 million in loans available for BWEP operations. Cotton's pink bollworm eradication and control program received $1.62 million, slight increase from FY01. In other provisions, FSA received increase of $119 million over last year and Foreign Agriculture Service received slight increase from last year to carry out its functions.
During consideration, committee debated nearly 30 amendments and adopted amendments which would prohibit USDA from implementing check-off programs that have not been approved by producers and amendment to provide $150 million in disaster assistance payments to apple producers. Latter amendment is controversial, as it classifies spending as "emergency" and Congressional leaders and Administration have expressed strong opposition to inclusion of "emergency" designation for any spending at this time.
NCC Urges Changes for Crop Insurance Implementation
Key proposals adopted at NCC Board meeting to enhance compliance and oversight of crop insurance program were conveyed to USDA's Risk Management Agency (RMA) Acting Administrator Phyllis Honor in letter from NCC President and CEO Gaylon Booker. Recommendations were included in letter urging agency to complete implementation of crop insurance legislation, Agriculture Risk Protection Act of '00.
Specific Board recommendations included insurance identification number standardization, soil productivity tests for T-yields, and skip row cotton provisions. RMA was requested to take all necessary steps to implement these recommendations at earliest possible date.
Letter stressed importance of maintaining program integrity and need for continually improving crop insurance program so cost-effective and adequate levels of risk-management can be provided. It was noted that although majority of insured cotton producers properly uses crop insurance, program should not be implemented in such a way as to encourage abuse.
China Negotiates 8.5% Cap on Ag Support
US and China reached further agreement that should pave way for China to accede to World Trade Organization (WTO) by late '01. Under agreement, China can take limited advantage of some WTO provisions that give special treatment to developing countries, but cannot use these provisions to extent it initially sought.
China has negotiated "de minimis" level of 8.5% of value of agricultural production as allowable support. Level is between 5% level allowed for developed countries and 10% level allowed for developing countries and is applied to product-specific and non-specific support. NCC economists estimate about $500 million in annual support could be available specifically for cotton.
China reconfirmed commitment to end agricultural export subsidies. China will not get benefits of WTO provisions that exempt investment subsidies and agricultural input subsidies for low-income or resource-poor producers in developing countries.
According to Office of US Trade Representative, agreement did not open important loopholes for China with respect to export subsidies on manufactured products. There are reportedly no changes with respect to textile provisions.
US Cotton Exports Projected to Exceed Consumption for 1st Time Since '84-85
USDA's projections for '01-02 put US cotton exports above mill consumption for first time since '85 marketing year.
In monthly World Market and Trade report, exports are forecast at 9 million bales, unchanged from previous month's forecast and 200,000 bales above projection for domestic use. "While consumption is still relatively high, in historical terms, it has fallen for the past 4 years from a record level of 11.3 million (bales) in '97-98," report stated.
Production remains at near-record levels, resulting in large exportable surpluses. USDA's latest forecast for US production in '01-02 is 18.8 million bales.
During period between '79-80 to '84-85, consumption fell below 6 million bales for first time since mid-'30s, USDA report noted. At that time, exports remained relatively strong and surpassed consumption in 5 of 6 years.
CDC Finds No Evidence of Allergic Reactions to StarLink
Biotechnology enhanced StarLink corn did not cause allergic reactions in 17 people who had reported sometimes-severe reactions after eating corn tacos and tortillas last fall, said federal Centers for Disease Control and Prevention (CDC) health officials.
StarLink is variety of corn engineered to contain protein, referred to as Cry9C, that can protect crops against several insects. While many similarly modified corn varieties have been approved for general use, StarLink was approved only for animal feed because of concerns that it broke down more slowly than many proteins and might cause allergic reactions. Corn nonetheless inadvertently entered human food supply, triggering recall of about 300 corn products.
Fifty-one people reported experiencing adverse reactions in weeks after StarLink was found in tacos and other corn products. Of those, 28 fit definition of having suffered food allergy, and 17 agreed to provide blood sample. Some reactions had been quite severe.
Blood tests failed to find any signs of antibodies to protein in Cry9C corn, CDC reported, indicating none of those tested had experienced allergic reaction. All had complained to federal agencies last year of reactions ranging from rashes to anaphylactic shock after eating products made of yellow corn that might have contained StarLink.
Advocates of biotechnology applauded results as confirming safety of StarLink in particular and modified crops in general. But environmental groups called federal effort limited and insufficient to answer question of whether StarLink can cause dangerous allergic reactions.
Carol Rubin, an epidemiologist with CDC's National Center for Environmental Health, said that while test results were "only a first step" in answering questions about safety of Cry9C corn, "it can be seen as good news for consumers."
"Based on test methods used, it is highly unlikely that people had an allergic reaction to" StarLink, she said. "They may have experienced allergic reactions to some food, but not protein that was tested."
Developer of StarLink, Aventis CropSciences, Research Triangle, NC, has asked EPA for retroactive approval to allow small amounts of StarLink corn in food for people. Tests were requested by a scientific advisory panel convened by EPA to help determine whether to issue that approval. Advisory panel is set to meet again on StarLink issue July 17-18.
NRDC Consent Decree Decision Delayed
Final decision on consent decree in Natural Resources Defense Council v. (EPA Administrator) Whitman likely was delayed for several months when judge in case granted 3-week extension as requested by NRDC. Because judge is retiring on June 30, new judge will be appointed to case and new date for hearing will be set.
Judge previously ruled that NRDC consent decree, which establishes deadlines for EPA to complete certain risk assessments defined in Food Quality Protection Act, was not finalized in appropriate manner. He ordered EPA to post agreement on its web site for public comment. About 462 comments were filed with EPA during 3-week comment period ending May 21. Majority of comments echoed NCC concerns that consent decree "does not allow enough time to review data generated by pesticide makers," and "as a result could wrongly eliminate pesticides from market even if they are safe."
As indexed by EPA to date, comments were filed by 176 individual farmers; 173 agricultural organizations, agribusiness, pest control associations, chemical companies, land-grant universities and state departments of agriculture; 6 animal rights groups; 5 environmental groups; and 102 private citizens, Members of Congress and other affiliations.
Cotton Sales Slightly Higher
Net export sales for week ending June 7 were approximately 71,400 bales (480 lb.), approximately 9% higher than previous week's sales, raising total '00-01 sales to slightly more than 8.0 million.
Total sales at same point in '99-00 marketing year were about 7.56 million bales. Shipments for week were almost 160,000 bales, bringing total exports to date to approximately 5.49 million bales, down from 6.01 million at comparable point in '99-00 marketing year.
Effective June 15-21, '01
Adj. World Price, SLM 11/16 34.44 cents*
Coarse Count Adjustment 0.00 cents
Current Step 2 Certificate Value 1.96 cents
Mktg. Loan Gain Value 17.48 cents
*No Adjustment Made Under Step I
Current 3135 c.i.f. N. Eur 47.79 cents
Forward 3135 c.i.f. N. Eur 48.08 cents
Coarse Count c.i.f. N. Eur 47.53 cents
Current US c.i.f. N. Eur 51.00 cents
Forward US c.i.f. N. Eur 54.45 cents