House Approves Emergency Assistance Measure
House approved emergency economic assistance legislation to provide $5.5 billion by Sept. 30, ‘01. Chairman Combest (R-TX), in urging House to approve "The Crop year 2001 Agricultural Economic Assistance Package," said, "important point is to move process along…because FY01 funds will expire unless delivered to hard-pressed farmers by the end of September, it is imperative the bill is sent to the President for signature before the August (Congressional) recess."
House approved legislation June 26 by voice vote under expedited procedure. Legislation includes following provisions: $4.6 billion in Market Loss Assistance for producers of AMTA crops to be paid at ‘01 AMTA rate; $85 million additional cottonseed assistance for ’00 crop; $424 million for ’00 crop of oilseeds; $54 million for ’00 crop of peanuts; $129 million for tobacco; $17 million for wool and mohair; and $169 million for specialty crops.
Senate committee has begun to discuss informally development of its version of emergency assistance legislation but has not set timetable for action.
USDA Puts ‘01-02 Acres at 16.29 Million
In its June acreage report, USDA estimated ‘01-02 U.S. cotton plantings at 16.29 million acres, increase of 5% from previous year. Upland plantings are estimated 16.05 million acres, up 4.6% from previous year, while ELS area of 235,000 acres represents 38.1% increase. In its March prospective plantings report, USDA had projected ‘01-02 US cotton plantings at 15.61 million acres. Table details report. Southwest and West show declines while other regions increased. Using state-level 5-year average abandonment and yields, projected ‘01-02 crop would be 19.34 million bales (480-lb.). Upland crop would be 18.83 million bales and ELS production would 503,000 bales.
|
Prospective 2001 U.S. Cotton Plantings | |||||
|
2001 U.S. Cotton Plantings | |||||
|
2000 Actual |
2001 Estimated |
Change | |||
|
(Thou.) |
(Thou.) |
(%) | |||
|
SOUTHEAST |
3,560 |
3,795 |
6.6% | ||
|
AL |
590 |
610 |
3.4% | ||
|
FL |
130 |
120 |
-7.7% | ||
|
GA |
1,500 |
1,600 |
6.7% | ||
|
NC |
930 |
1,060 |
14.0% | ||
|
SC |
300 |
300 |
0.0% | ||
|
VA |
110 |
105 |
-4.5% | ||
|
MID-SOUTH |
3,940 |
4,790 |
21.6% | ||
|
AR |
960 |
1,170 |
21.9% | ||
|
LA |
710 |
910 |
28.2% | ||
|
MS |
1,300 |
1,700 |
30.8% | ||
|
MO |
400 |
400 |
0.0% | ||
|
TN |
570 |
610 |
7.0% | ||
|
SOUTHWEST |
6,720 |
6,494 |
-3.4% | ||
|
KS |
40 |
44 |
10.0% | ||
|
OK |
280 |
250 |
-10.7% | ||
|
TX |
6,400 |
6,200 |
-3.1% | ||
|
WEST |
1,127 |
975 |
-13.5% | ||
|
AZ |
280 |
280 |
0.0% | ||
|
CA |
775 |
620 |
-20.0% | ||
|
NM |
72 |
75 |
4.2% | ||
|
TOTAL UPLAND |
15,347 |
16,054 |
4.6% | ||
|
TOTAL ELS |
170 |
235 |
38.3% | ||
|
AZ |
5.0 |
6.0 |
20.0% | ||
|
CA |
145 |
205 |
41.4% | ||
|
NM |
4.2 |
7.4 |
75.1% | ||
|
TX |
16 |
17 |
6.3% | ||
|
ALL COTTON |
15,517 |
16,289 |
5.0% | ||
|
Source: USDA-NASS. |
|||||
House Committee Urged to Support Export Programs
Robert Weil, II, chairman of NCC’s International Trade Policy Committee, urged House Subcommittee on Specialty Crops and Foreign Agriculture Programs to define aggressive trade policy agenda that could help cotton and other agricultural commodities secure foreign markets against sometimes unfair international competitors. Montgomery, AL, merchant outlined serious economic conditions being faced by US textile industry, citing reports that domestic mill use of cotton is expected to fall 3 million bales from ‘97 level while US crop will be equal or greater than past 2 years. Weil stated, "we will have to find a home in foreign markets for an additional 2 to 3 million bales of cotton or see our carryover levels soar."
Weil expressed concern that US export programs were not being fully utilized; Foreign Market Development (FMD) program funding has failed to keep pace with inflation; Market Access Program (MAP) funding has fallen by 55% since ‘92 despite clear positive impact; export credit guarantee program is threatened by international negotiations; and Administration has chosen to classify supplemental market loss assistance payments as subject to World Trade Organization (WTO) limits.
Weil explained negative impact of strong dollar on cotton, noting that US cotton, is especially vulnerable to effects of appreciating dollar through its impact on imports of cotton textile and apparel products. He stated that cotton textile imports had taken half of US cotton textile retail market and are rising.
Weil urged increased funding of FMD program of $43.25 million, increased funding for MAP program of $200 million annually; improvements in export guarantee program and elimination of 1.25-cent threshold for Step 2.
Weil discussed other trade policy priorities: 1) maintaining cotton’s competitiveness provisions included in US farm law; 2) effective implementation of existing regional trade arrangements; 3) monitoring China’s compliance with WTO agreement; 4) ensuring regional trade arrangements currently being negotiated are favorable to US cotton and cotton textiles; and 5) working for new agreement in WTO that improves competitive position of US cotton and textile industries.
NCC Priorities Sought in Series of Washington Meetings
In series of Washington meetings, NCC senior staff sought consensus and support for number of industry’s legislative and regulatory priorities. In meeting with staff and industry leaders from commodity organizations, Gaylon Booker and John Maguire reviewed NCC farm policy priorities and heard priority reports from other groups. Goal was to identify policy issues on which consensus could be reported to Congress. Meetings also were held with key Congressional staffers to underscore policy priorities that have been communicated since House hearings in March and to convey policies approved more recently by NCC’s Board, including immediate elimination of 1.25-cent Step 2 threshold and inclusion of exchange rate provisions in new farm law.
Meetings also were held with USDA officials to; communicate board resolution calling for USDA to make full use of private sector to expedite establishment of electronic processing and redemption system for Form A cotton; seek clarification on audit procedures for warehouse block storage facilities and; encourage officials of Risk Management Agency to consider board recommendations for improved compliance and oversight of Agricultural Risk Protection Act.
Senate Ag Committee Members
Urge Work on Market Loss Assistance
Senate Agriculture Committee held first farm bill hearing under new leadership of Chairman Harkin (D-IA). Sunbelt Sens. Lincoln (D-AR), Miller (D-GA) and Hutchinson (R-AR) acknowledged need to begin work on new farm bill, but urged panel to first act on Market Loss Assistance package.
Committee heard from panel of witnesses that included American Farm Bureau, National Farmers Union, as well as rural development, conservation, nutrition and research specialists.
Chairman Harkin, who predicted "busy schedule of hearings over next several weeks" as Committee works on comprehensive farm bill, stressed that "we must seek to help agricultural producers earn a better return and a better share of the consumer dollar in the market. In short, we need to keep what has worked in Freedom to Farm and improve what has not worked."
Like nearly every commodity group that testified before House Agriculture Committee, Sen. Miller cited that, "it is not fair to punish producers with payment limits or caps."
Mushroom Promotion Program Violates 1st Amendment
Supreme Court held that federal mushroom check off program violates free speech requirements of First Amendment, stating that government may not "underwrite and sponsor speech with a certain viewpoint using special subsidies exacted from a designated class of persons, some of whom object to the idea being advanced" unless advertising is part of broader regulatory scheme. In ruling that will undoubtedly raise new questions about existing check off programs, Court distinguished mushroom promotion program from other check off programs previously deemed constitutional. Court held that mushroom marketing order compelled speech by participants and did not have broader purpose that could justify such infringement on First Amendment right.
Agriculture Secretary Ann Veneman indicated Department would review decision’s implications.
Because case only involved one check off program, it should not have immediate impact on others. Cotton check off program and cotton regulatory scheme are arguably broader than that in existence for mushrooms and are distinguishable in many respects from mushroom situation.
Lawmakers, EPA Discuss FQPA Implementation
Group of Congressmen led by Rep. Pombo (R-CA) met with EPA Administrator Christine Todd Whitman to discuss FQPA implementation. Also in attendance were Reps. Berry (D-AR), Boyd (D-FL), Goodlatte (R-VA), Norwood (R-GA), Radanovich (R-CA), and Stenholm (D-TX). Congressmen presented pointed questions to EPA regarding concerns with FQPA implementation. Whitman stated that EPA would not let deadlines drive decisions on pesticides but rather those decisions would be based on science. Working Group of Committee to Advise on Reassessment and Transition (CARAT) met to discuss cumulative risk assessment. EPA presented extensive update on progress development of cumulative risk assessment. EPA is counting on completing cumulative risk assessments by Aug. 3, ’02 deadline in order to include more than 1,000 OP tolerances. Working Group discussed ways to provide more public participation in process of developing cumulative risk assessment methodologies.
Meanwhile, Senate confirmed Stephen L. Johnson to be Assistant Administrator for EPA’s Office of Prevention, Pesticides, and Toxic Substances. Johnson, 20-year EPA employee, will be responsible for implementing federal laws dealing with industrial chemicals, pesticides (including Food Quality Protection Act, pollution prevention and food safety.
Academy Urges EPA to Amend TMDL Program
National Academy of Sciences (NAS) issued report stating there is sufficient science to support regulation of impaired waters but urges EPA to amend its current proposal for setting Total Maximum Daily Loads (TMDLs). Congress had requested report in response to concern over rules.
NAS report states that gaps in science exist but should not prevent TMDL program from proceeding. Rather, EPA must explicitly account for uncertainty in models used in setting TMDLs by estimating "prediction errors" and also by developing system that measures uncertainty for margin of safety estimates. NAS recommended that required listings by states should be split so that "threatened" waters could be separated from those needing action. States should develop different classifications for designated uses as current classes are too broad. Report appears to support EPA’s efforts to regulate non-point source pollution.
NCFAR Testifies in Support of Ag Research
National Coalition for Food and Agricultural Research (NCFAR) provided testimony to both House and Senate Committees as Congress holds hearings related to Farm Bill. NCFAR is newly organized broad-based stakeholder coalition of some 90 organizations involved in ag production and conservation including NCC.
NCFAR mission is to double federal funding of food, nutrition, agriculture, natural resource, and fiber research, extension and education programs during next five years. This additional funding is to be on continuing basis that complements, not competes with or displaces existing portfolio of federal programs of research and education.
April Mill Use Revised Up
Commerce Department estimates May cotton mill use at 309.83 million pounds, for 8.08 million bale seasonally adjusted annualized rate. Revised April estimate is 318.83 million pounds for 8.37 million bale annualized rate. Preliminary June mill use estimate and revised May estimate will be released on July 26, ’01.
On monthly basis, since December ‘00, US mill consumption has decreased from seasonally adjusted annualized rate of 9.72 million 480-pound bales to estimated 8.08 million 480-pound bales for May ‘01. Much of this decrease in consumption has been attributed to rise of textile imports. Continued strength of dollar has been key factor for textile import increase and reduced domestic spinning.
Effective June 29 - July 05, ‘01
Adj. World Price, SLM 11/16.......33.01 cents*
Coarse Count Adjustment............0.00 cents
Current Step 2 Certificate Value...2.10 cents
Mktg. Loan Gain Value.............18.91 cents
*No Adjustment Made Under Step I
Five-Day Average
Current 3135 c.i.f. N. Eur........46.85 cents
Forward 3135 c.i.f. N. Eur........46.65 cents
Coarse Count c.i.f. N. Eur........45.42 cents
Current US c.i.f. N. Eur..........50.20 cents
Forward US c.i.f. N. Eur..........53.50 cents