Cotton's Week January 19, 2001

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Veneman, Whitman Complete Confirmation Hearings

Ann Veneman and Gov. Christine Todd Whitman of New Jersey, President-Elect Bush's selections to head USDA and EPA, respectively, went before Senate committees for questioning on views and positions associated with posts.

Veneman pledged to Senate Agriculture Committee that she will focus attention on solving economic problems facing US farmers. More than $22 billion in support to farmers last year accounted for about half of net farm income nationwide. USDA estimates farm earnings will drop about 10% this year without 4th emergency payment in as many years from Congress. "It's important that we continue safety nets," said Veneman. "I'm not prepared to say what form that should take."

Lawyer and trade expert, Veneman worked at USDA from '86 to '93, rising to Deputy Secretary. She later served as agriculture secretary in California. She is expected to win easy confirmation despite some apprehension from Midwest farmers of her California roots. Consumer advocates and environmental groups have praised Veneman for her reputation of openness and are not expected to oppose her nomination.

Appearing before Senate Committee on Environment and Public Works, Whitman said she intends to "transform the way the EPA meets its mission by seeking consensus instead of confrontation." She told committee that, as EPA's head, she would balance concern for environment with need for economic growth by pursuing negotiation and compromise instead of aggressive enforcement of laws and regulations. She followed that model in New Jersey, she said. "Instilling fear does not solve problems," Whitman said. "What happens is that people back away from problem-solving and they get in a defensive mode or end up in court. And it doesn't solve the problem."

Whitman's environmental record as governor is considered mixed. Along with seeking compromise rather than taking polluters to court--arguing that approach yields quicker results at lower cost--her New Jersey administration also reduced penalties and gave polluters grace periods to correct violations of environmental law. At same time, she initiated program to add 1 million acres of open space over 10-year period. She also led successful effort to hold coal-fired power plants in Midwest responsible for emissions that contributed to acid rain damage in eastern states.

Environmental activists also are focusing on Interior Secretary-Designate Gale A. Norton, whose views on public land use and other issues are seen as much more pro-business.

In related development, Sen. Cochran (R-MS) endorsed Bill Hawks, Mississippi farmer and former Republican nominee for Lt. Gov. of Mississippi, as Deputy Secretary of Agriculture. Hawks is very active in agriculture and agricultural organizations and has considerable political and legislative experience. He has served industry through leadership posts in many agricultural organizations and through local and civic activities and has keen appreciation of role of government in agriculture.

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NCC Delegates Convene in San Diego Jan. 28-31

Delegates will be asked to develop policy that will steer US cotton industry toward profitability at NCC Annual Meeting, Jan. 28-31. "Today's Vision, Tomorrow's Challenge" is theme of meeting at Hyatt Regency San Diego.

"A chronic absence of profitability across the industry poses a serious challenge, but one that NCC leadership and delegates will address at this meeting," NCC President Robert McLendon said. "Restoration of profitability hinges on our being successful in maintaining a healthy policy partnership with the federal government; on the progress we make in reducing production, processing and distribution costs throughout the industry; and on our ability to expand markets for U.S. cotton."

McLendon will cover state of industry in address during meeting's general session Jan. 31. Also addressing that session will be William Kristol, Washington political analyst and commentator, and J. Berrye Worsham, III, president and chief executive officer of Cotton Incorporated.

Meetings of American Cotton Producers, NCC Policy Advisory Committee on Trade and Cotton Council International Board of Directors are scheduled Jan 28. Program committee meetings, luncheon remarks by Senate Ag Committee member Lincoln (D-AR) and annual meeting of National Cotton Ginners Assn. highlight Jan. 29 schedule

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Export Commitments Almost 5.3 Million Bales

Net sales for week ending Jan. 11 were about 81,000 bales (480-lb.), raising total '00-01 commitments to over 5.2 million. Shipments for week were approximately 134,000 bales, bringing total exports to almost 2.3 million. Exports at comparable point in '99-00 season were just over 2.0 million.

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FDA Proposes New Biotech Food Rules

Seeking to ease public anxiety about biotechnology derived food products, FDA has issued new proposals. Agency announced long-awaited rule for mandatory pre-market review of new biotech products.

FDA proposal would " . . . require submission to agency of data and information regarding plant-derived bioengineered foods that would be consumed by humans or animals." FDA is proposing that submission be made at least 120 days prior to commercial distribution of such foods. Scientific descriptions and data about new products would be published on internet for public disclosure during agency's review. To this point, FDA review has been voluntary, although industry customarily seeks review. Proposal has 75-day public comment period.

FDA also released proposed guidelines for voluntary labeling of foods that claim to be made with or without bioengineering or use of bioengineered ingredients, to ensure that labeling is truthful and not misleading. Claims such as "biotech free" would not be allowed because of difficulty of proving claim. Guidelines would also forbid promotion of non-biotech products as superior to biotech products. Commonly used term, "genetically modified," would not be allowed. Proposal has 60-day public comment period.

Biotech and food companies are lauding new policies and hope they will nullify calls for more stringent regulations.

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EPA Issues Biotech Rules

In final hours of Clinton Administration, EPA and other agencies were continuing to release new regulations and decisions.

EPA finalized its rules for regulating Bt and other biotech crops claiming pesticidal properties under Federal Insecticide, Fungicide and Rodenticide Act (FIFRA) and under Federal Food, Drug and Cosmetic Act (FFDCA). Agency originally proposed Plant Pesticide Rule in '94, which stirred considerable controversy, especially among scientists. Final rule, now called "Plant Incorporated Protectants" (PIPs), was signed by EPA Administrator Browner on Jan. 17.

Rules define type of PIPs that are required to undergo scientific review. In cases where the agency determines that PIPs pose little or no health or environmental risk, they will be exempted from certain regulatory requirements. For example, PIPs developed through conventional breeding will remain exempt from all requirements under FIFRA and FFDCA, with exception of adverse effects reporting requirements for manufacturers. In addition, as proposed in '94, rules will exempt from tolerance requirements for genetic material DNA involved in production of pesticidal substance in plant.

Of particular concern, EPA has not exempted PIPs derived through genetic engineering from plants that naturally propagate; PIPs that act primarily by affecting plant (such as causing plant to have thicker wax cuticles); and PIPs based on viral coat proteins.

EPA is soliciting public comments and data on these exemptions as well as public comments on National Academy of Sciences report, published in April '00 entitled "Genetically Modified Pest-Protected Plants: Science and Regulation," as it relates to plant-incorporated protectants derived through genetic engineering.

Federal Register notices are available at: and will be published in Federal Register shortly.

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China Negotiations Continue

Final stages of negotiations on China's membership in World Trade Organization (WTO) continue in Geneva with focus on whether China should be treated as developing country. Developing countries have less restrictive limits on domestic subsidies and on manufacturing subsidies. Although China has reported domestic subsidies well below limit, even for developed countries, China is insisting on right to raise subsidy levels to those of developing countries.

Head of Chinese delegation negotiating China's accession reportedly stated that China has already made big concession by agreeing to remove export subsidies and was not prepared to limit its use of other subsidies. NCC has urged US to oppose China's treatment as developing country because it is highly competitive in cotton and textile production.

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Pork Producers Sue USDA

Coalition of pork producers sued USDA after thousands of hog farmers voted to end government's $54 million pork checkoff program.

USDA released results of referendum held last year in which hog farmers voted 15,951 to 14,396 to kill program. Opponents say program has done little to stimulate pork consumption and mostly benefits meat processors and large corporate farms.

National Pork Producers Council, Michigan Pork Producers Assn. and various independent pork producers filed lawsuit in US District Court in Grand Rapids, MI. They seek temporary restraining order and preliminary injunction that would keep checkoff program alive.

Based on referendum vote, outgoing Agriculture Secretary Glickman has announced termination of program.

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NCC, BASF Continue Partnership on Education Programs

NCC and BASF are partnering to continue 2 successful cotton industry educational programs in '01: Cotton Coalition Professional Development Program and Cotton Physiology Education Program. Announcement was made by Phil Burnett, NCC Executive Vice President and Chief Executive Officer during '01 Beltwide Cotton Conferences. Coalition is special project of The Cotton Foundation, funded by grant from BASF.

Burnett also confirmed that BASF will continue to support Cotton Physiology Education Program through grant to Foundation. Now in its 12th year, program's mission is to discover and communicate more profitable methods of producing cotton.

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Joan Vass U.S.A. Receives US Cotton Champion Award

New York City-based Joan Vass U.S.A. is recipient of US Cotton Champion Award for '01. Award was presented at Beltwide Cotton Conferences on behalf of National Cotton Women's Committee (NCWC) and as part of Grown and Made in the U.S.A.-It Matters campaign. Award is in recognition of Joan Vass' past and present commitment to use of US cotton in its Joan Vass U.S.A. clothing collection.

Grown and Made campaign is supported by Aventis CropScience Company through grant to Cotton Foundation.

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Effective Jan. 19-25, '00

Adj. World Price, SLM 11/16........50.43 cents*
Coarse Count Adjustment............0.00 cents
Current Step 2 Certificate Value...3.49 cents
Marketing Loan Gain Value..........1.49 cents
Import Quotas Open..........................1
*No Adjustment Made Under Step I

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Five-Day Average

Current 3135 c.i.f. N. Eur........64.26 cents
Forward 3135 c.i.f. N. Eur...........No Quote
Coarse Count c.i.f. N. Eur........60.42 cents
Current US c.i.f. N. Eur..........69.00 cents
Forward US c.i.f. N. Eur.............No Quote

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