Cotton's Week: January 16, 2004

The NCC joined other commodity, livestock and general farm organizations in a letter urging the Senate to act promptly to pass the FY04 omnibus appropriations bill. The bill, approved by the House prior to the Christmas break, would provide funds for USDA’s operations, including farm program delivery as well as funding for conservation, nutrition, export promotion, food safety and crop insurance programs.

“Taken together,” the letter stated, “this bill funds a significant portion of the federal US budget that ensures safe food and fiber for American consumers and provides access to nutritious foods by low-income individuals and families. To defeat this legislation would create tremendous uncertainty in the programs that producers and consumers rely upon for their livelihood and confidence in (the) food supply.” The full text of the letter is available on the NCC Web site at http://www.cotton.org/gov/omnibus-appropriations-letter.cfm

Without the Senate’s prompt passage of the omnibus bill, another Continuing Resolution will be necessary to provide funds for USDA and other federal agencies whose individual appropriations bills were not passed separately and were combined to create the omnibus bill. The omnibus bill does not include any amendments to the commodity programs and is not open to amendment. Senate action would ensure that the FY04 appropriations process is completed without amendment to commodity programs, program eligibility rules or payment limitations.

The NCC is one of 20 fiber, textile and labor organizations objecting to any increase in textile quotas in ’04 as a result of a practice known as “carryforward.” Carryforward is a provision contained in most textile trade agreements that allows an importer to borrow a specific amount from the next year’s quota for use in the current year. This borrowing feature is reconciled by a reduction of an equal amount from the future or donor year quota.

In a letter to President Bush (available at the NCC Web site, www.cotton.org), the coalition objected to the carryforward proposal on the grounds that there is no ’05 quota from which to borrow and, therefore, no ability to reduce future quotas. The letter noted that granting the carryforward request would permit importers to increase quota amounts dramatically during this final year of the textile import restraint program.

In support of the coalition’s objection, the letter stated, “Moreover, importer complaints that there will be a quota shortage are completely unfounded. First, the existing quota program guarantees all World Trade Organization partners annual growth factors on all remaining textile and apparel quotas. These growth factors have provided significant increased access in ’04 to all foreign suppliers. In addition, we have several preferential trading partners such as Mexico, Canada, Central America, the Caribbean and Sub-Saharan Africa who enjoy quota-free access for the vast portion of their textile and apparel exports to the US. The flood of primarily Asian produced textile and apparel exports to the US need not be exacerbated by a false carryforward scheme.”

The US attempted to jumpstart World Trade Organization negotiations by sending a letter to trade ministers of member countries outlining what the US believes is necessary to make progress during ’04. US Trade Representative Zoellick highlighted negotiations in agriculture, goods and services.

With respect to agriculture, Ambassador Zoellick stressed that the discussions should focus on export competition, domestic support and market access. The letter called for the elimination of export subsidies by a date certain, meaningful disciplines on State Trading Enterprises and indicated that the US was committed to eliminating the subsidy component of export credit programs. The letter called for reductions in amber box domestic support and for caps on blue box support.

With respect to market access, the US is calling for substantial openings in markets of developed and developing countries, caps on high tariffs and a common methodology for tariff reduction. The letter also opened the door for exemptions for special products for certain developing countries.

The letter specifically references cotton, stating that the US supports cuts in trade-distorting domestic support for agricultural products, including cotton; the elimination of export subsidies for all agricultural products, including cotton; and substantial improvements in market access for cotton and all other agricultural goods. The letter also indicates possible support for sectoral negotiations in agriculture, without specifically identifying those negotiations.

With respect to market access for industrial products, including textiles, the letter called for “an ambitious formula for cutting tariffs on manufactured goods” and stated the US “continues to favor the total elimination of tariffs for goods, ... perhaps as a second-stage goal....”

US Trade Representative Zoellick opened the first of 3 negotiating rounds aimed at integrating the Dominican Republic into the Central American Free Trade Agreement (CAFTA) reached in mid-December among the US, El Salvador, Guatemala, Honduras and Nicaragua. Costa Rica backed out of the accord but expects to conclude further negotiations with Washington this month.

The Administration hopes to conclude the talks with the Dominican Republic by the spring and then submit CAFTA to Congress. Including the Dominican Republic would increase the size of the CAFTA by 40% and make the CAFTA countries collectively the 2nd largest US trade partner in Latin America behind Mexico. The Dominican Republic imports about $4.3 billion of US goods a year.

A Commodity Market Information System (CMIS) designed to consolidate many sources of commodity information from various agencies is under development by USDA for its Web site (www.usda.gov).

The CMIS will provide searchable access to more than 3,000 commodity-related reports USDA produces every year. Ag Secretary Veneman said the system is one of a series of e-government initiatives that are a special focus for USDA in ’04.

“E-government is an important part of President Bush’s management agenda to improve the operations of government,” Veneman said. “The computer has already taken its place next to the plowshare and tractor as indispensable to farmers. USDA’s e-government initiatives will standardize processes and provide tools to unleash the fuller potential of information technology. Our goal is to operate more efficiently in order to be more responsive to the needs of American agriculture and consumers.”

Veneman said that beginning immediately, visitors to the USDA Web site will begin to see a new design, which is the first phase in efforts to make the Web site more powerful and improve access to USDA information and science.

Another feature that users will see soon, she said, is a “customer statement.” Customer statements will put a range of USDA services and programs into a single report for agricultural producers. For instance, farmers would be able to view their contracts in various conservation programs, payments under commodity programs and information on loans and crop insurance.

Bayer CropScience announced it has received federal registration for the use of Ignite herbicide on its LibertyLink cotton varieties.

Ignite is a non-selective, contact herbicide that controls more than 100 weeds in cotton. LibertyLink cotton varieties have a genetically-based resistance to Ignite, which will enable growers to spray the herbicide over the top of their crop into early bloom. Bayer said Ignite also can be used as a pre-plant burndown or as a hooded application on non-LibertyLink cotton.

Cotton Foundation President Larkin Martin, a Courtland, AL, producer, received Cotton Grower magazine’s 34^th annual Cotton Achievement Award. She was recognized during the ’04 Beltwide Cotton Conferences for her progressive farming operation, including her efforts to incorporate new technologies and techniques such as conservation tillage, and for her active participation in the cotton industry. She also currently is a NCC delegate and Cotton Board executive committee member and a director of the Federal Reserve Bank of Atlanta.

Recipients of the ’04 High Cotton awards are Billy Sanders, Vienna, GA; Coyt Hendon, Indianola, MS; Ernest Bippert, Kingsville, TX; and Fred Starrh, Shafter, CA.

The producers were recognized for producing a profitable, high quality crop while meeting the best standards of environmental stewardship. The awards have been sponsored since ’95 by the Delta, Southeast, Southwest and Western Farm Press through a grant to The Cotton Foundation. The recipients received an all-expense paid trip to the ’04 Beltwide Cotton Conferences in San Antonio, where they were recognized.

“This year’s winners represent the best of the environmental ethic displayed by so many of our farmers,” says Greg Frey, publisher of the 4 Farm Press publications. “We are proud to be participating in the honoring of these growers in partnership with The Cotton Foundation.”

Global acreage devoted to genetically altered crops showed double-digit growth for the 7^th straight year in ’03, climbing 15%, according to a report by the International Service for the Acquisition of Agri-Biotech Applications (ISAAA).

Since the introduction of genetically-altered crops on a commercial basis in ’96, the number of acres planted to these crops has climbed from 4.3 million acres to 167.2 million, the ISAAA said.

The report noted that while acreage continued to rise in the US, the biggest change was in developing countries, where increasing numbers of small farmers are growing biotech crops, notably cotton.

The annual study found 18 countries planted biotech crops in ’03, 2 more than last year. Six countries - the US, Argentina, Canada, Brazil, China and South Africa - accounted for 99% of the biotech farmland. Seven million farmers planted genetically engineered crops, 1 million more than in ’02.

Net export sales reached 9.5 million bales for the marketing year following sales of 144,500 bales for the week ending Jan. 8. Total sales at the same point in the ’02-03 marketing year were approximately 7.7 million bales. Total new crop (’04-05) sales are 374,100 bales.

Shipments for the week were 313,700 bales, bringing total exports to date to 4.1 million bales, ahead of the 3.7 million bales at the comparable point in the ’02-03 marketing year.