Cotton's Week: February 13, 2004

The House Agriculture Committee and the Senate Judiciary’s subcommittee on Immigration recently held hearings regarding proposals to reform immigration policies.

The House Agriculture Committee hearing, chaired by Rep. Goodlatte (R-VA), focused on reforming the H2-A program. Chairman Goodlatte and Ranking Member Stenholm (D-TX) have introduced H.R. 3604, the Temporary Agricultural Labor Reform Act, to reform the H2-A guest worker program by creating a more streamlined process. The bill currently has 32 co-sponsors. 

The Senate Judiciary’s subcommittee on Immigration chaired by Sen. Chambliss (R-GA) held a hearing on overall immigration reform. During the hearing, Chairman Chambliss said, “We need a total overhaul of our immigration policies. This overhaul should meet our national security needs and our economic interests and be a manageable policy for how many people we admit into the US. The logical place to start is with reform of the H2-A agricultural worker program. Based on the testimony and discussion … I plan to work with my colleagues and introduce an H2-A bill that can be a starting point for total immigration reform.”

The NCC has worked with Cotton Belt members of Congress as well as a coalition of agricultural groups to help craft workable reform to the current H2-A program that would benefit the cotton industry. There are several proposals currently introduced in both the House and the Senate. In addition, President Bush has indicated the need to reform current guest worker policies.

In its February report, USDA gauged US ’03-04 cotton production at 18.22 million bales. Both mill use and exports were unchanged at 6.2 million bales and 13.2 million bales, respectively. The projected total offtake now stands at 19.4 million bales, generating ending stocks of 4.25 million bales. The estimated ending stocks-to-use ratio is 21.9%.

World production for the ’03-04 marketing year was estimated at 92.65 million bales, up 450,000 bales from the January report. World mill use is estimated to reach 97.24 million bales. Consequently, world ending stocks are projected to be 32.49 million bales for a stocks-to-use ratio of 33.4%.

The US and Australia reached a free-trade agreement that officials say will eliminate duties from more than 99% of American manufacturing exports to Australia.

The deal, which requires Congressional approval, also will boost most agricultural trade between the countries on products ranging from beef to fruit to macadamia nuts.

One notable exception is sugar, where current rules will remain unchanged. American sugar producers had lobbied hard against opening US markets to more Australian sugar.

The agreement also calls for lengthy phase-in periods to increase Australian beef and dairy exports, responding to pressure from US dairy farmers and cattle ranchers who had complained that a flood of cheaper Australian products could have cost thousands of jobs.

On the Australian side, the deal removes tariffs on more than 97% of manufacturing exports to the US, including a 25% tariff on light commercial vehicles that had severely limited Australian imports to the US.

The deal is the first US free-trade agreement with a developed country since one with Canada in ’88, 5 years before the ’93 North American Free Trade Agreement that linked the US, Canada and Mexico.

US Trade Representative Zoellick said the US still has concerns about China’s implementation of its World Trade Organization (WTO) commitments but praised the Beijing leadership for understanding “the importance of their commitment.”

Zoellick was in China as part of a multination tour to promote more WTO negotiations under the Doha Development Agenda, which aims to expand global economic growth by reducing trade barriers.

Zoellick met with Chinese officials, including Vice Premier Wu Yi, but said he discussed only global trade - not the bilateral trade relations between Beijing and Washington that have sometimes proved to be points of contention.

“While we have differences on these issues, the Chinese understand the importance of their commitment,” Zoellick said at a news conference. The language was more conciliatory than during previous visits, when Zoellick said China's access to US markets could be in jeopardy if it didn't move faster in meeting its WTO commitments.

Zoellick said he and his Chinese counterparts agreed to “work together in terms of opening access to our markets and theirs.” He said China’s reaction to his advocacy of the Doha agenda was “generally very positive.”

The Fish and Wildlife Services (FWS) and the National Oceanic and Atmospheric Administration (NOAA) released the long-anticipated counterpart regulations detailing how the EPA is to meet its consultation obligations under the Endangered Species Act (ESA). Litigation by environmental groups accuses EPA of failing to comply with the ESA to protect listed endangered species and have demanded that EPA address this oversight.

One of these cases, Washington Toxics v. EPA, has resulted in the court’s suspension of over 40 crop protection products within certain buffer ranges in the Pacific Northwest around salmon-bearing habitat. Due to the broad ranging usage of crop protection chemicals over the US, consultation under ESA, intended primarily for construction or land development activities, would prove to be unmanageable to the services. The counterpart regulations issued by FWS and NOAA clarify EPA’s role in meeting its obligations under ESA.

The proposed regulations would allow EPA to rely on much of its internal risk assessment to determine if there is a risk to endangered species for each given use. This process would greatly speed the consultation process and allow EPA to continue to register all but the most problematic products with minimal delay. These counterpart regulations have generated thousands of comments from the environmental community opposing implementation of the rule. Estimates from the Council of Environmental Quality have stated that several thousand comments were submitted by environmental groups before the proposed rule even was made public.

A grassroots effort is being conducted by commodity groups, pesticide manufacturers and other pesticide users to generate a large volume of comments in support of the counterpart regulations. The NCC will join this effort to generate support for the counterpart regulations in order to expedite the registration of crop protection products.

Discussions on implementing the Biosafety Protocol (BSP), recently recognized as an international treaty governing the transboundary movement of Living Modified Organisms (LMOs) found in biotech crops, are scheduled in Kuala Lumpur on Feb. 23-27.

While the US is not a signatory to the BSP, Mexico and other important trading partners are participants in the discussions on how to safely and properly ship, label and introduce transgenic crops throughout the world. As a result, the US cannot vote or actively suggest changes to how the protocol will work.

However, the US recently completed a series of meetings in Central and South America to discuss labeling requirements imposed by the BSP on commodity shipments. In an attempt to minimize regulation on shipping and introduction requirements, the US has been lobbying Western Hemisphere countries to set up a preliminary system that complies with the BSP but does not impose trade restrictions with a complicated labeling regime. Mexico, the US and Canada have signed such an agreement, with Mexico being an important leader in trying to convince other countries in the hemisphere.

If the US is unsuccessful in its attempts, the BSP is likely to be influenced by the European Union and its allies for a more strict system of tracking and compliance that is reflected in their current traceability and labeling regulations, which currently are being criticized by importing food companies and commodity organizations. Such a system may impose liability frameworks and tracing and technological requirements that would be trade disruptive and costly.

The NCC supports the US position and released a BSP update to exporters and traders with suggestions on how to comply with the BSP that align with US efforts.

Cotton Foundation membership now stands at 73 with the recent addition of 4 new agribusiness allies.

Omaha-based Lindsay Manufacturing Company - www.zimmatic.com - a leading manufacturer and marketer of center pivot and lateral-move irrigation equipment, also produces large-diameter steel tubing and provides outsource manufacturing and production services.

AutoFarm, Menlo Park, CA, is a leading provider of sub-inch GPS precision farming products, including the AutoSteer tractor guidance system for bedding (listing), planting and tillage operations. Visit www.integrinautics.com.

Precision Farming Enterprises, Inc., headquartered in Woodland, CA, offers specialized equipment and services for the agricultural, environmental and archeological markets. For more information, go to www.precisionfarming.com.

Agrivert, Inc., a New York-based wholly owned subsidiary of Arysta LifeScience Corp. in Tokyo, Japan, is focused on the development, production, registration, promotion and marketing of environmentally acceptable, biologically-based products, including Chaperoneä, a plant growth stimulator and protein transport enhancer for use in cotton.

Net export sales for the week ending Feb. 5 were 736,100 bales (480-lb.), resulting in total ’03-04 sales of almost 10.8 million bales. Total sales at the same point in the ’02-03 marketing year were approximately 8.7 million bales. Total new crop (’04-05) sales are 466,800 bales.

Shipments for the week were 367,000 bales, bringing total exports to date to 5.4 million bales, ahead of the 4.7 million bales at the comparable point in the ’02-03 marketing year.