Cotton's Week: September 24, 2004

Agriculture Secretary Ann Veneman announced that the first advance counter-cyclical program (CCP) payment rates for ’04 crops will be announced soon after USDA’s scheduled Oct. 12 release of its World Agriculture Supply and Demand Estimates (WASDE).

“By using the October report, we can incorporate the most current supply and demand information into the projections,” Veneman said. “This is also the same approach and timing used for last year’s program.”

The farm law provisions authorize the advance payment, if any is projected, based on expected marketing year average prices in October of the harvest year. A second advance can be made in February of the next calendar year. For cotton, the final payment (if any) would be made in Oct. ’05. The first partial payment may be up to 35% of the total projected CCP rate payment, at the Secretary’s discretion. The USDA release indicated that the first partial rates will be equal to 35% of the total projected rates.

In early September, NCC Chairman Woody Anderson sent a letter to Secretary Veneman urging a first advance CCP for the ’04 crop of upland cotton at the maximum allowable rate of 4.81 cents/lb. He also urged USDA to make the announcement as soon as possible so producers and their lenders can plan accordingly.

In testimony before the House Ways & Means Subcommittee on Trade, Avondale Mills President/CEO Stephen Felker urged Congress not to enact the Senate-passed Haiti Trade Preferences Bill, stating it would undermine trade preferences established with other Caribbean countries, lead to more job losses in the US textile industry and fail to create a healthy textile industry in Haiti.

The Senate’s Haiti bill would open the door to imports of apparel from Haiti, no matter where the components of the apparel were made - essentially making Haiti a transshipment platform for Asian garment manufacturers.

Felker stated that the bill would benefit Chinese and other Asian producers of yarn and fabric at the expense of US workers and workers from other Caribbean and Central American countries.

"Quite simply, the Senate bill creates an enormous and irresistible incentive for apparel makers to shut down their operations elsewhere in the Caribbean and Central America and move to Haiti, where they can freely utilize Chinese fabrics made of Chinese yarn and still get the same zero-duty access to the valuable US market,” he stated.

Felker urged Congress to: 1) provide support that Haiti needs to diversify its economy and become more stable and 2) consider legislation that ensures the financial and operational services from US export credit and financing agencies are available to US textile and apparel companies that choose to do business in Haiti. "Such a program in Haiti could serve as a pilot program for similar initiatives in other Caribbean and Central American nations and would be very beneficial in helping the partnerships our industry has established there withstand the challenges they will certainly face from Chinese imports in the years to come," Felker noted.

NCC and Cotton Foundation members can make advance hotel reservations until Oct. 25 for the ’05 Beltwide Cotton Conferences scheduled Jan. 4-7 at the Marriott and Sheraton Hotels in New Orleans.

An online request form is available at www.cotton.org/bwhousing for credit card payments only. Once information is submitted, NCC will confirm receipt and membership status in separate emails. Acknowledgement from the Beltwide Housing Bureau will follow within 3 weeks after submitting a reservation.

NCC’s Boll Weevil Action Committee (BWAC) developed recommendations to USDA’s Animal & Plant Health Inspection Service (APHIS) on allocation of FY05 boll weevil eradication cost share funds. At press time, Congress had not completed work on the FY05 ag appropriations legislation.

In addition to its established allocation process, the BWAC, meeting in Memphis, recommended a special allocation of $300,000 for the Pecos New Mexico zone in order to ensure this program can continue to operate. The BWAC also provided its executive committee the authority to recommend to APHIS the use of a contingency fund set-aside for possible future funding assistance to the pink bollworm eradication programs along the US/Mexico border. Border areas simultaneously conduct boll weevil and pink bollworm eradication programs. When boll weevil programs in the US near completion, the importance of establishing a buffer zone along the US/Mexico border will become the focus. Mexico has programs underway in the area south of El Paso in Chihuahua and in the area south of the Lower Rio Grande Valley in Tamaulipas.

“It is a huge advantage to maintain a boll weevil buffer in Mexico where there is a natural break in cotton production” said BWAC Chairman Charles Parker, a Missouri producer. “All regions of the Cotton Belt are either under active eradication or have been eradicated except for two zones in Texas that are scheduled to vote this year.”

James Radintz with USDA’s Farm Services Agency (FSA), Washington DC, reported that the Boll Weevil FSA Loan Program has been “an unsung success story.” He said the loan payments have been received on schedule or earlier, and no payment has ever been delinquent.        

The subcommittee on Post Eradication Transition, chaired by Texas producer Craig Shook, met to develop protocols for post eradication activities. Working groups – covering  organizational framework, interagency participation, emergency response protocol, and monitoring, supplies, and equipment -- reported summaries of breakout sessions to the subcommittee.

The formation of a Technical Advisory Committee (TAC) also was announced. Chaired by TexasA&MUniversity entomologist Dr. Tom Fuchs, the TAC will examine the draft Federal Quarantine for Boll Weevil upon its release for public comment. William Grefenstette, USDA-APHIS, Riverdale, MD, reported that the draft is expected to be published in December or soon thereafter.

The NCC’s Quality Task Force, chaired by Texas producer/ginner Larry Nelson, unanimously agreed to ask the NCC to issue an industry advisory cautioning ginners to exercise care in adding moisture because of still undetermined quality risks.

During their meeting in Memphis, the panel was updated on: moisture, short fiber content measurements, USDA Agricultural Research Service’s variety spinning trials, the Georgia quality initiative, NCC’s ongoing lint contamination educational campaign and its recent rack sample survey. USDA Agricultural Marketing Service (AMS) reported on: 1) the proposed format changes for various quality measurements and guides for extraneous matter and 2) an international cotton standards summary. USDA’s Farm Service Agency updated the task force on implications of maintaining a 150-point wedge between 32 and 33 lengths in the loan schedule.

The task force was created to develop the NCC’s quality policy and recommend improvement in fiber measurements, loan premiums and discounts, and general fiber quality. Past meetings have focused on such issues as pepper trash, high micronaire, module averaging and moisture.

Net export sales for the week ending Sept. 16, ’04 were 154,500 bales (480-lb.), resulting in total ’04-05 sales of almost 5.6 million bales. Total sales at the same point in the ’03-04 marketing year were approximately 3.6 million bales. Total new crop (’05-06) sales are 163,600 bales.

Shipments for the week were 69,300 bales, bringing total exports to date to 1.0 million bales, below the 1.2 million at the comparable point in the ’03-04 marketing year.

The Lawsuit Abuse Reduction Act (LARA), HR 4571, passed the House by a vote of 229-174. LARA amends Rule 11 of the Federal Rules of Civil Procedure which currently allows a judge to impose sanctions, including the cost of representation, on parties that file frivolous lawsuits.

Under this bill, should a lawsuit prove to be trivial, the courts would be obligated to levy sanctions against the responsible party. The bill also outlines the criteria for litigation to affect interstate commerce, to which the Rule 11 provisions would apply. The bill also sets standards as to whether a jurisdiction is the most appropriate forum to file a claim in order to reduce forum-shopping based on a court’s track record. Should the court decide it is an inappropriate forum a case can be dismissed or referred to another jurisdiction.

In a press release from the House Resources Committee, Chairman Pombo (R-CA) supported the bill stating, “Frivolous lawsuits filed under the guise of environmentalism actually hurt the environment and hinder economic growth at the same time.”

He said resources and agricultural interests have been mired in litigation from environmental activist groups with some 7,100 litigations pending. These lawsuits put a severe drain on agency resources, hinder the recovery of endangered species and economic growth, and cause lost jobs.

Rep. Pombo also stated that, “Because the environmental organizations that file these suits are entitled to recover taxpayer-funded attorneys’ fees and court awards - win or lose – environmental litigation has become big business in America. The American taxpayer should not foot the bill for this, nor should our economy have to suffer the dampening effects these suits cause. These and other frivolous actions prevent the creation of good jobs, which is why I was pleased to support this legislation today.”

Environmental activist groups filed a lawsuit against the Departments of Interior and Commerce contending that the Joint Counterpart Regulations on endangered species violate the Endangered Species Act (ESA) and the National Environmental Protection Act (NEPA). The Counterpart regulations, finalized in early August, allow the EPA greater discretion in determining pesticides’ effects on endangered species.

The brief was filed by Earth Justice on behalf of the Washington Toxics Coalition. It states that the Commerce and Interior departments did not execute the Environmental Impact Statement required by NEPA.

The NCC and other agricultural interests filed more than 40,000 comments in support of the counterpart regulations. NCC will continue to support and advocate the development of the counterparts as a scientific means in which threats to endangered species can be determined.

The EPA appointed Jon Scholl as the new agricultural counsel to EPA administrator Mike Leavitt. He replaces Adam Sharp who has been serving as interim counsel in addition to his responsibilities in the Office of Pesticides Prevention & Toxic Substances.

Scholl will provide the EPA administrator with confidential advice and analysis on how the agency’s policies could affect agricultural interests. He also will maintain a strong working relationship with the USDA on the many common issues they share and will communicate to the agricultural community from the EPA.

Scholl spent the last 25 years serving with the Illinois Farm Bureau in Bloomington, IL, and is an active partner in soybean and corn production in that state. He also worked in the Illinois Department of Agriculture and for Congressman Ed Madigan.