Step 2 Program Vital to U.S. Cotton Competitiveness

MEMPHIS, TN – The National Cotton Council says the Step 2 program is vital to U.S. cotton’s competitiveness and helps the industry “ride out” downturns that range from severe currency fluctuations to massive increases in subsidized Asian polyester production.

In response to the Environmental Working Group’s (EWG) posting of Step 2 recipients and amounts received on its web site, the Memphis-based NCC said these payments are part of a highly successful federal 3-step cotton competitiveness program primarily designed to help cotton producers.

“The competitiveness program for cotton is an important component that enables the U.S. cotton industry to better compete in a difficult economic environment,” said NCC Chairman Bobby Greene. “Despite the presence of the competitiveness program, most foreign growths of cotton still manage to undercut U.S. cotton prices in international markets. This program better enables our industry to respond to aggressive pricing by our competitors.”

The Alabama cotton ginner stated that “it is extremely fortunate that these competitiveness programs for cotton have been in place over the last several years; otherwise the U.S. textile industry likely would have suffered even more job losses and plant closures than already have occurred.”

NCC President/CEO Mark Lange said the Step 2 program was conceived as an additional competitiveness tool to help U.S. farmers defend against subsidized foreign cotton and cotton products and compete in international markets that are riddled with government intervention – particularly the many centrally-planned states that dominate a significant portion of the world cotton trading market.

“Some form of a competitiveness program for cotton has been in legislation since 1985 - almost 20 years,” Lange said. “The 3-step competitiveness program in particular has been enacted and re-enacted three times by Congress. This program's attributes, its costs and its success in keeping U.S. cotton stocks at manageable levels and reducing the government’s inventory management exposure while avoiding reliance on production controls are well known and widely supported.”

Lange said there is nothing new in the EWG report, which is another attempt by the organization to sensationalize farm programs and turn public opinion against a program that helps the U.S. cotton producer compete in international markets despite raw fiber and textile tariff inequities, weak or manipulated Asian currencies, and competitors’ policies designed to favor their domestic cotton and textile industries.