NCC Opposes Damaging FY12 Ag Appropriations Bill Amendments

MEMPHIS -- The National Cotton Council (NCC) strongly opposes amendments to the FY12 Agriculture Appropriations bill that (1) rewrite provisions of the 2008 Farm Bill and (2) violate a government-to-government agreement established between the United States and Brazil.

NCC Chairman Charles Parker, producer from Senath, MO, said that the Appropriations Committee’s actions circumvent the thoughtful and deliberate process initiated by the agriculture committees that authorize the comprehensive multi-year farm legislation.

“As the House and Senate Agriculture Committees are beginning the process of developing the successor legislation to the ’08 farm law, the House Appropriations Committee has undertaken a misguided approach to farm policy,” Parker said.

The combined effect of two amendments offered by Representatives Flake (R-AZ) and DeLauro (D-CT) would violate the Framework Agreement established between the United States and Brazilian governments. The Framework, which was finalized in June 2010, is a multi-faceted document that outlines an orderly resolution of the WTO trade dispute involving the export credit guarantee programs and certain provisions of the upland cotton program. As part of the agreement, the United States committed to establish a fund of $147.3 million per year that would provide technical assistance and capacity building for Brazil’s cotton industry. The fund, which is subject to transparency and audits, will continue until the next farm bill’s passage or a mutually agreed solution is reached. If enacted, the appropriations amendments would end those payments, thus putting the United States in violation of the agreement and exposing a broad range of sectors of the U.S. economy to more than $800 million in harmful trade retaliatory measures by Brazil. Representative Flake’s amendment would reduce upland cotton direct payments by the amount necessary to fund the Brazil Cotton Institute. The amendment is the latest in a long line of attempts to undermine or alter the Framework Agreement achieved by the United States and Brazilian governments.

“It is unfortunate that Representative Flake’s amendment will divert funds from the most trade compliant provision in the farm safety net and also squarely places the burden of the dispute on upland cotton programs, even though export credit programs account for 80 percent of Brazil’s retaliation authority,” Parker said. “Representative DeLauro’s amendment goes a step further by diverting the funds away from the Brazil Cotton Institute, and thus violating the government-to-government agreement.

“Actions by the Appropriations Committee have violated the Framework Agreement that had already established a clear path to resolving the ongoing WTO trade dispute. Provisions in the Framework establish principles that will likely mean substantive changes to upland cotton programs as part of the 2012 farm bill. The U.S. and Brazilian governments negotiated a detailed process that will resolve the trade dispute and Congress should let that process come to fruition.”

Parker also expressed disappointment regarding Congressman Flake’s amendment to reduce the income means test for farm program eligibility.

“By lowering the adjusted gross income (AGI) test to $250,000, the Appropriations Committee has introduced a major change that cuts across all of production agriculture,” Parker added. “In the 2008 farm bill, Congress went through a lengthy debate before imposing tighter eligibility requirements. It is anticipated that the Agriculture Committees will debate eligibility provisions in the next farm bill. Any debate or changes to those provisions should only be done by the authorizing committees as part of the next farm bill.”

Despite generally higher market prices, 2011 is shaping up to be a year characterized by extreme price volatility, escalated input costs, devastating droughts and historic floods. In this environment of increased risks, farmers have made multi-year planning decisions based on the provisions of the 2008 farm law.

“The actions by the House Appropriations Committee undermine the critical safety net of farm programs in an uncertain economic climate,” Parker said.

The NCC will work with the leaders of the House Agriculture and Appropriations Committees in an effort to reverse these misguided and counterproductive amendments.