NCC Applauds Defeat of Amendment to Terminate Key Cotton Provisions; Disappointed With Adoption of Amendment to Violate U.S.-Brazilian Agreement

MEMPHIS -- The National Cotton Council (NCC) said it was deeply appreciative for efforts by leaders of the House appropriations and agriculture committees to successfully convince the House to reject a series of amendments to the FY12 agriculture appropriations bill(H.R. 2112). Those amendments would have severely compromised the cotton program by amending the 2008 farm law two years before it is scheduled to expire.

The NCC also complimented leaders on developing the legislation while working under severe budget pressure.

“Once again agriculture was asked to contribute to deficit reduction,” NCC Chairman Charles Parker said, “and while the cuts in this bill are difficult to accept, the leaders are to be complimented for their efforts to preserve funding for key programs and agencies as best they could.”

An amendment, offered by Rep. Jeff Flake (R-AZ) that was defeated on a voice vote, would have terminated counter-cyclical payments for upland cotton, prohibited repayment of cotton marketing assistance loans at the adjusted world price or issuance of loan deficiency payments for upland cotton, and would have prohibited cotton storage payments.

“Fortunately, a blatant and inappropriate circumvention of the farm program development process was avoided with this amendment’s defeat,” Parker said. “It would have targeted cotton specifically and undermined a critical safety net for cotton farmers who face uncertain economic and weather climates and seriously jeopardized an industry that makes significant contributions to our nation’s economic well-being.”

The Missouri cotton producer was referring to the fact that the U.S. cotton industry provides some 191,000 jobs and generates $27.6 billion in revenue with an additional downstream of 427,000 jobs and $123 billion in generated revenue.

The House also rejected amendments to change key components of current farm law related to determination of eligibility and limitations on benefits. Rep. Earl Blumenauer (D-OR) proposed capping annual payments for direct payments, counter-cyclical payments, loan deficiency payments and marketing loan gains at $125,000/crop year. Rep. Flake proposed amendments that would have: 1) denied all farm program benefits if an individual’s adjusted gross income exceeds $250,000 and 2) eliminated funding for USDA’s Market Access Program (MAP).

Parker said the U.S. cotton industry understands the gravity of the current budget situation but reiterated that Congress went through a lengthy debate during 2008 farm bill development before imposing tighter eligibility requirements and establishing limitations on benefits.

It is anticipated that both agriculture committees will debate eligibility and limitation provisions in the next farm bill, and Parker emphasized that, “the U.S. cotton industry is committed to work with Congress to achieve a balanced and reasonable approach to these critical issues so that the farm safety net for U.S. agriculture is available to all commercially viable operations.”

The NCC is deeply disappointed that the House approved an amendment by Representatives Ron Kind (D-WI) and Flake that would prohibit the transfer of funds to the Brazilian Cotton Institute. If enacted this would result in the United States violating the Framework Agreement negotiated by the U.S. and Brazilian governments. The agreement allowed Brazil to withhold implementation of prohibitively high tariffs on U.S. exports and provided for a series of consultations that could lead to a resolution of the dispute.

Parker said the Kind amendment -- the latest in a long line of attempts to undermine or alter the 2010 Framework Agreement achieved by the U.S. and Brazilian governments -- places the United States in violation of the agreement, undermines the good work of U.S. officials and exposes a broad range of U.S. sectors to harmful trade retaliatory measures by Brazil on up to $800 million in U.S. exports.

“The NCC is committed to work with Congress and the Administration to ensure the U.S. can continue to comply with the Framework Agreement to avoid serious disruption in trade and to identify a solution to the dispute,” Parker said.