Senators Thanked For Letter Seeking Clarification on Marketing Assistance Loans Reduction
The NCC expressed appreciation to Sens. Thad Cochran (R-MS) and Saxby Chambliss (R-GA) and 12 of their Sunbelt colleagues for their bipartisan communication to USDA Secretary Vilsack requesting clarification of the basis for the decision to reduce Marketing Assistance Loans by 5.1% and to shut down loan processing until software modifications are made.
MEMPHIS -- The National Cotton Council expressed appreciation today to Senators Thad Cochran (R-MS) and Saxby Chambliss (R-GA) and 12 of their Sunbelt colleagues for their bipartisan communication to USDA Secretary Vilsack requesting clarification of the basis for the decision to reduce Marketing Assistance Loans by 5.1% and to shutdown loan processing until software modifications are made.
The letter explains that growers, merchants and marketing cooperatives were unable to make any contingency plans to mitigate the adverse impact of the last-minute announcement made on September 30 without warning or consultation with Congress or the private sector.
NCC Chairman Jimmy Dodson, a South Texas cotton producer, said, "the sudden and unexpected decision to reduce loans and stop loan processing has a significant impact on the availability of working capital, orderly marketing, and in some cases, results in unrecoverable income losses for farmers who forward-contracted their crops. The action will result in little if any budget savings to the government since loans are repaid fully with interest."
Dodson noted that the announcement also lacked clarification of how loan redemptions would be calculated, further confusing the market and creating uncertainty. He said the action was even more surprising and unexpected because 2012 crop loans were not reduced by sequestration, which calls into question USDA's selected use of any statutory flexibility. Earlier this year, USDA made the decision to reduce direct payments by a greater percentage than required in order to not claw back SURE and MILC payments.
The NCC will continue to work with Members of Congress and other commodity organizations to urge USDA to reconsider its decision and to resume loan processing as quickly as possible as peak harvest approaches and the adverse impacts worsen.
Joining Senators Cochran (R-MS) and Chambliss (R-GA) were Senators Wicker (R-MS), Isakson (R-GA), Boozman (R-AR), Pryor (D-AR), Cornyn (R-TX), Landrieu (D-LA), Vitter (R-LA), Graham (R-SC), Inhofe (R-OK), Shelby (R-AL), Burr (R-NC) and Hagan (D-NC).
Senator Sessions (R-AL), ranking member of the Budget Committee, sent a separate letter.
Dodson added, "We greatly appreciate that our industry's concerns and questions on these matters have been effectively conveyed in the Senate letters."
Copies of the letters are on the NCC's website at www.cotton.org/issues/2013/upload/13CochranMalsLet.pdf and at www.cotton.org/issues/2013/upload/13sessionsmalslet.pdf.