Current Uncertainties Do Not Diminish Need for ‘Sound Farm Policy’
National Cotton Council Chairman James Echols told the organization’s Board of Directors that current political, economic and national security uncertainties do not diminish the cotton industry’s need for new farm policy that holds promise for restoring economic health to all industry segments.
"Indeed, economic viability of the U.S. cotton and textile industries is essential to our nation's national security, and we will need to drive that point home with policymakers," he stated at the Board's fall meeting in Memphis. "While we cannot predict the hand we will be dealt in the weeks ahead, I fully expect this industry to play it with the same political acumen that has always characterized Council leadership."
The NCC's 35-member board represents the industry's seven segments and the directors reside throughout the 17-state Cotton Belt.
The Memphis merchant said the NCC has operated under the assumption that the House will proceed with consideration of new farm legislation in the weeks immediately ahead and the Senate will do so shortly thereafter.
"I think it is prudent for us to continue on that course and to be prepared to quickly respond to Congressional friends if tough choices must be made among our farm policy priorities," he said.
He reminded the directors that NCC has cautioned throughout farm policy deliberations that maintaining and possibly improving on provisions of the House bill would be an uphill battle because of budget constraints plus "an altogether different set of priorities among a number of influential Senate Ag Committee leaders."
He noted that while Congress has signaled a willingness to authorize deficit spending for what the whole nation would affirm is a very high priority ($40 billion for terrorist victims), he did not know where Congress will see agriculture on the scale of national priorities.
Meanwhile, he said the NCC is continuing its efforts to negotiate with EPA the re-registration of Bollgard, to finalize emission standards for vegetable oil solvent extraction and to conclude the appropriations process with the cotton industry's priority programs intact.
Dr. Mark Lange, NCC's vice president, policy analysis and program coordination, provided the Board a U.S. cotton economic outlook.
He said the NCC will continue to emphasize the importance of sound agricultural policy to industry infrastructure maintenance. Actions in Congress over the next several months, he emphasized, will be crucial to insuring U.S. cotton's economic future.
The economist noted that the latest USDA estimates of net farm income continue to reflect the importance of government payments in averting financial disaster for the U.S. agricultural sector. Crop receipts and income of principal row crops are not expected to increase in 2001, he said, and the decrease in government payments will translate into a decrease in net farm income for commodity crops.
Regarding the world cotton situation, Lange said the latest 2001 world cotton production estimate of 96.2 million bales and 2001 cotton mill use forecast of 92.6 million bales would be world records.
In the U.S., Lange said that while USDA maintains the Census Bureau's mill use estimate for 2001 of 8.87 million bales, the more likely case is about 8.4 million bales. With an estimated 6 million bales of carryover and a record expected crop of 19.99 million bales, U.S. supplies are forecast at 26 million bales.
He said USDA's export estimate of 9 million bales, which has been controversial since its first announcement in May of this year, would leave U.S. ending stocks at 8.7 million bales, with a corresponding stocks-to-use ratio of 50.3 percent.