Senate Ag Committee Bill Has Potential to Restore U.S. Cotton Profitability

The farm bill commodity title passed Thursday by the Senate Agriculture Committee “includes priorities that have the potential to restore U.S. cotton industry profitability,” said National Cotton Council Chairman James E. Echols.

November 15, 2001
Contact: Marjory Walker
(901) 274-9030

MEMPHIS - National Cotton Council Chairman James E. Echols says the farm bill commodity title passed by Senate Agriculture Committee includes priorities with the potential to restore U.S. cotton industry profitability.

Offered by Chairman Harkin (D-IA) with principal co-sponsors Sens. Daschle (D-SD) and Conrad (D-ND), the title passed on a 12-9 vote, with Sen. Hutchinson (R-AR) joining with Democrat members in voting for final passage. An alternative measure offered by Sen. Roberts (R-KS) and endorsed by Secretary of Agriculture Veneman failed on a party line vote, with Sen. Lugar (R-IN) abstaining.

"We commend Chairman Harkin for moving ahead with the farm policy agenda so as to provide producers and lenders with a more stable outlook for U.S. agriculture for the 2002 crop year and beyond," Echols said. "The goal now is to work in a bipartisan manner to get a bill passed by the Senate, through conference and signed by the President in time for next year’s crop."

Echols noted that several provisions, which were high NCC priorities, are incorporated in the bill. Those include retention of the marketing loan, with redemption keyed to prevailing world market price; retention of cotton’s 3-step competitiveness program; a procedure for computing base acres that does not penalize growers who have opted to use FAIR Act’s flexibility provisions to under-plant their crop bases; payment eligibility provisions that enable commercially viable family farming operations to benefit from farm program participation; and a safety net that helps producers better manage income and risk.

"Senators Lincoln (D-AR) and Miller (D-GA) provided critical leadership in getting these major provisions included in the bill," Echols said. "In particular, Sen. Lincoln worked to ensure that payment eligibility provisions and base acreage adjustments were incorporated into the final version. Senators Cochran (R-MS), Helms (R-NC) and Hutchinson worked hard to make the Republican alternative as viable as possible for U.S. cotton and to draw the Administration into the debate."

"We look forward to working with the Senate to ensure that these cotton industry principles are retained in the bill that is finally enacted. The industry also will continue to work for other important but low-cost provisions that were not included, among which are elimination of the 1.25-cent threshold in the industry’s Step 2 competitiveness provision and income protection for cottonseed."

NCC analysts said the bill includes a number of improvements making it much more acceptable than earlier Senate versions. Importantly, payment limit provisions were adjusted to much more reasonable levels for commercially viable family farming operations.

Majority Leader Daschle expressed his intention to bring the bill to the Senate floor sometime after Thanksgiving recess.

Key bill provisions include: 1) 55-cent marketing loan with redemption at prevailing world market price; 2) safety net price of 68 cents/lb. paid on 100 percent of eligible pounds; 3) fixed decoupled payment of 13 cents/lb. for 2002-2003, 6.5 cents for 2004-2005 and 3.25 cents for 2006; 4) $100,000 per person limitation on combination of fixed and counter-cyclical payments; 5) continuation of 3-entity rule; 6) continuation of marketing certificates; and 7) ELS loan of 79.65 cents/lb. and continuation of competitiveness program.

Provisions of Republican alternative included: 1) 51.92-cent marketing loan with redemption at prevailing world market price; 2) continuation of 3-step competitiveness program; 3) 9.18-cents/lb. fixed, decoupled payment; 4) continuation of 3-entity rule and marketing certificates; and 5) Farm Counter-Cyclical Savings Account with matching contribution of up to 2 percent of average adjusted gross revenue.