MEMPHIS, TN (Special) – The National Cotton
Council (NCC) has joined with other agriculture organizations in
urging the Senate Agriculture Committee to expedite development of a
new farm bill and in expressing concern with provisions of the
proposal authored by Sen. Richard Lugar (R-IN) that would phase
out and ultimately eliminate the marketing loan in five years.
Chairman Tom Harkin (D-IA) had scheduled the committee to
begin work on the bill on Thursday, Oct. 18, but the session was
cancelled when House and Senate office buildings were closed for an
anthrax inspection. Although supportive of committee action, the NCC
and other agriculture organizations urged the chairman to present a
comprehensive package which allocates funds among titles in a manner
similar to the House-passed bill before proceeding with
title-by-title consideration.
"We continue to emphasize how
important it is to have a new farm bill in place for next year,"
said NCC Chairman James E. Echols of Memphis. "The House passed a
bill that provides a fair and equitable allocation of $73.5 billion
in additional spending, as authorized in the 2002 budget resolution
and maintained in a hard-fought battle to reject amendments to
reduce commodity title funding during the House floor debate. We
urge the Senate Agriculture Committee to consider both the funding
level and the structure of the House bill as the committee begins
its work."
The NCC expressed concern with the five-year farm
bill concept paper unveiled Oct. 17 by Sen. Lugar (R-IN), saying "we
believe it falls short of meeting the needs of U.S. farmers,
ranchers and consumers at a time when the stability and safety of
our food and fiber supplies is so critical to national security."
"The commodity title of Senator Lugar’s bill is essentially
a subsidized insurance product with inadequate coverage," said
Echols. "It would phase down the marketing loan formula in its first
three years and discontinue it entirely in the last two years. The
marketing loan has been the cornerstone of the U.S. cotton
industry’s success since its introduction in 1985.
"We have
expressed our concerns to USDA and have very strongly discouraged
the department’s support of the bill. We are deeply disappointed
that USDA has expressed support for the concepts in the
legislation, which includes the elimination of the marketing
loan, and has indicated that in spite of the budget resolution it
will support an increase in funding of only $25 billion over the
baseline."
Echols said the cotton industry’s leadership has
requested a meeting with Secretary of Agriculture Ann Veneman to
discuss ways in which USDA can respond to the financial stress faced
by U.S. agriculture and join in the effort to enact effective new
farm legislation.
Sen. Lugar’s bill is estimated to cost
about $25 billion above current spending estimates for the 2003-07
period, in line with what the Bush Administration indicated it would
spend for a new farm bill. The House bill was scored by the
Congressional Budget Office at just under $40 billion for those
years. In addition to phasing out cotton’s successful marketing
loan, the commodity title of Sen. Lugar’s bill would discontinue
fixed de-coupled payments and phase down "commodity specific"
support programs in its first two years, NCC President and CEO
Gaylon B. Booker noted.
The proposal incorporates a whole
farm revenue insurance product and doubles spending on conservation
programs. It requires participants to pay 52 percent of the premium
for insurance that would guarantee, at best, 80 percent of a farm’s
five-year average gross market revenue. A voucher would help cover
the producer’s share of the premium, with the value of the voucher
determined by a sliding scale that is inversely correlated to a
farm’s gross revenue and capped at $30,000.
The value of
vouchers for a farm large enough to be commercially viable is almost
inconsequential.
"We are deeply concerned that, on initial
review, Senator Lugar’s proposal would not provide the safety net,
absent from the 1996 farm law, that commercially viable farming
operations need to continue to provide the nation with high quality,
affordable food and fiber products," Booker said. "In fact, we
believe the legislation would likely lead to a continued need for
expensive annual ad hoc financial assistance packages.
"The
House-passed bill, which complies with the budget resolution and is
consistent with current international trade commitments, provides
predictable, effective long-term policy so desperately needed by
farmers trying to compete in world markets and comply with expensive
regulations. Congress approved an $8.2 billion overhaul of the crop
insurance program in 2000. That legislation provides authority for
development of pilot programs, including revenue insurance, as a
complement, not a replacement, for sound farm policy."
The
Memphis-based National Cotton Council of America’s mission is to
ensure the ability of all U.S. cotton industry segments to compete
effectively and profitably in the raw cotton, oilseed and
manufactured product markets at home and
abroad.
