MEMPHIS -- National Cotton Council Chairman James Echols told the
American Cotton Producers (ACP) that he was encouraged with the
House's progress on enacting a new farm bill - one that meets many
of the NCC's goals.
In an address
at the ACP's meeting in Monterey, CA, he said the farm
bill process will boil down to decisions about money and its
allocation.
"I know every (industry) segment will have its own 'wish list' as
we continue to work for the best possible farm bill," the Memphis
merchant said. "Everything I hear suggests that we may have trouble
holding what we have in the House bill."
He said that although Senate Agriculture Committee
Chairman Tom Harkin (D-IA) has some farm policy ideas considerably
different than NCC's, U.S. cotton will be able to work closely with
Senators Cochran (R-MS), Helms (R-NC), Lincoln (D-AR), Hutchinson
(R-AR) and Miller (D-GA).
NCC priorities in future farm legislation, Echols said, include
elimination of the 1.25 cent threshold under step 2, permanent
cottonseed assistance and freezing the Extra Long Staple (ELS) loan
rate. In addition, the NCC continues to seek additional ways to help
offset the negative impact on cotton of the strong U.S. dollar.
"Throughout the past two months," he noted, "we have communicated
these objectives to Congressional leaders and Administration
officials, pointing out the destructive impact the strong dollar has
had on our industry, the continuing weak prices of cottonseed and
the need to ensure that ELS cotton remains a viable choice for
western producers."
Echols suggested that elimination of the 1.25 cent step 2
threshold in the cotton competitiveness program needs to be among
the industry's highest. He said that may not be enough to help
salvage the U.S. textile sector, but would be a start.
"Beyond that, we need to find a way to help the mills offset the
devastating impact of the strong dollar," Echols said.
He said the NCC's Economic Services staff estimates that if the
dollar's value had not risen from its 1995 relationship to other
currencies, today's U.S. mill consumption rate would be 12.3 million
bales - about 4.5 million bales higher than the actual rate.
"Think how far that would go toward solving our price and offtake
dilemma," he said.
Echols said exchange rate provisions will cost money and the
House already spends all of the $73.5 billion that was authorized
for the farm bill. He said the industry may have to consider the
possibility that funding for exchange rate adjustments for cotton
might have to come from cotton's share of that
amount.