New Farm Legislation
Aware of the 2002 farm law’s September expiration, National Cotton Council leaders and staff emerged from the 2007 Annual Meeting with farm legislation improvement as a goal.
Efforts were immediate as the Administration soon released its proposal for 2008-2012 farm legislation, and the NCC subsequently solicited and received cooperation from USDA in conducting a thorough review of the marketing assistance loan.
Specifically, the USDA’s assistance was sought in reviewing the “discovery of premiums and discounts,” factors determining the loan repayment rate and loan repayment and redemption practices. In the absence of seven-segment agreement to seek administrative changes in the operation of the marketing loan for the 2007 crop, the American Cotton Producers sought changes independently -- and unsuccessfully. USDA refused to act, citing both budgetary concerns and lack of industry consensus.
After discussions spanning four months by a special study committee chaired by NCC Vice Chairman Larry McClendon, agreement was reached to recommend changes in a number of existing marketing loan provisions with the goal of improving competitiveness, speeding movement of cotton to the market, and strengthening the industry’s ability to defend the marketing loan against the numerous challenges from a number of domestic and foreign sources. The study committee’s recommendations were first approved by the NCC’s Executive Committee and then by the full Board.
The broad-based recommendations included: changes in the calculation of loan premiums and discounts; urging USDA’s Agriculture Marketing Service to explore additional sources for price data; using a different methodology for valuing leaf, color and micronaire in premiums and discounts; using a different protocol for discovering the adjust world price (AWP) and adjusting it for average location and quality differences; adding an adjustment to the AWP for trade barriers; employing a new, seamless procedure for old and new crop AWP calculations; making changes in loan repayment and LDP procedures; and changes in rules for storage credit on loan cotton transferred from one warehouse to another. It was agreed that the AWP changes would be sought for the 2007 crop. The NCC’s comprehensive agreement was presented to USDA Under Secretary Mark Keenum by NCC Farm Policy Task Force Chairman Woody Anderson, American Cotton Shippers President and NCC Director Andy Weil, III, and NCC Director Mike Quinn.
After the House Agriculture General Farm Commodities Subcommittee’s commodity title proposal reduced cotton’s target price from 72.40 cents/pound to 68.61 cents/pound, NCC was successful in convincing Congressional Budget Office officials that certain provisions of the cotton program had not been taken into account in their initial budget estimates. The revised score allowed the cotton target price to be set at 70 cents.
NCC Chairman John Pucheu testifies regarding farm policy before the Senate Agriculture, Nutrition & Forestry Committee.
Subsequently, the House passed the Farm, Nutrition and Bioenergy Act of 2007 on a vote of 231 to 191 – legislation which incorporated many NCC-sought provisions to reform and improve the cotton program.
In early September, Senate Agriculture, Nutrition & Forestry Committee Chairman Tom Harkin (D-IA) released his proposed commodity title. American Cotton Producers Vice Chairman Chuck Coley joined NCC President Mark Lange in a session with national commodity organizations to discuss the status of new farm law debate and to seek consensus on a response. They also met with Senators Saxby Chambliss (R-GA) and Kent Conrad (D-ND) to stress NCC priorities for new farm law. The NCC then joined with other national commodity organizations on a letter urging the Senate committee to move expeditiously with mark-up and passage of new farm legislation.
Following the markup in late October, the NCC expressed deep appreciation for the successful efforts of Senators Chambliss, Blanche Lincoln (D-AR), Conrad and Harkin in guiding farm legislation through that panel and complimented Senators Chambliss, Lincoln, Thad Cochran (R-MS) and Lindsey Graham (R-SC) for including provisions that address many of the cotton industry’s priorities.
The NCC added Congressional contact information, farm bill summaries and talking points to a special “Farm Bill” page that had been created on its web site during House farm bill consideration. An “Action Alert” was issued to members urging them to thank their Senators for their work on the farm bill and asking them to vote against any damaging amendments that were expected to be introduced on the Senate floor – including specific opposition to a Grassley-Dorgan amendment on payment limits.
The NCC also joined with other agricultural organizations on letters to Senators Harkin and Chambliss urging them to support the legislation reported out of the Senate agriculture committee during Senate floor action and to oppose the Grassley-Dorgan amendment. NCC letters to Cotton Belt Senators asked them to urge the same. Later, a letter also was sent to the Senate Majority and Minority Leaders, Reid (D-NV) and McConnell (R-KY), urging a prompt resolution to the amendment process for the 2007 farm legislation.
Unfortunately, Senate activity stalled when disagreement arose over several amendments offered by both Democrats and Republicans, and a subsequent cloture vote failed. The Senate later reached agreement to res-start debate after a five-week delay. The negotiations included an agreement limiting debate to amendments that were germane to the bill.
The Senate passed its farm bill in December by a vote of 79-14, and it also contained a number of NCC-favored provisions.
The NCC joined 31 other agricultural organizations on a letter to the Senate and House Agriculture Committee chairmen and ranking members, thanking them for providing a three-month extension of current law but urging completion of the farm bill conference report by no later than late January or early February.
In other farm policy/legislative-related activity, the NCC:
- Mobilized opposition to FARM 21 legislation, introduced by Reps. Kind (D-WI), Flake (R-AZ) and Reichert (R-WA) that would have dramatically altered commodity, conservation, energy and nutrition programs
- Asked Secretary of Agriculture Mike Johanns to announce the second advance 2006-crop counter-cyclical payment for upland cotton
- Joined a coalition of commodity and livestock organizations urging House approval of a disaster assistance package
- Met with the House Agriculture Appropriations Subcommittee to solicit their support of the industry’s funding priorities, including boll weevil and pink bollworm eradication, research projects and retention of storage credits when the adjusted world price is below the loan
- Worked with USDA and key Congressional committees to ensure an appropriate transition to the Far East index after Cotlook Limited announced their intention to discontinue the Northern Europe “A” Index effective August 1, 2008
- Thanked Senator Saxby Chambliss (R-GA) for his rebuttal of a Washington Post editorial critical of the U.S. cotton program