Their efforts have not met with much success to date, but cotton industry leaders are not giving up on their fight to win near-term economic assistance for financially-beleaguered cotton producers.
The fight was dealt a setback earlier this month when Agriculture Secretary Tom Vilsack told members of Congress he did not have the legal authority to designate cottonseed as “an other oilseed,” a move that would have made cottonseed a crop for farm program purposes.
“The industry built a broad base of political support within Congress and also generated support for the cottonseed proposal within the agricultural lending community and other commodity groups,” National Cotton Council Chairman Shane Stephens told farmers attending the Mid-South Farm and Gin Show in Memphis, Tenn. Feb. 26.
That included testimony at a “cotton crisis” hearing of the House Agriculture Committee’s General Farm Commodities and Risk Management Subcommittee last December in which Stephens was joined with other industry leaders and a lender representing all four regions of the Cotton Belt.
“While those efforts have not yet produced the result we want—and we are extremely disappointed in Secretary Vilsack’s current stance, we knew this would likely be a challenging and drawn out effort,” said Stephens, who was recently elected chairman at the NCC’s annual meeting in Dallas.
“As a result, we are continuing to demonstrate the financial need that exists in the countryside and are continuing to work closely with House Agriculture Committee Chairman Mike Conaway and other friends in Congress to seek this designation—while also building a case for near-term economic assistance.
Cost-share proposal for ginning
At press time, NCC leaders were meeting with USDA officials to discuss a proposal in which the government would pay a portion of a producer’s ginning costs. But Stephens said it was too early in the negotiating process to comment on the chances for the proposal.
Vilsack has also indicated he could use Commodity Credit Corp. Act authority to provide help to cotton producers if Congress would remove restrictions that were put on such actions in the 2016 Agricultural Appropriations Act.
Stephens said the Cotton Council has had some successes including relief from the “more onerous” payment limitation rules from USDA, which the NCC, the American Farm Bureau Federation and the USA Rice Federation said went beyond what the Agricultural Act of 2014 required.
Some of the relief came in the form of commodity certificates which were approved by Congress in the 2016 Omnibus Appropriations Act that passed in December. The certificates can be used to redeem cotton from the Commodity Credit Corp. loan.
The Council also was successful in working with the RMA to bring new options for a cotton farmer’s crop insurance coverage. Beginning in 2016, growers have the option to add the cottonseed coverage to their STAX policy.
“However, it is recognized that the positive outcomes on these issues do not fully address the current economic climate—which has dramatically changed since 2011 when the process started for developing the current farm bill,” Stephens said.
As most cotton producers know, the 2015 U.S. acreage was the lowest in more than 30 years, exports were the smallest in 15 years, and cotton prices are at their lowest level since the 2009 recession. That’s a different picture from when Congress was writing the 2014 farm bill and elected to not retain the cotton program because of an adverse WTO ruling in the Brazil case against the U.S. cotton program.
Secretarial designation for cottonseed
As a result, the industry concentrated its efforts on USDA, seeking secretarial designation of cottonseed as an ‘other oilseed,’ which would lead to eligibility under the 2014 Farm Bill ARC and PLC programs. But Secretary Vilsack is resisting those efforts, insisting Congress did not provide for cottonseed to be designated as a program crop in the 2014 farm bill.
“In short, we do not yet have the outcome we want – so our work will continue,” said Stephens.
The Council also has been active on the international trade front, he noted, maintaining close communications with U.S. representatives and WTO officials to ensure they were informed on U.S. cotton policy changes, developments in the cotton policies of other countries and key factors impacting the global cotton market.
Among those is the Turkish anti-dumping investigation which has been ongoing for more than a year. In early October, NCC President Gary Adams and Christy Birdsong, a Council attorney, met with Turkish Government officials, U.S. Embassy officials and Turkish textile groups in the efforts to bring an end to the investigation.
“Unfortunately, earlier this month, the Turkish government released its final disclosure report recommending the imposition of anti-dumping duties on U.S. cotton imports,” he said. “This week, Gary and Christy, along with several representatives from U.S. merchandising companies, are back in Turkey to present testimony at the public hearing. The Council also is submitting extensive written comments, along with our oral statement.”
Stephens said the Council has worked closely with the American Cotton Shippers Association and AMCOT, and also engaged the Administration and Congress in the effort to achieve a favorable conclusion to this investigation.
For more on the National Cotton Council, visit www.cotton.org.