Speaking at the 50th annual Mid-South Farm and Gin Show, Hood acknowledged that the cotton industry is facing an economic outlook as dire as any in its 60-year history, in part, because of the uncertainty over the 2002 farm bill.
At press time, newly appointed House members of the conference committee were scheduled to hold their first meeting with Senate conferees to begin trying to resolve the differences between the House and Senate versions of the farm bill, most notably the Senate’s Grassley-Dorgan amendment on payment limits.
Hood and other NCC leaders attending the Gin Show in Memphis said they were pleased with the “Sun Belt” flavor of the 14 House members named to the farm bill conference committee. But they also said the cotton industry faces major challenges in dealing with the Grassley-Dorgan amendment.
“Both the Senate and the House versions of the farm bill have their good points,” Hood said in an interview. “They both have some points that need clarification or mediation. I think both bills can be mediated to bring them closer together, particularly on loan rates and trade issues.
“The Grassley-Dorgan amendment will be the most time-consuming and complex issue because of the total devastation it will have for some crops in some areas, particularly in the Sun Belt,” he noted. “The amendment basically tries to treat all crops the same, and you can’t treat all crops the same in all areas because of climate, because insect pressure, which goes to the cost of production, is so much different from region to region.”
Even without Grassley-Dorgan, resolving the differences in the two bills would be a time-consuming process because of the number of amendments that are attached, particularly to the Senate side of the farm bill.
“You have amendments that apply to water rights in the Far West, to the WTO on trade issues,” he said. “You have other commodities, such as dairy and peanuts that have some very contentious issues. These are issues that will require a considerable amount of discussion and time to resolve.”
Still, the Grassley-Dorgan amendment threatens to be the straw that could break the farm bill’s back, said Hood, a cotton producer and ginner from Gunnison, Miss.
“It is very complex and has a lot of ramifications,” he said. “And I really don’t think all of the conferees have had a chance to sit down and see exactly what effect it is going to have across the United States. When that happens, I think you will have a lot more discussion on this amendment.”
In his speech, Hood talked about the need to educate members of Congress and the conference committee about the misery the Grassley-Dorgan amendment could inflict on some areas of the United States.
“I think that a good analysis needs to be done for each commodity to see what effect it would have not only on a crop basis but on a regional basis,” he said. “As I mentioned, you have different costs of production from region to region and you can’t treat everybody and every crop the same. We need to emphasize that to every member of Congress.”
He acknowledged that much of the impetus for the Grassley-Dorgan amendment came from information supplied by the Environmental Working Group’s delving into records of government payments to farmers.
“The Environmental Working Group showed the actual dollars that have been going out, but they don’t break it down into the different areas in which these dollars were allocated,” Hood said. “Some crops because of the very low prices had a higher Loan Deficiency Payment, which means you get more money for those particular crops. So, I think what has to be done is to break it out, crop-by-crop, area-by-area and then look at the market and the international market to see what the differences were.
“Look at the whole ball of wax and then see how accurate these data that were being published, how accurate they really are. When you do that you will find out the information was presented in a way that showed it in an adverse way rather than was actually the case.”
Hood said he would hope that the conference committee completes it works and issues a conference report that can be passed by the House and Senate before Congress leaves on its Easter recess March 22. Congress will not return until April 8.
“By April, you have most areas of the United States that are planting, have planted or beginning to plant,” said Hood. “Even if they have a farm bill passed in early April, it’s going to be very, very difficult to implement with that late a start date.”
Hood said the National Cotton Council thinks it is “crucial that the conferees have a farm bill finished before they recess for it to be implemented in the manner that it needs to be.”
Of the House conferees announced on Feb. 28, four are from the Mid-West, three from California and two from Texas. Alabama, Georgia, North Carolina, Oklahoma and Virginia have one representative each.
“There were no real surprises on the House conferees,” said Hood. “We have been working with several of these members for a number of years.”
Members of the conference will elect a chairman when they meet. Hood said Council leaders were not sure who the chairman would be when he spoke on March 1, but that he would like to see House Agriculture Committee Chairman Larry Combest of Texas fill that role.
“Chairman Combest has said that is priority is a good farm bill and that he does not want to sacrifice that objective to a quick process,” he said. “The Council shares that view, yet certainly understands the urgency of getting a bill so that crop financing can be arranged.”
Combest, who along with fellow conference committee member Charlie Stenholm represents the Texas High Plains, has said he opposes the Grassley-Dorgan amendment.
If the conferees reach an impasse and can’t decide between the Senate and House versions of the farm bill, Hood said he is hopeful they will take the path that would make the most sense to the NCC.
“If the Senate bill was so far away they couldn’t agree on it, I’m not sure the conferees couldn’t just say let’s vote the House bill in,” he noted. “Then, some mediation could be done to satisfy President Bush’s desires on trade issues. The president has already said that he would sign the House bill.”
Asked about the biggest single factor contributing to cotton farmers’ woes, Hood said he would have to say low prices.
“The most formidable problem we as cotton farmers have is that of low prices and no foreseeable change in the near future,” he noted. “That’s the thing that is really paramount in the producer’s mind right now.
“And it gets back to what the lending institutions can do to help the farmer. They can only go so far. Institutions are asking what the safety net will be. So, it all hinges so importantly on the farm bill, and the Grassley-Dorgan amendment is just devastating in that aspect.”