NCC: Payment Limit report right on target

It would have been the surprise of the century if it had done otherwise, but the National Cotton Council said it agreed with a national commission's conclusion that Congress should leave the payment limit provisions of the 2002 farm bill alone.

The report by the congressionally-created Commission on the Application of Payment Limits to Agriculture said there should be no legislative changes in payment limits or eligibility requirements nor any significant regulatory changes during the life of the Farm Security and Rural Investment Act of 2002.

In saying so, the commission apparently agreed with the position of the NCC and other commodity groups that more restrictive payment limits would have a negative impact on U.S. agriculture and cause instability in that sector's production, financing and marketing segments.

NCC President and Chief Executive Officer Mark Lange said this and other report recommendations reflect the testimony and input he and other production agriculture representatives provided to the 10-member panel during a public hearing in June.

“Based on our initial assessment of the report, we believe the commission, for the most part, agreed with the council's assessment of impacts on land values, cropping decisions, rural communities and differential impacts on Sunbelt commodities,” said Lange who noted that during the public hearing every farmer and agriculture representative presenting testimony expressed opposition to payment limit changes.

Lange commended the insight of the commissioners who recognize the value of a fully-functional marketing loan that includes the use of certificates for loan redemptions. This is especially critical for producers to be competitive globally.

“The U.S. cotton industry commends the commission members for their hard work on a difficult policy issue,” he said. “Their willingness to get input from the production segment prior to generating this report is appreciated. The commission recognized the crucial need for stability in the agricultural production sector in emphasizing the importance of avoiding any change in current farm legislation.”

Lange also noted Congress fully debated this issue for two years in preparation of the 2002 farm law.

The commission was established by that law to conduct a study on the potential impacts of further payment limitations on direct payments, counter-cyclical payments and marketing assistance loan benefits on farm income, land values, rural communities, agribusiness infrastructure, planting decisions of producers affected, and supply and prices of covered and other agricultural commodities.

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