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Budget blueprint forces hard choices

This budget "shows that Congress is prioritizing agriculture," says Jim Echols, chairman of the National Cotton Council, but the difference in funding level "makes it harder for Congress to make all the right choices" for agricultural programs.

"It forces choices and priorities between program options," he told members of the Southern Cotton Ginners Association at their summer meeting at Biloxi, Miss. Given the unusual economic stress pervading the industry — from producer to textile manufacturer — it's difficult for the council and other ag organizations to prioritize programs and spending, he said.

"We need all of the assistance we have asked for in order to restore the cotton industry to profitability."

In presenting the council's testimony on the new farm bill to the Senate Agriculture Committee, Echols said, "We were much more cautious about voicing any support for a market basked approach to farm payments. Analysis shows this would not be as beneficial as a more commodity-specific approach to counter-cyclical payments."

He noted that Vermont Republican Senator James Jeffords' move to the Independent column, shifting control of the senate to the Democrats, "is particularly significant for agriculture," creating a new emphasis on the Great Plains states and an alteration of the Senate's approach to agricultural policy. Tom Harkin, D-Iowa, chairman of the Senate Agriculture Committee, will likely press for means testing for farm program payments, broader conservation measures, and a different delivery system for program benefits, Echols said.

Council leadership has met with members of Congress and representatives of the White House and other commodity organizations to discuss both short and long term policy, as well as the cotton industry's trade priorities. "We've tried to establish a consensus on how best to deal with the crippling financial crisis enveloping the cotton industry and agriculture as a whole."

At the top of the list, Echols said, has been an effort to get congressional authorization for supplemental income assistance for 2001. "We've asked Congress to supplement existing AMTA payments with additional marketing loss payments at the highest rate possible, with the goal of these payments resulting in a level of income assistance equivalent to that received by producers in 1999.

"We've also asked that producers be allowed to receive these supplemental payments on the higher of existing crop bases or an average of recent planting history, provided adequate funds are available. We've also requested that Congress mitigate the impact of payment limitations and to reauthorize cottonseed payments when seed prices are low."

The budget that Congress adopted for this year authorized $5.5 billion for supplemental income assistance, Echols noted. "That amount, while very helpful, is not enough to maintain total support at the 1999 level." The House has already passed supplemental income assistance for 2001, staying within the $5.5 billion budget, he said, and its emergency assistance package provides supplemental AMTA payments at about 85 percent of last year's level.

"Although this helps, when added to the smaller 2001 regular AMTA payment, overall support will be lower in 2001 than in 2000."

The Senate has passed a $7.5 billion emergency assistance package — over the threat of a veto by the White House. A House-Senate conference committee will have to resolve the differences in the versions passed by each chamber.

The Senate bill would “borrow” funds from the 2002 appropriations bill to fund the other provisions higher Agricultural Market Transition Act or AMTA payments and fund conservation programs into the next fiscal year.

In addition to its emergency assistance proposal, the House has completed its version of new farm legislation, incorporating many of the features in a recent bipartisan "concept paper" developed by Agriculture Committee Chairman Larry Combest, R-Texas, and Charles Stenholm, D-Texas.

While the policies reflected are generally in line with those espoused by the National Cotton Council and "establish a solid foundation for new farm programs that will contain an effective safety net for farmers and that will enhance our competitiveness," Echols said, "because of budget restrictions, the level of income support falls short of our goal.


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