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Cotton industry keeps close eye on legislation

It's no accident that farmers began signup for the 2000 agricultural assistance program on Jan. 18.

When Congress completed action on the 2001 agricultural appropriations bill last fall, all it said was that USDA should implement the disaster program in the legislation "with as much speed as possible."

Once the ink dried, cotton industry leaders began lobbying USDA to schedule signup for no later than Jan. 20, the date that George W. Bush will be sworn in as president of the United States.

"We did not want to have the disaster program caught up in the transition between the old administration and the new," said John Maguire, vice president for Washington Operations for the National Cotton Council. "We asked that they start signup before Jan. 20."

Speaking at the Beltwide Cotton Production Conference in Anaheim, Maguire said the appropriations bill was carefully crafted to provide as much assistance as possible following the third year of low yields and poor prices.

"The bill contains those most important words in the English language - `Such sums as may be necessary,'" he told recipients of the Delta Council/Aventis scholarship program in a special Beltwide session.

Rather than having to take all the requests for assistance and pro-rate the funds as it did the last two years, USDA will be able to compensate eligible producers for 100 percent of their "quantity, quality and severe economic losses."

The latter is important because it means producers with quality losses and not quantity losses can qualify for assistance - something they could not do in the last two disaster programs. USDA has not issued the final rules on the quality loss program, so growers may want to wait to see whether the quantity or quality loss option better fits.

"USDA has also issued a clarification that the 20 percent loss threshold for quality losses applies to affected production," said Maguire. "If a producer has 1,000 acres, but only 200 acres were affected, he might not qualify for aid if the threshold were applied to his total acreage."

If that sounds like overkill, it's that kind of attention to detail that will be needed as agriculture begins the process of writing new farm legislation. Maguire says he believes it will take three years to write the law that replaces the Federal Agricultural Improvement and Reform Act in 2003.

Some producers are seeking a higher marketing loan rate - 55 cents per pound - in the new farm bill to improve producer incomes. There were indications at the Beltwide that merchants, who have traditionally opposed such increases, might be willing to go along with one this time.

But, William B. Dunavant Jr., giving his traditional Beltwide Market Insight speech, urged producers to move cautiously on such increases. "The problem I see with raising the loan is that it sends the wrong signal to other producing countries," he said. "Even though we have the marketing loan, raising the loan level can encourage additional foreign production and that we don't need."

It looks like the National Cotton Council has its work cut out for it.

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