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NCC says it opposes Step 2 elimination

The National Cotton Council said it would oppose the immediate elimination of cotton’s Step 2 program as proposed by the Bush administration in legislation submitted to Congress July 5.

A WTO appeals panel ruled that Step 2, part of the U.S. farm bill’s three-step competitiveness plan, was illegal in a case brought by the government of Brazil against the U.S. cotton program. Step 2 provides payments to U.S. merchants and manufacturers that help bring U.S. cotton prices closer to the world price.

"By implementing these proposed changes, we are being fully responsive to the WTO decision," said Agriculture Secretary Mike Johanns in announcing the proposal July 5. The step is essential for the United States, he said, "to continue to be a leader in the WTO Doha negotiations, which are crucial to U.S. market access and the long-term prosperity of U.S. farmers and ranchers."

But NCC Chairman Woods Eastland indicated that the NCC opposed the immediate elimination of Step 2.

"The approach suggested by the legislation would change the terms and conditions of the cotton program in the middle of the marketing season – something the National Cotton Council has always opposed," Eastland said.

"Sales of the 2005 crop have already begun in earnest. Cotton will begin to be harvested across the Cotton Belt well before this legislation is even considered by Congress. The approach suggested by the administration would alter a fundamental piece of the sales and marketing structure for cotton in the United States in mid-stream, harming many U.S. cotton merchants and textile manufacturers."

Urges options

Eastland urged "Congress to review options in this matter that are short of the immediate elimination of the Step 2 program. We further urge Congress to insist that it receive clear indications of Brazil’s intentions before making drastic changes to a U.S. commodity program."

The National Cotton Council will continue to work with Congress and the administration to construct a fair and appropriate response to this decision, he said.

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