U.S. textile manufacturers can begin signing up for the Economic Adjustment Assistance Program that Congress included in the Food, Conservation and Energy Act of 2008 to help stabilize the textile industry.
Under the EAA program, the secretary of agriculture can provide assistance to textile manufacturers that invest an equivalent amount of funds in capital improvements by acquiring, constructing, installing modernizing, developing, converting or expanding land, plant, buildings, equipment, facilities or machinery.
The 2008 farm bill provides payments based on the amount of cotton consumed by the textile manufacturer after Aug. 1, 2008. The manufacturer must sign a user agreement to be eligible for the funding.
Officials with the National Cotton Council and the National Council of Textile Organizations said they were grateful to USDA for implementing the program in a timely manner that was consistent with the way Congress meant for it to operate.
“U.S. growers appreciate the importance of the U.S. domestic textile industry and are hopeful this program will help the industry improve its competitive position in the textile and apparel marketplace, said NCC Chairman Larry McClendon of Marianna, Ark.
U.S. textile mills consumed as much as 11 million bales of cotton annually, almost all of them from U.S. cotton producers, until the early part of this decade. USDA recently forecast that U.S. mill consumption could drop to 4 million bales in the 2008-09 marketing year (August-July).
NCTO Chairman Anderson Warlick said the timely release of funds under the Economic Adjustment Assistance program is critical given the financial challenges faced by U.S. textile manufacturers dealing with uncertain credit markets, a sluggish economy and continued erosion of U.S. markets by subsidized textile and apparel imports.
“These funds can be an important component of our continued efforts to modernize our facilities and maintain competitiveness” said Warlick, who is also a member of the NCC’s board of directors from Gastonia, N.C.
Warlick noted that participants would need to carefully review the applicable regulations and guidelines before they sign the user agreement and apply for assistance, which took effect Aug. 1. The user agreement is at http://www.fsa.usda.gov/FSA/webapp?area=home&subject=coop&topic=landing.
McClendon stated that given the intense competition in the worldwide textile and apparel market, it was appropriate for the United States to help U.S. textile firms take steps to enhance their efficiency and improve their competitiveness.
“U.S. cotton producers worked with Congress to ensure this program would be budget neutral, even to the point of agreeing to a slight reduction in their own benefits in the 2008 farm bill,” he said.
The House Agriculture Committee agreed to the program as part of a 10-point plan aimed at helping revive the U.S. cotton industry, but had to agree to budget offsets in USDA’s cotton programs after the Bush administration insisted on spending reductions in the 2008 farm bill.
“NCC and NCTO leaders look forward to working with USDA to ensure that the program achieves its objectives and that participants fully comply with all provisions of the regulations and user agreement,” said Warlick.