Cotton Industry Overcomes Challenges in 2006

Despite policy and trade issues, National Cotton Council Chairman Allen Helms says the industry is doing well.

Published on: Jan 10, 2007

The cotton industry forged ahead in 2006 despite challenges on multiple fronts, National Cotton Council Chairman Allen Helms told the standing room-only crowd gathered for the opening session of the 2007 Beltwide Cotton Conference.

"In spite of the number of challenges in the farm policy and trade arenas, I believe the council his having a very successful year thus far in effectively focusing its resources on the industry's current priorities," Helms said. "However, there are still many challenges before us. Along with new farm policy and international trade commitments, research, education and technology transfer continue to be critically important."

To address non-policy challenges and establish the cotton industries priorities, Helms announced the Cotton Foundation will sponsor the Cotton Project to organize all stakeholders, including Council membership and the allied industry.

"The project's primary purpose would be to ensure that our industry's resources are effectively concentrated on the clearly defined priorities outside of the policy focus conducted by the Council," Helms said.

Among the well-publicized challenges faced in 2006 – and continue to batter the industry as 2007 begins are the federal budget, the Doha round of the World Trade Organization trade negotiations, the 2007 Farm Bill and quality and flow issues.

Helms noted Council continues to work on disaster assistance issues and hold the line against any efforts to lower payment limits.

"We have urged Congress to provide much-needed emergency disaster assistance to producers who have suffered severe financial losses due to hurricanes, drought and upwardly spiraling costs of production due to fuel and input costs," Helms said. "While Congress has been unable to agree on a comprehensive disaster bill in the appropriations process, it did add $15 million in cottonseed disaster funds for declared counties in 2005. Producers in those counties will not have to prove losses for cottonseed assistance for 2005."

The Council continues to support the firm stand taken by U.S. Agriculture Secretary Mike Johanns in the Doha negotiations. That stand, supported by the Council, is that the U.S. will make "no additional concessions without commensurate net gains in market access for U.S. agriculture".

Further, Helms said, the Council continues to defend the industry against the latest charges by Brazil, as they relate to the WTO ruling on subsidies that led to the end of the Step 2 program. The WTO established a compliance panel to decide whether the U.S. complied with the ruling.

"Brazil is contending the U.S. actions relative to the programs for Step 2, export credit guarantees, marketing loans and countercyclical payments are not enough to comply with the original ruling," Helms said.

On the Farm Bill, Helms said, the Council presented an industry perspective at six field hearings. Helms said the Council's Farm Bill message to Congress, as noted at the field hearings, is to:
• Maintain current Farm Bill provisions until its schedule expiration with the 2007 crop.
• Base the new Farm Bill on the current legislation.
• Make no further reductions in payment limits or changes in eligibility rules.
• Operate conservation programs on a voluntary, cost-share basis, as a complement – not a substitute – to farm programs.
• Consider extending the current Farm Bill if the WTO negotiations continue to create uncertainty.

On quality and flow issues, the Council in 2006 started a Bale Moisture Task Force to provide USDA with input on address excessive bale moisture issues. That force helped develop the USDA rule.