Cotton Industry - PowerPoint PPT Presentation

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Cotton Industry

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3 cloture votes fail. New Farm Legislation- Senate. Concept Paper I ... 3 cloture votes fail, consideration suspended Dec. 19; Daschle promises to bring ... – PowerPoint PPT presentation

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Title: Cotton Industry


1
Cotton Industrys Interest(s)in New Farm Law
  • presented to
  • the
  • Cotton Economics and Marketing Conference
  • January 11, 2002
  • Atlanta, GA

2
COTTON INDUSTRYSINTERESTS/OBJECTIVES
  • predictable/effective income safety-net
  • marketing loan with AWP and competitiveness
    provisions
  • combination of fixed, de-coupled payments and
    target price
  • no discrimination based on size, revenue,
    organizational structure or crop mix
  • WTO compliant
  • equitable treatment with other crops
  • preserve industry infrastructure
  • adequately funded conservation, trade and
    research programs

3
Situation
  • 3 emergency assistance packages
  • depressed prices
  • weak demand
  • escalating cost of production
  • strong dollar (undervalued Asian currencies)
  • federal budget surplus
  • more emergency assistance or new farm law

4
Early 2001
  • FY02 Budget resolution
  • 5.5 billion FY01
  • 7.35 billion FY 02
  • 66.15 billion FY03-11
  • Emergency Assistance Package 2001 Crop
  • 5.5 billion
  • 2.0 billion retained for new farm bill

5
New Farm LegislationHouse
  • Field hearings
  • Washington hearings
  • Concept paper
  • Reactions
  • Committee mark-up
  • Floor debate
  • Adopted HR2646 on October 3 (291-190)

6
New Farm LegislationHouse
  • Key decisions
  • funding allocation (49.9 billion commodity
    title)
  • loan rate levels and marketing loan
  • fixed, de-coupled payments continued
  • counter-cyclical provision target price
  • yields frozen
  • bases-modified choice 85 payment base

7
New Farm LegislationHouse
  • payment limitations increased 3-entity and certs
    retained
  • soybeans become program crop
  • peanut program modified
  • conservation programs enhanced and funding
    increased

8
New Farm Law House
  • Challenges
  • funding allocation by title
  • livestock and specialty crops
  • EWG web-site and press focus on benefit
    distribution
  • Amendments
  • Kind-Boehlert (200-226)
  • Smith (187-238)
  • Lessons learned
  • conservation program funding
  • commodity program focus and payment distribution
  • policy comprehension

9
New Farm Legislation-Senate
  • Control shifts from Republicans to Democrats
  • Emergency assistance package stymied in July
  • September 11 then anthrax closes Hart
  • Concept paper released, then modified
  • Committee mark-ups
  • Floor debate (Dec. 5-19)
  • 3 substitutes rejected
  • 3 cloture votes fail

10
New Farm Legislation- Senate
  • Concept Paper I
  • higher loan rates with limitation on loan
    eligibility
  • de-coupled payment continued
  • counter-cyclical revenue/acre target
  • payment limits
  • 100,000 combined
  • no authority for certificates
  • eliminate 3-entity
  • up-date base and yields 100 payment base
  • allocation of funds to conservation (CSA)

11
New Farm LegislationSenate
  • Concept Paper II
  • higher loan rate without limit on volume eligible
  • increased fixed, de-coupled payment
  • counter-cyclical target price
  • payment limits 100,000 and current law
  • choice to up-date bases and yields
  • allocation of funds to commodities increased
  • Final Modifications
  • 1.25 threshold eliminated to July, 2003

12
New Farm LegislationSenate Floor Debate
  • Lugar substitute
  • increase funding for nutrition and decrease for
    commodities
  • Roberts-Cochran (White House Proxy)
  • freeze loan rates (except soybeans)
  • continue fixed, de-coupled payments
  • no target price---FARM Accounts (10k)
  • frozen yields
  • choice to up-date base, 85 payment base
  • Hutchinson-Sessions
  • modified House bill

13
New Farm LegislationSenate Floor Debate
  • Dairy
  • Conservation funding
  • Loan Rates
  • WTO compliance
  • Concentration/Competition
  • Payment Limitations, Targeting, Means- Testing

14
New Farm LegislationAdministration
  • New administration-House already at work
  • Concept paper released end of September
  • SAP strongly criticizes HR 2646
  • Select farm groups invited to White House-urged
    to delay
  • Endorse Lugar proposal
  • Senate Committee mark-up scheduled-Secretary
    urges delay
  • Chuck Conner appointed WH liaison
  • Secy. endorses Roberts-Cochran proposal

15
New Farm LegislationAdministration
  • President speaks Nov. 28--oks proceeding
  • SAP strongly criticizes S1731, endorses
    Roberts-Cochran substitute
  • 3 cloture votes fail, consideration suspended
    Dec. 19 Daschle promises to bring-up when Senate
    returns Jan. 23
  • Secy. Veneman calls for bi-partisanship
  • OMB Director confirms 73.5 bil available

16
New Farm LegislationProvisions
17
New Farm LegislationProvisions
18
New Farm LegislationProvisions
19
New Farm LegislationProvisions
20
New Farm LegislationPolicy Issues
  • Loan rates
  • Counter-cyclical program -TP vs FARM
  • WTO compliance
  • Dairy
  • Benefit distribution-crops and operations
  • Conservation funding-working lands program
  • Concentration/competition

21
New Farm Legislation-Politics
  • Daschle vs Republicans
  • Jeffords
  • 2002 Senate elections
  • Johnson-Thune (SD)
  • Harkin-Ganske (IA)
  • Cottonbelt
  • Hutchinson, Cleland, Landrieu, Cochran, Sessions,
    Carnahan, Gramm, Helms, Thurmond
  • Leverage
  • Economic Stimulus Package
  • Trade Promotion Authority
  • Energy policy

22
New Farm Legislation-Schedule
  • Key dates
  • Congress returns Jan. 23
  • Budget submitted new CBO baseline Feb. 20
  • FY03 Budget Resolution April 15
  • Latest date for implementation for 02 crops
  • Transition to advocating emergency pkg
  • Process
  • Senate action completed
  • Conference committee
  • Conference Cmte Rpt apprvd by House and Senate
  • Presidents signature

23
Cotton Industrys Message
  • Need improved farm law in place in time to
    finance 02 crop and to retain 73.5 billion in
    new budget authority
  • OR
  • need timely and adequately funded emergency
    assistance package for 02 crop and new farm
    legislation in place for 03 crop

24
Textile Industry Facts
  • textile manufacturing complex employs 1.0 million
    and contributes 75 billion to GDP
  • textile mills employ 450,000 with annual payroll
    of 15 billion-100 plants closed, 65,000 jobs
    lost in 2001
  • annual shipments valued at 47 billion
  • textile industry supplies 13,000 items to US
    military
  • industry has invested 25 billion over 10 years,
    productivity growth exceeds vehicles, paper,
    steel, printing and most other industries
  • total exports have tripled (exports to CBI have
    doubled), now valued at 16 billion and support
    100,000 jobs
  • textile-apparel trade deficit is 62.4 billion
    textile products account for 4.4 billion of
    deficit
  • annual cotton consumption by US mills declined
    from 11.4 million bales in 97/98 to 8.0 million
    bales in 01/02
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