National Cotton Council officials say they are not far enough along in their consensus-building process to make specific recommendations for the next farm bill. But, they have arrived at one conclusion:
Congress needs to provide more budget authority for agriculture in the next few years if it wants the farm sector to remain a viable part of the U.S. economy.
Speaking at the NCC's fall board of directors meeting in Memphis, Tenn., council president Robert McLendon said his organization has been trying to stress two points in its contacts with congressional leaders.
"First, we cannot develop effective agricultural policy in the next farm bill without adequate budget authority," he noted. "The budget baseline for all program crops upon expiration of the 1996 FAIR Act is about $4 billion for direct income payments. This is clearly inadequate given recent spending levels."
While cotton producers are grateful for the assistance provided by the federal government, the NCC believes that Congress must re-establish agriculture's priority in the country's budget process.
"The emergency legislation that we have seen for the last three years has been the lifeblood of our industry," said McLendon. "But, we need a policy that provides a decent level of income protection without having to rely on year-to-year passage of special assistance."
The second point: Congress should re-evaluate its discriminatory policies against commercial-sized farming operations.
"Limitations on marketing loan gains are making a bad situation worse," said McLendon, referring to Congress' imposition of a $75,000 per person per year cap on the amount of marketing loan or loan deficiency payments a producer may receive.
He said that when he testified before the House Agriculture Committee last summer, he pointed out that "I started farming in 1974, and I made a good living on 600 acres of land. Now, I have to have 3,000 acres to have the same standard of living. I did not choose to get big because I didn't want to go fishing. I had to get big to survive."
Payment limitation activity Two things are happening in Washington concerning payment limitations, according to McLendon.
"The Office of Management and Budget has stressed means testing more than ever in the last years of the Clinton administration," he noted. "We understand that virtually every program that advances through OMB these days is subjected to a means-testing debate. As a result, the members of the House Agriculture Committee appear very sensitive to this issue. They are concerned about a political backlash.
"At the same time, more agricultural groups are calling for increases in the marketing loan gain limit. Corn producers are expecting to be severely affected by the limit this marketing year, and for the first time in my memory, they have openly called for an easing of this limitation."
McLendon noted that Reps. Marion Berry, D-Ark., and Jo Ann Emerson, R-Mo., have introduced legislation raising the limit on marketing loan gains from $75,000 to $150,000 for consideration before Congress' scheduled adjournment Oct. 6.
"The council is staying on top of this effort and providing assistance wherever we can," he said. "But, we must be diligent to ensure that this effort does not jeopardize marketing certificates for loan redemption purposes. Marketing certificates are crucial to our ability to manage the limit."
He said he also stressed the importance of the marketing loan program and the council's Three-Step Competitiveness program.
The council has set up a farm policy committee that has met to begin formulating recommendations for the next farm bill. "It hasn't been as active as I anticipate it will be next year when the debate on the 2002 farm bill begins in earnest," said McLendon.
"The American Cotton Producers also has its own committee that is reviewing farm policy issues as well. We will not be caught unprepared when the debate begins in Washington."
The council president noted that several Cotton Belt states are suffering through severe drought conditions, and that yields are being adversely affected.
"The secretary of Agriculture recently visited Texas to see first hand the serious drought and insect conditions that exist in several parts of that state," he said. "The Southeast has had a dry year, and the Mid-South has just gone through record high temperatures, along with very dry conditions."
McLendon noted that the agricultural appropriations bill passed by the Senate contains $450 million in disaster assistance. "This will not cover all anticipated losses," he said. "However, that amount is on top of more than $5 billion already provided this year in additional AMTA payments.
"And, although it does not go into effect until next year, some in Congress will only remember that they spent a significant amount on crop insurance earlier this year."