NCC leader says Senate bill could restore profitability

James E. Echols, the NCC’s chief executive and a cotton merchant, says quick action is needed by the full Senate and the conference committee that would be convened to iron out differences between the Senate bill and one passed by the House to get the legislation to the president for his signature in time for the 2002 crops.

A compromise commodity title in the Senate bill was offered by Chairman Tom Harkin of Iowa in an effort to break a logjam that was developing between Democrats and Republicans on the Ag Committee.

The title, co-sponsored by Senate Majority Leader Tom Daschle, D-S.D., and Sen. Kent Conrad, D-N.D., passed on a 12-9 nearly party line vote with Sen. Tim Hutchinson, R-Ark., casting the lone Republican vote for the measure. Hutchinson also voted for a Republican alternative offered by Sens. Thad Cochran of Mississippi and Pat Roberts of Kansas.

“We commend Chairman Harkin for moving ahead with the farm policy agenda so as to provide producers and lenders with a more stable outlook for US agriculture for the ’02 crop year and beyond,” said Echols. “The goal now is to work in a bipartisan manner to get a bill passed by the Senate, through conference and signed by the President in time for next year’s crop.”

Echols noted that several of the National Cotton Council’s priorities were included in the Harkin bill, including the marketing loan, the Three-Step Competitiveness provisions, and a base acreage formula that allows growers to retain their current base.

Sen. Harkin also dropped an earlier provision in his chairman’s mark bill that would have limited farm program payments to $100,000 per person.

“Senators Blanche Lincoln of Arkansas and Zell Miller of Georgia provided critical leadership in getting these major provisions included in the bill,” Echols said. “In particular, Senator Lincoln worked to ensure that payment eligibility provisions and base acreage adjustments were incorporated into the final version.

“Senators Cochran, Jesse Helms of North Carolina and Hutchinson worked hard to make the Republican alternative as viable as possible for U.S. cotton and to draw the Bush administration into the debate.”

Sen. Lincoln said that Harkin agreed to the changes in his bill late Wednesday afternoon after committee members were unable to garner a majority of votes for any of the farm bill proposals before it.

“We told him time and time again what our concerns were, particularly for rice and cotton and the commodity titles,” she said. “Our farmers are very capital-intensive. They invest a lot of money into their crop. Cotton and rice, particularly, are capital-intensive. It’s not like some of the Midwestern crops.”

Normally, Hutchinson said, he would have agreed with the administration position that higher payments would lead to overproduction of crops and lost market share.

“We’re talking about survival for those farmers out there,” said Hutchinson, who noted that Senator Harkin had gone out of his way to find a compromise that would move the bill out of committee.

“Initially, Harkin had $10 billion less for soybeans, cotton, rice and for other crops,” he said. “He now is $2 billion over the House bill. That’s how far he moved. Given that, and given the need to get a bill out of the committee, it was certainly worth supporting.”

“We look forward to working with the Senate to ensure that these cotton industry principles are retained in the bill that is finally enacted,” said Echols. “The industry also will continue to work for other important but low-cost provisions that were not included, among which are elimination of the 1.25-cent threshold in the industry’s Step 2 competitiveness provision and income protection for cottonseed.”

Majority Leader Daschle has said he intends to bring the bill to Senate floor sometime after the Thanksgiving recess.

Key bill provisions include: 1) 55-cent marketing loan with redemption at prevailing world market price; 2) safety net price of 68 cents/lb. paid on 100 percent of eligible pounds; 3) fixed decoupled payment of 13 cents per pound for 2002-03, 6.5 cents for 2004-05 and 3.25 cents for 2006; 4) $100,000 per person limitation on combination of fixed and counter-cyclical payments; 5) continuation of 3-entity rule; 6) continuation of marketing certificates; and 7) extra long staple cotton loan of 79.65 cents per pound and continuation of competitiveness program.

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