Mr. Chairman and members ofthe Committee, thank you for the opportunity to submit comments on current andfuture farm policy.
My name is Barry Evans. Ifarm cotton and grain sorghum in Swisher County, Texas, and am currentlyserving as Vice President of Plains Cotton Growers, Inc. PCG is the certifiedproducer organization representing cotton farmers in the 41-county area thatmakes up the High Plains cotton production region of Texas. This area normallyplants 3.5-3.75 million acres of cotton each year and typically accounts for18-20 percent of total US cotton production.
Farmers in my area of Texasstrongly support current farm law and urge you to utilize the same structure indeveloping future policy. The marketing loan enables us to be competitiveagainst subsidized competition in international markets; the decoupled directpayment provides certainty to those who finance our operations and thedecoupled counter-cyclical payments are important when prices are low. We arefortunate that Congress has provided an effective financial safety-net toassist us when prices are low and to facilitate orderly marketing of our crops. Unfortunately, recent low prices mean a significant percentage of my farm'srevenue has been derived from program payments. These payments are not profit. We use the funds to pay operating expenses including wages, input costs andother expenses.
Farming is a full-time,year-round occupation in this area. My operation, for example, requiresintensive management, so there are few opportunities for off-farm incomecompared to the mid-west where farmers can hold down other jobs.
While the structure of farmpolicy is important, unrealistic limitations on benefits and unnecessarilyrestrictive eligibility requirements can result in the most generous andeffective policies being unworkable for us.
Mr. Chairman, we continue tohear statements that 20% of farmers receive 80% of the benefits; that farmersare increasing the size of their operations solely to capture more payments;and, that programs inflate land values and increase rent, which blocks entryinto farming.
From my perspective, theone-size fits-all, randomly established limitations on benefits unfairlypenalize full-time family farmers like me. The limit on counter-cyclicalpayments, which applies cumulatively to all crops except peanuts, coverssignificantly fewer acres than what is considered to be an economicallyefficient unit. That same limit covers considerably more corn and soybeanacreage in Iowa. National Cotton Council economists, using conservativeassumptions and USDA data, concluded that the amendment proposed by SenatorGrassley would reduce the direct payments to Texas farmers by $161 million peryear, a reduction of 38%. Total benefits, including counter-cyclical payments,direct payments and marketing loan gains - assuming average prices for 2000 to2004 - would be reduced $355 million or 25% annually. Analysis by the PaymentLimit Commission reached a similar conclusion. So, not only am I competing againstheavily subsidized production in China, India and Pakistan, I am competingagainst other US farmers who have significantly more of their productioneligible for program benefits. I'm not asking you to penalize them, just don'ttighten limits to further penalize me and my family.
I also want to address landvalues and beginning farmers. I too am concerned about the declining number offarmers and the difficulty young people have in starting their own operations. USDA-ARS has published a study which concludes that farm programs are not theprinciple cause of increased land values and that farmers do not expand theiroperations
due to increase programs benefits. Ican assure you that tighter limits and eligibility requirements, coupled with significantcuts in support when prices , are low will make it even moredifficult for young people to begin farming and will guarantee continuedconsolidation. In the absence of a financial safety net, what financialinstitution is going to provide operating capitol to an inexperienced,beginning farmer?
Finally, I want to addressinternational trade and its influence on farm policy. The US cotton programhas been singled out as the primary cause of poverty in sub-Saharan Africa. Obviously, the real causes are more complicated and include the combination ofa lack of infrastructure and a marketing and distribution system which deniesAfrican farmers an opportunity to purchase inputs and market their cottoncompetitively. The result is that African farmers' yields have declined andthey receive prices well below the average world price. European negotiatorsuse the US cotton program as a negotiating tool and China, India, Pakistan andBrazil refuse to participate in meaningful discussions about market access anddistortions in world trade in fibers, textiles and apparel. We are deeplyconcerned by the US proposal to cut domestic support by 60% because we haven'tseen a reciprocal offer by our trading partners to make
Mr. Chairman, in closing Iencourage you to continue to push for the development of better, moreaffordable levels of coverage for crop insurance; to maintain funding forimportant agricultural research - particularly the research at our gin labs; tosupport effective, public-private international market development programs;and to continue to invest in conservation programs operated on a voluntary,cost-share basis. Each of these items is important to producers and I encourageyou and the members of the Committee to continue them in future farmlegislation.
Again, thank you for theopportunity to submit these comments.