Statement of Mike Hughes

Lamesa, Texas

Presented to the

House Agriculture Committee


San Angelo, Texas

May 9, 2006


Thank you for coming toTexas and providing a way for Texas farmers and ranchers to let their thoughtsbe considered as you begin to develop future U.S. farm policy. I appreciatethe opportunity to present these remarks about current and future farm policy.I also want to thank Representatives Conaway, Neugebauer and Cuellar for theirservice on the Committee and their strong support for farmers and ranchers.


My name is Mike Hughes. Ifarm approximately 2,500 acres of cotton, peanuts and wheat in Dawson andGaines Counties. In addition to my farming operation, it is also my honor toserve as the current President of Plains Cotton Growers, Inc. PCG's membershipconsists of cotton producers in a 41-county area of West Texas. This area isalso commonly known as the High Plains of Texas. We normally plant over 3.5million acres of cotton each year and account for approximately 20 percent ofthe cotton grown in the U.S.


Mr. Chairman, the HighPlains, along with the Rolling Plains region to our east, is home to a diverseagricultural economy. Cotton is our principle crop and farming and ranchingare important components of our economy. It is critical to farmers andranchers that our farm policy remains balanced between commodities and betweenthe various programs. Program-driven shifts in plantings to alternative cropswill result in unintended market disruption.


Cotton producers in my area,and across Texas, strongly support the current farm law. It is imperative thatit continue to operate without major modification through its scheduledexpiration with the 2007 crop. Producers have made substantial long-terminvestments and make cropping and marketing decisions based on theirunderstanding of current law. We are particularly concerned by annual proposalsto further tighten limitations on benefits or limit eligibility to the loan. We appreciate your expressed opposition to these proposals. Currentlimitations adversely impact many of our operations and especially irrigatedoperations.


We strongly support usingcurrent law as the basis for future farm law. The combination of a marketingloan, counter-cyclical payment when prices are low, and a direct payment forstability are a sound foundation.


As you develop new farm law,we urge you to maintain the marketing loan without limitations; maintaindecoupled direct payments; maintain a counter-cyclical program for times whenprices are low and preserve the cropping flexibility provision in current law. It is also important that payment limitations, which already unfairly penalizemany of our growers, not be reduced further and that current eligibilityrequirements be maintained.


Conservation programs willcontinue to be an important component of farm policy. The Conservation ReserveProgram (CRP) has been especially useful to farmers in this area. We havesuccessfully reduced soil erosion and improved air quality. Conservationprograms should be operated on a voluntary, cost-share basis as a valuablecomplement to commodity programs. However, they should not be viewed as aneffective substitute for the safety net provided by commodity programs.


Research and crop insuranceare also important to the future of our industry. Affordable, effective cropinsurance is important in our area, given the extraordinary risk ofweather-related losses. The cotton industry, through the National CottonCouncil, recently presented our recommendations to improve crop insurance tothe Federal Crop Insurance Corporation Board. We have also expressed interestin a permanent disaster program and innovative products including thecombination policy developed by Representative Neugebauer.


I want to express my specialappreciation for the continued cost share funds provided to APHIS to facilitateoperation of the boll weevil eradication program. This year, every acre ofcotton in Texas is in an active eradication program. Producers contribute amajority of the cost for this highly successful program. We are pleased to saythat the eradication of the boll weevil may be just a few short years away. Wealso appreciate the support for the Pink Bollworm eradication program in theTrans-Pecos Valley, which will assist us in reducing insect control costs.


Mr. Chairman, research is animportant function of USDA so we were disappointed that the administration'sFY07 budget proposal reduced cotton research by 15% or $8.2 million. We wereparticularly disappointed that the administration's proposal included closingthe gin labs at Lubbock and Las Cruces, New Mexico and cutting research at theCropping Systems Research Laboratory in Lubbock. We urge you and yourcolleagues in Congress to reject these proposed cuts and closures.


Due to changes in theinternational textile business, US cotton growers must now find an exportmarket for up to 75% of the US crop. We support continuation of marketdevelopment through the successful public-private partnership fostered by theMarket Access Program (MAP). And we urge continued funding for the ForeignMarket Development program and a WTO-compliant export credit guarantee program.


Mr. Chairman, we are deeplyconcerned that the language in the recent WTO Hong Kong Ministerial agreementwill be used to single cotton out for special and differential treatment. Weask that you and your colleagues urge the US negotiating team to insist thenegotiations be conducted as a single undertaking with no early harvest forcotton. We also urge you to make clear to our negotiators that the agreementmust include meaningful increases in market access for all commodities beforethere can be agreement on reductions in domestic support. And we ask that youcontinue to tell our negotiators that any agreement presented to Congress forapproval must be beneficial to US agriculture.


We are also concerned thatcertain countries, which are highly competitive in world markets, not beallowed to utilize special and sensitive product designations and safeguards,designed to assist the poorest of the poor, as a way to avoid following throughon commitments to increase market access.


If negotiations in the Doharound cannot be completed to the point that the impact on future U.S. farmpolicy is clear, we would support continuation of the current farm bill for atleast one additional crop year. While we understand Congress, not thenegotiators in Geneva, will write the next farm bill, we believe it will bedifficult for you to write new farm law while a far-reaching new tradeagreement is being negotiated simultaneously. Further, if Congress modifiescurrent law before negotiations are complete, it could undermine US negotiators'leverage to obtain concessions by our trading partners.


The US cotton industry hassupported the Doha round but we will not be able to recommend that Congresssupport an agreement that requires cotton to accept deeper and quickerreductions in domestic support; that does not provide significant andmeaningful increases in market access, particularly China, and that allowscountries like Brazil, China, Pakistan and India to declare themselves lessdeveloped for the purpose of evading compliance.


Again, thank you for comingto Texas and for the opportunity to submit these comments.