This Week's "COTTON NEWS"
Friday, February 19, 2010 By Shawn Wade
The second round of negotiations aimed at redefining the parameters under which crop insurance companies operate has begun following USDA's release of its second draft of a proposed Standard Reinsurance Agreement (SRA). Renegotiation of the SRA was authorized in the 2008 Farm Bill.
Following USDA's announcement, which was presented to the crop insurance industry during its' annual meeting earlier this week, the response from companies, agents, commodity groups and, perhaps most importantly, Congressional agriculture leadership, has been less than enthusiastic.
House Agriculture Chairman Collin C. Peterson, speaking to the crop insurance group after the second draft was released, indicated his opposition to the level of USDA's proposed cuts and questioned the legality of the proposed cuts to administrative and operating expenses that he says were not envisaged by Congress when it passed the Farm Bill.
Crop insurance companies have 30 days to respond to the latest USDA proposal with an acceptance or counteroffer. A counteroffer is expected.
Unfortunately, the end game that USDA seeks is unchanged. The latest USDA proposal maintains all of the detrimental cuts and mechanisms that Congressional leaders, commodity and insurance industry groups agree will undermine the foundation of the crop insurance program and have an adverse impact on commodity producers who depend on it.
Industry concerns about the second draft center on both the deep cuts that the changes would impose on the budget baseline for the farm safety net and on the adverse impact it would have on every aspect of the program from producer to company.
USDA released the first draft of the proposed SRA agreement on December 4, 2009, proposing $4 billion in cuts over the next five years, or a total of $8 billion over ten years.
The second draft reduces the proposed cuts somewhat to $6.9 billion over ten years, primarily through delayed implementation of the full range of initially proposed cuts.
Friday, February 19, 2010 By Shawn Wade
In a surprise announcement this week, Cotton Board President and CEO, Drayton C. Mayers has resigned his position effective February 17, 2010.
Members of the Cotton Board Executive Committee have accepted Mayers' letter of resignation, which was tendered to Cotton Board Chairman Larkin Martin of Alabama.
Martin also announced that Lisa Droke, current Cotton Board VP of Finance and Administration, has agreed to serve as the organization's interim CEO.
Martin added she would soon assemble a team comprised of Cotton Board Members to begin the search for a new CEO.
According to the statement released by Chairman Martin, Mayers agreed to remain available to the Cotton Board during this transition should we have questions for him related to ongoing Cotton Board projects.
In his resignation letter Mayers wrote, "I have made this decision because I have done all that I can to lead and manage the Board during the transition from my predecessor to today." Mayers also noted that intends to resume his career in international trade and market development.
During his tenure, Mayers led efforts to strengthen the Cotton Board's operational performance, emphasizing improvements in internal and external policies and procedures.
During his tenure, the Cotton Board implemented anew governance initiative, modernized the collections process, deployed a new regional communications team, improved financial controls and improved internal IT capabilities.
In her statement, Martin acknowledged Mayers' hard work and devotion to the organization and the cotton industry. "We know he will bring his energy and talent to his next task and we wish him all the best," she concluded.
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|Editor's Note:|| |
"Cotton News", a weekly service of Plains Cotton Growers to the cotton industry and news media in the 25-county High Plains area, is mailed from Lubbock each Friday. Its contents are confined to news items and comments pertaining to the High Plains cotton industry which is so vital to us all.
Anyone interested in making comments about the contents of this column can call PCG at 806-792-4904 or Email PCG at: firstname.lastname@example.org
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