Cotton Issues Top Washington News

LUBBOCK, July 23, 2004                           By Shawn Wade

      Centerstage has been a busy place in Washington, DC during the month of July with theusual jumble of individuals and issues vying for the spotlight.

      Forcotton the top candidates for attention have been consideration of the House ofRepresentatives FY05 Agriculture spending bill, development of the U.S. appealof the WTO's Brazil/cotton decision, and efforts to gain improvements in thefederal crop insurance programs.

House Approves AgricultureSpending Bill

      AsCongress completes its last legislative week before their month-long Augustrecess, a large number of important issues remain unresolved. For those inagriculture the most critical issue on the table is the 2005 AgricultureAppropriations bill.

      Theprocess did move forward slightly last week when the House of Representativesapproved its version of the FY05 spending bill. The Agriculture Appropriationsbill is the seventh of 13 spending bills acted on by the House to date.

      Withno action on a Senate version of the Agriculture Appropriations measure, itappears the Congress will add agriculture to the growing list of unfinishedspending bills.

      HighPlains Congressmen Randy Neugebauer, Charlie Stenholm and Mac Thornberry allvoted for the legislation that provides $16.77 billion in discretionary fundingfor FY05 on top of $66.746 billion in mandatory spending. The final votepassing the Bill was an overwhelming 389-31.

      Inthe House bill Conservation programs were funded at the following FY05 levels:Conservation Reserve Program, authorized for full funding estimated at $1.9billion; Environmental Quality Incentives Program, capped at $1.01 billion;Conservation Security Program, cappedat $194 million; Wildlife Habitat Incentives Program, capped at $60million; and, Wetlands Reserve Program, capped at $248 million.

      Whilethe House approved budget did trim back some of the intended spending increasesoriginally called for in the 2002 Farm Bill, major Farm Bill provisions such aspayment limitations were left untouched during the legislation's considerationby the Budget Committee or during consideration on the House floor.

Crop Insurance Hearing HighlightsImportant Issues

      HouseAgriculture Committee members heard reports and questioned Federal CropInsurance Corporation Board Chairman Keith Collins and Risk Management AgencyAdministrator Ross Davidson during a July 21 hearing to update the Committee onthe latest developments in the federal crop insurance program.

      Duringthe hearing, Ag Committee members Randy Neugebauer and Charlie Stenholmquestioned Collins and Davidson about recent RMA actions and noted theimportance of key issues affecting producers.

      Amongthe issues brought up during the hearing were the recent Standard ReinsuranceAgreement negotiation process, the need to develop a solution regarding thedeferred appraisal requirement for non-emerged seed, and increasing the abilityof producers to tailor a risk management program to their situation.

      Amongthe ideas discussed during the hearing was a proposal by Congressman Neugebauerto allow producers buying an APH-based insurance product to also purchase aGroup Risk Policy that would cover the amount of their production deductible.Neugebauer also asked if consideration had been given to allowing a producer toselect different levels of coverage based on production practice.

      Collinsand Davidson acknowledged the need to fully explore new risk managementoptions. Collins noted that the FCIC Board has previously passed a resolutiondiscouraging the Risk Management Agency from looking into the idea of allowinga producer to select different plans of insurance and coverage levels. Heexplained that the Board's decision was based on their perception that it wouldincrease the complexity of the program for both producers and agents, andintroduce additional opportunities for program abuse.

      PlainsCotton Growers officials have suggested adding a limited amount of flexibilityto the grower. PCG's concept would maintain the requirement that the producerpick a single insurance product, but add the ability to select different levelsof coverage for dryland or irrigated production.

WTO Update

      The National Cotton Council and theU.S. Trade Office continues to develop an aggressive appeal that will be filedin response to last month's release of the Brazil/WTO dispute panel reportfinding fault with the U.S. cotton program.

      NCCand USTR officials have been publicly countering some of the conclusions drawnby the WTO panel and will continue to do so as additional details are released.

      Resolutionof the Brazil/WTO case following consideration of the U.S. appeal is notexpected until the end of this year.

      Inother WTO news text of a suggested agreement designed to reinvigorate the DohaRound negotiations was released by the WTO leadership earlier this week and wasmet with opposition from the U.S. cotton industry.

      NCCofficials say that the draft document unfairly and unnecessarily singles outcotton and specifically opens the door for U.S. cotton to receive unequaltreatment and be held to unreasonable expectations.

      Echoingstatements made by the cotton industry, Congressman Charlie Stenholm contactedU.S. Agriculture Ambassador Allen Johnson and expressed his concerns about thedraft WTO document and stressed the adverse impact it would have on U.S.agriculture.

      TheU.S cotton industry continues to reach out to those countries that believe theyhave been unfairly impacted by the U.S. cotton program. This week a group ofMinisters and Ambassadors from Mali, Chad, Burkina Faso and Benin are visitingthe U.S. to learn how the U.S. program works and to discuss ways to worktogether to improve the situation.