USDA Submits Legislation To Eliminate Step 2

Friday, July 8, 2005                                    By Shawn Wade

      Officials from the United States Department of Agriculture have sent Congress proposed legislation designed to bring several U.S. support programs into compliance with WTO rules, but significant changes to the U.S. cotton program could still be months away as Congress takes up the issue.

      A key part of this legislative proposal is the USDA's announcement that it is recommending an immediate elimination of the Step 2 program. The Step 2 program is part of the three-step cotton competitiveness provisions through which the government compensates exporters and domestic mills that buy U.S. cotton. It is designed to keep U.S. cotton competitively priced with cotton from other parts of the world.

      The U.S. programs that would be impacted by the proposed legislation were deemed non-compliant in the recent WTO Dispute Settlement Panel's findings in the Brazil-U.S. Cotton Subsidy case. The USDA proposal requires Congressional action to become permanent.

      Last week USDA announced and implemented changes to the Export Credit Guarantee Program (GSM-102), the Intermediate Export Credit Guarantee Program (GSM-103) and the Supplier Credit Guarantee Program (SCGP) in accordance with the WTO appellate body's decision. Since that time USDA has also recommended that Congress pass appropriate legislation to immediately terminate the Step 2 cotton program.

      Cotton industry groups, led by the National Cotton Council of America, have already voiced their opposition to the Administration's proposed timetable for removing Step 2. The NCC continues to advocate a structured timeframe for phasing out the Step 2 program that allows U.S. cotton merchants and textile manufacturers the maximum possible time to adjust during the course of 2005-crop marketing period.

      Additionally, the NCC has recommended that Congress insist on a clear understanding of Brazil's intentions regarding these issues before any change is made in the U.S. cotton program.

      "The process of complying with the WTO Dispute Settlement Panel's findings has entered a new phase," says PCG Executive Vice President Steve Verett. "Now that the Bush Administration has sent a set of proposed changes to Congress, the efforts of the cotton industry will be focused on the development of a reasonable time-frame for terminating Step 2. The cotton industry has worked hard to find a way to retain the Step 2 program and has consistently disagreed with any plan that included the immediate termination of the program."

      PCG officials will continue to work closely with the NCC and with the members of the House and Senate Agriculture Committees to craft a more reasonable termination schedule.

      USDA's proposed legislation also includes changes necessary to make its previously announced modifications to the Export Credit Guarantee Program (GSM-102), the Intermediate Export Credit Guarantee Program (GSM-103) and the Supplier Credit Guarantee Program (SCGP) permanent.

      USDA's announced changes in the three export credit guarantee programs took effect July 1.

      First, CCC has initiated use of a risk-based fee structure for the GSM-102 and SCGP programs. Fee rates are now based on the country risk that CCC is undertaking, as well as the repayment term (tenor) and repayment frequency (annual or semi-annual) under the guarantee. The new fees respond to a key finding by the WTO that the fees charged by the programs should be risk based.

      Also as of July 1, the CCC will no longer accept applications for payment guarantees under GSM-103. Any remaining country and regional allocations for GSM-103 coverage under fiscal year 2005 program announcements will be reallocated to the existing GSM-102 program for that country or region.


Earn Continuing Education Credits Online With the Help of Southwest Farm Press

Friday, July 8, 2005                                    By Shawn Wade

      Texas and Oklahoma licensed applicators can earn Continuing Education Unit (CEU) course credits online at or

      Sponsored by Southwest Farm Press (, the online coursework is approved by both the Texas and Oklahoma Departments of Agriculture and is structured so that all necessary paperwork documenting completion of each course is sent to the appropriate agency. At the end of each successfully completed course Texas producers will receive a CEU certificate that they can print and keep for their files.

      Texas regulations require all licensed private pesticide applicators to maintain documentation for CEU coursework they complete. Texas licensed private applicators are required to recertify every five years by obtaining 15 continuing education credits including two (2) credits in laws and regulations and two (2) credits in integrated pest management (IPM) by December 31 of the year preceding license expiration.

      Currently Texas producers can earn a total of 1.5 CEU credits (0.5 credits in Laws and Regulations and 1 credit for Drift Minimization) by working through a course entitled "Spray Drift Management" available through the Southwest Farm Press website.

      The Oklahoma Department of Agriculture has approved this course for two credits, one each in categories 1A-Ag Plant and 10-Demo and Research.

      The Southwest Farm Press site also has helpful links to a wide variety of information sources from Texas A&M University, Texas Tech University, the Texas Department of Agriculture, New Mexico State University, Oklahoma State University and the USDA Agricultural Research Service.