Friday, March 20, 2009 By Shawn Wade
The recently approved American Recovery and Reinvestment Act of 2009 (ARRA) includes several agricultural disaster assistance components designed to enhance and extend assistance available through the 2008 Farm Bill's Supplemental Revenue Assistance (SURE) Program.
In accordance with the provisions of the ARRA, Agriculture Secretary Tom Vilsack announced March 17 that USDA would extend to producers currently ineligible for the 2008 SURE program, because they did not previously obtain the statutorily required policy crop insurance from the Federal Crop Insurance Corporation (FCIC) or Non-insured Crop Disaster Assistance Program (NAP) coverage through the Farm Service Agency for 2008, the opportunity to pay a buy-in fee to establish SURE program eligibility through May 18, 2009.
Paying the buy-in fee does not provide the producer with crop insurance or NAP coverage for losses incurred during the 2008 crop year.
Producers who have not already taken the necessary steps to become eligible for the Supplemental Revenue Assistance Program (SURE), Emergency Assistance for Livestock, Honeybees, and Farm-Raised Fish (ELAP), and the Tree Assistance Program (TAP) may now become eligible for such programs by completing the following steps by May 18, 2009:
(1) Paying a $100 buy-in fee per crop. The maximum fee for insurable or non-insurable crops is $300 per county, per producer, not to exceed $900 for multi-county producers.
(2) In the case of each insurable crop (those for which insurance is available from FCIC), excluding grazing land, agreeing to obtain a policy or plan of insurance for the next insurance year for which crop insurance is available that covers 70 percent or more of the yield at 100 percent of the price.
(3) In the case of each non-insurable crop, agreeing to file the required paperwork and pay the applicable administrative NAP coverage fee by the applicable state application closing date for the next available year.
Producers who choose to buy in under the ARRA provision will be considered, for insured crops for the 2008 Farm Bill disaster assistance programs only, to have obtained a policy or plan of insurance for the 2008 crop year at a level of coverage not to exceed 70 percent of the yield at 100 percent of the price.
For non-insurable crops for the 2008 Farm Bill disaster programs only, producers will be considered to have a level of coverage equal to 70 percent of the yield. These levels of coverage will be used to calculate the 2008 SURE guarantee. Producers who buy in will not be eligible for actual crop insurance or NAP benefits for the 2008 crop.
Producers who meet the definition of "Socially Disadvantaged, Limited Resource," or "Beginning Farmer or Rancher," are not required to pay the buy-in fee.
Friday, March 20, 2009 By Shawn Wade
For the first time in a decade a COTTON USA Executive Delegation traveled throughout Latin America to meet with leading customers of U.S. cotton fiber, yarn and fabrics. The tour, which occurred March 1-10 included stops in Mexico, El Salvador, Colombia and, for the first time ever, Peru.
The tour was lead by Cotton Council International (CCI) President Clyde Sharp, producer from AZ, led the Delegation. Other members of the Delegation were: John Dunavant, American Cotton Shippers Association (ACSA) First Vice President; Jordan Lea, ACSA Second Vice President; Hank Reichle, representing AMCOT; Richard Kelley, producer from TN representing the American Cotton Producers; Shawn Holladay, producer from Lubbock, Texas representing Cotton Incorporated; Marc Lewkowitz, Supima; William E. May, ACSA; and CCI staff and representatives.
A number of U.S. cotton exporters and their agents also joined the Delegation during the receptions and dinners with the industry throughout the trip.
The Western Hemisphere represents a market of around 6 million bales of U.S. cotton - fiber markets of 2.2 million bales combined with 3.8 million bale equivalents of U.S. manufactured products that are exported in the form of yarn and fabrics. All together, this is about 30 percent of U.S. cotton production.
During each stop, textile mill representatives representing the majority of U.S. cotton fiber consumption in the market warmly received the Delegation and had an open dialog on cotton and cotton product topics.
Topics of discussion during the tour included U.S. Upland and Pima cotton production and programs, cotton supply and demand outlook, cotton quality, bale packaging and contamination, the cotton futures market and sustainability.
In each country, mills and manufacturers called for more emphasis on collaboration and integration of the cotton/textile/apparel industry within the hemisphere in order to be competitive with other origins, particularly Asia and India. In the Andean Region and Central America, textile mills also communicated the fact that they are generally pleased with the U.S. cotton they are receiving, although some concerns do exist in regard to the belief that U.S. cotton contains percentages of neps and short fiber than cotton from other growth areas.
Highlights of the feedback the delegation received from important Latin American customers included:
Colombia: While traveling to Medellin and Bogota, the two centers of Columbian textile production, to meet with textile industry leaders, the delegation learned that the Colombian government had finalized recently announced plans to eliminate duties on cotton fiber imports into the country. They also learned that the industry is eager to see final approval of the pending U.S.-Colombia Free Trade Agreement signed by the Bush Administration signed and awaiting Congressional action. Significant discussion centered on cotton quality issues, how buyers can specify quality when purchasing U.S. cotton, and the belief by the mills that there continues to be a market for short staple cotton in Colombia.
Peru: The Peruvian industry consumed 270,000 bales of U.S. cotton in 2007/08, making it the 2nd largest market for U.S. cotton fiber in Latin America. The delegation discussed how U.S. cotton fiber, yarn and fabric imports will benefit from the removal of duties on exports to Peru because of the recently implemented U.S.-Peru Free Trade Agreement. Peruvian industry officials complimented the U.S. on its contamination-free record, but expressed concerns about neps and short fiber content. They requested the Delegation address these concerns with the U.S. cotton producers and ginners.
Central America/Caribbean (CBI) Region: The last leg of the Delegation's trip was to Central America - a market that consumes the majority of U.S. cotton yarn and fabric imports, reaching around 2.8 million bale equivalents in 2007-08 along with 250,000 bales of U.S. cotton fiber. Nearly 90 percent of U.S. domestic cotton mill products are exported, primarily in the form of yarn or fabrics and almost all goes to the Western Hemisphere.
While Mexico remains U.S. cotton's largest single market of both fiber and textile exports, the countries of the CBI region collectively consume more U.S. cotton textile exports than Mexico. For the Central American portion of the trip, the Delegation visited El Salvador.
During meetings in El Salvador, the local industry expressed its satisfaction with U.S. cotton with regards to quality, contamination and packaging. A large concern in El Salvador was the lack of credit availability to finance U.S. cotton exports, and the Salvadoran industry requested the U.S. industries assistance in establishing a separate GSM-102 credit line be made for cotton.
Mexico: The final stop for the Delegation was Mexico, the largest market for U.S. cotton fiber in the region. Following briefings on the overall Mexican economy, cotton production as well as textile and apparel outlook, the Delegation attended the spring meeting of CANAINTEX, the Mexican Textile Industry Association. Following the meeting, a private meeting was held with the Cotton Committee of CANAINTEX and attended by mills representing a large majority of Mexico's cotton fiber consumption.
Mexican mills expressed fewer quality and packaging concerns, but did mention short fiber with the suggestion that this situation might be positively impacted by changes in processing at the gin level to preserve fiber quality. Mexican mills also stressed their dependence on U.S. cotton fiber and their lack of interest in local Mexican fiber.