“My name is
“I serve as chairman of the
“In addition to cotton fiber, cottonseed products are used for livestock feed, and cottonseed oil is used as an ingredient in food products as well as being a premium cooking oil.
Current Industry Conditions
“As you know, the current economic situation for much of production agriculture is bleak, including for
“To understand the challenges facing cotton farmers, it is important to review the dynamics at work in global cotton demand.
“I highlight these issues because of the critical influence of international markets and manmade fiber on the financial conditions of
“While cotton acres across the
“Under the current farm bill, cotton producers can purchase the Stacked Income Protection Plan (STAX) crop insurance policy. In addition, the marketing loan program was modified so that the loan rate can adjust lower based on average market prices of the prior two years. Cotton is the only program crop that does not have any long-term price or revenue protection policy in the 2014 Farm Bill.
“Cotton policy in the 2014 Farm Bill was enacted largely in response to a
“For more than a year now, NCC has been working with
“While we will continue our short-term efforts related to cottonseed, NCC is also beginning internal discussions on the policy objectives for cotton in the next farm bill. We know that a meaningful safety net for cotton must be included in Title I of the farm bill. Better protection in times of depressed markets can take on several forms, and our industry will continue to pursue the best avenue to provide growers adequate protection that is consistent with both our international obligations and the needs of our industry.
Farm Bill Budget Resources
“In order for
“Last month, NCC joined 16 other organizations on a letter to the House and Senate Budget and Appropriations Committees stressing the critical need for the Agriculture Committees to have additional budget resources in order to craft a new farm bill. The additional resources are needed to help address the significant holes in the safety net for cotton and other commodities, while maintaining other programs designed to respond to the significant downturn in commodity prices and farm revenue.
Marketing Loan Program
“In addition, our industry relies heavily on a properly functioning marketing loan program that helps ensure orderly marketing and flow of cotton to the market. Maintaining the marketing loan policy, with some minor adjustments, is also a priority.
“A strong crop insurance program is also critical since in agriculture, one thing is for certain, crop losses will occur in some part of the
“In 2016, 96% of cotton acres were covered by either multi-peril “buy-up” insurance or catastrophic coverage. 88% of these acres were covered by multi-peril insurance. The STAX policy was purchased on over 2.5 million acres covering 26% of total insured acres. Participation in STAX has not been as extensive as initially projected, largely because of extremely low prices, which render the revenue assurance of STAX less beneficial relative to the costs of production.
“For this reason, it is imperative that cotton producers have access to the same complement of risk management policies and tools as other producers, including commodity policies in Title I, along with crop insurance.
“Federal crop insurance provides an effective risk management tool to farmers and ranchers of all sizes when they are facing losses beyond their control, reduces taxpayer risk exposure, makes hedging possible to help mitigate market volatility, and provides lenders with greater certainty that loans made to producers will be repaid. The public-private partnership of program delivery works very well, allowing for timely and outstanding service to producers when they need it the most and providing much-needed jobs across rural America.
“While the overall crop insurance program is working well and should be defended, there are a few areas that can be improved. NCC is currently working with the
Payment Limits and Program Eligibility
“Our industry is opposed to any further tightening of payment limits and eligibility requirements, as we believe these policies are already too burdensome and restrictive in light of the size and scale of production agriculture necessary to be competitive and viable in today's global market. In addition, we believe the current definition of 'family member' that is used for actively engaged provisions the farm bill should be broadened to ensure extended family members are not forced out of the family farm simply because they do not fit within the current, unnecessarily restrictive definition for 'family member'. We hope to work with the committee to address this problematic provision in the next farm bill.
Extra Long Staple Cotton Policies
“There are important policy considerations for
“Conservation programs continue to be extremely popular across the Cotton Belt. Specifically, the Environmental Quality Incentives Program and the Conservation Stewardship Program are both heavily accessed. I commend the Committee for streamlining conservation programs in the 2014 Farm Bill. This will make them easier for the
“One area that can be improved is exempting NRCS from requiring producers participating in
“After a decade of experiencing a precipitous decline in the amount of cotton used by
“The recent years of stability and expected future growth can be attributed to the continued benefits of the
Trade Promotion Programs
“Given the tremendous reliance by our industry on exports of raw cotton fiber and yarn, it is essential that the
“The value of
Federal Check-off Programs
“In closing, for the past three years,
“NCC looks forward to working with the Committee and all commodity and farm organizations to develop and pass a new farm bill that effectively addresses the needs of all commodities and all producers in all regions of the country.
“Thank you for this opportunity, and I would be pleased to respond to any questions.