- Significant challenges face ag industry as Congress begins the process of debating a new farm bill in an environment of political intrigue and ever tightening budgets.
- Disagreements between commodities must be resolved.
- Brazil continues to demand more.
Mark Lange, president and CEO, National Cotton Council, understands and appreciates the importance of agricultural commodity organizations presenting a unified front to Congress in order to get the best farm program possible.
But Lange is adamant that a united front will not happen if cotton and other southern crops have to sacrifice billions of dollars in support to other commodities.
“Can commodity groups agree on the distribution of equity and program objectives?” Lange asked in a presentation to the Plains Cotton Growers, Inc. annual meeting. “We will have no unified voice if grain and oilseeds try to take money from cotton, rice and peanuts. We will not roll over and will not speak with a unified voice if they try to take billions of dollars (from southern crops) to enrich themselves.”
Lange said significant challenges face the industry as Congress begins the process of debating a new farm bill in an environment of political intrigue and ever tightening budgets. “And outside interests will weigh in wanting money. Disagreements between commodities must be resolved.”
He said any new farm program should include choices and not a “one size fits all” approach. “Choice is a necessity because of the diversity of U.S. agriculture. Patience, perseverance and unity of purpose will be critical,” he said.
Lange said Congress has several options for dealing with a farm program that expires at the end of the government’s fiscal year (Sept. 30). They can enact a new one; they can extend the old one; or “We might see some kind of transition. All are possible.”
Transition or extension could be problematic because certain actions and changes are required in a new farm program to satisfy agreements spelled out in the Brazil WTO cotton case. “If we extend the current program, we could have trouble with Brazil,” he said.
Lange said the Council knew passing a farm bill would have been tough in 2011, but he also said Congress “missed a good opportunity” when the joint committee created to find acceptable solutions to last year’s budget dilemma failed. The recommendations proposed by the House and Senate Committees on Agriculture, he said, would have addressed the budget resolution and the Brazil case. “It also would have prevented across the board cuts in 2013.”
That proposal would have cut ag program funding by $23 billion. It also included shallow loss components and provided choices.
“Agriculture was the only industry that came forward with a plan to offer budget cuts,” Lange said. Those cuts were significant but left an acceptable safety net. He said the budget just passed by the U.S. House of Representatives would trim $33 billion from farm program spending, leave agriculture “fragile and (would) take significant cuts from conservation and crop insurance. The safety net is disappearing and that is disturbing,” he said.
Lange said the farm bill debate has started “in regular order in an election year.” Field hearings are in process. Mark-ups will follow and then floor debates, amendments, conference committees, more floor debate and then presidential action—sign or veto.
He said the timeline for completion “is uncertain. But we could see a Senate Ag Committee mark-up by late April.” Whether Congress can complete the work by early October is yet to be determined. But he said the short legislation session imposed by an election year “might provide motivation to act.”
He also said a lame duck session could take up the farm bill after the election.
Lange said the Brazil case continues to be a thorny issue for the cotton industry.
“I’ve lived it since 2002, and it is frustrating beyond belief,” he said. Of near-term concern is expiration of the current farm program at the end of the year. The Framework Agreement negotiated last year that prevents or delays Brazil from taking retaliatory measures against U.S. products and intellectual property also expires.
And Brazil continues to demand more. Lange said recent communication from Brazil “criticized all revenue programs, including STAX (a newly proposed cotton program that addressed Brazil’s initial complaints). The letter was well beyond the scope of the WTO. Brazil is over-reaching and certain statements regarding current policy seemed to indicate that they liked some aspects of the current program.”
Lange said some observers believe recent Brazil communications indicate they prefer “to negotiate rather than retaliate.” USDA and the U.S. Trade Representative also prefer negotiations to going before a WTO compliance panel, he said.
“Our goal is to maintain the framework and work for a policy that is effective within budget constraints and brings a resolution to the Brazil case.”