NCC Chairman Echols Says Continued Government Assistance Necessary

NCC Chairman James Echols told the NCC’s directors today that he senses that, unlike 1995, Congress recognizes that a viable U.S. agriculture is contingent upon continued government assistance.

May 24, 2001
Contact: Marjory Walker
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WASHINGTON, DC - National Cotton Council Chairman James Echols told the NCC's directors today that he senses that, unlike 1995, "Congress recognizes that a viable U.S. agriculture is contingent upon continued government assistance."

Echols noted, though, that the spending authority earmarked for agriculture in this year's budget resolutions falls short of what is needed to fund the kind of farm programs called for by the NCC and other commodity organizations.

"So, we have some hard work ahead of us and, in all likelihood, some difficult decisions, too," the Memphis merchant told the board at its spring meeting here.

He said all of the NCC's communications with policymakers this year have distinguished between the need for short-term economic assistance and longer-term farm policy goals. Short-term needs conveyed to Congress include:

  • Supplement existing Agriculture Market Transition Act (AMTA) payments with additional marketing loss payments at the highest rates possible,
  • Allow producers to receive supplemental payments on the higher of existing crop bases or an average of recent planting history, provided adequate funds are available,
  • Mitigate the impact of limitations on supplemental payments, and
  • Reauthorize cottonseed payments when seed prices are low.

With respect to longer-term farm policy, Echols said the NCC has asked Congress to continue cotton's three step competitiveness provisions and the marketing loan program, including the issuance of marketing certificates. He said the industry is still seeking a consensus on loan rate but the segments are not that far apart.

Echols said lawmakers were told the NCC could support a farm policy that relies on a combination of coupled and decoupled payments, and these combined payments should include improved support levels which are necessary to provide cost-effective and adequate income protection while meeting U.S. cotton's international trade commitments. Along these lines, the NCC encouraged reliance on decoupled, AMTA-like payments as well as counter-cyclical income support which is as coupled and commodity-specific as practical without exceeding the support ceiling agreed to by the U.S. in the World Trade Organization.

"If it becomes necessary, in order to comply with U.S. obligations under WTO, our testimony voiced qualified support for a market-basket approach, where payments are triggered when gross revenue for a specified number of commodities falls below a threshold level," Echols said. "We also voiced our concerns with this approach because of the possibility of years in which the revenue for an individual commodity would be out of step with the commodity market basket."

Earlier NCC testimony, he noted, also urged elimination of payment limits, or, at a minimum, retaining the three-entity rule and provisions for Commodity Credit Corporation loan redemptions with marketing certificates, while providing for separate and reasonable limits for each category of benefits.

Echols said the NCC also has been actively conveying U.S. cottons trade priorities such as the need to preserve an effective export credit guarantee program and effectively implement regional trade agreements.

The Memphis-based NCC's mission is to ensure the ability of all U.S. cotton industry segments to compete effectively and profitably in the raw cotton, oilseed and manufactured product markets at home and abroad.