The National Cotton Council on Wednesday defended its farm bill reform ideas, which may be presented to the supercommittee this week by the leaders of the congressional agricultural committees.
The group says it understands the farm bill that is being developed behind closed doors will contain a subsidy program the NCC has designed and that program will not balloon when commodity prices dip. The cotton proposal delinks the commodity from target price-based countercyclical payments, the NCC said.
Senate Agriculture Committee Chairwoman Debbie Stabenow (D-Mich.) and House Agriculture Chairman Frank Lucas (R-Okla.) are putting the finishing touches on a farm bill proposal that is to shave $23 billion from the deficit over ten years.
Their work continues to be delayed due to fighting among agricultural commodity groups.
Some groups are worried that if new subsidy programs for some crops are too attactive, farmers will switch crops and damage markets for those crops with less generous government programs.
Meanwhile, fiscal groups, such as Taxpayers for Common Sense, are outraged by the "secret farm bill" talks which they say are designed to ram a new five-year farm bill through the fast-track supercommittee process.
The agricutlural committee proposas under development would save money by doing away with direct payments to farmers and replacing them with a several different programs for different commodities.
One option will be a “shallow loss” revenue insurance backed by producers of corn, soy and wheat. Another involves higher target prices for rice and peanuts.
NCC said that statements by sources that cotton will be given higher subsidies, linked to higher commodity prices in lieu of the shallow loss program are false.
“In fact, as we understand the current negotiations within the [Agriculture] Committees, cotton will have no target price and will also not be eligible for the shallow-loss revenue program being discussed for other commodities,” spokesperson Marjory Walker said.
“To our knowledge, the negotiations do not involve a higher marketing loan rate for cotton. We’ve actually proposed a formula that would allow the marketing loan to adjust to a lower level in times of low prices,” she added.
NCC believes that its Stacked Income Protection Plan will not bust the budget when commodity prices dip and will not distort world trade under World Trade Organization rules.
Under STAX, growers would be able to purchase coverage to insure revenue and payouts would be made when actual revenue fell below 70 percent.
“We believe this program address the current budget constraints and also satisfies the long-standing dispute with Brazil. We are not proposing a price-based program because we believe such as program is contrary to the findings of the WTO case. Our proposal of an insurance program is based on the fact that Brazil challenged insurance programs as part of the case and were unsuccessful on that challenge,” Walker said.
Cotton producers defend farm bill changes (The Hill)
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