House Action Critical for Effective Long-Term Farm Policy

MEMPHIS, Oct. 5 (Special) – House passage of the Farm Security Act of 2001 is "an important step to putting effective long-term farm policy in place for the next 10 years," said National Cotton Council Chairman James E. Echols.

"We are deeply grateful to Agriculture Committee Chairman Larry Combest, the members of the committee and the members of the congressional staff for their determined and successful effort to craft and pass this important legislation."

The House passed the $170 billion bill on a 291-120 vote after defeating amendments that would have shifted $19 billion from commodity programs to conservation and placed limits on payments farmers receive for marketing loan gains, loan deficiency payments and loan forfeitures.

"We still have much work to do," said the Memphis, TN, merchant. "The Senate has yet to develop its policy recommendations, but we hope the House action will stimulate movement in the Senate.

"The Administration’s disappointing last-minute criticism of the House bill, including comments about the availability of funds for agriculture programs, is another indication that we have much more work to do to promote prompt enactment of new farm policy.

"Finally, the very narrow defeat of the conservation amendment, the number of votes for the payment limitations amendment and the extensive press coverage and rhetoric about ‘large, corporate’ farms during the debate are of concern. We must reinforce our resolve to educate elected officials on the importance of a commercially viable production agriculture sector and a healthy domestic textile industry."

Key provisions of the bill for cotton, beginning with the 2002 crop, include:

Maintaining the marketing loan and 3-step competitiveness provisions;

Stable fixed payments for the 10-year life of the bill amounting to approximately 6.7 cents per pound for cotton;

Allowing producers to opt for a modified payment acre base;

Maintaining the 3-entity rule;

Increasing the limit on fixed payments to $50,000;

Providing a price-based counter-cyclical program, with cotton’s target price at 73.6 cents per pound;

Limits of $75,000 for the counter-cyclical payment and $150,000 for the marketing loan gain payment;

Continuing the certificate redemption of loan collateral; and

Establishing loan eligibility for program crops grown on non-eligible farms.