NCC Unity Boosted Farm Bill Process; WTO Actions Stifling U.S. Cotton’s Competitiveness

NCC Chairman John Pucheu said there's a long way to go in the farm bill process - including upcoming Senate markup.

August 15, 2007
Contact: Marjory Walker
(901) 274-9030

ST. LOUIS, MO – National Cotton Council President John Pucheu said today there is still a long way to go in the farm bill process - including next month’s Senate markup - but the U.S. cotton industry already has benefited from a productive 2007 NCC Annual Meeting.

Pucheu told a joint meeting of the American Cotton Producers and The Cotton Foundation that February meeting boosted the U.S. cotton industry’s preparation for that debate and development and “the Council was able to re-confirm our priorities for sound farm policy. We also prepared to undertake a number of internal initiatives in preparation for farm bill debate.”

Pucheu noted: 1) the NCC’s House and Senate testimony which afforded the NCC to convey its support for the basic structure and provisions of the 2002 farm law and 2) meetings with Secretary of Agriculture Mike Johanns, which allowed the NCC to provide its assessments of the current marketing conditions and review the NCC’s policy for studying cotton flow and all facets of the marketing loan program.

“A majority of the Council’s recommendations – regarding the structure and operation of the cotton program – were included in the legislative language approved by the House Agriculture’s Subcommittee for General Farm Commodities and Risk Management,” the California producer said.

Pucheu told attendees that the NCC has continued its active involvement in World Trade Organization (WTO) issues, including Doha agricultural negotiations and the Brazil compliance case. Press reports indicate the Panel largely sided with Brazil, he said, but faces a likely appeal from the United States early next year.

“I would note that the U.S. actions taken to comply with the WTO Panel ruling have had a significant impact on the U.S. cotton industry,” Pucheu said. “The loss of Step 2 has reduced U.S. competitiveness in international markets and ultimately impacted the producer through lower equity offers. In addition, the current world market situation flies in the face of Brazil’s claims. During the 2006 marketing year, India was undercutting world prices by as much as 5 cents per pound; Brazil was selling government stocks to dampen domestic cotton prices; and China was using its variable levy system to increase internal prices and stimulate production. It cannot be credibly argued that the U.S. cotton program is causing any country serious prejudice in 2007 - the first year the cotton program has operated without Step 2.”

Pucheu also reminded attendees that the NCC has been actively communicating with the Administration regarding texts that have emanated from WTO agricultural negotiations. That included a recent draft text to which the NCC urged “the Administration to strongly oppose the cotton-specific language and not accept any agreement containing similar language.”

Throughout this year, Pucheu said the NCC has been delivering a consistent message to U.S. trade negotiators that “first and foremost, the U.S. should not improve its offer until other countries agree to meet the U.S. offer on market access. We also have detailed our industry’s priorities on market access and pointed out that a successful Doha outcome must include significant increases in market access to China.”

Pucheu, in noting the importance of strengthening U.S. cotton’s relationship with China, announced the NCC’s hosting of a Chinese delegation in September to all four Cotton Belt regions as part of its Memorandum of Understanding it signed with the China Cotton Association last year. The upcoming visit follows a recent U.S. industry delegation visit to China, which included meetings with many mill customers of U.S. cotton and with regional representatives of China’s fiber inspection agency.