Sunday, February 22, 1998

National Cotton Council shocked by Clinton's cuts

By J.T. Smith / Abilene Reporter-News

The National Cotton Council is deeply concerned over President Clinton's budget proposal that would cut funds for the cotton industry's Step 2 Marketing Certificate Program.

"For the administration to propose cuts in the cotton program at this time -- given the current price situation and the Asian financial crisis is shocking to cotton producers," said Jack Hamilton, National Cotton Council president.

The timing is especially bad, he noted at the council's recent annual meeting in San Antonio.

"We are facing one of the most severe profit squeezes we have seen in more than 15 years, and we have just learned that (national) cotton acreage may be the lowest since 1989," Hamilton lamented. "On top of this disturbing outlook, the Office of Management and Budget proposes to use <I>cotton<I> funds to make up shortfalls in other agriculture programs. This is not only short-sighted, it is foolhardy."

The Lake Providence, La., cotton producer said Congress capped spending under the Step 2 program as part of the overall ag budget reductions written into the 1996 Federal Agricultural Improvement and Reform Act. The 7-year farm law governs agricultural policy through Year 2002.

The new budget proposal, submitted by the administration would reportedly take $100 million of these funds during fiscal year 1999 and "transfer" them to the Federal Crop Insurance Program to make up a shortfall there.

"This proposal evidences a complete disregard of cotton economics and the current market situation," Hamilton said. "Cutting this program could reduce our export competitiveness at the time the Asian financial crisis is making sales more difficult to achieve."

Could bring in cheap imports of raw cotton

The cotton grower noted that the Clinton proposal would increase the chances of opening special import quotas of raw cotton and exposes the U.S. cotton market to cheap imports.

Hamilton noted this could come at a time when U.S. stocks of cotton already are high and prices to the grower are low.

"This is contradictory to a cotton program amendment that Congress just passed which is designed to reduce industry reliance on imports and increase reliance on Step 2 as a means of achieving competitiveness," Hamilton said.

Cotton council economist Dr. Mark Lange noted that both the earlier amendment and the directly contradictory OMB proposal would go into effect Oct. 1

"The cuts proposed by OMB would directly undermine the Step 2 amendment that was passed by Congress just a few months ago," Lange said. "To cut this program now seems to indicate that the promoters of this idea do not understand how the program works and how important agricultural exports are to cotton producers."

Lange pointed to the importance of keeping the United States in the world market.

"Other cotton exporters -- such as Uzbekistan -- are pricing their cotton very aggressively, which could lead some purchasers to consider canceling contracts with U.S. (cotton) suppliers," Lange said. "The availability of a Step 2 marketing certificate could very well make the difference in convincing the buyer to stay with the U.S. growth."

Hamilton said the council would oppose the proposed budget cuts.

"We are not against crop insurance or any other well-founded program," Hamilton said. "But OMB is trying to rob Peter to pay Paul. There would be negative consequences for cotton producers should this proposal be enacted."

Two sesame meetings set for Thursday

Two information meetings on sesame production are slated for Thursday.

One will be a breakfast at 6:30 a.m. in the Cliff House Restaurant at Stamford.

The other sesame meeting is noon in the Community Center at Roscoe and will be a luncheon gathering.

Those interested in growing sesame as a rotation crop are encouraged to attend either of these meetings and learn more on the latest progress.

Call (915) 773-3995, or 1-888-771-2767 if you would like toattend one of the meetings. The toll-free number is the phone for AG CROP Insurance, which can take your name to help plan for the meals.

Please RSVP on Monday, if possible.

Educational meeting for CEUs at Baird

An pesticide educational meeting is 6 p.m. Thursday at the Callahan County Extension Office in Baird.

The meeting is worth three continuing education units to help producers toward renewing their licenses. There will be a $5 fee which will cover both materials and refreshments.

For more and/or to RSVP, contact Robert Pritz, Callahan County Extension agent, at (915) 854-1518 by 5 p.m. Wednesday.