National Cotton Council leaders say they faced a “tough call” on the new payment limit legislation in the House-passed 2007 farm bill. But they're convinced they made the right choice on the issue.

Speaking at the American Cotton Producers/The Cotton Foundation joint meeting in St. Louis, NCC Chairman John Pucheu traced the steps leading up to what could have been a controversial decision to agree to proposals for tightening payment limit rules.

Pucheu said NCC leaders were called to a meeting with House Agriculture Committee Chairman Collin Peterson shortly before the committee convened to “mark-up” its version of the 2007 legislation July 19. Wheat, rice and peanut organization representatives also attended.

During the meeting, Peterson laid out the details of the payment limit package that he planned to include in the House bill, H.R. 2419. The package called for direct attribution of payments (to a single Social Security number), elimination of the three-entity rule and a reduction of the adjusted gross income limit from $2.5 million to $1 million.

“We were faced with a very difficult decision — whether to agree to a package containing significant payment limit reforms in return for a pledge from Chairman Peterson and House leadership to fully support cotton's provisions in the committee bill and to oppose damaging amendments to the cotton program and further payment restrictions,” he said.

“If we didn't agree and decided to stay where we are on current payment limits, we would have done so without the House leadership's support and would have had to fight every amendment on our own. So, our options were obviously very limited, and we made the decision to support Chairman Peterson's package.”

(The House Agriculture Committee ultimately adopted 11 of the NCC's 14 proposals for enhancing the competitiveness of the U.S. cotton program. The NCC is continuing to lobby Congress for including the other three in the final version of the new farm bill.)

For an organization that wrote the book on consensus building, the decision on payment limits posed a major dilemma for the Cotton Council, said Pucheu, who was accompanied to the meeting by NCC Vice Chairman Larry McClendon and former Chairman Woody Anderson.

“There was no time to contact the American Cotton Producers or even the Council board of directors on this significant decision,” said Pucheu. “Basically, we had to consider our options and given them a decision at the close of the meeting.”

The NCC chairman said he was convinced it was the right decision. “The House leadership carried out their commitment during the floor debate of the bill, starting first with a rule limiting amendments to 31 and their support throughout the remainder of the process.

“There is no doubt that we would have faced much tighter payment limit restrictions, had we tried to do this on our own. If there is any doubt, all we have to do is look at the groups who are claiming that the current payment limit package doesn't constitute real reform.”

Although the House-passed payment limit reform legislation could have a significant impact on some farm operations, American Cotton Producers members seemed to be supportive of the legislation because it helped prevent what could have been even more draconian measures.

The legislation also increases the limits for direct payments from $40,000 to $60,000, a move that has incurred the wrath of a number of environmental and consumer groups that have sought changes that would eliminate most of the payments that now go to larger, commercial farmers.

Pucheu credited members of the American Cotton Producers, the organization that represents the producer segment of the NCC, for their efforts to help defeat an amendment offered by Reps. Ron Kind, D-Wis., and Jeff Flake, R-Ariz., that would have eliminated the three main “legs” of the current farm programs — direct and counter-cyclical payments and marketing loan gains.

“During the days leading up to the farm bill consideration on the House floor, in response to a number of Council action alerts, our members went to their phones to contact their House members in support of the Agriculture Committee's farm bill and opposition to the Kind-Flake and other damaging amendments,” said Pucheu, a producer from Tranquility, Calif.

“A large team of Council leaders, representing virtually all industry segments, came to Washington on very short notice to participate in the successful effort to defeat the Kind-Flake amendment and pass the Committee's bill. It was very gratifying that the Kind-Flake amendment was overwhelmingly defeated. That is a valuable reminder of the strength agriculture has when we work together.”

Pucheu said NCC leaders are pleased that the committee's bill achieved passage. “It is unfortunate that a last minute dispute over a tax provision used as a budget off-set caused all but 19 Republicans to vote against final passage even thought a significant majority indicated they supported the provisions that were unanimously reported by the Committee,” he noted.

“I hope we can look forward to a return to bipartisanship as the process moves forward. I also hope the administration will reconsider the veto threat issued following passage of the legislation by the House.”

Pucheu said Congress still has a long way to go in the farm bill process — including the Senate Agriculture Committee mark-up, which could come in early September, according to comments made by Committee Chairman Tom Harkin at the Iowa State Fair Tuesday (Aug. 14).

Pucheu told attendees at the ACP/Cotton Foundation meeting the NCC has continued its active involvement in World Trade Organization 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.”