There is “serious concern” that any congressional budget reconciliation process during 2005 will adversely affect agriculture, says the chairman of the National Cotton Council.

“Budget and appropriations measures are being crafted in a very partisan environment, with election politics dominating every issue,” Woody Anderson said at the annual conference of the Cotton Board at Seattle. The board provides oversight for the research and promotion programs of Cotton Incorporated.

“We could face efforts to change payment limitation rules during the budget reconciliation discussions,” Anderson says, “and we will work closely with Congress and the administration to maintain this farm bill, without changes, and to insure that we get proper credit for spending under the 2002 farm bill that has been below projections to date.”

In testimony before the House Agriculture Committee, Anderson says, “I reminded them of the need to keep this farm law intact for the remainder of its term.” He also met with key USDA officials, including Secretary of Agriculture Ann Veneman, discussing a wide range of issues and “expressing our industry's appreciation for the way the farm bill has been implemented thus far.”

Despite the council's best effort, he notes, the Central America Free Trade Agreement that will be presented to Congress contains several provisions granting benefits to non-signatory countries.

“While we believe a good CAFTA is essential to preserving a viable U.S. cotton and textile industry, and the council's board of directors has adopted policy that opposes the agreement in its current form, we must continue to seek opportunities to negotiate improved textile provisions for CAFTA.”

Opposes HERO

The council will continue to oppose the Haiti Economic Recovery (HERO) legislation, Anderson says. “If passed, it would allow duty-free and quota-free entry of all products originating in Haiti, without any rule of origin, and would further disadvantage our cotton and textile industries.”

The council “strongly disagrees,” he says, with many of the decisions in the World Trade Organization's 2,100-page report in the dispute by Brazil over the U.S. cotton program.

“Very simply, the facts in the case, the economics, and the existing WTO agreements don't support the panel's primary decisions. There are several clear avenues for an aggressive appeal and we will work closely with the U.S. attorneys in the appeals process.”

That will take several more months, Anderson notes, and “will offer a reasonable time frame for conforming the program to a final ruling. But we remain hopeful that the appeals process will result in substantial revisions to the initial ruling.”

The final WTO framework agreement, while improved from earlier drafts, “is still troublesome,” he says, because of its specific references to cotton.

Ambassador Allen Johnson discussed the issue with members of the American Cotton Producers Association at their annual meeting at Albuquerque, N.M., Anderson said, and “We were pleased to hear that the agreement contains sufficient structural flexibility to maintain an effective farm program.

“But our negotiators must insure that any domestic support reductions, beyond the initial year, continue to move global subsidies toward harmonization and that they are not unfair to U.S. agriculture.”

He said several industry leaders would reinforce that position during meetings with Ambassador Johnson during a trip to the Mid-South in September.

China concerns

Issues related to China continue to get council attention, Anderson says.

“While they are a very important export customer for our raw cotton, we will work with the U.S. textile industry to insure that appropriate textile import safeguards are implemented.” He and John Pucheu, chairman of the American Cotton Producers Association, plan a trip in October for discussions with Chinese industry and government leaders.

The cotton research and promotion program, supported by checkoff funds from U.S. producers and importers, is “crucial to cotton's future,” Anderson says. “The U.S. leads the world in per capita consumption of cotton products. We are the cotton market of the world, and our annual consumption of cotton textile and apparel products exceeds U.S. production of the crop. This program is vital to maintaining growth in cotton demand.”

The council's export promotion arm, Cotton Council International, continues to play a major role in strengthening key markets in Europe, Asia, Latin America, the Middle East, and Africa, he says.

In addition to successful Cotton Sourcing Summits, CCI and Cotton Incorporated are collaborating on a new initiative, with funding through the USDA's Emerging Markets Program, to accelerate and intensify the use of CI's Engineered Fiber System (EFS) overseas.

Cotton Incorporated is the largest private funder of Cotton Council International.

Quality issues

Through the council's Quality Task Force, Anderson says, “critical quality issues, ranging from short fiber content to moisture management, are being addressed.” The committee's bale moisture recommendations, if implemented by gins, “will assure that fiber color and other quality characteristics will not be degraded by excess bale moisture.”

A coordinated research plan also has been established, Anderson says, to address quality problems occurring in Georgia and other parts of the Southeast.

e-mail: hbrandon@primediabusiness.com