Producers Weigh Farm Policy Options

December 27, 2000

The American Cotton Producers (ACP) Policy Committee, chaired by North Carolina producer Billy Carter, has developed farm policy recommendations for the National Cotton Council. The recommendations include adequate congressional budget authority of about $20 billion a year, elimination or "mitigation" of payment limits and targeting of benefits and maintaining planting flexibility.

Budget authority is expected to be a major consideration for farm policy in 2001; the budget baseline includes $4 billion a year for "Freedom to Farm" payments and several billion more for loan deficiency payments. The ACP recommendations will be discussed at NCC Leadership Committee meeting Jan. 10. Committee members also agreed that farm policy changes should comply with current World Trade Organization (WTO) support guidelines.

More specifically, the committee recommended continuation of the marketing loan at an uncapped rate plus a slight increase in the minimum level. Cotton competitiveness provisions were strongly endorsed as necessary part of effective cotton program. Most discussion centered on type of income support delivery system.

There was basic agreement that for the remaining years of 1996 farm law additional marketing loss payments based on modified contract acreage should be authorized, with payment rates as high as possible. A modified base would allow a grower to adjust payment acres to higher of current contract acres or average of recent plantings.

Growers also supported updating payment yields by the same procedure but realized it carried a much higher program cost, according to NCC. For the 2003 crop year and beyond, growers recommended continuation of fixed payment combined with some form of counter-cyclical payment to address periods of low returns.