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- COTTON’S AGENDA -

Cotton Must Be Equal

By Jay Hardwick
NCC Chairman
Newellton, La.


 
The National Cotton Council remains concerned that some want to single out cotton in World Trade Organization Doha negotiations, and that some countries still believe U.S. farm programs have distorted trade, caused low cotton prices and hurt foreign growers.

Is the U.S. cotton program to blame for the problems in the world cotton market?

Critics, especially Brazil and the West African C-4 countries, allege that U.S. farm programs were responsible for the increased U.S. cotton production between 1999 and 2004 – and for taking market share. Even though U.S. exports increased during 2001-2007, U.S. cotton’s share of world production did not increase. In fact, that share has declined from 20 to 12 percent, and we’re planting only 60 percent of the average annual upland cotton acreage in the years 1999 to 2005. Also, U.S. exports were not expanding at the expense of foreign competitors because foreign production has not kept pace with foreign cotton use. So, foreign countries have needed additional cotton, leading to higher U.S. export levels.

The truth is that U.S. farm programs have operated as designed, supporting farmers’ incomes while allowing them to react to market signals. Furthermore, today’s U.S. cotton program is not the same as the one approved by Congress in 2002. The elimination of the Step 2 provision, changes in the administration of export credit guarantee programs and USDA’s administrative changes to the marketing loan program have reduced the overall support to the U.S. cotton industry. In addition, the 2008 farm law further lowered support levels and tightened payment eligibility requirements.

What about the C-4 countries’ complaint?

The West African C-4 countries are trying to hold U.S. cotton hostage in the Doha negotiations, blaming the U.S. cotton program for their economic struggles. The truth is that since the mid-1980s their yields have declined while other developing countries’ yields have shown a marked increase. In recent years, the average yield in the C-4 countries ranged between 300 and 350 pounds per acre while other developing countries’ yields have surpassed 700 pounds per acre. Inferior inputs, the misallocation of inputs and the failure to embrace biotechnology insure that West African producers can’t compete with other countries’ producers.

How is the NCC dealing with this issue?

In a meeting with U.S. Trade Representative Ron Kirk, we stressed that U.S. cotton is not the source of the current problems in the world cotton market, as our acres are down 40 percent from 2005 while Brazil, India and China continue to produce more cotton than they did in 2005. We are pleased that Ambassador Kirk is committed to Doha negotiations that include no cotton discussion until an agreement is completed. We look forward to future discussions with the Ambassador to reiterate U.S. cotton’s trade priorities.

The NCC will continue stressing that the United States has unilaterally reduced cotton support while other countries have increased support. In addition, the general agricultural provisions of the Doha negotiating text would require more changes. To expect further separate concessions by cotton is unfair, unjustified and unreasonable.

Jay Hardwick is a Newellton, La., cotton producer currently serving as chairman of the National Cotton Council of America. He and other NCC leaders contribute columns on this Cotton Farming page.



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