The National Cotton Council says that President Obama’s FY2011 USDA budget ignores the extensive changes to production agriculture support that were embodied in the Food, Conservation and Energy Act of 2008. In addition, the NCC notes, USDA already has announced unwarranted restrictions in program eligibility during the legislation’s implementation.
“The President’s proposal on phasing down direct payments and limiting total payments affects the farms that produce more than three-fourths of all agricultural products marketed in the United States,” says NCC chairman Jay Hardwick, a Louisiana producer.
“The financing demands of commercial agriculture require a high level of confidence by lenders in program availability. In the midst of a credit crisis, it makes no sense to threaten a vital component of the borrower’s cash flow.”
Storage Costs Were Offset
The 2008 farm law includes provisions for the Commodity Credit Corporation (CCC) to pay a portion of the storage costs during periods of low prices. These provisions’ costs were completely offset by changes in the upland cotton counter-cyclical target price.
“Baled upland cotton is an identity-preserved commodity that re-quires off-farm storage in facilities approved by CCC while under loan,” Hardwick says. “Loan eligible cotton must comply with a number of CCC regulations stipulating bale wrapping and packaging.
“Foreign sales account for one-third of U.S. agricultural production’s total value,” Hardwick adds. “Solid export performance is essential for the economic health of rural America.”
The National Cotton Council provided information for this article. For additional details, visitwww.cotton.org. |
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