COTTON'S AGENDA

Developing Demand

The National Cotton Council strongly supports the funding levels authorized in the 2008 farm law for USDA’s Market Access Program (MAP) and Foreign Market Development Program (FMD).

Why are these programs important?

Cotton Council International (CCI), the NCC’s export promotions arm, is actively promoting exports of U.S. cotton and cotton products in Asia, Europe, Africa, and Central and South America. That’s because the U.S. cotton industry currently exports nearly 95 percent of its annual fiber production: 75-80 percent as raw fiber and the remaining 15-20 percent as fiber contained in U.S. yarn and fabric.

Projections call for U.S. raw cotton exports of 15 million bales both in 2011 and in 2012. This healthy volume is no coincidence. It has been documented that activities carried out through MAP and FMD have helped increase export sales of cotton fiber and value-added cotton products. With global cotton requirements continuing to increase and additional markets continuing to emerge, the NCC wholeheartedly believes that the U.S. cotton’s current export momentum needs these demand-building programs to be adequately funded.

How do these two programs  work?

Both the MAP and FMD are administered on a required cost-share basis – with producers and other participants contributing up to 50 percent. The industry actually contributes well beyond the minimum matching requirements. For 2009-10, U.S. industry matching contributions reached 189 percent ($1.89 for every $1 from USDA) for MAP and 102 percent for the FMD program. To receive MAP and FMD funds from USDA, annual proposals must be made and reasonable results must be met and documented. Both of these programs – MAP and FMD – are governed through CCI’s Board of Directors with representatives from each U.S. cotton industry segment.

One MAP/FMD funding use example, under CCI’s Fiber Servicing program umbrella, is the COTTON USA Sourcing Summit, which brings together U.S. exporters and executives from many of the world’s largest textile mills. Summit attendees participate in seminars and networking events. Survey results from the 2010 Summit indicate that 1.2 million bales (about $750 million in value) of U.S. cotton were sold during the event with an additional 3.5 million bales expected to be sold in the subsequent three months.

CCI’s Supply Chain Marketing program serves U.S. manufacturers who export their cotton yarns and fabrics to garment manufacturers in Central and South America. In 2010, U.S. textile mills sold approximately $5 million of product as a direct result of their participation in MAP and FMD activities, with many other sales resulting from contacts made over the years through program involvement. There also are multiple consumer education programs supported through MAP and FMD. For example, CCI’s “Let’s Design” effort in India helped to create and grow consumer markets for cotton fiber in a large, rapidly growing and increasingly wealthy population. Such programs are helping to arrest cotton’s market share slide in India. With successful promotion, future cotton import demand in India is likely to be second only to China’s, where CCI also conducts similar demand building programs.

Mark Lange is president and chief executive officer for the National Cotton Council of America. He and other NCC leaders contribute columns on this Cotton Farming page.