The “Killer Bs” could inflict some major welts on the cotton program during the 2012 farm bill debate, according to National Cotton Council president and CEO Mark Lange.

Lange’s soubriquet for the impact of budget, baseline and Brazil could first buzz into Washington on the wings of November elections.

Budget

“There is a good chance that Republicans may take the House in fall elections and if they do, there will be a number of ‘budget hawks’ coming to Congress. If that happens, we may be writing a 2012 farm bill with tremendous pressure on ag spending,” said Lange, speaking at the Southern Cotton Ginners Summer Meeting in Memphis.

Lange said there’s also a possibility of a budget reconciliation package in the spring of 2011 “that could catch agriculture right in the midst of the debate.”

But agriculture may also feel a sting if Democrats retain the House, Lange noted. House Agriculture Chairman Collin Peterson “does not like marketing loans.”

Baseline

Lange noted that given current high prices for corn and soybeans, “the only price support money built into the Congressional Budget Office’s current baseline — beyond direct payments — is for cotton. When Peterson starts his discussion about a revenue package, where’s he going to find the money? The only place to take money is from direct payments or cotton’s price support system.”

Lange said that Peterson’s preference is to use crop insurance to deliver program benefits. “That presents a real problem for us because a lot of us in the cotton industry are not real comfortable with crop insurance. We have our work cut out for us to demonstrate to the Congress why it should not be the vehicle for cotton.”

Brazil

Brazil could also challenge the marketing loan, Lange says. “I think we’re going to be writing the farm bill with the Brazil case hanging over our shoulder.”

Brazil has suspended retaliation on U.S. goods and services going into the country, but Lange noted that it still has the right to do so. Brazil has said under a framework agreement with the United States that it could reconsider its decision “after the 2012 U.S. farm bill is signed. If Brazil doesn’t believe there has been sufficient reform of the cotton marketing loan and the counter-cyclical payment, they can retaliate.