The new chairman of the National Cotton Council is warning that if the Grassley Amendment to the Senate Agriculture Committee farm bill becomes law, many commercial-size cotton farms across the United States cannot survive.
In a letter to senators on the eve of the Senate's vote on the farm bill, Kenneth Hood said that while the basic bill would have provided a substantially improved safety net, the “average cotton farmer will be worse off” under the proposed Grassley amendment.
“The Grassley-Dorgan amendment, as adopted by the Senate on Feb. 6, dramatically changes the potentially positive impact the Senate Agriculture Committee's bill could have on many of the United States' most productive, commercially viable farmers and ranchers,” said Hood, a cotton producer from Gunnison, Miss.
“If these provisions are eventually signed into law, our analysis leads us to conclude that the majority of commercial-size cotton farms across the United States cannot survive.
Before the Grassley-Dorgan amendment was approved, Hood said, the bill being considered by the Senate would have “provided a substantially improved income safety net for all farmers.”
“As amended, the average cotton farmer will be worse off than under current law. The amendment essentially destroys the non-recourse, marketing loan — a longstanding mainstay of farm policy that is important to producers of all loan-eligible commodities.” Hood said NCC leaders believe many senators who voted for the amendment were unaware of these implications. “Taking away the non-recourse loan effectively removes this last viable safety net for Sunbelt farms large enough to sustain a family without other sources of income,” he noted.
“NCC analysis indicates that the Grassley-Dorgan amendment puts such severe limitations on marketing loan gains and fixed and counter-cyclical payments that production financing will be out of the question for most Sunbelt farmers,” said Hood.
“With current commodity prices, many farms cannot cash-flow, even with current restrictions on payments. An unintended consequence of the amendment is that it will drive farmers to increase production of oilseeds and grains as well as specialty crops, regardless of market signals, disrupting the sensitive supply/demand situation.”
Hood said some senators used payment limits to essentially “gut an otherwise good farm bill and to divide farmers by region and by size on emotion rather than facts. We believe the stringent Dorgan-Grassley payment limitations actually hit family farms hardest, which is the same group the amendment purports to help.”
The result, he said, is a unilateral disarmament of our farmers just ahead of resumption of another round of World Trade Organization (WTO) negotiations.
“If these provisions survive in a final farm bill, our negotiators will have little hope of convincing the rest of the world to reduce farm subsidies,” he noted. “It has been our contention that farm subsidy reductions should be done under the auspices of the WTO and in a way that is fair and equitable for American agriculture — not at their expense.”
The Council chairman said Sunbelt farmers desperately need an improved farm bill for the 2002 crop. He asked senators to take the necessary steps to insure that the “highly destructive provisions of the Grassley-Dorgan amendment do not survive in the measure finally signed into law.”