What is in this article?:
- Cotton producers, other farmers may see steeper budget cuts in new farm bill
- Congress must take action
• Since Congress did not pass the farm bill drafted by the House Ag committee last summer and, instead, extended the 2008 farm bill, both bodies will have to start anew if they want to pass new farm legislation when the fog begins to clear on budget and debt issues.
RAY YOUNG, veteran cotton consultant from Wisner, La.; Tom Barber, Extension cotton specialist for Arkansas and Sandy Stewart, North Carolina State University and NCDA, Raleigh, visit at the Beltwide Cotton Conferences.
Congress must take action
“The Taxpayer Relief Act also postponed sequestration for 60 days. So Congress is going to have to take some action to deal with the conditions that bring about sequestration, which again has to do with spending cuts. Or, effective March 2, there will be sequestration on most government payments to the tune of about 8.5 percent.”
The biggest impact will be defense spending cuts. If those happen, significant layoffs will occur, further damaging the already fragile economic recovery. That’s an action Congress and the administration would rather avoid.
Third, right before it recessed for the Nov. 6 elections, Congress passed a continuing resolution that funded the continued operation of the government through March 27. Unless Congress takes further action, every agency in the government will shut down on March 28.
“They’re not going to let that happen,” said Lange “But there will be a significant fight about the extension of the operation of the government.”
And the new farm bill? House Agriculture Committee Chairman Frank Lucas had said he planned to start marking up a new version of the farm bill by March 1. On Jan. 4, Lucas backed away from those plans, saying it would be difficult to do while Congress is debating how to resolve the government’s fiscal situation.
Given those realities, Lange says he thinks an August recess timeframe for completing writing of a new farm bill may be a more realistic scenario.
The continued delays are creating uncertainty for farmers elsewhere. U.S. cotton is unique in that the industry’s every move is monitored by the Brazilian government, which challenged the target price and export credit features of the cotton program in a WTO case filed more than 10 years ago.
“The ultimate thing for us right now is we need a negotiated settlement that should be part of a legislative package that should be part of the cotton program as well as the GSM Export credit,” said Lange.
“Signals from Brazil are that a package that looks something like the Senate STAX package could work, but they are adamant that there not be a reference price or a target price in any cotton legislation. So the big thing they have is they don’t want to see any reversion to target prices or reference prices in the safety net for U.S. cotton”.