“A decision to completely terminate a U.S. farm program in the middle of a farm bill is virtually unprecedented. The loss of the Step 2 program will reduce offtake of U.S. cotton and put additional pressure on prices received by farmers. The elimination of Step 2 and the administrative changes to the export credit programs constitute significant progress in response to the WTO decision on prohibited subsidies. The reduction in benefits from the marketing loan and counter-cyclical payments combined with the elimination of Step 2 address the price suppression and serious prejudice ruling in the Brazil WTO cotton case.”
In noting the proposed reductions in program spending, Eastland said, “They spread the pain across all components of the cotton program, from marketing loans to counter-cyclical payments. This reduction, particularly in the face of rising fuel and fertilizer costs, will be keenly felt. The Senate did what it could to minimize overall negative impacts from this budget-cutting exercise. We look forward to continuing to work with Committee Chairman Chambliss during the rest of the budget process.”
He also stated, “Preparations and planting of the crop currently being harvested were largely complete before the ruling of the WTO appellate body was announced this spring. By ending the Step 2 program at the conclusion of the current marketing year, instead of immediate termination, the Senate Agriculture Committee has managed to limit market disruptions.”
National Cotton Council of America
marketing@alchempro.com
