Cotton Production: The Global Arena By Ronald Rayner
  U.S. cotton producers, processors, handlers and textile manufacturers endured a difficult year in 1999.  The price of cotton fell to the lowest level in 25 years, despite a 1999 crop that had diminished yields and quality. There was some good news in 1999, however. The U.S. cotton industry's tradition of working together to secure an income safety net for growers passed the test.
  Thanks to the good work of Congressional friends, including the outstanding leadership of Sen. Thad Cochran (R-MS), the Agricultural Appropriations bill signed into law last October included $8.7 billion in emergency financial assistance for farmers and ranchers. Some of the provisions provided tremendous benefits for cotton farmers:  a doubling of Agriculture Marketing Transition Act payments with a provision to allow producers to request future payments in one or two installments anytime after October 1, 1999; $475 million for direct payments to soybean and minor oilseed producers; reinstatement of cotton's Step 2 competitiveness provision through 2003; $1.2 billion for weather-related crop losses; an increase in the limitation on marketing loan gains and loan deficiency payments (LDPs) to $150,000 per person for crop year 1999; authorization for issuance of marketing certificates, which could further relieve marketing problems associated with limitations on marketing loan gains and LDPs; and, funds to allow USDA to extend a 30 percent discount on buy-up crop insurance coverage for the 1999-2000 crop year. Later, Senator Cochran was able to add two key cotton-related provisions into the fiscal 2000 Omnibus Spending Bill.  One of those gives the Agriculture Secretary discretionary authority to use unspent funds from earlier emergency appropriations measures to implement a cottonseed assistance program.
  The National Cotton Council continues to press for implementation of the marketing certificate program, which can help many farmers cope with payment limit problems, and the cottonseed assistance program. There are farmers in the Mid-South and all across the Cotton Belt who have bales under loan that cannot move to market until certificates are issued making that cotton eligible for redemption at the adjusted world price. There also are economic hardships that will be significantly relieved when payments are made on cottonseed.
  The Council will continue to nurture the existing government/private sector partnership, but the industry must look further and enact policies that can help right some of the competitive aspects of the business. Profitability from the farm to textile mills will be difficult to restore. Intense global competition will continue. Some significant U.S. textile companies -- producers' most dependable customers -- are in serious financial trouble. Cotton's competition with polyester is becoming more of an uphill battle, and the entire industry faces an upcoming round of international trade negotiations where developing countries want to open the textile import door even wider. Council leaders believe one of the best tools for enhancing our competitive position in the global arena is passage of a good Caribbean Basin Initiative (CBI) parity bill -- one that would extend trade preferences to countries of the Caribbean Basin for apparel products made from U.S. textile components, including U.S. yarn. We were extremely disappointed that a CBI parity bill was not passed in 1999, and believe CBI parity legislation should be among the highest priorities for U.S. cotton and textiles in 2000. Council economists estimate that a good CBI parity bill, after three years, would add a million bales annually to U.S. cotton offtake. (offtake is the combination of domestic textile mill use plus exports).
  Meanwhile, the Council will continue efforts to reduce production and processing costs, improve fiber quality and strengthen demand for U.S. cotton and cotton products through product promotion and trade servicing activities. Council leaders are convinced that the industry's profitability dilemma will be resolved only if we attack it on a broad front. Back (Ronald Rayner is a Goodyear, Arizona cotton producer and is President of the National Cotton Council of America)