Organizations face challenges for Georgia producers

The 2002 cotton production season looks to be another one that we will be glad to see in the rear view mirror. A difficult dry growing season was followed by the worst harvest conditions experienced in recent years.

When the much needed rains finally came, most portions of our state were fortunate to escape heavy rains and flooding conditions experienced in other areas of the cotton belt. Unfortunately, the precipitation was accompanied by cloudy and damp conditions that have slowed the pace of this year's harvest.

The weather related delayed harvest would certainly negatively impact the yield and quality of this year's cotton crop, thus continuing the difficult economic situation faced by cotton producers. Hopefully, the new farm legislation will provide some relief to agriculture during these trying times. Let's look at some issues on which your cotton organizations are working, sure to be major factors on industry's fortunes in the coming months and years.

First, the new farm legislation provides a desperately needed income safety net with counter cyclical payments during periods of low prices and an opportunity for Georgia producers to update their yields and bases. This is particularly important to Georgia producers due to the dramatic increases in Georgia's cotton and allows our producers to benefit more equitably from the cotton program.

Cotton's three step competitive provisions were retained as well as other provisions contained in the 1996 farm bill. We certainly appreciate the members of our congressional delegation for their efforts on our behalf and the cooperation provided to our industry organizations the National Cotton Council and Southern Cotton Growers.

Each Georgia producer is a member of these organizations through their support of the Commission. The rules and regulations for the new farm legislation have just been released and these organizations have well represented our interests in this process.

Other issues addressed are international trade and access to foreign markets. These are vital to the future success of the cotton industry. China is the largest producer and consumer of cotton in the world. Industry estimates are that Chinese cotton stocks have been reduced to levels that would require the importation of as much as one million bales of cotton.

This export opportunity would certainly positively impact world cotton. However the Chinese are not providing market access for cotton as required by its WTO accession agreement. China has allowed unrestricted access for only six percent of the 3.75 million bales of quota it agreed to open and even this six percent has been parceled to its textile mills in such small allocations that transactions have not been feasible.

The Chinese have agreed that the above description of their position is accurate but deny they are in violation of their WTO accession. The Bush Administration and our friends in Congress are vigorously pursuing a remedy to this issue. We expect to eventually prevail but the process takes time and sales opportunities are being lost.

Another issue with the Chinese is the inclusion of tests for neps and short fiber content. The proposed tests would be costly and ineffective due to the methodology China proposes is both inaccurate and too slow to be commercially feasible. This issue has also been brought to the attention of the USDA's United States Trade Representative and the Congress.

NCC and Cotton Incorporated have provided USDA with data that supports the lack of reliability and the impracticality of these tests. This is another non-tariff issue that will penalize the U.S. cotton industry while a solution is being pursued.

Another important trade issue is Brazil initiating consultations in the WTO with the U.S. regarding US cotton programs. In recent comments regarding this situation National Cotton Council President, Kenneth Hood stated that the U.S. is fully complying with WTO requirements. Hood also recognizes that U.S. cotton producers are suffering from the same depressed market as Brazilian producers. The depressed market is caused by the dramatic increase in supplies and use of man-made fibers.

The devaluation of Asian currencies, the overall weakening of the international economies, and China's unwillingness to provide market access to cotton along with other agricultural products are the causes, not the U.S. cotton program.

The article below, courtesy of the National Cotton Council, regarding the impact of Exchange Rates and the U.S. Cotton Industry illustrates how our industry is particularly vulnerable to the effects of an appreciation of our currency's value through its impacts on export sales and imports of cotton and textile products. It shows that cotton producers and associated industries are continuously challenged on many fronts.

The Commission's investment in cotton organizations, on Georgia cotton producers' behalf, is working and paying dividends for you as daily challenges are faced and solutions identified.

Hide comments


  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.