The House Agriculture Committee’s Subcommittee on General Farm Commodities and Risk Management held a hearing Dec. 9 to examine the current state of the U.S. cotton industry. Members heard from producers, warehousers, ginner, and agricultural lenders on the current situation unfolding in the cotton belt.
As Congress was crafting the 2014 Farm Bill, reforming cotton policy to resolve the long-standing Brazil WTO cotton dispute, both China and India, the world’s largest cotton producers, were busy implementing some of the most destructive policies in modern history, the effects of which are now being felt in world cotton markets. From 2011-2013, China implemented a stockpiling policy that has pushed global cotton stocks to levels that are double the long-run average. That policy has significantly impacted the demand for cotton and is now resulting in a significant depression of global cotton prices.
While the U.S. has responded by growing the fewest acres of cotton since 1983, India has responded by increasing their minimum support price which has resulted in record levels of cotton production—a 60 percent increase over the last 10 years, overtaking China in 2015 as the world’s largest producer.
U.S. cotton producers are left facing this unprecedented recklessness on the part of the world’s two largest cotton producing nations with virtually no safety net. With growing stress in cotton country and in recognition of the extraordinary circumstances facing the U.S. cotton industry, the National Cotton Council has requested that Secretary Vilsack use his authority in the 2014 Farm Bill to designate cottonseed as an “other oilseed” and thus be eligible for the ARC and PLC assistance.
“Cotton is the economic lifeblood of many communities, and it is essential we hear directly from the folks who are being affected by these low commodity prices, rising input costs and distorted markets. Most farmers in America face these challenges at some point, but cotton farmers are trying to weather all of these conditions at once, in their severest form, and without the benefit of an effective farm safety net. I am hopeful Secretary Vilsack will use his authority to take administrative action like he has in the past to help cotton farmers,” said Subcommittee Chairman Rick Crawford.
“Times are tough for cotton farmers, with many families facing the real possibility of going out of business. I hear from producers in my district and all over West Texas about the stress they are facing. Farmers know the risks that come with farming, and crop insurance helps in mitigating those risks. But as our witnesses noted today, crop insurance is not designed to protect against the destructive and anticompetitive policies of the governments of China and India. I fear we are in jeopardy of losing much of the U.S. cotton industry if this dire situation is not addressed,” said House Agriculture Committee Chairman K. Michael Conaway.
Written testimony provided by the witnesses from today’s hearing is linked below. Click here for more information, including Subcommittee Chairman Crawford's opening statement, and the archived webcast.
Witness list included:
- Mr. Shane Stephens, Vice Chairman, National Cotton Council, Greenwood, MS
- Mr. Nathan Reed, Arkansas State Chairman, American Cotton Producers, Marianna, AR
- Mr. Shawn Holladay, Producer Board Member, National Cotton Council, Lubbock, TX
- Mr. Kendall "Kent" Wannamaker, President, Southern Cotton Growers, Saint Matthews, SC
- Mr. Cannon Michael, Producer Board Member, National Cotton Council, Los Banos, CA
- Mr. Mike Wright, Executive Vice President, City Bank Texas, Lubbock, TX