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NCC Chairman sees excellent prospects for US cotton

06 Jan '10
5 min read

National Cotton Council Chairman Jay Hardwick believes that although the U.S. cotton industry still faces many challenges but has excellent prospects for achieving profitable cotton production and processing.

In the opening address at the 2010 Beltwide Cotton Production Conference here today, the Louisiana cotton producer said, “Research, education and technology transfer continue to be critically important. I assure you that the Council will continue its longstanding commitment of its resources for technology development and transfer and bringing resolution to the technology-based priorities.”

Hardwick said he was pleased at how the industry's collective resources – through the NCC -- have been effectively applied to an array of priority issues this past year. Among those, he said were farm bill implementation, trade, emergency disaster assistance and a number of pressing technical issues.

Regarding farm bill implementation, Hardwick said the farm bill's final passage came after more than two years of hard work with pleasing results.

“We were able to maintain the general structure of the cotton program while instituting a more accurate world price formula and providing assistance for the domestic textile industry,” he said. “Storage credits were also continued.”

Hardwick said the new farm law includes: 1) significant changes in program eligibility and payment limits, 2) direct attribution and no three-entity rule, 3) expanded spouse eligibility, 4) removal of limits on Marketing Loan Gains and Loan Deficiency Payments, and 5) means tests on farm and non-farm income.

He said the NCC was very disappointed that USDA's rules included significant changes to the provisions determining a person “actively engaged in farming” and submitted extensive comments to these proposed rules. In response to these comments, USDA recently announced finalization of a Memorandum of Understanding with the IRS to establish an electronic information exchange process for verifying compliance with adjusted gross income eligibility provisions for farm program and conservation program benefits. He said the NCC will monitor this USDA-IRS process that will evaluate program participants' compliance with the Adjusted Gross Income provisions.

Hardwick reported that USDA also announced a less restrictive interpretation of the labor and management provisions of the actively engaged requirements for some entities for 2010. For operations where the total direct payments do not exceed $40,000, only stockholders that have at least 50 percent interest in the legal entity have to make a significant contribution of active personal labor or management. Otherwise, he said the NCC believes the eligibility regulations for 2010 will be unchanged.

Hardwick also reiterated the industry's appreciation of Congressional efforts led by Senators Lincoln (D-AR) and Chambliss (R-GA) to ensure that regulatory changes for 2010 would not further undermine producers' abilities to fully participate in farm programs.

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