Sen. Saxby Chambliss (R-Ga.) Defends Cotton Farmers from Editorial

November 8, 2007

Excerpt from a Nov. 8 Statement on the Senate Floor

I wish to take just a minute to address an issue that appeared in The Washington Post earlier this week.

[A]s with most people who write these editorials and publish them around the country, frankly, this editorial is filled with total inaccuracies. I want to talk about a couple of those.

First of all, this editorial takes on the Cotton Program in the 2002 farm bill and says this program has a very negative effect—if you can imagine this—a very negative effect on the ability of cotton farmers in the West African countries of Benin, Burkino Faso, Chad, and Mali.

Now, in this editorial the author writes to start with: “For years, the Federal Government has guaranteed American cotton producers about 72 cents a pound, even though the real market price of cotton has averaged about 57 cents.”

Nothing could be further from the truth. That is just a completely inaccurate statement. What the author is talking about is the fact that in the 2002 farm bill, there is a target price for cotton of 72.4 cents a pound, but that simply does not guarantee a cotton farmer 72 cents a pound. The only correlation between guaranteeing a cotton farmer a floor on the price of cotton and the farm bill is the fact that there is a marketing loan available to a cotton farmer, and the marketing loan rate is 52 cents a pound.

That is the amount guaranteed to a cotton farmer from the 2002 farm bill. The fact is, the price of cotton today is in the range of 60-plus cents, so what that means is there would be no marketing loan benefits available to a cotton farmer as long as the current price is above the marketing loan rate.

So for some off-the-wall editorial writer to come in and say a cotton farmer is guaranteed 72 cents a pound by the 2002 farm bill is misleading and is typical of the statements that are made about farm bills by folks who have no idea what they are talking about.

Let me point out another inaccuracy. The author goes on to say: “Since 2002, market prices haven’t even covered the cost of producing cotton, but the amount of acres planted in cotton has increased because the government guarantees a higher price.”

Again, the author of this editorial simply has not done their homework.

Here are the actual facts: Cotton acreage in the United States in 2002 was 17.2 million—17.2 million. In 2007, this year, cotton acres in the United States are 10.5 million. Instead of cotton acres increasing in the United States, we have seen a 39-percent reduction in the number of acres planted from 2002 to 2007.

Furthermore, the author goes on to say: “Who benefits from the current system of cotton subsidies?”

His answer to his own question: “About 20,000 American cotton producers, with an average annual income of more than $125,000.”

Let me tell my colleagues who really benefits from the cotton program in America as we know it today. We have in the United States today about 20,000 cotton producers. Those cotton producers deliver their cotton to gins where it is then processed, and the outcome of ginning cotton is a cotton bale. The cotton bale then goes into the marketing stream, where it can be sold to domestic cotton mills or exported, as most of our cotton is today.

Unfortunately, all of our textile mills that were located all over the Northeast and then in the Southeast today are located in either the Caribbean region or in China or in Vietnam or elsewhere. Therefore most of our cotton is exported. But the farms and businesses directly involved in the production, distribution, and processing of cotton employ more than 230,000 Americans and result in direct business revenues of more than $27 billion.

Additional economic multipliers through the broader economy, direct and indirect employment surpasses 520,000 workers with economic activity in excess of $120 billion.

Now, the author of the editorial makes this statement: “The effects in the cotton-growing regions of West Africa are dramatic.”

The author is talking about the U.S. cotton program’s impact on West African countries. What they say is, the production of cotton in the United States under the current farm bill dictates to cotton growers in Africa what they can get for a pound of cotton.

Again, nothing could be further from the truth because I have already noted what happened relative to the decrease in the production acres of cotton in the United States. Well, guess what has happened in other parts of the world. If we are having such a negative impact on producers in Africa, does it not stand to reason we are also having a negative impact on cotton growers in Brazil and in China and in India and in other cotton-growing areas? I do not think it would have just a negative impact in West Africa.

The fact is, in China, in 2002, the cotton acreage was 10.3 million acres. In 2007, cotton acreage in China was up to 15.1 million acres. During this time that we have been negatively impacting West African cotton growers, China has increased its cotton acreage by 50 percent.

In 2002, India had cotton acreage of 18.9 million acres. In 2007, that was up to 23.5 million acres, an increase of 24 percent. In Brazil, in 2002, 1.8 million acres of cotton were planted. In 2007, 2.8 million acres of cotton were planted in Brazil. Again, up 55 percent.

For the author of this editorial to say the United States cotton program is having such a negative impact on four West African countries is totally ridiculous.

This editorial failed to mention the fact that in this farm bill the Senate has before it for consideration, we provided significant reforms in the cotton program itself to reduce amber box government expenditures. The administration of the cotton marketing loan program is reformed to improve the efficiency of the program. The target price for cotton is the only target price in the Senate bill that is reduced. We thereby save $150 million over 10 years.

The trade title also includes provisions that repeal authority for the supplier credit and GSM-103 program, measures that are necessary for the United States to comply with the Brazilian cotton case and the WTO. That creates a savings of $50 million. Also, we have significantly reformed the payment limitation provision, and the Adjusted Gross Income limitations are reformed, which saves $456 million.

None of this is mentioned in this grossly mischaracterized, inaccurate article that is aimed solely at a program that provides over 520,000 American jobs.

Editor’s note: To read the full speech in the Congressional Record, use this link.