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Statement

By Sam Spruell

Chairman, State Cotton Committee
Alabama Farmers Federation

U.S. House Agriculture Committee
Farm Policy

Mr. Chairman, I am Sam Spruell, a cotton, corn, soybean, and wheat farmer from Mt. Hope, Alabama. I serve as Chairman of the Alabama Farmers Federation State Cotton

Committee.

Thank you for scheduling field hearing on new farm policy and giving me the opportunity to present these thoughts. I also want to thank you for you leadership in the House Ag Committee that provided us much needed economic relief in recent months through the Ag Assistance package you supported last year. This relief could not have come at a more crucial time as we had been reeling from a series of weather disasters, low commodity prices, and anemic foreign economies that created commodity surpluses. Because of your and other's support in Congress, most of us are able to put in another crop this year.

What is really needed now is a long-term viable market-oriented national farm policy with a safety net to protect producers in times of low prices and low yields. Foreign subsidized competition and other factors have not allowed the current system to work so that the American farmer can compete in the world market. Adequate budget authority is necessary to fund a safety net. Congress and the Administration must be willing to make a serious budget commitment to fund a strong safety net. A strong food/fiber policy is as important to the United States as a strong national defense.

There are provisions in current farm policy that we favor and request your continued support. Planting flexibility with no acreage controls has allowed us to plant according to market

signals and to exercise crop rotation, which is a must in our overall crop management plan for controlling weeds, diseases, and insects. We believe that the marketing loan provisions of the current farm bill work well in providing support to producers and help make our products available to foreign and domestic buyers at competitive prices. We support the cotton competitiveness provisions of current law and would like to see this provision continued and not artificially capped. We appreciate your resuming funding of the Step 2 program for cotton because this action resulted in competitively priced U.S. cotton and increased U.S. cotton exports. We need a system whereby the payment is based on planted acres and current yields and goes to the producer, the one who bears the production risks. Most southeastern cotton farmers receive an AMTA payment on considerably fewer cotton acres than they plant. In 1999, farmers in the southeast planted 3 million acres of cotton. However, our maximum acres for AMTA payments totaled less than 2.1 million acres. By contrast, AMTA payment acres in all the other regions of the belt were higher than actual planted acres. The result, of course, is that program benefits are distributed unequally across the regions of the Cotton Belt. Also, because emergency relief benefits were distributed on the basis of production flexibility contract (PFC) acreage and yields, we also received a smaller share of those benefits. For the 1999 season, the two payments combined totaled about 13 cents of each PFC pound in every region. However, when the payments are applied to actual pounds produced, the payment in the southeast is only 10 cents per pound. That compares with a payment rate as high as 23 cents per pound on production in the west. These same inequities exist in the distribution of the disaster and emergency relief benefits.

Currently here in the southeast, a cotton farmer harvesting base grade cotton at December 2000 prices can expect a market price close to 55 cents a pound. On the rare southeastern farm where planted acres and payment acres are roughly the same, the fixed AMTA payment would add about 7 cents a pound for a gross return of about 62 cents a pound. However, with planted acres exceeding those AMTA payment acres, our average gross return outlook this fall is closer to

60 cents than 62 cents. USDA's latest cost of production data for the southeast indicates that the average farmer spends 72 cents a pound to grow cotton.

We also need an improved crop insurance program, which will serve as a viable,

affordable risk management tool. We support legislation that would increase subsidy levels at the upper end of the rating scale, i.e., 65%, 70%, 75%, 85%, which would have the net effect of reducing the cost while allowing for higher coverage. While the need to reform crop insurance is great, we should not attempt to use crop insurance as a delivery mechanism for farm program payments. Any reforms in crop insurance should include provisions to remove disaster years from an individual producer's APH yield history, to limit support to insurance providers, and to minimize fraud that, in the end, hurts all producers. We believe that the Individual Risk Management Account (IRMA) concept is a workable option and deserves additional consideration.

An effective national farm policy is tied closely to effective national trade. We request your support of CBI parity (Caribbean Basin Initiative) legislation. It would give trade preferences for Caribbean apparel imports made from U.S. textile components, including yarn, and would likely increase demand for U.S. raw cotton and U.S. yarn by at least one million bales annually with three years. This legislation is especially important in light of the recent World Trade Organization agreement between the U.S. and China as is the best weapon the U.S. textile industry has in its effort to compete with Chinese apparel imports. Ag policy should be developed considering world trade rules and the true competitive situation that exists in world markets. We would like to remind you and Congress of the importance of market development programs such as the Marketing Assistance Program and Foreign Market Development programs. Federal credit programs need to be reviewed to determine the optimum method of providing help to supplement commercial lending.

Some proposals that have surfaced recently are targeted to small farms and are criticizing larger farms. We should not allow the debate between small family farms and larger farms to

interfere with creating new farm policy. It would not be in the best interests of American consumers and taxpayers. Helping to preserve our most efficient farming operations is crucial to long-term livelihood of American agriculture. I do not believe our country is well served by policy that results in dependence on imports for most of our food and fiber needs.

And last, but not least, is the need for Congress to fully fund agricultural research that reduces production costs, develops new crop varieties, increases yields, and develops new technology. Such strides are necessary in U.S. agriculture to keep our producers competitive in a global marketplace.

Mr. Chairman, thank you again for the opportunity to offer these comments. I look forward to working with members of Congress as new farm policy is developed.

WRITTEN TESTIMONY

CONGRESSIONAL AGRICULTURE FIELD HEARING
AUBURN, ALABAMA

From Dr. Luther Waters, Jr.

Dean, College of Agriculture

Director, Alabama Agricultural Experiment Station
Auburn University

March 18, 2000

I am honored to be able to share these events with you. I am the son of a farmer. I grew up on a farm in South Carolina and I have a special appreciation of the many technical, regulatory, and economic restraints you and agribusiness must deal with on a daily basis. As an administrator of a University research and teaching program in agriculture, my challenges are a little different, but they remain intertwined with yours.

Climatic extremes and variable prices (mostly low prices lately) are the age-old scourges of agriculture, along with numerous pests! As a land-grant institution, we have a long history of work with both weather and economics. Helping farmers address the high prices and/or the low level of efficiency of fertilizers were some of the reasons the Agricultural Experiment Station system was founded. The Alabama Agricultural Experiment Station has been involved with weather since its inception. Patrick Mell, who worked in the College of Agriculture from 1878 until the early 1900s was the first agricultural meteorologist in Alabama, and probably the first in the Southeast. Though a botanist by training, Mell established and headed The Alabama Weather Station from 1884 until 1893. Mell later became Director of the Alabama Agricultural Experiment Station, which may have been the last time a Director literally knew which way the wind was blowing.

Seriously, I think it is significant that we can now accurately say, "we can affect the weather."

Obviously, we can't control the weather, but we can in part control the affects weather has on agriculture. We have developed crops with freeze resistant genes, with genes which make crops tolerant of drought stress. This is not new. We've done that for centuries with crop breeding and genetic selection. Nationwide, biogenetics is making significant strides in helping agriculture overcome production limitations due to extremes in weather.

In Alabama, we have made significant strides in developing genetically improved catfish. We are on the threshold of having catfish that can survive dramatic changes in oxygen levels in ponds, which can continue to grow in water temperature extremes. Auburn researchers have led the way in developing genetically improved catfish, which can thrive under adverse climatic conditions.

We are well along in a project that we hope will unlock the key to growing various fruit trees and ornamental crops in Alabama and the Southeast. Most of us think our summers are too hot to

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