WASHINGTON – A long-stalled disaster relief bill now pending in Congress not only would help Texans rebound from the misery Hurricane Harvey poured on Houston and the Gulf Coast last summer, but also could be a windfall for cotton growers on the high plains of West Texas.
Much of the disaster debate has focused on delays and entanglements over broader budget and immigration issues. But out of the headlines, farm country lawmakers backed by Texas Gov. Greg Abbott have been spearheading a drive to add a safety net program to protect cotton producers from market fluctuations.
Tucked into a House-passed $81 billion disaster relief package, now before the Senate, is a key change in farm policy that would put cotton back into a price support program called the Price Loss Coverage – a status it lost in 2014 after a challenge before the World Trade Organization.
Cotton is big business in Texas – the state’s biggest cash crop, generating about $2.2 billion in crop value in 2016.
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There’s bipartisan support in the House for what insiders call the “cotton fix.” But it appears to have hit a snag in the Senate, where it has been questioned by lawmakers on both sides of the political spectrum.
“It’s a much bigger part of the delay that people realize,” said Minnesota U.S. Rep. Collin Peterson, the ranking Democrat on the House Agriculture Committee. Although Peterson supports the measure, he said it has “absolutely” become a harder sell in the Senate, particularly among some powerful northern Democrats.
The provision has been blistered by critics on the left and right who see it as an opportunistic end-run around the 2014 Farm Bill, which excluded cotton from the program. But it has the backing of Abbott and a slew of powerful Texas lawmakers, including the state’s two U.S. senators, who see it as a remedy for the estimated $100 million in losses Texas farmers suffered in Hurricane Harvey.
While the measure could help farmers in southeast Texas who were hit by the storm’s flood waters, the main impetus has come from South Plains cotton growers championed by freshman U.S. Rep. Jodey Arrington, a Republican from Lubbock, more than 500 miles from the storm-ravaged coast.
“You can’t overstate the importance of cotton to West Texas,” Arrington said, “and restoring its safety net status would save billions of dollars to our local economy and is the single biggest factor for ensuring a prosperous future for families living on the South Plains. Cotton is the lifeblood and identity of West Texas.”
Indeed, most of the state’s nation-leading cotton production is centered in the West Texas cotton fields surrounding Lubbock, where rock ‘n’ roll legend Buddy Holly got his start in 1955 playing at local venues like the Cotton Club.
Critics note that long before Harvey made landfall on the Texas coast last August, the industry had been battling to get back into the farm bill’s price and income support program, a move that could have significant implications for international trade agreements.
“This is a major policy change that shouldn’t be buried in some disaster bill,” said Daren Bakst, a research fellow in agricultural policy at the free-market Heritage Foundation. “It has nothing to do with a disaster at all. This is why people become skeptical about these disaster bills.”
Inclusion in bill is criticized
Backers of the cotton fix note that the Congressional Budget Office, which calculates the costs of legislative changes, rated it as “budget neutral,” meaning it would not add to the government’s budget deficit.
In part, that’s because growers would be expected to pivot from special crop insurance subsidies Congress created for cotton farmers when they were dropped from the commodity support program linked to crop prices.
But in any future down markets, opponents say, taxpayer costs could rise. They also argue that the change could invite a trade war with other cotton-producing countries like Brazil, which challenged the subsidies in the World Trade Organization a decade ago, winning a $300 million settlement in 2014 after retaliating against an array of U.S. imports.
Backers of the new cotton proposal say it has been re-written to comply with U.S. treaty obligations, just like other major farm commodity programs. But its linkage to a bill intended to help victims of hurricanes and wildfires has caused political problems.
In a blog on the eve of the 251-169 House vote for the disaster aid package last month, Scott Faber, vice president for government affairs at the Environmental Working Group, warned that Congress was “once again… attempting to provide more subsidies to cotton farmers” under the guise of providing relief from the hurricanes in Texas, Florida and Puerto Rico.
Cotton already is one of the most heavily subsidized farm commodities in the U.S. agricultural system, which has sought to protect farmers from the vagaries of weather and markets since the Great Depression. Cotton farmers ranked third in commodity payments per-acre in a 2017 study by the Congressional Research Service, behind producers of rice and peanuts.
But to Texas growers and the state’s representatives in Congress, the cotton fix has been long overdue. Arrington says that Congress’ decision to take cotton out of the price support program in 2014 has had a “devastating effect” on producers throughout the 17-state Cotton Belt, putting some West Texas farmers in danger of losing their farms.
The overall economic impact from cotton and the many products it creates has been estimated to be as high as $24 billion annually, according to Southwest FarmPress, an industry publication. Texas produces about five million acres of cotton each year.
Among those lobbying for the cotton fix is Richard Gaona, president of the Southern Rolling Plains Cotton Growers, who put out a statement through Arrington’s office saying the change would provide “the necessary risk management tools” farmers need to succeed throughout the entire region.
Critics argue that the cotton subsidy provision should be negotiated as part of the upcoming farm bill. But Steve Verett, executive vice president of the Plains Cotton Growers, said farmers are making planting decisions for the coming year now.
“Timing is of the essence, and by including this fix in legislation prior to the 2018 farm bill, our growers will have more certainty going into the new year,” said Verett, who has spent time in Washington meeting with congressional leaders.
Among them was Arrington, backed by House Agriculture Committee Chairman Mike Conaway, a Republican from Midland, whose district also is in the middle of the cotton patch. Both were instrumental in whipping up support for the cotton provisions in the House version of the disaster relief bill.
‘Window of opportunity’
Abbott also has become involved, writing to Washington lawmakers this month urging their support for “a narrow window of opportunity” to help cotton farmers in the House-passed aid package.
Abbott’s letter cited “setbacks” in the cotton industry and in U.S. farm income generally, calling it “the steepest decline since the Great Depression.” But it did not mention Harvey or any other natural disaster.
Stephen Worley, a spokesman for Senate Appropriations Committee Chairman Thad Cochran, R-Miss., said that while the Mississippi Republican supports the cotton fix, he stopped short of committing his support for including it in the disaster relief package, saying only that talks are “ongoing.”
The press office for Vermont Sen. Patrick Leahy, the ranking Democrat on the committee, did not respond to a request for comment.
But in agriculture, the fault lines are often regional, rather than partisan. An attempt last year to restore the cotton subsidy got tangled in a dispute between southern commodity producers and northern dairy interests, represented by Leahy and Michigan U.S. Sen. Debbie Stabenow.
But the player with the most leverage in the end may be Conaway, whose district produces more cotton than any other in the nation. Peterson said that resolving the cotton fix now would make the upcoming farm bill – a perennially complicated piece of legislation that affects every facet of American agriculture – “90 percent easier to do.”
To Peterson, that’s a powerful incentive for Congress to resolve the cotton subsidies, whether it’s in the disaster bill or not. “There’s not going to be a farm bill,” he said, “unless cotton is fixed.”