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Rep. Neugebauer Discuses Cotton Issues with Secretary Vilsack

A news release today from Rep. Randy Neugebauer (R., Tex.) stated that, “I appreciate USDA Secretary Vilsack for coming before the House Agriculture Committee today to provide an update on the state of the rural economy and specifically where things stand with the implementation of the 2014 Farm Bill. The USDA has jurisdiction over many issues that impact hardworking farmers in the 19th District, and I raised several concerns with the Secretary regarding issues affecting our cotton producers, including concerns with the relationship between marketing loan gains and the new payment limit, and China’s cotton program and its effect on the global price of cotton. I also voiced my objections to President Obama’s budget request which would dramatically increase the cost of crop insurance for producers of all crops in the 19th District and limit its viability. We cannot afford to move in that direction and the President’s budget request is dead on arrival in Congress. As Farm Bill implementation continues and deadlines are right around the corner, I look forward to working with Secretary Vilsack to ensure that we have a Farm Bill that works for the 19th District of Texas and our great nation.”

More specifically with respect to cotton and China, Rep. Neugebauer had this exchange with Sec. Vilsack:

Rep. Neugebauer:Ambassador Froman came to sit down with some of the members of the House Ag Committee last week and talked about what’s going on in the trade. And as you know, trade is extremely important to agriculture. And, you know, I think with the recent, I guess, defeat in WTO with cotton with the Brazil case, I think we were forced to kind of basically redraft our farm program, particularly for cotton producers.

And I think one of the concerns that a lot of the people in cotton have right now is, particularly with China, are they playing by the rules. And, you know, their policy is not very transparent, and they have a huge influence on the world price of cotton. And as you know right now the price is down. Can you kind of expand on what the department’s doing to help make sure that our friends in China are playing by the rules?

Sec. Vilsack: That’s a big challenge, Congressman. I would say that we’re heartened by the announcement today from the U.S. Trade Representative’s office that beginning the process within the WTO to raise questions about the export subsidies that China is engaged in [related Wall Street Journal article here]. And agriculture is one of the industries that was identified as being part of that effort. And certainly it’s fairly clear that they have been not necessarily playing by the rules in a number of areas.

We’ve also urged them in terms of their reserves, their cotton reserves, to have much greater transparency in terms of what they have and where they have it and what they’re going to do with it, because that obviously does, indeed, impact and create instability in the market, which we don’t need. This is an issue that’s raised in every meeting that we have with the Chinese, along with several other issues that we have with them.

I would say that we’ve also, in the last meeting I’ve had, we suggested that there needed to be a strategic dialogue with China, a much more in-depth dialogue and conversation about a variety of issues, from biotech, to regulatory processes, to subsidies, to the way in which they control markets. And they have agreed to this strategic dialogue. We will be submitting to them a proposed agenda, and the hope would be that that dialogue will begin this spring.

They are our number one customer, and so it’s—obviously we have to be sensitive to that. But at the same time, we want a science-based and rules-based system because if everyone plays fair, we’ll do just fine in that system. If we’re at a disadvantage, obviously that’s a problem. So I think we’re calling them out and we should.

Rep. Neugebauer: Thank you, Mr. Secretary.