A rush of pre-holiday Congressional action gave the U.S. cotton industry an optimistic boost heading into the New Year.
On December 20, the U.S. Senate passed the Tax Cuts and Jobs Act (H.R. 1) – legislation supported by the National Cotton Council (NCC) that can spur economic growth by lowering taxes and simplifying the code for America’s cotton producers and associated businesses.
In a letter to Senate Majority Leader Mitch McConnell (R-KY) and House Speaker Paul Ryan (R-WI), NCC President/CEO Gary Adams thanked them for crafting and shepherding through Congress a bill that will allow farm families to further invest in their operations and preserve that farm for future generations by allowing full and immediate expensing of capital purchases and doubling the estate tax exemption.
“As you know, many family farms are structured as pass-through entities, and we appreciate the provisions to specifically provide tax relief for these entities, as well as a provision for cooperatives and their members given the loss of Section 199,” Adams stated in his letter. “The lowering of individual tax rates will further help alleviate the tax burden on farm families.”
Adams also noted that U.S. cotton producers continue to face low prices and high input costs while lacking an adequate farm bill safety net. As a result, a number of family cotton farms and other cotton businesses have been lost in recent years.
“We look forward to working with Congress, both in the near term and through the upcoming farm bill debate to provide cotton farming families with the necessary policy improvements to withstand the unique challenges of cotton production and marketing,” stated Adams.
On December 21, the U.S. House of Representatives advanced its Supplemental Appropriations bill that includes critically-needed policy to restore eligibility for cotton in the Title I ARC/PLC programs of the farm bill.
“NCC has been working with Congress for over two years to seek a legislative solution to improve the effectiveness of the cotton safety net in the current farm bill,” said NCC Chairman Ronnie Lee, a Georgia producer and ginner. “Our industry greatly appreciates the strong leadership of Chairman Conaway (R-TX), Chairman Aderholt (R-AL), Ranking Member Bishop (D-GA), Ranking Member Peterson (D-MN), and Rep. Arrington (R-TX) to help advance this important policy through the House.
“Cotton producing families across the Cotton Belt are continuing to suffer with low prices and increased input costs, compounded this year by natural disasters in major cotton-producing areas,” added Lee. “We look forward to continuing to work with both the Senate and the House to ensure a final legislative measure is enacted in the near future that includes cotton policy to help stabilize the industry in the face of these challenging financial conditions.”
The NCC is U.S. cotton’s central organization, and its members include producers, ginners, cottonseed processors and merchandizers, merchants, marketing cooperatives, warehousers, and textile manufacturers.
Farms and businesses directly involved in the production, distribution and processing of cotton employ more than 125,000 workers and produce direct business revenue of more than $21 billion. Accounting for the ripple effect of cotton through the broader economy, direct and indirect employment surpasses 280,000 workers with economic activity of almost $100 billion.
Source – National Cotton Council