Competitiveness: No Simple Solutions
March 2, 2009 With over half the cotton marketing year gone and a huge portion of the U.S. crop sitting in the loan waiting for a buyer, the questions on the mind of every U.S. cotton producer are, “How did we get here?” And “How do we get cotton moving again?”
We did not get in the situation we find ourselves because of any single issue. Our current lack of competitiveness is the result of a broad range of influences that have snowballed since the loss of Step 2 and recent changes made in the Upland Cotton Market Assistance Loan Program.
To restore U.S. cotton’s competitiveness, I believe the cotton loan program is the key. The framers of the U.S. cotton program intended the marketing loan to be the mechanism that helps U.S. growers enter the international market place assured that they are competing on a level playing field.
Give us Equal Terms
Experience has shown that when competing on equal terms, U.S. cotton is a preferred product in the market. Few competitors can match our cotton’s predictability and performance characteristics.
Unfortunately, the convoluted machinations of the international trade policy process have forced alterations to the U.S. cotton loan program and brought our industry to a crossroads. Our options may be limited, but a solution is out there if we have the willingness to seek it out.
It would be a sad commentary on the state of the U.S. cotton industry if we can’t find a way to do what generations of cotton leaders have done so successfully in the past: Work Together.
The ability of the cotton industry to work together, investigate alternatives and develop workable compromises presented from a united position has made us the envy of other U.S. commodity groups. Clearly we have done more together than we would have ever been able to do separately.
It is guaranteed that some of the solutions our industry has agreed on in the past haven’t been exactly what any particular segment would have implemented on its own. However, up until the last 10-12 months the programs we crafted together, along with compromises made, have allowed our industry to enjoy a steady cycle of production and marketing.
The Loss of Step 2 Changed it All
Following the loss of the Step 2 mechanism and changes to the cotton loan program, we are once again struggling to find a way to level the playing field with our foreign competitors.
I believe the mechanisms are in place that can get us into a more competitive position. Still, it will take a compromising spirit for us to come together to develop a unified plan outlining needed changes with a rationale that makes good fiscal sense for both our industry and the federal government.
Our challenge is to commit ourselves to finding a solution. This process started earlier this year at the National Cotton Council Annual Meeting and must not be abandoned.
The U.S. cotton industry’s strength is in its ability to work together. Now is the time for us to rely on that strength.
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