NCC Releases Statement on the Energy Act
Council praises the efforts of Ag Committee Chairman Collin C. Peterson, but stresses more could be done to keep U.S. producers competitive.
June 30, 2009
The National Cotton Council commended House Agriculture Committee Chairman Collin C. Peterson's (D-MN) stalwart efforts, in the face of formidable opposition, to successfully negotiate amendments to H.R. 2454, The American Clean Energy and Security Act -- which authorizes USDA to develop and administer agricultural offsets in a cap-and-trade program.
The NCC's statement said it supports development of these offsets as a means to mitigate, to some degree, the impact of significantly higher energy and input costs to production agriculture and agribusiness. Upon consideration of the legislation's broad impacts, however, the NCC said it has concluded that the higher costs of energy and other production inputs for every sector of the US cotton industry will far outweigh any benefits resulting from offsets. Production, marketing, and processing will be adversely affected in varying degrees. A preliminary analysis of direct energy costs related to production, ginning, marketing, and yarn spinning indicates that every 10% increase in input prices will increase costs by at least $175 million. The estimate, which should be viewed as a lower bound, does not fully account for the ripple effects that higher energy costs will have on all industries that supply inputs to the US cotton and textile industry.
The statement continued, "NCC is deeply concerned about the international disparity that this bill would establish for U.S. industries. China and India, the two largest cotton and textile producing countries, are competitors with U.S. cotton in the international market. Both countries are significant and growing greenhouse gas emitters and both have thus far refused to sign onto any agreement to curtail their emissions. The additional production costs that will result from implementation of the provisions of H.R. 2454 will place U.S. cotton and cotton products at a clear disadvantage in international markets, which are critically important to the U.S. cotton industry. For these reasons, NCC urges support for Chairman Peterson's amendments but can not support the bill without significant modifications and improvements to address the concerns outlined above."