Challenge to Cotton

How much does the cotton support program cost taxpayers? Last week Lamar Fleming Jr., board chairman of Anderson, Clayton & Co., world's largest private cotton dealers, dug into Government figures, came up with the staggering total of $1,156,000,000 as the cost this year. In a speech to the American Cotton Congress in Dallas, Fleming, a crusader for sound farm policies (TIME, April 8), pointed out that this is more than $1,000 for each of the 850,000 farms on which cotton is grown.

Fleming's figures were underlined in a press conference in Washington where Agriculture Secretary Ezra Taft Benson took pride in the fact that his department this fiscal year is selling 7,500,000 bales of surplus cotton abroad v. total U.S. cotton exports last year of 2,200,000 bales. But Benson conceded that the Government will lose $530 million by selling cotton for an average of $115 a bale v. the Government cost of $186.

Actually, said Cottonman Fleming, the Department of Agriculture export program is just plain old-fashioned dumping, and the U.S. has laws to punish other countries who try to do this in the U.S. Now, said Fleming, "by espousing international dumping as the key procedure for liquidation of cotton surpluses, we have initiated a reaction from these principles, back toward an isolationism which, if adopted by other nations, will play havoc with our export markets."

Mule-Power Farms. Moreover, said Fleming, the U.S. is not really selling about half of the exported cotton; it is giving it away or exchanging it for soft currencies or covered by long-term soft loans. He estimated that some $100 million of such losses should be added to the outright subsidy in this year's export program, which he figured out at $536 million. On top of $636 million, he added $150 million in cotton soil-bank payments this year, $80 million in general Agriculture Department expenses for cotton, and $290 million in artificially inflated raw-material costs for American cotton-goods manufacturers.

The expensive price-support system, said Fleming, has tended to keep cotton' production in the old, uneconomic mule-power farms of the Southeast, while retarding the natural shift of cotton growing to the low-cost, highly productive tractorized flatland farms of the South and of the irrigated Southwest and West. This keeps cotton prices so high that they provide an umbrella for foreign growers and a powerful incentive for consumers to shift to synthetic fibers. To cure the situation, Fleming advocated gradual reductions in U.S. cotton price-support levels, gradual removal of U.S. acreage controls, and gradual lifting of the U.S. subsidized export price.

Artificial Market. If this is done for the next two or three years, Fleming said, American cotton growers will be able to "feel their way" back into world competition. Making the outlook most encouraging, he said, are two facts. One is the continuing expansion of industry in the old Cotton Belt, which is absorbing farmers freed from the hardscrabble, impoverished existence of old-style farming. The other is the competitive advantage of better mechanization enjoyed by American agriculture over foreign growers. With foreign living standards rising rapidly, aid Fleming, the market for cotton is increasing at the rate of a million bales of cotton each year. U.S. growers can either compete for that market or hand it over "on a silver platter" to foreign growers or to synthetics.

Warned Fleming: "The question for American growers is whether to plan to serve the increased market, increasing their volume of operations but accepting lower prices, or abdicate it and reconcile themselves to a declining business within a sheltered artificial market, provided the rest of their countrymen are willing to bear the cost of sheltering it."

With less than one American in 13 now dependent on agriculture for a living, Fleming said he did not think farmers should count on such protection forever.

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