WASHINGTON — President Obama is expected to sign a sweeping farm bill after the Senate passed the measure on Tuesday.
The massive legislation provides billions of dollars in funding to broadly implement farm safety-net policies and conservation and food stamp programs over five years. The Senate passed the legislation 68-32 after House passage last week.
Several segments of the industry will benefit from the measure, which restores funding for cotton and wool funds and gives relief to some companies that have faced higher costs since one of the government’s trust funds expired five year ago and another could no longer be adequately funded.
The measure establishes the Pima Agriculture Cotton Trust Fund, which would run through 2018 and provide $16 million in funding annually. It essentially restores the Cotton Trust Fund, which expired in 2009 and suspended duties on imported cotton shirt fabric, and provided grants to cotton shirt manufacturers and yarn spinners in the U.S. It was created to offset an inverted tariff — the U.S. duty on imported finished cotton shirts was lower than the tariff on cotton shirt fabrics, which impacted the competitiveness of U.S.-based cotton shirt makers.
The farm bill will also restore funding to the Wool Trust Fund under a new name. The fund makes payments to U.S. wool fabric and yarn producers, as well as sheep growers, to encourage more production of wool fabrics. The new Agriculture Wool Apparel Manufacturers Trust Fund provides up to $30 million in annual funding.
There is also a provision in the bill that creates a new wool research and promotion fund, allocating $2.25 million annually from 2015 through 2019.
Textile producers will also benefit from a new Economic Assistance Adjustment program that would give U.S. textile mills 3 cents a pound on domestic or imported upland cotton they use, as long as the money is invested in acquiring, modernizing or expanding land, plants, buildings or equipment.
It remains to be seen whether the legislation will resolve a long-standing cotton subsidy dispute with Brazil and bring U.S. cotton programs into line with World Trade Organization requirements but lawmakers said it should, by eliminating direct payments of about $580 million a year to cotton farmers, ending countercyclical payments and modifying the export guarantee program.