Cotton Policy Research Articles

Government Policy and the Location of Cotton Production

GOVERNMENT POLICY AND THE LOCATION OF COTTON PRODUCTION William H. Bailey Geographers who seek an understanding of the arrangement of agricultural land use should be aware of the influence of government policy on farmers' decisions. Recent changes in federal cotton policy have been closely associated with significant changes in the distribution of cotton production in the United States. Two weaknesses of federal cotton production-control programs have long been recognized : 1) hindrance of expansion of cotton production in areas better suited to produce the crop under emerging market and technological conditions; and 2) subsidization of cotton production in marginal areas. (1) Changes in federal cotton policy since the mid-1960s, however , removed these obstacles and accelerated the relocation of cotton production from marginal to more optimal growing areas. The purpose of this paper is to examine the relationship between locational shifts in cotton farming and certain key provisions of federal cotton programs in effect since 1966. BACKGROUND. The federal government began purchasing surplus cotton in 1929 to relieve cotton producers of the debilitating effects of cyclic fluctuations in cotton prices and output levels. (2) A huge cotton surplus mounted, however, because of decreasing demand and increased production fostered by relatively high guaranteed price supports . Surplus needed prevention. The government assumed responsibility for the economic survival of American cotton farmers with the Agricultural Adjustment Acts of the 1930s and retained this burden until recently. Two persistent features of cotton programs have been: 1) acreage allotments and marketing quotas to restrict the volume of output in order to increase the market price of cotton, and 2) price support subsidies in the form of Dr. Bailey is Assistant Professor of Geography at Eastern Kentucky University in Richmond, Kentucky 40475. 94Southeastern Geographer direct payments and Commodity Credit Corporation ( CCC ) purchases to insure income stability for cotton farmers. Assignment of allotments and quotas to farms according to production history fixed the locations of production. (3) This practice was a barrier to the expansion of individual cotton operations and to the opening of new areas. (4) Although limited expansion and relocation of production occurred in years when restrictions were relaxed, or when loopholes were enacted into the law, the controls hindered changes otherwise warranted by changing market conditions and technology. Chief among the changes in market conditions have been increasing production costs and greater competition from foreign cotton and synthetic fibers. (5) Technological progress in cotton production has favored production in areas suited to large scale operations employing large machines. Before 1966 the major loophole permitting relocation of cotton allotments was the "release and reapportionment" provision begun in 1960. Allotment holders no longer producing cotton could release their allotments annually for reapportionment to growers requesting more production allocations, but this provision by no means resulted in the needed redistribution of allotments. Released allotments were made available first to growers within the county where the release originated . Surplus released allotments in a county were surrendered to the state for reapportionment among farmers requesting them in other counties. There was little chance that a grower would receive an adequate allotment for significant acreage expansion because reapportioned allotments were divided equally among growers requesting them. The only competitive advantage was shared by growers in major release counties. Although many of these growers managed marginal operations compared to those in other regions where releases were slight, they were able to keep cotton "at home" as long as they were given first pick of released allotments and were able to expand their operations. The "neotenant" described by Prunty and Aiken operated in this manner. (6) Released allotments were annually returned to the control of the original holder, who decided whether to retain or to release the allotment during the next year. The stage was set for a new federal cotton policy to remove locational constraints on cotton production in areas where cotton can be produced most efficiently. (7) By 1966, a combination of factors threatened the United States cotton industry: Vol. XVIII, No. 2 95 1)16 million bales of surplus cotton, of which 14.5 million bales were government owned through CCC purchases; 2)high price supports which fostered production of the surplus and raised the ire of taxpayers; 3...

A Reconsideration of the Cotton Program

The purpose of this article is to point out some of the more im? portant reasons why American cotton growers have been losing their relative shares of the foreign and domestic fiber markets to synthetics and foreign growths. An attempt is made here to examine and to integrate the necessary information, as well as the diverse studies which have been done on various phases of the cotton program, with an eye to developing a price policy acceptable to both cotton farmers and the general public. In line with this objective the analysis is divided into six parts: (1) some results of government cotton programs, (2) factors influencing the domestic demand for American cotton, (3) future com? petition from fqreign growths, (4) some observations on production costs, (5) desirable objectives of a government cotton policy, and (6) a suggested price policy for cotton. I. Some Results of Government Cotton Programs

International Cotton Advisory Committee

The eighth plenary meeting of the International Cotton Advisory Committee was held in Brussels from April 25 to 30, 1949, to review the world cotton situation and exchange information concerning the cotton policies of the member governments. Eighteen nations were represented at the meeting while twelve governments sent observers.

Changing Trends in Cotton Production and Consumption

This paper deals with certain long-time trends in cotton production and consumption in the United States and abroad purely from the statistical standpoint. A great deal has been said in the past three years about the effect of the cotton policies of the United States and the foreign markets for American cotton, and most of what has been said has turned on the very limited facts of the past four years. One of the commonest devices has been to contrast the restricted production of 1933-1936 with the expanding production abroad and with the reduced exports and foreign consumption. And one of the obvious conclusions derived from these simple short-range facts is that by adopting an unrestricted and therefore comparatively large production, the low prices resulting would check foreign expansion and stimulate our exports., The data presented here call for a reconsideration of that simple conclusion. The economic and political forces at work in the world in shaping the course of foreign cotton production and trade are much too complex to justify the acceptance of that conclusion without a careful and searching examination. This paper is not to be taken as praising or criticizing the cotton programs, or criticizing the opponents of those programs. It argues neither for nor against loan programs, unrestricted production, export subsidies or other course of action. Nor does it argue for a high price policy with huge stocks held by the federal government as opposed to a low price policy and moderate or no holdings. Furthermore, it is not intended to leave the impression that the price of American cotton has not influenced and will not influence production and