MEMPHIS--USDA senior officials have informed the National Cotton Council that the Secretary of Agriculture has authorized a marketing certificate program to be administered in keeping with past procedures.
While operational details have not been completed, the Council has been told that the program will include both Step 2 certificates and generic certificates. The program will be administered so that: 1) commodities can be redeemed from the loan at a globally competitive price, such as the Adjusted World Price (AWP) in the case of cotton, and 2) marketing loan gains will not count against payment limits.
According to USDA sources, certificates can flow to individuals who need them not only via Step 2 issuance, but producers could request certificates in lieu of cash for loan proceeds or loan deficiency payments.
The Council is staying in close contact with USDA about the much-needed certificate program and will report implementation procedures and other details on its Website, www.cotton.org and in its newsletter, Cotton's Week.
A USDA spokesman said the Department will move as quickly as possible to implement the program and is already making key personnel assignments to expedite the process," said newly-elected Council President Robert E. McLendon.
The Leary, GA, producer commended Agriculture Secretary Dan Glickman for this decision, saying, "this program, making loan redemptions possible at the AWP, will provide an invaluable marketing assist for U.S. cotton. Without it, we estimate that more than a million bales of cotton would languish under loan, eventually being forfeited and sold at auction by the Commodity Credit Corporation just as new crop cotton is coming to market.
"USDA's planned procedures are in keeping with statutory language calling on the Secretary to implement the program in a way that best effectuates the purposes of cotton user marketing certificates, including enhancing the competitiveness and marketability of U.S. cotton."
CCC said certificates soon would be offered under programs for producers of other commodities such as wheat, feed grains and oilseeds.
McLendon, other industry leaders and Council executive staff discussed the benefits of certificate issuance with Secretary Glickman last week and urged him to implement the program so that producers could redeem and market cotton in an orderly fashion.
The marketing certificate authority was included in the 2000 Agricultural Appropriations Bill, which was signed into law last October.
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