Textile Manufacturers Have Stake In Farm Bill

The US House of Representatives is expected this week to take up a farm bill that includes a
textile economic assistance program designed to make US textile manufacturers more competitive. The
textile program is modeled after another trade adjustment assistance program for companies and
employees impacted by import competition. If enacted, it would give textile manufacturers direct
payments of 4 cents per pound for opened bales of cotton beginning this August 1 and continuing
until August 1, 2012, when the payments would be reduced to 3 cents per pound.

The competitiveness aspect of the program comes into play because mills would have to invest
the payments in plant and equipment modernization.

President Bush reportedly has threatened to veto the bill in its present form, not
necessarily because of the cotton title, but because he believes other sections of the bill do not
meet budget requirements, and they may present problems with the World Trade Organization.
Secretary of Agriculture Ed Schafer has vowed that the administration will fight to defeat an
override vote, but textile and other interests are mounting a major lobbying effort to secure
enough support to override.

May 13, 2008