Cotton: Bad Days on the Plantation

In the 14 states that make up the U.S. cotton belt, the unmistakable racket of mechanical cotton pickers filled the air last week. It was harvest time for the crop that reigned supreme in the South for a century. But even though modern machines have largely displaced the tattered ranks of Negro field hands, the resulting rise in productivity cannot conceal the fact that King Cotton is in deep trouble.

All the king’s men—the 300,000 U.S. cotton farmers—will harvest little more than 11 million bales this year, compared with 18 million in 1955, when the U.S. produced half the world’s supply. That proportion is now down to a fifth—and the U.S. cotton industry is under assault from growers in Brazil, Mexico, Egypt, Pakistan and Turkey. Last year the U.S. exported only 2.7 million bales of cotton, compared with 4.2 million in 1967.

Even more of a threat is posed by the rapid advances of synthetics, which last year outsold cotton 2 to 1. The cotton industry is fighting back, but its $13 million research and advertising campaign amounts at best to a rearguard action. Research is concentrated on quick development of permanent-press fabrics made entirely of cotton. Ordinarily, such fabrics must be strengthened with synthetics, since the chemicals used to impart a permanent press weaken cotton fibers. The first limited success was an all-cotton durable-press shirt marketed this year.

Such small gains are not nearly enough to reverse cotton’s decline, which has all but wiped out the once bustling exchanges of the South. The exchange in New Orleans, from which clipper ships braved Northern blockades during the Civil War, closed in 1964 and is now a dusty, rotting building. The Galveston and Charleston exchanges shut down last year. Next to go, most likely, will be Houston’s, which sold only 100,000 bales in 1968. There is little left for its score of traders to speculate upon —except the question of how long the exchange will hold out.

Ironically, both synthetics makers and foreign growers were given access to cotton’s domain as an unforeseen result of U.S. Government policy. The troubles began with rigid, Depression-born price supports, which eventually reached a peak of 32½¢ a pound in 1955. They were aimed at propping the growers’ income, but in the process they raised the price of U.S. cotton above the going world rate. The Government’s solution to that problem was to subsidize exports, beginning in 1956. That move, in turn, created a crisis for domestic mill ers, who complained that they had to pay more for U.S. cotton than competing foreign mills. Washington’s answer was to add a third subsidy, this time for the millers.

The costly and cumbersome system was replaced in 1965 by one that provides only two subsidies—both for growers. The first, amounting to 110 a pound this year, is paid directly to the farmer, on condition that he limit his cotton acreage. The second, technically a “loan” from the Commodity Credit Corp., supports the price of cotton at 90% of the fluctuating world rate, and this year is set at 20½¢ per pound. The advantage of this arrangement is that U.S. cotton prices are no longer fixed at artificially high levels. Trouble is, the current system was adopted only after foreign growers had entrenched themselves in a market once dominated by the U.S.

Vague Proposal. The Nixon Administration’s policy seems realistically designed not so much to recapture lost ground as to lessen the cost of supporting King Cotton. Two weeks ago, when he appeared before the House Agriculture Committee, which must produce new legislation before the present subsidy program expires next year, Agriculture Secretary Clifford Hardin suggested some important modifications. He would continue the direct payments to growers but encourage some farmers to shift to more profitable crops. He would also lower the price support. With that, the Government could save as much as $250 million of the $1 billion annual cost of supporting cotton.

Hardin purposely left his proposal vague, throwing much of the responsibility for a workable program to the farm-belt Congressmen. That, at least, offers an opportunity for change in a business that has been harmed more than helped by the complicated schemes spun by federal bureaucrats, who are far from the soil.