1. Washington Update presented to 2004 Beltwide Cotton Production Conference Today’s Challenges, Tomorrow’s Solutions

2. Challenges and Opportunities Farm Bill--defense Trade Policy--legislate, negotiate and enforce effective trade policy Appropriations-- fund key programs, which build demand and enhance competitiveness Environment--biotech and conventional Conservation-- programs that work Politics--stay involved & prepare for change Farm Bill--defense Trade Policy--legislate, negotiate and enforce effective trade policy Appropriations-- fund key programs, which build demand and enhance competitiveness Environment--biotech and conventional Conservation-- programs that work Politics--stay involved & prepare for change

3. Congress returns Jan. 20 Unfinished FY04 Omnibus Appropriations Energy Bill Unfinished FY04 Omnibus Appropriations Energy Bill New Budget resolution Appropriations Other > ETI repeal > Transportation > Immigration

4. Farm Bill/Cotton Program Defense “ No legislative amendments are being proposed which would enhance the cotton program!” Domestic challenges > Budget based > Philosophically based Solutions > Build coalitions > Identify and educate decision makers > Respond to press attacks when it’s effective Domestic challenges > Budget based > Philosophically based Solutions > Build coalitions > Identify and educate decision makers > Respond to press attacks when it’s effective

5. Farm Bill/Cotton Program Defense “No one is proposing trade agreements provisions that strengthen the US cotton program!” International challenges > Brazil’s WTO complaint > WTO Doha round > African initiative Solutions > Support US government’s defense efforts > Challenge others to discuss all trade distorting practices International challenges > Brazil’s WTO complaint > WTO Doha round > African initiative Solutions > Support US government’s defense efforts > Challenge others to discuss all trade distorting practices

6. Attacks Are Not P.R. Problems! P.R. -vs- Crisis Management

7. Trade Policy Challenges Negotiate beneficial trade agreements Support responsible trade legislation Enforce existing trade agreements > China textile safeguard > China market access Promote market based exchange rates Negotiate beneficial trade agreements Support responsible trade legislation Enforce existing trade agreements > China textile safeguard > China market access Promote market based exchange rates

8. Appropriations Fund Public-Private Partnerships Boll Weevil Eradication Pink Bollworm Eradication Aflatoxin control Textile marker system Export promotion Boll Weevil Eradication Pink Bollworm Eradication Aflatoxin control Textile marker system Export promotion

9. Conservation and Environment Conservation programs > CRP, WRP, and EQIP > Conservation Security Program (CSP) Biotech products > Availability > Acceptance Conventional products > Timely registrations and reasonable regulations Conservation programs > CRP, WRP, and EQIP > Conservation Security Program (CSP) Biotech products > Availability > Acceptance Conventional products > Timely registrations and reasonable regulations

10. Politics and Elections Support Your Political Action Committee-CAC House > Agriculture Committee leaders-Stenholm (TX) > Ways and Means Cmte Chair-Thomas (CA) > Ag Approps Sbcmte Chair-Bonilla (TX) > Redistricting and retirements Senate > Agriculture Committee Chair-Cochran (MS) > Majority leader- Frist (TN) > 6 new cottonbelt Senators elected in 2002 > 6 cottonbelt Senators retiring at end of 2004 House > Agriculture Committee leaders-Stenholm (TX) > Ways and Means Cmte Chair-Thomas (CA) > Ag Approps Sbcmte Chair-Bonilla (TX) > Redistricting and retirements Senate > Agriculture Committee Chair-Cochran (MS) > Majority leader- Frist (TN) > 6 new cottonbelt Senators elected in 2002 > 6 cottonbelt Senators retiring at end of 2004

11. NCC Needs Your Support Resources to preserve cotton program- respond to domestic international challenges-assist domestic mills—maintain competitiveness > economic analysis > legal expertise > communications capabilities > political resources Resources to preserve cotton program- respond to domestic international challenges-assist domestic mills—maintain competitiveness > economic analysis > legal expertise > communications capabilities > political resources

13. 108th Congress Senate > Republican control 51-49 > Republican leadership changes > New Cottonbelt members: Dole, Graham, Chambliss, Talent, Cornyn, and Pryor > Committee chairmen + Cochran-Agriculture + Nickles-Budget + Stevens-Appropriations + Grassley-Finance Senate > Republican control 51-49 > Republican leadership changes > New Cottonbelt members: Dole, Graham, Chambliss, Talent, Cornyn, and Pryor > Committee chairmen + Cochran-Agriculture + Nickles-Budget + Stevens-Appropriations + Grassley-Finance

14. 108th Congress Senate Agriculture > Cochran (MS) > Lugar (IN) > McConnell (KY) > Roberts (KS) > Fitzgerald (IL) > Crapo (ID) Senate Agriculture > Cochran (MS) > Lugar (IN) > McConnell (KY) > Roberts (KS) > Fitzgerald (IL) > Crapo (ID) > Chambliss (GA) > Dole (NC) > Coleman (MN) > Talent (MO) > Grassley (IA)

15. 108th Congress House > Republican control 229-205-1 > Some leadership changes + DeLay- Majority Leader + Pelosi-Minority Leader > 56 new members + NC, GA, AL House > Republican control 229-205-1 > Some leadership changes + DeLay- Majority Leader + Pelosi-Minority Leader > 56 new members + NC, GA, AL

16. 108th Congress House Agriculture Committee > New Chairman + Rep. Bob Goodlatte (VA-6) > New Republican members + Janlow (SD), Burns (GA), Bonner (AL), + Rogers (AL), King (IA), Chocola (IN), Musgrave (CO), Nunes (CA) House Agriculture Committee > New Chairman + Rep. Bob Goodlatte (VA-6) > New Republican members + Janlow (SD), Burns (GA), Bonner (AL), + Rogers (AL), King (IA), Chocola (IN), Musgrave (CO), Nunes (CA)

17. Cotton Program Provisions Loan52.00 cents Direct Payment 6.67 cents > update base Target Price72.40 cents Counter-cyclical Pay.13.73 cents > update base and yield > Dec. (Oct) advance 4.80 cents Payment Limits > Direct Payment$40,000/person > Counter-cyclical Pay.$65,000/person > MLG/LDP$75,000/person Loan52.00 cents Direct Payment 6.67 cents > update base Target Price72.40 cents Counter-cyclical Pay.13.73 cents > update base and yield > Dec. (Oct) advance 4.80 cents Payment Limits > Direct Payment$40,000/person > Counter-cyclical Pay.$65,000/person > MLG/LDP$75,000/person

18. Golden Rule “It doesn’t do to leave a live dragon out of your calculations if you happen to live near one.” “The Hobbit” “It doesn’t do to leave a live dragon out of your calculations if you happen to live near one.” “The Hobbit”