WASHINGTON, D.C. — The coming farm bill is large and complicated and with looming budget cuts, it is safe to say the different groups affected by it stand to lose something.

When the Senate Agriculture Committee passed its version of the legislation late last month, trimming the budget was paramount, with many of those cuts coming from the elimination of crop subsidies and replacing them with an enhanced crop insurance program.

The cotton industry is one such group at the center of discussions concerning the bill. The National Cotton Council of America (NCC) supports a program based on its recommendations known as STAX (Stacked Income Protection Plan) to become a part of the final bill.

According to the agency, “STAX provides an income safety net by making available for purchase an affordable revenue-based crop insurance program consistent with crop insurance delivery and complementary of existing crop insurance programs. Specifically, STAX would address shallow revenue losses on an area-wide basis, with producer premiums offset to the maximum extent possible using available cotton program spending authority.”

It is the lack of a safety net that has many commodity groups worried about subsidy cuts. But Sen. Debbie Stabenow (D-Mich.), chair of the Senate Ag Committee, insists provisions are included in that committee’s version of the bill to adequately protect farmers against natural disasters and market volatility.

The STAX program was one such provision that made it through the committee’s vote. Now, the NCC is asking the House Ag Committee to do the same with its bill.

NCC Chair Chuck Coley, in testimony before the committee’s General Farm Commodities & Risk Management Subcommittee, said it is critically important the new farm bill provide certainty to those involved in production agriculture because “they make long-term investment decisions based in part on federal farm policy.”

In his testimony, Coley said the recent cotton market has been characterized by extremes, noting volatility in prices and weather conditions.

“Farmers understand that agriculture is an extremely risky endeavor, but they also understand that effective risk management is the key to long-term viability. While the goal of farm programs is not to completely remove the risk associated with farming, farm programs should strive to provide opportunities for effective risk management. The Stacked Income Protection Plan (STAX) accomplishes that goal,” he said.

Coley also urged the committee to include, beginning with the 2013 crop, STAX in the new law. He said the program will be administered in a manner consistent with current crop insurance delivery systems and is designed to complement existing crop insurance products, according to a release from the NCC.

But the concern about the cotton industry is not based solely on domestic production. This has become an international affair, and what will ultimately make it into a final farm bill concerning cotton will at least in part be internationally connected.

In 2002 a case brought about by the World Trade Organization (WTO) and initiated by Brazil claimed provisions of the U.S. cotton program created “adverse effects and serious prejudice in the international cotton market,” according to a report from the Congressional Research Service (CRS). In part, these “effects” came from the existing cotton supports.

 “In September 2004, a WTO dispute settlement panel found that certain U.S. agricultural support payments and guarantees – including (1) payments to cotton producers under the marketing loan and counter-cyclical programs, and (2) export credit guarantees under the GSM-102 program (USDA’s Export Credit Guarantee Program) – were inconsistent with WTO commitments,” the CRS report noted.

By 2010 no agreement had been reached, prompting Brazil to threaten trade retaliations against other U.S. goods that would have totaled more than $800 million. By April 2010 the United States offered a settlement of $147.3 million in annual payments to Brazil to “provide technical assistance and capacity-building for Brazil’s cotton sector,” among other stipulations that in essence would stave off the retaliations.

Some legislators think it is time for that payment to go away. Rep. Ron Kind (D-Wis.) is one of those. He, along with colleagues Reps. Jeff Flake (R-Ariz.) and Earl Blumenauer (D-Ore.) introduced legislation that called for the end of Brazilian cotton payments.

In a statement from Kind’s office, he said, “Failing to reform our own domestic cotton program has resulted in millions of taxpayer dollars unnecessarily subsidizing Brazil’s cotton industry. This has got to stop.

“It’s clear that the agriculture committees aren’t going to make the commonsense reforms we need to eliminate these payouts – which is why I’ve authored this bill. We’ve got to get our priorities straight to ensure a fiscally responsible, smart food and farm bill for the 21st century.”

Along with eliminating the payments, his bill would put “pressure on the House and Senate agriculture committees to make the necessary reforms to be World Trade Organization-compliant, ensuring American goods, services and intellectual property aren’t subject to trade retaliations.”

Coley said, in his House testimony, “The U.S. cotton industry faces the unique challenge of resolving the longstanding WTO dispute with Brazil. In developing new farm legislation, the U.S. cotton industry pledges to work with Congress and the administration to resolve the Brazil WTO case and remove the imminent threat of retaliation against exports of U.S. goods, services and intellectual property.

“As you know, the case includes findings against parts of the upland cotton program, as well as the export credit guarantee program used by cotton and many other commodities. We believe our proposal resolves the cotton portion of the dispute. However, the export credit guarantee program must also be addressed and we look forward to working with other agriculture groups to resolve that aspect of the case.”