Agricultural Information Bulletin No. (AIB-591) 99 pp

March 1990

Fibers: Background for 1990 Farm Legislation

This report provides an overview of the cotton, wool, and mohair sectors and addresses considerations in the 1990 farm bill debate, including market conditions, policy proposals, trade agreements, and the interactions between policy and markets for selected commodities. Cotton acreage, production, and prices have been influenced by Government programs since the 1930s in an attempt to meet market needs, with varying degrees of success. The Food Security Act of 1985 is generally considered successful in dealing with the cotton sector despite several problems. While the general preference for 1990 legislation for cotton will likely be for stability, the combination of budget, trade, environment, and flexibility issues may result in more than fine tuning of the current act. Wool and mohair have been declining industries. Sheep inventories are a fifth of their World War II level; goat numbers are a third of their mid-1960s level. Policymakers have had limited control over wool program costs given the formula-based Government support price, the trend of declining textile market share, rising raw wool textile imports, stagnant lamb and mutton consumption, and the dominance of Australia and New Zealand in the world wool market. Issues for 1990 include whether to continue the program and, if so, the level and method of determining support prices.

Keywords: costs and returns, exports, cotton, cotton production, farm programs, imports, mohair, policies, program effects, textile mill use, wool

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