HD17 - The Study of Virginia's Cotton Industry


Executive Summary:
As requested by the 1999 Virginia General Assembly, the Virginia Department of Agriculture and Consumer Services (VDACS) conducted a study of the transporting, ginning, storing, and purchasing of cotton in Virginia to determine what additional safeguards are needed to ensure that the interests of the Commonwealth's cotton industry are protected throughout the process of growing, storing and marketing cotton. For the purposes of this study, transporting cotton was not addressed as an activity separate from ginning, storing and/or purchasing cotton.

Current state and federal laws relating to the cotton industry were reviewed to determine what protection is provided at present to the industry.

The other 16 cotton-producing states were requested to provide information about existing requirements relating to their cotton industries.

Two meetings of the Virginia Cotton Industry Group were held to review the ginning, storing and purchasing of cotton in the Commonwealth and to seek input from persons involved in growing, storing and marketing of this commodity regarding what additional safeguards are needed. Representatives of the Virginia Farm Bureau Federation, the Virginia Agribusiness Council, the Virginia Cotton Growers Association, the Virginia Cooperative Extension, and of individual cotton gins participated in these meetings.

Key Findings

2. Many cotton-producing states, including Virginia, have limited or no specific requirements relating to the transporting, ginning, storing and purchasing of cotton.

3. There are requirements in the Virginia Commission Merchants law that relate to cotton. There are no state laws that relate specifically to the ginning, storing and purchasing of cotton.

4. Federal law only provides for a voluntary licensing and bonding of cotton warehouses, and some cotton warehouses in the Commonwealth have elected to be licensed under the federal law.

Recommendations

1. Virginia should consider establishing a "cotton handlers'' law that would provide a simplified approach to regulating the ginning, storing and purchasing of cotton that places no more than necessary restrictions on commerce and trade.

2. VDACS should continue to work with the participants in the Virginia Cotton Industry Study Group to develop a proposal that would address the industry's concerns for adequate safeguards in the least burdensome manner. The industry has expressed an interest in possibly seeking support for the draft proposal to be introduced in the 2000 Session of the Virginia General Assembly.