to be subject to the same assessments as domestic producers. Collection of assessments on imported
cotton and the cotton content of imported textile and apparel products began in August 1992. In addition,
elimination of the refund provision made participation mandatory for all U.S. growers of upland cotton.
These changes led to substantial increases in the value of assessments collected. In 2000, producers and
importers paid a total of just under $67 million in assessments.
Beginning several years after implementation of the Cotton Research and Promotion Program
(CRPP), funded by these assessments, cotton’s market share at U.S. mills leveled off after more than a
decade of steep decline (see Figure 1). Market share then rose sharply throughout the 1980s until the
early 1990s. While market share at U.S. mills has since declined by a few percentage points, U.S.
consumption of cotton has continued to increase rapidly. U.S. cotton consumption increased from 23.6 to
34.6 pounds per capita and from 35.3 percent to 39.5 percent of all fibers consumed between 1990 and
2000.3 This provides some compelling anecdotal evidence that the CRPP has been effective. However,
many other factors must be considered in evaluating the CRPP, one of which is the influence of
government programs on the market for cotton.
1.2 Federal Farm Programs for Cotton
Beginning with the Agricultural Adjustment Acts of 1933 and 1938, the government has
attempted to support cotton growers’ incomes by restricting output and supporting domestic prices. The
Federal Agricultural Improvement and Reform (FAIR) Act of 1996, also called the “Freedom to Farm
Act,” kept several of the long-standing loan and payments provisions but swept away a complicated set of
price targets and acreage quotas that had been in place for decades. The FAIR Act covers the period from
1996 to 2002 and includes the following elements: marketing assistance (MA) loans, loan deficiency
payments (LDPs), and agricultural marketing transition assistance (AMTA) payments.4 The FAIR Act
3The quantity of imported textile products nearly tripled during the 1990s, allowing cotton to increase its share of U.S.
fiber consumption despite a lower share at U.S. mills by increasing the share of cotton in imports.
4These payments are also known as production flexibility contracts (PFCs).