Arkansas cotton leader wants Congress to approve tax credits to boost consumption

Northwest Arkansas Democrat Gazette

Arkansas cotton leader wants Congress to approve tax credits to boost consumption

By Alex Thomas

WASHINGTON -- One Arkansas farmer says federal lawmakers need to boost interest in domestic cotton products as producers continue to struggle amid poor economic conditions.

The U.S. Senate Agriculture, Nutrition and Forestry Committee hosted agriculture leaders on Tuesday for a hearing on domestic consumption of American-grown agricultural products. The panel held its hearing as farmers continue preparation for the upcoming crop year.

Marianna farmer Nathan Reed was among the witnesses before the Senate panel. His appearance stemmed from his role as chair of the National Cotton Council, a trade association representing growers, textile manufacturers and other parties within the cotton industry.

"The financial situation of U.S. cotton growers continues to deteriorate with market prices still well below the cost of production," Reed told senators. "This is on top of deep losses producers suffered in 2023, 2024 and 2025."

Agriculture organizations have been urging Congress to help operations ahead of the new crop year. In their calls for action, the groups have cited mounting financial stress from multiple years of high input costs and low crop prices.

A recent American Farm Bureau analysis shows farm-related Chapter 12 bankruptcies increased by 46% between 2024 and 2025, reaching 315 filings nationwide.

Agriculture is Arkansas' leading industry with a $25.6 billion annual contribution to the state's economy. Arkansas is among the leading states in cotton, with the Arkansas Department of Agriculture reporting production has a $568 million value. The American Farm Bureau report mentions Arkansas led the United States last year in farm-related Chapter 12 bankruptcies with 33 filings.

According to Reed, cotton producers face additional headwinds from rising international competition and human-made fiber consumption. He specifically mentioned Brazil's growing global presence; the country has eclipsed the United States as the third-largest cotton-producing country.

"Over the last 20 years, cotton has seen no consistent demand growth," Reed added.

Reed and the National Cotton Council have thrown support behind the Buying American Cotton Act. The bicameral legislation would establish a tax credit for companies to incentivize the sale of domestic cotton products.

Arkansas Republicans John Boozman and Tom Cotton are cosponsoring the Senate version of the measure. Rep. Rick Crawford, R-Ark., has signed on to the House bill; the Jonesboro congressman serves on the House of Representatives Agriculture Committee.

Mississippi Republican Cindy Hyde-Smith, the Senate legislation's lead sponsor, touted the Buying American Cotton Act during Tuesday's hearing. She said it is imperative for Congress to "invest in long-term demand-building initiatives."

"We in Washington need to adopt a comprehensive strategy for domestic consumption that lifts all of American agriculture products," she said. "That is how all growers benefit, and it is the only fix worth having."

Minnesota Democrat Amy Klobuchar, the Senate agriculture committee's top Democrat, voiced support for efforts to increase domestic consumption of American agriculture products. She also said the Trump administration's international trade agenda -- which prioritizes tariffs on foreign products -- has fostered uncertainty among farmers.

"The chaos caused by our tariff and trade policy is causing many, many issues," she said.

The hearing came as the U.S. Department of Agriculture continues accepting applications for its Farmer Bridge Assistance Program. Most of the program's funds -- $11 billion -- have been set aside for farmers of cotton and other row crops, while producers of specialty crops can apply for the remaining dollars.

Boozman, of Rogers, and Sen. John Hoeven, R-N.D., unveiled legislation in January to expand coverage of the Farmer Bridge Assistance Program and increase farm ownership and operating loan limits. Boozman chairs the Senate agriculture committee. Hoeven serves on the committee and leads the Senate Appropriations Subcommittee on Agriculture and Rural Development.

"If you're putting something in the ground, you're losing money," Boozman said Tuesday. "It doesn't matter what you're planting or where you're planting it. No row crop is currently profitable."

Boozman and other Republicans have touted language in the GOP's One Big Beautiful Bill Act modernizing agriculture programs. The law -- which President Donald Trump signed into law in July -- includes an increase in commodity reference prices among other changes, yet these updates will not take effect until October.

Reed expressed gratitude for the incoming ad hoc support and revamped programs. He stressed, however, the United States' cotton industry "cannot survive without stronger demand."

"We are in a dire situation in cotton due to cheap polyester and cheap foreign cotton," Reed said.

"Providing more consumption of American cotton will absolutely reverse the trend of the loss of cotton-processing facilities," he added. "Once they're gone, it's very difficult to get those back."

The Senate and House have yet to pass legislation addressing rural development and other agriculture-related services not handled in the One Big Beautiful Bill Act. The House Agriculture Committee last week voted 34-17 in favor of a skinny farm bill covering these programs.