King Cotton

When it comes to subsidies, cotton is king. The Federal Government has long subsidized cotton growers. Then, when exporters complained that the farmers' subsidy priced American cotton out of overseas markets, the U.S. started subsidizing exporters. And last year, after textile mill owners protested that the exporters' subsidy permitted foreign mills to buy U.S. cotton cheaper than American mills could, the Johnson Administration pushed through Congress a subsidy for the mills.

The argument was that with the Government shelling out 6 1/2-c- of the 30-c- per Ib. paid by the mills, textile prices would fall and the consumer would benefit. This entirely ignored the fact that the consumer is also a taxpayer--and anyway, it hasn't worked out. So far, the textile industry has received a mouth-watering $329 million in subsidies; payments have even gone to prisons whose convicts work at weaving. Textile industry profits have soared to their highest level since Korea. But there has been no dramatic drop in wholesale or retail textile prices. For example, the Agriculture Department recently reported that the price of a heavy cotton union suit has risen from $3.07 a year earlier to $3.14, a long-sleeved sport shirt from $3.38 to $3.41.

The overall cotton program was advertised as costing $448 million during its first year. Instead, it is now expected to amount to nearly $800 million. Reason: despite all the subsidies, exports have kept falling and production has kept rising, meaning that the Government has had to buy up still more cotton for its already bulging inventories. By last week the Commodity Credit Corp. owned a record 7,372,000 bales at a cost of $1.2 billion, on which storage charges alone run another annual $30 million.

In his 1965 farm message, President Johnson promised "to reduce the cost of this program and the level of [cotton] stocks." But nobody expects the Administration to propose more than minor alterations in the current program--and cotton is likely to remain the only U.S. crop that is subsidized from stem to steam whistle.

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