Recall that late last year, House Agriculture Committee Chairman Mike Conaway (R., Tex.), along with 100 of his colleagues, made a formal request to Secretary of Agriculture Tom Vilsack to “use legal authority provided under the 2014 Farm Bill” to provide additional federal assistance to struggling cotton farmers.
A detailed backgrounder on the debate about whether or not USDA could consider cottonseed as an “other oilseed” under the Farm Bill, an idea that Chairman Conaway requested, and a proposition that was ulitmately rejected by Secretary Vilsack, is available here.
Yesterday, DTN Ag Policy Editor Chris Clayton reported that, “USDA will provide up to $300 million in aid to cotton producers under a new Cotton Ginning Cost-Share program, the department announced Monday.
“Groups representing cotton producers have been calling on Agriculture Secretary Tom Vilsack to provide some type of commodity safety net to cotton farmers since last year.
“Under the program, cotton farmers will receive a one-time payment based on their 2015 cotton acres reported to the Farm Service Agency. The acreage would be multiplied by 40% of the average ginning costs for each production region. Roughly 13 million bales of cotton were ginned in 2015 from 9 million planted acres.”
Mr. Clayton noted that, “The average cotton producer would collect roughly $8,100, according to FSA. That means payments will be 60% higher on average than they were for farmers under the 2014 Cotton Transition Assistance Program, which was created in the 2014 farm bill to help ease the shift from direct payments to being dropped from commodity programs.”
The DTN article explained that, “The cotton industry had agreed to forego commodity payments in the 2014 farm bill, but reversed course after cotton prices fell sharply. Industry leaders had specifically asked for USDA to consider cottonseed as an ‘other oilseed‘ that would allow cotton producers to sign up for the Price Loss Coverage program for cottonseed payments. Vilsack rejected that request, stating that he did not have authority under the 2014 farm bill to designate cottonseed eligible for PLC.
“The announcement comes as cotton prices have been ticking up in recent weeks. The December cotton futures contract finished Monday at 65.54 cents a pound.
“Zippy Duvall, president of the American Farm Bureau Federation and a Georgia farmer, said the payments would help cotton farmers dealing with some of their toughest market conditions in a decade.”
