WASHINGTON, D.C. — Cotton farmers could have a new safety net; the Senate Appropriations Committee has passed a fiscal year 2018 appropriations bill that contains a provision making cottonseed eligible for Price Loss Coverage (PLC) payments in the 2014 farm bill.

 

Championed by Sen. Thad Cochran (R-Miss.), chair of the committee, the cottonseed policy would apply beginning with the 2018 cotton crop.

“Cotton producers have faced economic hardship for three consecutive years,” said Cochran. “The provisions in this bill are intended to help our producers even the odds, and to illustrate that Congress is willing to act based on industry needs when they are necessary and justified.”

Cotton growers are currently not entitled to the safety nets enjoyed by the producers of other crops. This inability to qualify for crop insurance stems from a World Trade Organization case brought in 2002 by Brazil, a major cotton exporter, who expressed concerns about WTO-prohibited subsidies being paid to U.S. cotton growers and the unfair advantage it gave U.S growers over Brazilian producers.

In a final settlement, the United States agreed to several concessions, including the elimination of price and income support programs to cotton growers that are offered to producers of other crops. Instead, cotton growers receive the Stacked Income Protection Plan (STAX), a revenue insurance policy that the 2014 farm bill authorized as a replacement for direct payments – which, in the opinion of many in the cotton industry, is sorely lacking.

“The cottonseed policy, if enacted, would apply beginning with the 2018 cotton crop, the last year of the current farm bill, and would help address the significant economic challenges currently facing America’s cotton families,” said National Cotton Council Chair Ronnie Lee.

In July 25 testimony to the Senate’s Committee on Agriculture, Nutrition and Forestry, Nick McMichen, a Centre, Ala., cotton producer on behalf of the NCC, said, “The current economic situation for much of production agriculture is bleak, including for U.S. cotton farmers. The passage of the 2014 farm bill coincided with significant changes in the global cotton market.

“Shortly after the bill was approved, cotton prices began a significant decline, the result of a buildup of global cotton supplies, especially in China, decreased demand and reduced exports. In 2015, this led to the lowest U.S. cotton acreage in more than 30 years.

“While cotton prices and acreage have increased from the lows experienced in 2015,producers are still struggling with prices at levels not adequate to cover all production costs. According to USDA data, in 2016, 19 percent of cotton farms are considered either highly or extremely highly leveraged,” he said.

Since 2015, the cotton industry has seen two years of solid growth. The USDA estimated growers harvested 17 million bales in 2016, up 4 million from 2015. According to the latest USDA estimate, American producers planted 10.1 million acres of cotton in 2016, which was an increase of more than 17 percent from the previous spring.

All cotton-planting regions observed increases with the exception of the Southeast, which lost some acreage to soybeans. Improved cotton prices, more favorable  planting conditions and increased water availability in the Western cotton states were the primary factors for the increases.

In separate letters to President Trump, 109 members of the House and 26 senators voiced support for Congressional support for cotton producers. “We can’t continue ignoring the economic turmoil of U.S. cotton farmers,” said Agriculture Committee Chair K. Michael Conaway (R-Texas).

“While countries like China and India are pouring billions of dollars into subsidies for fiber production each year, America’s cotton producers have been struggling to scrape by without a safety net to help them soldier through these tough times – the steepest slide in net-farm income since the Great Depression. Cotton producers can’t wait until the next farm bill; they need help now.”