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USDA announces short-term fiscal relief for cotton acres

MEMPHIS, Tenn. — Cotton producers will be finding some short-term assistance in the form of a Cotton Ginning Cost Share (CGCS) program. The USDA initiative is aimed at expanding cotton growth and maintaining the domestic marketing of cotton.

The program was recently announced at the 66th Annual Mid-South Farm and Gin Show in Memphis. “America’s cotton producers have now faced four years of financial stress, just like the rest of our major commodities, but with a weaker safety net,” said USDA Secretary Sonny Perdue.

“In particular, cotton producers confront high input and infrastructure costs, which leaves them more financially leveraged than most of their colleagues. That economic burden has been felt by the entire cotton market, including the gins, cooperatives, marketers, cottonseed crushers and the rural communities that depend upon their success.”

The CGCS initiative will be administered by USDA’s Farm Service Agency (FSA), and under the program, cotton producers may receive a cost share payment, which is based on a producer’s 2016 cotton acres. Regional per-acre payment rates are set at 20 percent of USDA’s regional costs of ginning and are as follows:

•Southeast (Ala., Fla., Ga., N.C., S.C., Va.) – $23.21

•Mid-South (Ark., Ill., Ky., La., Mo., Miss., Tenn.) – $30.39

•Southwest (Kan., Okla., Texas) – $19.65

•West (Ariz., Calif., N.M.) – $48.02

Cost share payments are capped at $40,000 per individual or entity. These payments do not count against the 2014 farm bill payment limitations.

National Cotton Council Chair Ron Craft applauded the measure. “Our industry is also very thankful for the strong commitment and support by numerous members of Congress, who have led letters and other efforts to build support within the administration for this assistance. In addition, the support provided by the agricultural lending community and agribusinesses across the Cotton Belt was an integral part of these successful efforts."

To be eligible for a cost share payment, each applicant is required to be a person or legal entity actively engaged in farming in 2016 and who complies with requirements including, but not limited to, those pertaining to highly erodible land conservation and wetland conservation provisions, commonly referred to as the conservation compliance provisions.

A producer’s three-year average adjusted gross income may not exceed $900,000 to be eligible for the cost share payments.

The CGCS program supplements Congress’ passage earlier this month of a supplemental disaster bill that includes policy that establishes seed cotton’s eligibility in the Title I ARC/PLC programs of the farm bill. The signup period for the CGCS program runs to May 11.