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Cost Share Program Provides Much-Needed Assistance

The National Cotton Council and other industry organizations expressed gratitude to Secretary of Agriculture Tom Vilsack for providing a one-time $300 million program that offsets a portion of a cotton producer’s 2015 crop season ginning costs.

The Cotton Ginning Cost-Share (CGCS) program, announced June 6 by USDA, resulted from the agency’s   administrative authority under the Commodity Credit Corporation Charter Act to help facilitate the marketing of commodities.

“The U.S. cotton industry commends Secretary Vilsack for his efforts on making possible a program that will provide much-needed marketing assistance for our nation’s cotton producers,” NCC Chairman Shane Stephens said.

The Mississippi cotton warehouseman said although this program will provide direct marketing assistance to producers, it also will help stabilize a seven sector industry that provides employment for some 125,000 Americans and generates more than $75 billion in annual economic activity.

To be eligible for a cost share program payment, each applicant is required to be a person or legal entity who was actively engaged in farming in 2015 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 in order to be eligible for the cost share payments.

Cost share payments are capped at $40,000 per individual or entity and do not count against the 2014 Farm Bill payment limitations.

Program sign-up period begins June 20, 2016 and ends August 5, 2016. Payments should be available shortly following an individual completing the sign-up process.

Payments will be calculated by multiplying a grower’s certified acres times the regional payment rate times a producer’s share of the crop. Regional payment rates (based on 40% of the regional costs of ginning) are:

  • Southeast (AL, FL, GA, NC, SC, VA) – $47.44/acre
  • Mid-South (AR, LA, MO, MS, TN) – $56.26/acre
  • Southwest (KS, OK, TX) – $36.97/acre
  • West (AZ, CA, NM) – $97.41/acre.

American Cotton Producers Chairman Mike Tate of Alabama said, “Our producers appreciate Secretary Vilsack’s efforts in providing marketing assistance to a commodity that is suffering a serious decline in market revenue partly due to heavily-subsidized foreign competition, with no signs of the commodity prices reaching the level needed to offset their production costs. The industry will continue to work with Congress and USDA to seek long-term policy solutions that will provide stability for the cotton industry.”

The American Farm Bureau also issued a statement about the program: “Farm Bureau commends Secretary Vilsack’s decision to provide a temporary Agriculture Department program to help U.S. cotton farmers defray processing costs, giving them hope as they face some of the most difficult market conditions in more than a decade.

“We are especially appreciative that Secretary Vilsack took the time to work with us, the National Cotton Council and others to arrive at this special, one-time arrangement without requiring legislative action. This is a clear example of what we can accomplish when we work together. Our cotton farmers and the rural businesses they partner with will be better off because USDA took action to address a serious market downturn in their industry.”

More information about the CGCS program is available online or at your local FSA office.

 

Sources – National Cotton Council, American Farm Bureau

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