USDA Renews Cotton Ginning Cost Share Program
U.S. Secretary of Agriculture Sonny Perdue has authorized renewal of the Cotton Ginning Cost Share (CGCS) program, based on U.S. cotton acres planted during 2016.
Perdue made the announcement while speaking at the 66th Annual Mid-South Farm and Gin Show in Memphis on March 3. The program, which is administered by the Farm Service Agency (FSA), will allow cotton growers to receive a cost share payment based on their 2016 cotton acres reported to FSA, multiplied by 20% of the average ginning cost for each production region.
“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,” Perdue said. “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.
“I hope this will be a needed help as the rural cotton-growing communities stretching from the Southeastern U.S. to the San Joaquin Valley of California prepare to plant,” he added. “This infusion allows one last opportunity for assistance until cotton’s new Farm Bill safety net becomes effective.”
Sign-up period for the CGCS program begins March 12 and ends May 11.
Industry reaction to the announcement came quickly.
“The U.S. cotton industry strongly commends Secretary Perdue for his efforts to deliver much-needed marketing assistance for our nation’s cotton producers,” said National Cotton Council Chairman Ron Craft.
The Texas cotton ginner and producer said this program will provide direct marketing assistance to producers, alleviate a portion of the economic conditions producers are struggling with, and help the safety net void until the seed cotton ARC/PLC program is implemented, beginning with the 2018 crop year.
“Our industry is also 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,” added Craft. “In addition, the support provided by the agricultural lending community and agribusinesses across the Cotton Belt was an integral part of these successful efforts.”
American Cotton Producers Chairman Shawn Holladay of Texas said, “Our producers across the Cotton Belt are sincerely grateful for Secretary Perdue’s commitment to provide marketing assistance to a commodity that is struggling due to heavily-subsidized foreign fiber competition and the immediate lack of a safety net policy on par with other crops. The industry will continue to work with USDA and Congress to implement the long-term policy solutions recently enacted by Congress that will provide stability for the cotton industry going forward.”
Plains Cotton Growers President Johnie Reed, a producer from Kress, TX, said, “We greatly appreciate U.S. Secretary of Agriculture Sonny Perdue and the USDA, along with the House Committee on Agriculture led by Chairman Mike Conaway, for understanding the needs of cotton producers and acknowledging the success of the previous Cotton Ginning Cost Share Program. Reauthorizing this program for the 2016 crop will help cotton growers offset their ginning costs, which in turn will improve many growers’ financial situations and help keep them in business.”
CGCS Program Details
Payments will be calculated based on a producer’s 2016 cotton acres reported to the FSA, with per-acre payment rates set at 20% of USDA’s regional costs of ginning. Those regional rates are:
- Southeast (AL, FL, GA, NC, SC, VA) – $23.21 per acre
- Mid-South (AR, IL, KY, LA, MO, MS, TN) – $30.39 per acre
- Southwest (KS, OK, TX) – $19.65 per acre
- West (AZ, CA, NM) – $48.02
Cost share payments are capped at $40,000 per individual or entity, and do not count against the 2014 Farm Bill payment limitations.
To qualify for the program, cotton producers must meet conservation compliance provisions, be actively engaged in farming and have adjusted gross incomes not exceeding $900,000. FSA will mail letters and pre-filled applications to all eligible cotton producers.
Article sources – USDA, National Cotton Council, Plains Cotton Growers