Agriculture Secretary seeks ways to help cotton growers

Agriculture Secretary seeks ways to help cotton growers

Testifying before an agriculture committee hearing on the state of the rural economy Feb. 24, Vilsack suggested he'd be open to a cost-share program to pay for part of ginning costs.

Agriculture Secretary Tom Vilsack appears to be open to finding other avenues than designating cottonseed as an “other oilseed” to help cotton producers.

Testifying before an agriculture committee hearing on the state of the rural economy Feb. 24, Vilsack suggested he’d be open to a cost-share program to pay for part of producer’s ginning costs.

Vilsack said the details of such a program need to be worked out, including having the cotton industry provide the numbers on ginning costs and the amount of cotton being ginned annually. The secretary mentioned a figure of $300 million with $150 million being made available to cotton producers to help offset ginning costs.

Congress and Agriculture Secretary Vilsack continue to debate how to help cotton growers. (Photo: Chuyu/Thinkstock)

Based on the amount of cotton ginned in either the 2014 or 2015 crop year, the actual ginning cost could run around $800 million with USDA providing $400 million if the 50-50 cost share percentage were put in place by the secretary, according to sources in the cotton industry.

Heated debate

On Feb. 3, Vilsack announced he didn’t have the authority to make cottonseed an “other oilseed” as requested by House Agriculture Committee chairman Rep. K. Michael Conaway, R-Texas.

Conaway asked Vilsack to reconsider his decision and during the hearing Vilsack again defended his decision, saying he could not grant the request of more than 100 members of Congress that he designate cottonseed as a program crop because “I have taken an oath to uphold the laws and Constitution of the United States.”

Those laws, he said, include language in the Agricultural Act of 2014 that said cotton was no longer a program crop – a decision resulting from a ruling against the U.S. cotton program in the WTO case brought by Brazil in 2004.

“That decision basically made it impossible for me to do what you’re asking me to do,” said Vilsack, responding to the opening statement by Conaway.

“Certainly Congress could reopen the farm bill and address it then,” said Vilsack, “Or Congress could remove the prohibition that currently exists in the agricultural appropriations bill that was passed by Congress that prevents me from using the Commodity Credit Corp. Act to provide assistance and help.

“Or we could work collaboratively together on a cost-share program with reference to ginning that you and I talked about, Mr. Chairman, which we are still willing to do if the industry is willing to accept this and provide the information we need to initiate the program.”

Farm bill coverage

While cotton does not have Agricultural Risk Coverage or Price Loss Coverage as other commodities do in the current farm bill, Vilsack said 14 percent of U.S. cotton was covered by the Stacked Income Protection Plan or STAX in 2015, and $300 million in underlying crop insurance policy indemnities has been paid to date (STAX indemnities will be calculated later this spring).  

Cotton farmers also have the marketing loan and USDA has approved the use of marketing certificates for use in redeeming cotton from the CCC loan.

For more on the hearing, visit http://agriculture.house.gov.

Laws is on the Farm Press Editorial Staff.

TAGS: USDA
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