Legislators are urging USDA Secretary Tom Vilsack to use his legal authority provided in the Farm Bill to designate cottonseed as an oilseed, a change that would allow farmers who produce cottonseed to access the same risk management tools available to other oilseed farmers.
In a letter Tuesday, legislators said pressure from natural disasters and competition from China are hurting American cotton farmers, in addition to the "55% free fall in net farm income," said House Agriculture Committee Chairman Mike Conaway, R-Texas.
Also signing the letter were Ranking Member Collin C. Peterson, D-Minn., General Farm Commodities and Risk Management Subcommittee Chairman Rick Crawford, R-Ark., and Subcommittee Ranking Member Tim Walz, D-Minn. The group led rural and urban Democrats and Republicans from across the country, inside and outside of the cotton belt, in signing the letter.
Conaway said high and rising subsidies, tariffs, and non-tariff trade barriers are being used by foreign competitors "to elbow U.S. farmers out of world markets.
"Cotton farmers are getting hit the hardest right now and they are doing all they can just to hold on without access to key risk management tools under the Farm Bill," he said.
Last week, the General Farm Commodities and Risk Management Subcommittee held a hearing on the issues in cotton country.
"We are deeply concerned that unless the Secretary takes action, there will be significant economic consequences. We cannot allow the predatory trading practices of a few huge players in the world cotton market to destroy cotton production in this country, but that is exactly what will happen without action," Conaway said.
American Soybean Association support >>
The American Soybean Association also supported the proposal, writing to Vilsack to support legislators and the National Cotton Council in their request to classify cottonseed as an oilseed.
"ASA is aware of and concerned about the difficult economic conditions currently facing U.S. cotton growers and the cotton industry," wrote ASA President Richard Wilkins in the letter. "Participation in the STAX program in 2014, at only 24% of producers, leaves a large majority of cotton farmers with no protection against low prices other than crop insurance and the marketing loan program.
"Allowing farmers with generic acres the option to sign up for a cottonseed PLC or County-ARC program would offer producers an improved safety net," Wilkins said.
Wilkins added that ASA doesn't believe a cottonseed program would have a negative impact on the production of soybeans or other oilseeds, or on vegetable oil prices.
"The PLC and County-ARC programs are decoupled, so payments are not tied to current-year planting of any crop and producers can respond to market signals. This market-oriented approach is similar to programs in effect under the 2008 Farm Bill, when production of cotton and cottonseed was much higher, but did not negatively affect production or prices of soybeans or other oilseeds," he explained.
"All of us in agriculture need to work together to support a safety net that works for all farmers," commented ASA Chairman Wade Cowan of Brownfield, Texas. "Soybean growers are pleased to work with fellow producers from the cotton belt to make sure such a safety net exists."
ASA's support is conditional on the determination that the estimated cost of the program can be offset, if necessary, without negatively impacting funding for other farm bill programs or reducing funding for crop insurance, and that it will not violate U.S. commitments under the WTO.