Congress Calls on Administration for Economic Assistance for Cotton Producers

Dan Cotton, Industry News Release

economicA large, bipartisan block of 135 Senators and Representatives sent letters to President Trump strongly urging the Administration’s support, through USDA, to operate the Cotton Ginning Cost Share Program effective for the 2016 crop year and on an ongoing basis.

The Senate letter noted, “In the past decade, the U.S. cotton industry has endured a World Trade Organization (WTO) challenge, increasing foreign subsidies, tariff and non-tariff barriers to trade, and a weakened U.S. safety net.”

The House letter at noted, “In recent years, these factors have resulted in the United States experiencing a 30-year low in cotton planted area; global cotton prices approaching $2.00 per pound before plummeting to as low as 57 cents per pound; and record production costs far outpacing market returns for the last three years. As a consequence, America’s cotton farming families are struggling to compete on a lopsided global playing field heavily weighted to our competitors …”

Twenty-six Senators and 109 Representatives signed letters that were delivered to the President today seeking support for the cost-share program.

The National Cotton Council appreciates those who led the Congressional effort including: Senators John Boozman (R-AR) and Mark Warner (D-VA) and Representatives Robert Aderholt (R-AL), Jodey Arrington (R-TX), Sanford Bishop, Jr., (D-GA), Mike Conaway (R-TX), Rick Crawford (R-AR), Collin Peterson (D-MN), Rick Nolan (D-MN), and Tom O’Halleran (D-AZ).

The National Cotton Council and 82 other cotton interest organizations sent a similar letter to President Trump that requests his Administration to provide economic relief to U.S. cotton farming families.

The letter stated that to help bridge the gap until a new farm bill is adopted by Congress, “The cost share program will provide policy stability in the absence of a comprehensive policy for cotton in the existing farm bill. A cost share program was operated by the previous Administration for the 2015 crop and proved to be an effective and efficient means of providing economic relief to America’s cotton farming families.”

The letter noted that in the absence of the safety net offered to other crops, cotton producers are much more exposed to the volatile nature of commodity markets and global policy manipulations.

Without some action by the federal government, the letter stated, “nearly 18,000 cotton families will continue to see their equity erode or take on a greater debt load as they hope to keep their family farms in operation.”

Another letter sent to the President was signed by 1,605 agricultural lenders, agribusinesses, and other rural businesses. That letter strongly recommended the Administration use its discretionary authority to assist in this situation and specifically authorize assistance similar to the recent Cotton Ginning Cost Share program. It stated that this assistance would help bring much-needed stability and support to producers, and in these times of low prices, allow them to have the balance sheets necessary to procure production financing.

The lender/agribusiness letter cited USDA data showing cotton market returns fell short of the total costs of production. Losses in the past three years, it noted, are unlike any in recent history for U.S. cotton.

“Unfortunately, the recent economic pressures will intensify as projections by the Food and Agricultural Policy Research Institute for 2017 and 2018 are for lower cotton market revenue relative to the 2016 crop,” the groups stated.

They also emphasized that these projections of continued economic losses “cause serious concern among the lending and agribusiness community that relies so heavily on a vibrant farm economy. Equally concerning is that losses in cotton area translate into pressure on associated businesses, infrastructure and rural economies who are also our customers. Prolonged production declines of this scale will result in severe strain on the entire cotton infrastructure, which continues to be the backbone of many small, rural communities.”

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