It was officially announced this past weekend that cotton producers will get a little bit of financial help from the U.S. Department of Agriculture (USDA). Gary Crawford has the story.
Agriculture Secretary Sonny Perdue was in Memphis Saturday explaining why the Cotton Ginning Cost Share (CGCS) announcement was delayed.
Perdue announced at the 66th Annual Mid-South Farm and Gin Show the USDA is taking action to assist cotton producers through a CGCS program in order to expand and maintain the domestic marketing of cotton.
“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.”
The signup period for the CGCS program runs from March 12, 2018, to May 11, 2018.
Under the program, which is administered by the Farm Service Agency (FSA), cotton producers may receive a cost share payment, which is based on a producer’s 2016 cotton acres reported to FSA multiplied by 20 percent of the average ginning cost for each production region.
Perdue added, “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. This infusion gives them one last opportunity for assistance until their Farm Bill safety net becomes effective.”
The CGCS payment rates for each region of the country are:
|Region||States||Costs of Ginning per Acre||CGCS Payment Rate|
|Southeast………………………………………….||Alabama, Florida, Georgia, North Carolina, South Carolina, Virginia……………||$116.05||$23.21|
|Mid-South…………………………………………||Arkansas, Illinois, Kentucky, Louisiana, Missouri, Mississippi, Tennessee……..||$151.97||$30.39|
|Southwest…………………………………………||Kansas, Oklahoma, Texas…||$98.26||$19.65|
|West………………………………………………..||Arizona, California, New Mexico………………………….||$240.10||$48.02|
CGCS payments are capped at $40,000 per producer. 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.
The program was established under the statutory authority of the Commodity Credit Corporation Charter Act.
NCC Applauds Secretary Perdue for Ginning Cost Share Program
The National Cotton Council (NCC) greatly appreciates the strong support of Secretary of Agriculture Sonny Perdue to provide a cotton ginning cost-share program that offsets a portion of a cotton producer’s 2016 crop season ginning costs.
The Cotton Ginning Cost Share (CGCS) program, announced by USDA, resulted from the agency utilizing its administrative authority under the Commodity Credit Corporation Charter Act to help facilitate the marketing of commodities.
“The U.S. cotton industry strongly commends Secretary Perdue for his efforts to deliver much-needed marketing assistance for our nation’s cotton producers,” NCC Chairman Ron Craft said.
The Texas cotton ginner and producer said this program will provide direct marketing assistance to producers, and help alleviate a portion of the economic conditions producers are struggling with. This program, based on the 2016 cotton crop, will help to fill the safety net void until the seed cotton ARC/PLC program is implemented beginning with the 2018 crop year.
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.”
Craft stated that, “Our industry is also very 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. In addition, the support provided by the agricultural lending community and agribusinesses across the Cotton Belt was an integral part of these successful efforts.”
Payments will be calculated based on a producer’s 2016 cotton acres reported to the Farm Service Agency. Regional per-acre payment rates are set at 20 percent of USDA’s regional costs of ginning and are as follows: Southeast (AL, FL, GA, NC, SC, VA) – $23.21; Mid-South (AR, IL, KY, LA, MO, MS, TN) – $30.39; Southwest (KS, OK, TX) – $19.65; and West (AZ, CA, NM) – $48.02.
Cost share payments are capped at $40,000 per individual or entity. Cost share program payments do not count against the 2014 Farm Bill payment limitations.
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 2016 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 to be eligible for the cost share payments.
The program sign-up period is March 12, 2018 to May 11, 2018.
More information about the CGCS program can be obtained by contacting the local FSA office or visiting www.fsa.usda.gov/cgcs.