WASHINGTON, D.C. — Legislative language to add cottonseed as an oilseed under the farm bill commodity title was left out of the omnibus spending bill passed May 4, shrinking prospects for immediate expansion of federal benefits to cotton producers.

 

The policy would have added cottonseed to the USDA list of “other oilseeds.” Under that scenario, cotton farmers may have elected to reduce their base acreage for other crops covered by Agriculture Loss Coverage (ARC) and Price Loss Coverage (PLC), at the same time attributing cottonseed to their generic base acreage.

 

That acreage would then be eligible for cottonseed payments under PLC, according to an analysis published in April by Ohio State University and University of Illinois economists. That eligibility could have resulted in significant increases in payments for cotton producers.

 

The proposal was pushed by a cross-section of the cotton industry. “Cotton producers have suffered through three years so far of market returns well below costs of production, and the minimal amounts of government support provided to cotton producers during this time has not come close to closing the gap between costs and returns,” stated an April 29 letter to Congress from the National Cotton Council (NCC) and state and regional cotton industry and farm groups.

 

Cotton does benefit from 2014 farm bill provisions, according to the April articles published at U of I’s farmdocdaily website by Jonathan Coppess, Gary Schnitkey and Nick Paulson at U of I and Carl Zulauf at OSU.

 

They cited the “highly subsidized” Stacked Income Protection Program (STAX) crop insurance program for cotton, cotton’s eligibility for the marketing assistance loan (MAL) program, two years of transition assistance payments for farmers with former cotton base and the existing potential to receive ARC or PLC payments on generic base acres planted to a covered commodity.

 

But U.S. cotton producers believe there is more room for federal crop program assistance. In testimony to the House last month, NCC Chair Ronnie Lee said, “Market volatility and mounting economic pressures underscore the critical importance of an improved safety net for cotton farmers.”

 

He attributed politics for the exclusion of the cotton language in last week’s “cromnibus” (a combination of continuing resolution and spending bills). He said Sens. Patrick Leahy (D-Vt.) and Debbie Stabenow (D-Mich.) pitted the cotton industry against the dairy industry in budget negotiations.

 

“The senators’ desire to help dairy producers somehow became a prerequisite for whether Congress could provide a policy to cotton producers to help respond to the ongoing financial and trade policy challenges,” said Lee.

 

Congress did not ignore the cotton and dairy industries in the appropriations actions last week. The legislation includes language directing the USDA to write a report within 60 days on the needs of cotton growers. 

 

The bill also asks it to consider immediate assistance for dairy producers, clarifying some of USDA Risk Management Agency’s authority to develop dairy policy.

 

But cotton interests believe last week’s negotiations were a loss for their industry.

 

“Without the cottonseed policy in place, the result is that all farm bill stakeholders will be seeking support from an expected smaller overall budget available for the next farm bill,” Lee said.

 

The cotton policy was supported by some state Farm Bureau groups, as well as other agricultural commodity groups, according to Lee. However, some groups known for monitoring increases in federal spending opposed the cottonseed proposal.

 

Eight groups, including Heritage Action for America and Taxpayers for Common Sense, sent Congress a letter April 24 opposing the cotton proposal, insisting the industry is already subsidized and that more subsidies using tax dollars are unnecessary. The letter listed STAX, marketing loans, trade promotion programs, economic assistance to mills and ginning cost share subsidies as being “amongst the many ways taxpayers are forced to subsidize the cotton sector.”