Lawmakers Back Cotton Program

100 Members of Congress Write USDA to Support Cottonseed Subsidy

Chris Clayton
By  Chris Clayton , DTN Ag Policy Editor
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U.S. planted cotton acreage in 2015 was down to 8.5 million acres, the lowest since 1983. (DTN/The Progressive Farmer file photo)

OMAHA (DTN) -- One hundred congressmen signed a letter Monday to Secretary of Agriculture Tom Vilsack, demanding the secretary declare cottonseed as an eligible oilseed for federal farm-program payments.

The list of congressmen signing the letter included 80 Republicans and 20 Democrats, mostly from cotton-producing states. The chairman and ranking member of the House Agriculture Committee spearheaded the letter, which also was signed by House Majority Leader Kevin McCarthy, R-Calif.

The congressmen said in the letter that cotton farmers are "suffering under combined pressures of natural disasters and predatory foreign competition by China, India, and others." They urged Vilsack to use his legal authority under the 2014 farm bill to declare cottonseed as an "other oilseed" that would qualify cottonseed for payments under the Price Loss Coverage program or the Agricultural Risk Coverage program.

The House Agriculture Committee held a hearing last week highlighting the pressures facing cotton producers due to a price collapse since early 2014. Farmers, bankers and others have been writing letters to USDA since earlier this fall to encourage the department to take action.

In an email to DTN on Monday, a USDA spokeswoman issued the same statement the department issued when DTN wrote an article last month on the effort to designate cottonseed as an oilseed. The department stated, "We recognize that these are tough times for cotton producers, and are thankful that there is a safety net in place that provides the Stacked Income Protection Program and Supplemental Coverage Option, which Congress created in the 2014 farm bill. USDA is currently analyzing the complex legal, programmatic and policy issues associated with declaring cotton an oilseed, which would make the crop eligible for additional safety net programs like ARC or PLC."

In a news release, House Agriculture Committee Chairman Mike Conaway, R-Texas, said the leadership of his committee led the effort to draft the letter, calling it "a rare coalition of rural and urban Democrats and Republicans from across the country, inside and outside of the cotton belt."

Congressmen are pushing for Vilsack to use his authority on the oilseed program while also pushing in the omnibus spending bill this week to re-establish commodity certificates that cotton farmers and others could also use as a way to avoid potential commodity-payment limits created in the 2014 farm bill.

The congressmen stated in the letter that Vilsack had authority to make the oilseed designation and should do so for the 2015 harvested crops. Still, any effort to create a new farm program would draw backlash from critics of farm programs on both the left and the right. Another risk could be a response from Brazil, which successfully sued the U.S. in the World Trade Organization following the 2002 farm bill.

Conaway noted, "America's farmers are currently experiencing a 55% freefall in net farm income, with huge losses due in part to the culprits of natural disasters and the unfair trade practices of foreign countries that use high and rising subsidies, tariffs, and non-tariff trade barriers to elbow U.S. farmers out of world markets," said Conaway. "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."

In the letter, congressmen noted planted cotton acreage in 2015 was down to 8.5 million acres, the lowest since 1983. If low planting acreage remains, that will put a strain on the entire infrastructure of the cotton industry, "which continues to be the backbone of many small, rural communities across 17 cotton-producing states."

Conaway added, "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."

The American Soybean Association also wrote to USDA on Tuesday supporting the request to establish cottonseed as an oilseed for commodity programs. Delaware farmer Richard Wilkins, president of ASA, wrote that farmers are aware of the challenges facing the cotton industry and the need for an improved safety net.

"We do not believe a cottonseed program would have a negative impact on the production of soybeans or other oilseeds, or on vegetable oil prices," Wilkins said. "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."

The letter from lawmakers to USDA can be found at http://dld.bz/…

Chris Clayton can be reached at Chris.Clayton@dtn.com

Follow him on Twitter @ChrisClaytonDTN

(AG/CZ)

Chris Clayton