WASHINGTON (DTN) -- Agriculture Secretary Tom Vilsack said early Wednesday that USDA lawyers have determined the department does not have the authority to declare cottonseed an oilseed, as the cotton industry has asked.
The declaration would make cottonseed eligible for farm subsidies, but after a speech to the National Association of State Departments of Agriculture Wednesday morning, Vilsack said Congress did not grant the authority in the 2014 farm bill and through appropriations has forbidden it to use the Commodity Credit Corporation to provide the assistance to farmers or cotton gins.
The announcement would be a blow to the cotton industry that has been anticipating a decision from USDA. It would effectively mean Vilsack is kicking the issue back to Congress to reopen the farm bill and create such a program.
Vilsack said that Congress would need to find $1 billion over 10 years for the subsidies related to declaring cottonseed an oilseed.
USDA wants to help, Vilsack said, but "right now we are a bit stymied by the barriers."
Vilsack confirmed to reporters that he has informed congressional agricultural leaders of the decision.
Vilsack confirmed the situation to reporters after House Agriculture Committee ranking member Collin Peterson, D-Minn., said earlier Wednesday that Vilsack told him he does not have the authority for the oilseed declaration.
But speaking to reporters after his speech to NASDA, Peterson also said that lawyers for House Agriculture Committee Chairman Michael Conaway, R-Texas, believe that USDA does have the authority.
Peterson said he recognizes that cotton farmers are in financial trouble, but that the cotton industry got what it asked for in the farm bill -- the STAX crop insurance program. The House version of that bill included a reference price of 65 cents, Peterson said, but it was taken out in the final bill because the Senate objected to it.
One of the problems that has occurred, Peterson added, is that some cotton growers have shifted to peanuts and there is now a glut of peanuts, but that cotton growers do not have a peanut base.
Peterson also said that USDA had made an alternative proposal, but that neither the cotton industry nor the Republicans like it.
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