WASHINGTON (DTN) -- Cotton industry groups and supporters expressed disappointment after Agriculture Secretary Tom Vilsack said 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 early Wednesday, 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."
Industry groups, ag bankers and others have been lobbying aggressively since last fall for the designation. The National Cotton Council issued a statement Wednesday noting that the group is extremely disappointed in Vilsack's comments. The group believes Vilsack does have such authority.
"We continue to believe, like a broad group of members of Congress, that USDA clearly has this authority as described in the current farm bill. Our industry remains committed to pursuing a cottonseed designation and policy to help provide long-term stability to the industry," the National Cotton Council stated.
Zippy Duvall, president of the American Farm Bureau and a Georgia farmer, issued a statement citing that AFBF "is seriously disappointed" in the USDA determination that Vilsack doesn't have the legal authority to make cottonseed a program crop. Duvall noted a lot of cotton farmers are hurting financially.
"While we are disappointed in the USDA ruling, AFBF stands ready to work with leadership of the House and Senate Agriculture Committees and other congressional ag leaders to explore ways to overcome the legal barriers USDA has cited. Cottonseed should be granted that designation and, short of reopening the farm bill, we will work to ensure that all possibilities are fully explored."
House Agriculture Committee Chairman Michael Conaway, R-Texas, issued a statement pointing out that more than 100 members of Congress had written Vilsack to exercise the authority.
"Time and again the secretary has used the tools made available to him under the law to respond to a crisis in agriculture. The current economic situation for cotton farmers is dire and it warrants the same urgent and meaningful action by the department," Conaway stated.
Conaway added, "The department has not only the legal authority to designate cottonseed as an 'other oilseed,' but the responsibility to act, and I trust that the secretary is sensitive to the situation and shares my commitment and the commitment of so many others that this matter must be meaningfully responded to in a timely way."
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 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 peanut base.
Peterson also said that USDA had made an alternative proposal, but that neither the cotton industry nor the Republicans like it.
DTN Ag Policy Editor Chris Clayton contributed to this report.
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