Stuck between a rock and a hard place, right now cotton farmers will just take whatever they can get. However, local producers are hoping this is just the first step in an effort to keep area cotton farms afloat.
On Monday, the U.S. Department of Agriculture announced their plans to assist America’s cotton farmers by providing $300 million in federal aid.
Over the past several years, cotton producers have been struggling to survive as they face deep foreign subsidies, low cotton prices, high production costs and the exclusion of cotton assistance in the 2014 Farm Bill.
“The Cotton Ginning Cost Share program will offer meaningful, timely and targeted assistance to cotton growers to help with their anticipated ginning costs and to facilitate marketing,” United States Secretary of Agriculture Tom Vilsack said in a news release.
Lawmakers stripped most federal subsidies for cotton farmers in the 2014 Farm Bill – a move reportedly made to appease Brazil in trade talks.
The new aid is categorized as “marketing assistance” and provides 40 percent of a farmer’s ginning costs in a one-time payment based on their 2015 acreage reported to the Farm Service Agency.
For Texas farmers, this means payout would come out to $36.97 per acre.
Texas is the nation’s leading cotton producer.
After the announcement, industry leaders commended the USDA’s move to assist farmers.
“We greatly appreciate U.S. Secretary of Agriculture Tom Vilsack and the USDA for listening to the concerns of cotton producers and coming up with a viable short-term solution that will help us face some of our challenges,” PCG President Johnie Reed, a cotton producer from Kress, said.
“We had hoped for some flexibility in the payment limit, but we are grateful for the assistance, because our producers certainly need it.”
And local farmers have needed it. Over the past few years, farmers have found themselves in a constant gamble come harvest time. With the new help, farmers at least can have better peace of mind as they roll the dice. But for many local farmers, they hope this is just the beginning of pushing the odds in their favor.
“I personally feel, honestly, anything will help. But, I feel like this should be a first step,” said Hale County farmer Mark True.
True said that leaving cotton out of the 2014 farm bill has put a strain on local farmers.
“One of the things this does is try to remove some of that inequity that occurred during that process,” True continued.
But rising production costs and low commodity prices will lessen the impact of the new cotton aid.
“I believe the figure for the region is $36.97 cents per acre,” True said. “In my case, on about 200 acres, that’s roughly $7,300. Even with this payment, my cost of production is going to probably exceed what I can sell my crop for.”
True stressed his appreciation for any help, but noted that many farmers have been in dire conditions for quite some time and this shouldn’t be the final step in assistance for cotton farmers.
“We are just in a set of circumstances now that our margins are so very close,” True said. “We’ve already seen a tremendous number of producers go out of business this year and several more that may be on the bubble.”
Until then, farmers can only wait and continue their efforts to reduce production costs.
True noted farmers are adopting new technologies and practices in the field to do so. He added that the recent blessing of rain has helped tremendously.
One major factor that could help cotton farmers is a swing in the trend of buying and using cotton.
The growth of cotton purchases in items like clothing and oil would help raise the price of cotton to a better margin. But time will tell if consumer trends will shift toward the fiber.
“We recognize that this is a program for the near term, and we remain committed to working with Congress and others in trying to establish cottonseed as an ‘other oilseed’ under Title I of the 2014 Farm Bill, which would provide long-term stability for our industry,” added Reed.
The program has the same eligibility requirements as were used for the 2014 Cotton Transition Assistance Program, including a $40,000 per producer payment limit, requirement to be actively engaged in farming, meet conservation compliance and a $900,000 adjusted gross income limit.
Farmers can sign up at their local Farm Service Agency offices between June 20 and Aug. 5, with payments expected to start going out in July.