USDA Provides Assistance to Cotton Producers

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USDA’s Farm Service Agency (FSA) is offering $300 million in cost-share assistance payments to cotton growers to help with the cost of ginning as well as continuing expand and maintain the U.S.’s domestic cotton market.

Agriculture Secretary Tom Vilsack says the announcement shows USDA continues to stand with America’s cotton producers and rural communities. “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,” said Vilsack. “The program will provide, on average, approximately 60 percent more assistance per farm and per producer than the 2014 program that provided cotton transition assistance.”

Through the Cotton Ginning Cost-Share program, eligible producers can receive a one-time cost share payment, which is based on a producer’s 2015 cotton acres reported to FSA, multiplied by 40 percent of the average ginning cost for each production region. With the pressing need to provide assistance ahead of the 2016 ginning season this fall, USDA will ensure the application process is straight-forward and efficient. The program estimates the costs based on planting of cotton in 2015, and therefore the local FSA offices already have this information for the vast majority of eligible producers and the applications will be pre-populated with existing data. Sign-up for the program will begin June 20 and run through Aug. 5, 2016 at the producer’s local FSA office. Payments will be processed as applications are received, and are expected to begin in July.

Low prices and global oversupply have been affecting the market since 2011. Some producers are facing economic uncertainty, even liquidating assets to satisfy loans.  Benefits expand beyond producers, however, since affects will be felt by the broader market chain and the National Cotton Council (NCC) and American Farm Bureau Federation (AFBF) commend the program’s efforts to help producers overcome difficult market conditions.

“The U.S. cotton industry commends Secretary Vilsack for his efforts on making possible a program that will provide much-needed marketing assistance for our nation’s cotton producers,” said NCC Chairman Shane Stephens.

“We are especially appreciative that Secretary Vilsack took the time to work with us, the National Cotton Council and others to arrive at this special, one-time arrangement without requiring legislative action,” says AFBF President Zippy Duvall.  “This is a clear example of what we can accomplish when we work together. Our cotton farmers and the rural businesses they partner with will be better off because USDA took action to address a serious market downturn in their industry.”

American Cotton Producers Chairman Mike Tate of Alabama added, “Our producers appreciate Secretary Vilsack’s efforts in providing marketing assistance to a commodity that is suffering a serious decline in market revenue partly due to heavily-subsidized foreign competition, with no signs of the commodity prices reaching the level needed to offset their production costs. The industry will continue to work with Congress and USDA to seek long-term policy solutions that will provide stability for the cotton industry.”

The Cotton Ginning Cost-Share Program has the same eligibility requirements as the 2014 Cotton Transition Assistance Program, and also includes a $40,000 prodder payment limit, requirement to be actively engaged in farming, meet conservation compliance and a $900,000 adjusted gross income limit.  Learn more at your local FSA office or  visit www.fsa.usda.gov/cgcs.

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