USDA approves program to pay back cotton producers

USDA approves program to pay back cotton producers

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The Trump Administration giving a big boon to this region's biggest industry. Along with getting cotton labeled a covered commodity, the USDA announced it will pay back some producers.

 The "Cotton Ginning Cost Share" program will provide farmers financial aid with a one-time payment relative to the crop.

 For four years, cotton producers have faced financial stress and a weak safety net. This program aims to help offset anticipated ginning costs.

"The price for cottonseed has been systemically declining over time for the last couple of years. This is a means to provide some much needed economic assistance to producers," Kody Bessent with Plains Cotton Growers said.

Producers that planted cotton in 2016 and that were actively engaged are eligible for this program. 

"They also have to meet a means test, so if they have an adjusted gross income of $900,000 or greater, they are ineligible. It's also capped at a payment limit as well," Bessent said.

The one-time payment will be based on reported acreage for 2016, times 20 percent of the average ginning cost for that region.

"It is 20 percent of that so that's why ginning cost share assistance is set at $19.65 per acre (for Texas)."

The subsidy is the USDA's plan to maintain producers' livelihoods.

"Cotton producers specifically have been put into a financial disadvantage when it comes to weathering price systemic declines versus other rural crops where they've had a program in place that has provided them this financial certainty and protection," Bessent said.

He said luckily policymakers know cotton's need for sustainability.

"We're fortunate that U.S. Ag Secretary Perdue and Chairman Conaway and Congressman Arrington and others have recognized the dire need to have this program to ensure the survivability of a lot of producers from a financial standpoint."

Over the past decade, nationwide businesses ginning cotton have declined 33 percent. With this disaster relief and the protections from the upcoming Farm Bill revision, the future looks much brighter.

FSA will mail letters and pre-filled applications to all eligible cotton producers. CGCS program applications can be submitted to FSA either in person, by FAX or by email.  To find your local FSA office, visit http://offices.usda.gov

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