Seed cotton and ginning cost share programs give growers what they need
“You can’t always get what you want, but if you try sometimes, well you might just find, you get what you need,” are popular lyrics from the band, the Rolling Stones.
These lyrics could also be used to describe the new seed cotton policy included in the Bipartisan Budget Act (BBA) of 2018 that President Trump signed Feb. 9. The BBA brings cotton back as a Title I covered commodity, meaning seed cotton now qualifies for federal assistance. Seed cotton is defined as unginned upland cotton that includes both lint and seed.
Cotton producers across Georgia and the U.S. want to be paid a fair price for their commodity. A price that covers seed, inputs, freight and provides a profit. But as the Rolling Stones sing, “You can’t always get what you want.”
What farmers need is a reliable support program, a program that supplements their income and allows them to continue producing products when market fluctuations occur.
Under the BBA, seed cotton is now eligible for Agriculture Risk Coverage (ARC) and Price Loss Coverage (PLC) under Title I of the 2014 farm bill for the 2018 crop. Both programs provide support for cotton producers in different ways.
ARC provides protection for revenue losses while PLC provides protection when the price of cotton drops below a previously set reference price. Only one program may be elected for a covered commodity.
The new seed cotton program requires each farm to convert previous generic base acres to cotton or other covered commodity acres and to elect ARC or PLC. Farm owners will also have a one-time opportunity to update payment yields. The BBA gives producers 90 days to make farm allocations. The enrollment deadline had not been set when we went to press. Farm owners and producers interested in enrolling in the cotton seed program should contact their local FSA office immediately to meet the sign-up deadline.
Farm owners with covered commodities history may allocate generic base to seed cotton base in one of two ways. The first is to take the greater of 80 percent of their generic base or their seed cotton acres planted during 2009 to 2012, not to exceed total generic base acres.
The second option is to calculate the ratio of their 2009 to 2012 average of covered commodity acreage to all covered commodities, both including seed cotton. This second option allows producers to allocate generic base acreage to covered commodities other than just seed cotton.
Farms that don’t make base allocations and ARC/PLC elections will default to 80 percent of their generic base acreage being converted to seed cotton acres and auto-enrolled in the PLC program.
Stacked Income Protection Plan (STAX) will also be available for the 2018 crop.
STAX is the crop insurance product for upland cotton introduced in the 2014 farm bill. Since its introduction, STAX has been universally unpopular.
Going back to want vs. need, the want was to get cotton back into Title I status to compensate for an unpopular STAX program. The need is that many cotton producers could find a benefit to STAX for the 2018 crop, since it can be paired with ARC and PLC this season. After the 2018 crop, farms enrolled in ARC or PLC will be unable to purchase STAX.
May 11 deadline to enroll in ginning cost share program
On March 3, Secretary of Agriculture Sonny Perdue announced the sign-up period for the Cotton Ginning Cost Share (CGCS) program for the 2016 crop will end May 11.
This program assists producers with offsetting their 2016 ginning costs and assists with the marketing of cotton. This is a one-time payment based on the producer’s 2016 cotton planted acres reported to the Farm Service Agency multiplied by 20 percent of the average ginning cost for each of the four U.S. cotton production regions. The assistance rate for the Southeast/Georgia is $23.21.
CGCS payments will be capped at $40,000 per producer. To qualify for the program, producers must meet conservation compliance provisions, be actively engaged in farming and have adjusted gross incomes not exceeding $900,000. Contact your local FSA office to enroll or for more information.
Raynor Churchwell is an agricultural programs specialist in the GFB Public Policy Department. He may be reached at 478-474-0679, ext.5288 or email@example.com.