At a House Agriculture subcommittee hearing early this month, the National Cotton Council, an industry trade group, said growers are “vulnerable to further instability” due to low cotton prices, and lack the protection offered to other producers by farm subsidies. Economist Carl Zulauf of Ohio State University says the industry understated the federal support that is available.
“Contrary to the concerns … cotton farmers were not completely left out of the 2014 Farm Bill,” Zulauf wrote at farmdoc Daily, listing four types of assistance aside from the so-called STAX program, created as the successor to traditional cotton subsidies. Federally subsidized crop insurance is available, he said, along with so-called marketing loans that effectively create a minimum price for cotton. During the farm law’s first two years, while STAX was being implemented, growers received $487 million in transition payments. And farmers are eligible for crop subsidies if they grow grains or oilseeds on land that historically was planted to cotton. The USDA estimates it paid $593 million in supports for eligible crops grown on such “generic” base acres in 2014 and 2015.
The cotton industry says STAX, a revenue insurance policy, has proved inadequate because of low market prices. The industry wants to return cotton to the same subsidy programs offered to the other major U.S. crops.